Some Outstanding Features of Knowledge Economy

- Through international trade to acquire knowledge contained in goods and services.

- Attract foreign direct investment to acquire technological and management knowledge from multinational companies.

- Through technology licensing, developing countries gain access to new proprietary technologies more cost-effectively than developing them themselves.

- Take advantage of movement and migration to acquire knowledge such as sending people to study, visiting and exchanging

Maybe you are interested!

• Application of Science and Technology in the Development of Tourism Economy in the Northern Key Economic Zone
• Current State of Vietnam's Economic Development from the Perspective of the Knowledge Economy
• Research on theoretical and practical basis of developing high-quality human resources to form a knowledge-based economy in Vietnam - 27
• Anti-American Poetry: Time Range, Outstanding Features
• America's Strategy Towards a Knowledge Economy

Second , developing countries can take advantage of the “latecomer” advantage to go straight into some modern advanced technology fields. For example, building information infrastructure, applying advanced biotechnology to change agricultural production methods...

1.1.2. Concept of knowledge economy

The emergence of the seeds of the knowledge economy in recent times is considered a revolution that will comprehensively and profoundly change the world's socio-economic landscape.

1.1.2.1. Knowledge economy and related terms

In terms of vocabulary, knowledge economy can be translated into two terms in Vietnamese, which are “knowledge economy” or “knowledge economy”. (The word economy in English means both economy and economic sector or component, for example, individual economy .

). Although there is only a slight difference in form, these two translations represent two different views on the new development trend of the world economy. Depending on each specific context, in this thesis, both translations are used indiscriminately.

In the above translation, “knowledge economy” and “knowledge economy” are completely synonymous and represent the term knowledge economy .

Associated with the knowledge economy is the term "innovation", translated from the English term innovation originating from the original concept of economist J. Schumpeter. Accordingly, innovation is the processes and activities aimed at transforming invented knowledge into a specific "productive force" accepted in a social system (a firm, an economy, etc.) . An innovation can be a new production process, a new way of using raw materials or a new form of organization. As P. Drucker (1995) said: "Innovation is the art of providing resources with a new capacity to create wealth". Simply put, not limited to technology, innovation is the process of turning knowledge into real economic growth. In this way, the relationship between the knowledge economy and innovation is expressed through the equation: knowledge economy ="knowledge" + "innovation".

To talk about the emergence of this economy, there are a number of other terms such as knowledge-based economy, knowledge-driven economy, idea-based economy, information society, high-technology economy, information economy, network economy, digital economy, cyber economy, bio-digital economy, new economy... Each of the above terms represents a different understanding and perspective:

First , understanding knowledge economy with a narrow concept of knowledge.

In this understanding there are two common approaches:

- Knowledge is synonymous with science and technology: Those who follow this approach understand “knowledge” in a narrow sense, that is, synonymous with science and technology or, more narrowly, synonymous with the modern scientific and technological revolution, including four pillar technologies: information technology, biotechnology, aerospace industry and new materials technology. This understanding can be represented by the term “high-tech economy”. Or, more narrowly, emphasizing the great and unique role of information technology, one can use the terms “information economy”, “network economy”, “digital economy” and “cybernetic space economy”.

- Distinguishing the national economy into two parts: the knowledge-based economic sector and the old economic sector: The knowledge-based economic sector includes the so-called knowledge-based sectors, the rest is the old economic sector with traditional sectors. These two economic sectors operate with completely different mechanisms, rules, and results. The knowledge-based economy develops to a higher level if the knowledge-based sectors account for a larger proportion of the economy. According to the OECD's concept, there are two milestones showing that a national economy has moved to the knowledge-based economic stage: (i) The proportion of the industrial and agricultural sectors reaches a maximum point and is gradually decreasing. This milestone appeared in the most advanced countries about 30 years ago; (ii) The proportion of knowledge-based sectors according to the OECD classification accounts for over 70% of the national GDP.

Second, the understanding of the knowledge economy with the concept of knowledge according to the OECD definition as presented above, that is, all human understanding of themselves and the world. This understanding has two approaches:

- From the perspective of productive forces: Knowledge economy is a high level of development of productive forces. In which there are some viewpoints emphasizing

The development of a knowledge-based economy is only a step in the development of productive forces and is absolutely not related to a new socio-economic form. To consider the socio-economic form, many other aspects must be mentioned, especially the relationship between productive forces and production relations and the way to resolve the contradiction between the two.

- From the perspective of the contribution of knowledge to economic development: This perspective interprets the OECD definition stated above in its literal sense. Knowledge, or more specifically the activities of producing, disseminating and using knowledge, has surpassed capital and labor to become the dominant resource for all wealth-creating activities in the economy. In particular, knowledge is a very broad concept, encompassing all human understanding.

