ABSTRACT
The prevailing policy models of the knowledge-based economy, and the learning society conceived as its corollary, promote normative notions of higher skill levels and lifelong learning across a wide population in society. It is assumed that the knowledge-based economy’s demand for highly skilled workers is generalized and unidirectional. It is projected that high productivity sectors requiring high levels of skills will successfully displace low productivity sectors that require low levels of skills and accrue low wages. It is further assumed that the knowledge-based economy regime is “one of constant innovation” that constantly requires higher levels of education and higher skills development across the population in its pursuit (Foray 2004: 38). The increased capacities of higher skills further generate higher levels of production of increasingly knowledge-intensive products. This virtuous dialectic of skills and production is assumed as a core dynamic of innovation and growth. It is typically imagined that any gaps on this path of increasing proliferation of knowledge-intensive activities throughout all sectors of the economy are due to time lags, structural inertia and other behavioural hindrances to perfect dispersion. The growth of knowledge-rich economic activities across many sectors of
the economy and the development of many enterprising new fields including, for instance, in new branches of science in nanotechnology, xeno-transplant technology, bio-physics, and information and communications, as well as extensive new technological products in materials, pharmaceuticals, heavy industries and traditional industrial sectors is readily evident. There is no doubt that these developments are exciting and compelling. As well, activities in these fields assist the expansion of other technologically rich industries in marketing, communications, distribution and management systems. Moreover, the expansion of the financial services sector and its development of innovative new financial products and their markets is substantially a phenomenon of the application of advanced ICT characteristic of the knowledge-based economy and its liberalized institutions. All of these activities evidently require greater numbers of highly skilled workers. The expansion of jobs in the advanced technological fields has also, without doubt, achieved important objectives of
the European Union’s Lisbon Agenda of the pursuit of more jobs and (sometimes) better jobs across more industry sectors. None of these accomplishments must be understated. Yet, as important as
knowledge-rich production, innovation and successful market competition are to the contemporary economy, these activities do not disperse into a generalized trajectory of continual expansion and innovation prevailing across industries and labour markets. Amidst the general favourability of the knowledge economists’ projections and the optimism of political leaders and policy-makers, there is also clear evidence of the persistence of contradictory tendencies and serious discrepancies in the knowledge-based economy path. These apparent contradictions raise many concerns about the real extent of the knowledgebased economy and the promised generalized improvement in jobs and prosperity for everyone. They challenge the wisdom of reforming and refocusing education systems in the service of this grandly imagined economy. Importantly, there is growing evidence from empirical economic and organizational research that adds heavy weight to critical social concerns and compels further questions. Many economists propose that accelerated growth and technological
advancement should, of themselves, facilitate greater absorption of knowledgeintensive activities throughout the economy. Other social analysts observe the uneven development of higher skilled economies and the persistence of low-skilled economic sectors and regions with their accompanying low-grade and poor quality jobs. That unevenness occurs not only at the global level, as Castells observed in the 1990s (Castells 1996) and as Brown et al. (2008) observe more recently in their extensive global study, but is evident within the advanced economies and regions. Moreover, as the evidence discussed below indicates, it occurs within knowledge-intensive organizations themselves. These uneven labour market dynamics – with a distinct tendency toward bifurcation and polarization – are not just the result of slow rates of absorption and dispersion of the knowledge-based economy. They are, rather, the consequence of three powerfully combined forces: (1) the liberalization of economic institutions; (2) an acceleration of competitiveness; and (3) the effects of rational corporate firm action at the organizational level. Liberalized reforms, the recalibration of capital and labour relations, and the free hand of the firm or business network to utilize advanced ICT applications and engage in market action in ways that favour the firm’s interests in profitability maximization bring about, moreover, distinctly uneven outcomes of individuals’ investment in education and training. The segmentation of labour markets and markedly uneven distribution of productivity gains in a knowledge-based economy portend a widening of social inequalities and a further weakening of social cohesion and participation in European model welfare states. The question of whether or not it is a matter of time for the hoped-for
expansion of the knowledge-based economy model to occur and for a more generalized higher skilled, higher productivity economy to emerge more evenly
across nations and regions may be a crucial matter of scientific interpretation or political and economic opinion. Nonetheless, there appears in dominant economic and political discourses a distinct lack of attention to some factors which play a key role at everyday operational levels and in labour market dynamics. That lack of attention to, if not active ignorance of, those discordant and disconcerting factors encourages the current bias of interpretative opinion that is in unreasonable favour of a generalized march to the knowledge-based economy evenly benefitting all members of society. This chapter looks closely at those key factors. First, it addresses general
patterns in labour market dynamics that have become evident as the concerted economic policy interest in developing a knowledge-based economy ensues. Second, and this is the principal effort of this chapter, it draws sharply focused attention to the level of the firm and the firm’s organizational behaviour. The role of liberalized corporate firm action in the generation of uneven outcomes frequently escapes attention. Yet the action of the firm produces outcomes which delineate real-world limitations to the knowledge-based economy. Close attention to organizational behaviour casts new light on economic models and policy programmes that propose a general trajectory of knowledge-rich production and overall high productivity and wage yields. Policy programmes that forge a political subjugation and contortion of education to the service of economic imperatives exact that very high price on education while in possession of partial data and little analysis of corporate firm, employer and organizational behaviour. The organizational level of the labour market and the intricacies and tensions of organizational change and inertia are seldom addressed in economic models of the knowledge economy. At the same time, the field of organizational analysis has in recent decades been over-focussed on problem-solving for business interests. A relative neglect in the latter decades of the twentieth century of sociological interest in organization and economic institutions has yielded a dearth of social analyses of organizational activity. There is therefore much scope for further research on the matters raised in this chapter. Organized political-economic interests at the level of the firm play a decisive
role in affecting labour market dynamics in knowledge-intensive economies. Firms, and the business networks in which they may be immersed, have no interests in broader economic and social models in regard to optimal skills development, dispersion and utilization across societal populations. The behaviour of the firm in everyday life can show little correspondence with the economic models favouring knowledge-based absorption in corporate organizational behaviour and dispersion of those knowledge-rich activities across economic sectors. These matters, which attract far less attention than the factors of competitive advantage and growth, are, nonetheless, constituent behaviours of knowledge-based economy developments. Their effects call into doubt assumptions that uneven dispersion of knowledge-based economic activity may simply be understood as temporal maladjustments or inefficiencies of application.
