Information, Knowledge and Innovation Policy

Over the past decade, policy-makers have increasingly devoted attention to the factors that influence the rate and direction of innovation. In particular, developments in the ICT sector have been discussed as a currently dominant source of both technological change and overall economic growth. The obvious limitations of this approach and an improved understanding of the innovation process have widened the perspective. Essentially, industrial innovation is a process of knowledge creation the outcome of which depends on the learning that takes place at the level of individuals, firms, sectors and nations. Consequently, analytical concepts which focus on capabilities and competencies, as well as other factors which constitute a specific learning environment, have attracted the attention of economists. The analytical concept of the "Knowledge-Based Economy" or "Learning Economy" addresses the role of knowledge and learning processes in the economy. It is rooted in a modern understanding of the innovation process and to a certain degree an extended version of the Information Society, which has focussed on information and ICTs. Knowledge – as opposed to information (i.e., codified knowledge) – is at the heart of the explanatory framework, and it is the creation of new knowledge (innovation) which needs to be investigated. Innovative activities, understood as learning processes, are by nature cumulative, interactive, and require different forms of knowledge (regarding information, skill bases and technology). From a knowledge point of view, skill base and interactivity are the two main lines of investigation. Skill indicators reveal that individual capabilities have progressed over the last few decades. For example, the education levels attained by workers and general skill levels have risen across the European Union. In most countries, both R&D personnel and the number of persons with third level education working in the science and technology professions have grown. High quality labour is particularly important for the innovation process. As a result of an uneven pattern of development, further efforts to improve the qualification structure in the overall labour force will be necessary in most EU countries. There is also considerable evidence that innovation is a complexly networked activity and that innovating firms depend on inputs from a knowledge base that is distributed according to geographical considerations as well as specialisation. What matters is not just the localised capabilities of a region, but also the international knowledge flows. Especially for science-based industries (e.g., biotech and ICT), both the locally provided research infrastructure – in particular universities – and knowledge from international sources are vital. In general, the Knowledge-Based Economy is an analytical framework which is consistent with policies fostering both the creation of new knowledge as well as the establishment of a framework for better exchange and utilisation of knowledge.