THE ECONOMICS OF KNOWLEDGE

APPLIED TO AFRICAN

COMMUNITY LEARNING

Lynn IlonSeoul National Univer-

sitylynnilon@snu.ac.kr

Question: Why does Google give you a service and charge you noth-ing?

Question: Why do you give Google free information to improve its products and charge them nothing?

Question: Why is Facebook worth millions of dollars but has never made a profit?

Question: What is going on here?

Answer: Knowledge economics.

Prevailing theories of economic growth are built around an economic model that maintains that growth comes from markets and, therefore, must derive from industry.

Much of Africa is still rural and quite poor. Traditional theories of development view these communities as “costs” which must be “fixed.”

But a relatively new theory, proposed by Romer in 1992 has begun to have prominence which emphasizes the role of ideas and knowledge.

New Growth Theory

The theory is based on two major tenants: First, it posits that a nation’s ability to grow its economy is partly based on its ability to create and absorb new ideas (ori-ginally thought to be ideas about technolo-gical change).

Second, it posits that ideas have specific economic char-acteristics that make it per-form unlike other goods or services.

Knowledge is costly to develop, but, thereafter, it is free to duplicate and be-nefit a lot of people at low or no cost un-like physical goods which continue to cost something to duplicate.

For example, we all benefit from the idea of vaccines, maps and pasteurization. While each of these can take on a phys-ical form, each idea benefitted a lot of people, was spread cheaply and added to our society’s well being.

The theory is important for African devel-opment. Rather than industry being the center of ideas, we now know that it is networks of people who build and shape ideas. Network theory tells us that net-works are weakened when some people are marginalized or left out of the net-work.

The Value of Collective LearningAmartya Sen’s Nobel Prize winning work. Sen believed that societies that had the ability to talk freely about their issues and problems, exchange information, and raise awareness, effectively built new knowledge. If they could then take action, then they collectively raised the value of their lives – through knowledge creation rather than industrial production.

New growth theory com-bined with Amartya Sen’s theory of collective know-ledge building and network theory shows that it is in the world’s interest to view communities as part of a global network. Their local knowledge is invaluable to help solve globally linked problems as a source of in-genuity, innovation and strength to drive economic development.

Many issues such as health, communica-tions, governance, edu-cation, environment, housing, literacy, de-velopment, community organizing and social awareness; virtually any issue that involves collective awareness or responses can see sub-stantial effectiveness benefits and cost reduc-tions by using knowl-edge strategies.

Universal problems of disease, environ-mental degradation, terrorism, migration, refugees and hunger have two ways to be tackled. The old way is to bring in the experts once the problems have been created. Another way is to engage local communities in mitigating the underlying problems before the problems get out of hand.

OR

Before after

The key is to link such communities into a network and provide them with the learning tools and opportun-ities to make a contribution.

Thinking of community as a resource, lowers the cost of problem man-agement for government, industry and the entire world. New growth the-ory not only helps us un-derstand how develop-ment really works, it shows us how social pro-gress can be achieved by lowering the burden now carried by industry, gov-ernment and global insti-tutions.

PoliciesFirst, all entities must be brought into the know-ledge-generating network. Train “experts” to listen to com-munities; their expertise ex-tends only as far as a particular field

Second, government needs to begin to recognize that knowledge-value is now being created both within and outside of industry.

Third, knowledge is synergized around networks. As networks are only as strong as their weakest link, it is poor national policy to build networks around top knowledge users and neg-lect the least educated.

Fourth, reducing national costs of development means heavily engaging all communities. In-vestments not just in formal education, but in learning in-frastructure and knowledge linkages of poor communities will reduce long-term costs of social progress.

Question: How can government reduce the cost of its services?

Question: How can the learning ability of communities, NGOs and civic society be captured?

Question: How can society be improved without increasing monetary resources?

Answer: Knowledge economics.

THE ECONOMICS OF KNOWLEDGE

APPLIED TO AFRICAN

COMMUNITY LEARNING

Lynn IlonSeoul National Univer-

sitylynnilon@snu.ac.kr