The Competitiveness of Nations
in a Global Knowledge-Based Economy
2nd Draft March 2005
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Epithet He whose vision
cannot cover History’s three
thousand years, Must in outer
darkness hover, Live within the
day’s frontiers. Goethe, Westöstlicher
Diwan Epithet to Erich Neumann’s
The Origins and History of
Consciousness
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1. In 1995 the world changed. The World Trade Organization (WTO) began operations and a global economy rooted in the self-regulating market emerged, i.e., the market, not government, would henceforth govern world trade (WTO 1995). In 1996, the world changed yet again. The Organization for Economic Cooperation & Development (OECD) published The Knowledge-Based Economy (OECD 1996) in which it argued that the wealth of nations lays in knowledge and its commercial use and application. The next year the OECD published guidelines for competitiveness in this new economy in National Innovation Systems (OECD 1997). These developments combine to generate ‘the competitiveness of nations in a global knowledge-based economy’.
2. Ever since there has been ongoing debate and discussion about the nature of the new economy as well as institutional realignment of public, profit and nonprofit enterprise in response to its evolution, e.g., government, business and university research partnerships. Nonetheless, as will be demonstrated, the intellectual underpinning of this new economy, the Standard Model of economics, arguably the last ideology standing after end of the Cold War between Markets and Marx, cannot explain how such an economy is even possible.
3. Due in part to the inadequacies of the Standard Model, policy debate and discussion about the knowledge-based economy exhibits, at least to this and some other observers (Cowan, David, Foray 2000), a thinness of content and context. In brief, the Standard Model treats knowledge as an undifferentiated input not as a highly differentiated input to and output of the production process. It also admits only knowledge derived by calculatory rationalism, i.e., only knowledge that can be quantified. It ignores other forms such as moral and ethical values as well as intuition and aesthetic experience. Furthermore, the Standard Model treats knowledge as a public good that cannot be bought and sold in the marketplace. Rather it is freely available to all, i.e., there is perfect knowledge. This dissertation is intended to thicken debate and foster appropriate national adaptation to the mutagenic environment of the knowledge-based economy. Quite simply: knowledge feeds on knowledge.
4. Given the inadequacies of the Standard Model and the thinness of public policy debate, a methodology is required to reach beyond the disciplinary frontiers of economics to collect, compile and collate ‘knowledge about knowledge’. My solution is ‘Trans-Disciplinary Induction’ or TDI used to harvest evidence from the event horizons of five disciplines of thought and interdisciplinary fields of study including sixteen of their sub-disciplines plus etymology, i.e., the origin and meaning of words (3.0 Methodology).
5. In scanning these event horizons a significant quantity of evidence was harvested. Accordingly some principle, mechanism or model was required to organize and present it in a meaningful way. It is the methodological nature of induction that such patterns emerge. In this instance it was the most ancient Western paradigm for deriving knowledge – the Pythagorean tetraktys or ‘perfect triangle’ or “sacred decad” expressed by the numeric sequence 1 + 2 + 3 + 4 = 10 (Thesleff 2003). It is ironic, at least to me, that the most modern economic system – the knowledge-based economy - can be patterned after the most ancient of thought models (Apatow 1999). [A] It is, however, consonant with the trans-disciplinary nature of this dissertation because the tetraktys is used, in one form or another, today, in the natural & engineering sciences, the humanities & social sciences and the Arts including the literary, musical and visual arts. For my purposes, its medieval expression, is best, the Axiom of Maria Prophetesta or “Maria the Copt”: One becomes two, two becomes three, and out of the Third comes the One as the Fourth (Jung 1963, 249). In analytic psychology, it describes a path to knowledge about oneself. Discovering there is a problem (1) leads to breaking it into initially conflicting opposites (2) to then find a position between the two (3) from which resolution, meaning or understanding may emerge (4).
6. This Design will guide my dissertation. Accordingly, derivation of ‘knowledge about knowledge’ proceeds from less to increasingly complex and detailed. It will serve as my narrative line to keep the reader (and myself on track). It also means that the text is back-end loaded, i.e., more information is provided at the end the sequence 1 + 2 + 3 + 4 than at its beginning.
7. Two linguistic limitations must also be noted. First, knowledge generally finds expression in a human language. Each, including mathematics, is subject to inherent conceptual and other limitations (Boulding 1955). This is certainly the case with English, the language of this dissertation. In English, one verb, ‘to know’, veils four distinct meanings: to know by the senses, mind, doing and experience. This means that a knowledge-based economy is more than a ‘can-do’ economy which engages but one sense of the word ‘to know’ in English. By contrast, the closely related language of German has separate verbs for each meaning and roughly corresponding institutional structures to match. In more distant languages such as Chinese there may be words expressing ways to know that are difficult, if not impossible, to express in English.
8. Second, disciplines and sub-disciplines use words with specific disciplinary or technical meaning. Such technical meaning sometimes differs between disciplines. More often, however, it differs from ‘common sense’ usage. Given I will be treating findings from sixteen sub-disciplines, extensive, and to some disconcerting, use is made of definitions drawn mainly from the Oxford English Dictionary (OED 2005). Consider the term ‘utility’. In common use it means “the fact, character, or quality of being useful or serviceable” (OED utility, n, 1a). In economics, however, utility, technically, means a number of ‘utiles’, i.e., a unit measure of pleasure/pain, carried by a good or service. Utility is extracted by a consumer to achieve satisfaction or happiness expressed in the felicitous calculus of Jeremy Bentham. Accordingly, except where otherwise noted, words will be used in their common sense or dictionary sense throughout the text.
9. Beyond limitations and weaknesses inherent in this dissertation, there remains the fact that the event horizons of many more disciplines remain to be surveyed for ‘knowledge about knowledge’. Furthermore, other concatenations of knowledge may remain to be found and identified. And, of equal importance, there remain many significant non-English expressions of ‘knowledge about knowledge’ to be collected. Accordingly, not only is this dissertation limited by the disciplinary sample surveyed, it is also handicapped by being rooted in the English language with its inherent limitations and weaknesses that I hope to at least partially revealed.