ABSTRACT
The term knowledge-based economy, or its equivalents the knowledge economy and knowledge-driven economy, frequently shows up in government reports and policy speeches these days. It has become a cliché in policy circles, which always points to a bright side of the modern economy or a model of the future economy. While the positive image has some truth, the knowledge-based economy is not necessarily what the image conveys. This chapter reviews how the knowledge-based economy has come to the fore in the current discussion of economic development. It shows how the knowledge-based economy is distinct from the old, traditional economy. It also explores the recent trend of knowledge-based economic growth, referring to the performance of advanced economies, particularly in the US and the UK. In spite of its image of hyper performance, the knowledge-based economy grows only at a moderate pace. Another clear and disturbing feature of the knowledge-based economy is the polarization in the wealth distribution between the ‘haves’ and the ‘have-nots’ with a capacity to utilize knowledge.
