A Critical Review of the Precursors of the Knowledge Economy and Their Contemporary Research: Implications for the Computerized New Economy

Abstract

Despite nearly fifty-eight years since the term knowledge economy first appears, we are getting nearer in understanding this new kind of economy. The purpose of this paper is to clarify the meaning of the knowledge economy by conducting a critical review of the precursors of the knowledge economy and their major critiques so as to identify the current research implications. We aim to identify common ground in advancing the research of the knowledge economy. In essence, our understanding of the knowledge economy is viewed from a ‘new’ social-economic-theoretical perspective in which the theoretical foundation focuses on the explosion of technology that motivates people to be innovative and possess knowledge in producing knowledge products or be so engrossed with sociability using technology at home. Our finding is that the notion of the knowledge economy must be viewed from some phenomena that have transformed the contemporary economy. Other major findings include the following: (1) we use the term knowledge economy instead of the multiplicity of terms to describe this new form of economy; (2) we articulate that the theoretical foundation of the knowledge economy is a branch of social economy where the economy is not based solely on production and consumption but is based more on social values, technology, knowledge and innovation to commercialize knowledge products; and (3) the statistical assessment methodology is delivered through the use of indicators to proxy for the four knowledge economy criteria that makes up the knowledge economy. This has the following implications for economic management, knowledge-induced innovation, computerization of the economy, and knowledge management in the new economy.