Knowledge to build the world, knowledge to destroy the world. K.S.

Pang (2013)

The Knowledge Economy

Chapter 3: Knowledge Production



Knowledge is produced in different ways that can be defined in terms of a dual
dichotomy (Two Forms of Knowledge Production).

Firstly, through formal research and development work off-line. It means isolated
and sheltered from the regular production of goods and services).

Secondly, through learning on-line, where individuals learn-by-doing and, as a rule,
can assess what they learn and hone their practices for what follows.

A country's science system takes on increased importance in a knowledge-based
economy. Public research laboratories and institutions of higher education are at the
core of the science system, which more broadly includes government science
ministries and research councils, certain enterprises and other private bodies, and
supporting infrastructure. In the knowledge-based economy, the science system
contributes to the key functions of:

i) Knowledge Production developing and providing new knowledge.
ii) Knowledge Transmission educating and developing human resources.
iii) Knowledge transfer the method to disseminate knowledge.

The recent stories of knowledge production

The science system has traditionally been considered the primary producer of new
knowledge, largely through basic research at universities and government laboratories.
This new knowledge is generally termed science and has traditionally been
Knowledge to build the world, knowledge to destroy the world. K.S. Pang (2013)

distinguished from knowledge generated by more applied or commercial research,
which is closer to the market and the technology end of the spectrum.

In the knowledge-based economy, the distinction between basic and applied research
and between science and technology has become somewhat blurred. There is debate
as to the exact line between science and technology and whether the science system is
the only or main producer of new knowledge. This debate is relevant because of
different views on the appropriate role of government in funding the production of
various types of knowledge.

Scientific knowledge is broadly applicable across a wide and rapidly expanding
frontier of human endeavor. Technological knowledge stems more from the
refinement and application of scientific knowledge to practical problems. Science has
been considered that part of knowledge which cannot or should not be appropriated
by any single member or group in society, but should be broadly disseminated. It is
the fundamental knowledge base which is generic to technological development.

Because of this, much of science is considered a public good, a good in which all
who wish can and should share if social welfare is to be maximized. The public-good
character of science means that, like other public goods such as environmental quality,
the private sector may underinvest in its creation since it is unable to appropriate and
profit adequately from its production.

The government therefore has a role in ensuring and subsidizing the creation of
science knowledge to improve social welfare, just as it does in regulating
environmental protection.

Some argue that there is no longer a meaningful distinction between science and
technology in the knowledge-based economy. They present the view that the methods
of scientific investigation have been diffused throughout society through past
investments in education and research. The consequence is that no particular, or each
and every, site of research investigation, public or private, can be identified as a
possible originating point for scientific knowledge.

Knowledge to build the world, knowledge to destroy the world. K.S. Pang (2013)

In addition, there may no longer be a fundamental difference in the character of
scientific and technological knowledge, which can be produced as joint products of
the same research activity. Studies of the research process have demonstrated that
incremental technological improvements often use little scientific input and that the
search for technological solutions can be a productive source of both new scientific
questions and answers. As a result, the traditional base of the science system, research
institutions and universities, cannot be assumed to dominate the production of
scientific knowledge.

Government policies on knowledge production

Even though we know the contributions of the science system to the production has
not been great progress in measuring the extent of these contributions. A related
problem is establishing a standard of accountability for public research funding, a
problem that is of growing significance for future government support of the science
system. Although there is widespread belief that public funding for scientific research
has produced substantial benefits, there is concern with how these benefits may be
measured and related to funding levels.


Knowledge to build the world, knowledge to destroy the world. K.S. Pang (2013)

Efforts to measure the contribution of scientific knowledge to the economy are
difficult for several reasons:

First, because most scientific knowledge is freely disclosed, it is hard to trace its use
and therefore its benefits as it is employed within private economic activities.

Second, the results of scientific investigation are often enabling rather than directly
applicable to technological innovation, further obscuring any overt trace of their
beneficial impact.

Third, new scientific knowledge may save resources that would otherwise be spent in
exploring scientific or technological dead-ends and these resource savings are not
been observed.

As a result, cost-benefit analysis will be the leading method for evaluation of public
investments, is likely to understate the benefits of scientific research. Efforts to more
precisely define and measure the science system are occurring in an era of growing
public financial stringency throughout the OECD countries.


Social benefits or cost ???