Third, the understanding of knowledge economy is a new economic-cultural-social environment or form with suitable characteristics and creating the most favorable conditions for learning, innovation and creativity. In that environment, knowledge will inevitably become the most important production factor contributing to economic development. Therefore, the core of developing a knowledge economy is not simply developing science and technology but developing a culture of innovation and creativity to create the most favorable conditions for the production, exploitation and use of all types of knowledge and understanding of humanity. In this sense, knowledge economy can be understood as a new development stage of the entire economy, or more broadly, this will lead to a new development stage of society in general. Currently, more and more researchers, countries and organizations conceive of knowledge economy from this approach.

In many research papers, the authors' approach often follows one of the three above or fluctuates between them. It is difficult to say which understanding is correct and which understanding is wrong because there is no standard on

reality for the concept of knowledge economy. The understanding of knowledge economy with a narrow concept of knowledge emphasizes the particularly important role of the foundation of science and technology and "productivity growth" for all economic growth. It separates knowledge of science and technology from the much broader source of human knowledge as well as separates science and technology from the general economic-social-cultural environment. The understanding of knowledge economy with the concept of knowledge as defined by OECD has the limitation of being unclear. Approaching from the perspective of productive forces, at any historical period, productive forces are at a higher level of development than in previous periods. It is said that knowledge is currently the resource that contributes the most to economic growth, but people do not have a commonly accepted method to measure it [36, 29-31]. The understanding of the knowledge economy as a new economic-cultural-social environment with characteristics that are suitable and create the most favorable conditions for learning, innovation and creativity has many aspects including the first two conceptions. This understanding is useful for economic development in developing countries where the absorption, dissemination and use of knowledge play a particularly important role.

With the main purpose of identifying the “knowledge economy”, this topic begins by acknowledging the OECD definition: the knowledge economy is an economy that is directly based on the production, distribution and use of knowledge, with the understanding that this is a new stage of development in the entire history of human economic development .

1.1.2.2. Knowledge production

Knowledge production is simply understood as creating or more broadly as acquiring knowledge. For each economic organization, the decision to create or acquire knowledge is a

Receiving and using external knowledge is governed by financial capacity, level of scientific and technological development including human resources.

Knowledge is created through R&D and to some extent can be a by-product of activities for various purposes, when people learn from their experiences in producing or consuming goods, or when they listen to and learn from the experiences of others. For each country, knowledge production is important because it will not take advantage of the global knowledge pool unless it builds the capacity to find appropriate technologies, select and absorb, and adapt what is found.

There are many differences between knowledge production and production of means of production:

(i) Knowledge production is highly uncertain and risky; (ii) Knowledge is embodied in human and organizational capital; (iii) Many knowledge production methods use existing knowledge as inputs and this is the most important difference.

The consequence of these problems is that knowledge creation activities are difficult to measure and evaluate, as demonstrated by four difficulties: measuring knowledge input, investment in knowledge, quality improvement, and obsolescence. These difficulties often result in lower GDP growth and productivity measurements than are realistic.

To build a knowledge base and gain the best advantage from imported technology, developing countries must explore all means to exploit the global knowledge pool through the methods presented in the previous section as well as adapt it to local conditions. The role of the State is to create mechanisms to encourage organizations to seek the best techniques, invest in training and innovation. In addition, it is also necessary to harmonize the issue of intellectual property rights to disseminate it at the lowest possible cost. According to

WB 1999, the State's problems are to create a competitive market, open and eliminate all subsidies; conduct research and development first in agriculture and gradually in industry as manufacturing develops and then encourage the private sector to do so.

1.1.2.3. Knowledge distribution

In the knowledge economy, intellectual resources, which are expressed as human capital and organization, become the most important, penetrating into all areas of social life. Through knowledge, the exploitation and distribution of scarce natural resources are carried out effectively, benefiting the environment. Therefore, the possession of human resources, scientific and technological knowledge is much more important than the possession of other natural resources.

Knowledge distribution can take place strongly in many forms such as dissemination, trading, information exchange, copyright, technology licensing... in a strict institutional and legal environment. The development of information technology, especially the convergence process in the telecommunications industry, creates favorable conditions for the dissemination and exchange of knowledge. However, the application of advanced technology depends on many other factors such as cultural and social differences, low income, inadequate human capital, competitive environments and weak regulation that slow down their use. Despite some obstacles, one cannot deny the great role of the information technology revolution in the knowledge economy.

1.1.2.4. Using knowledge

Knowledge can be used as a commodity for many purposes. People can use knowledge as a consumer good or to create other goods, market opportunities, or new knowledge. However, the use of knowledge as a means of production has some distinct characteristics.

First , the use of knowledge leads to increasing returns to scale. New knowledge applied to the production process increases output without increasing input costs. This is inconsistent with the general equilibrium framework under perfect competition. Second , the use of knowledge automatically makes other knowledge and means of production obsolete - creating externalities. For example, the discovery of new composite materials that are stronger and lighter is gradually replacing steel as well as changing manufacturing processes in the automobile industry. Third , the use of knowledge will not only create more products at lower costs but also create products that did not exist before.

Knowledge is not given for free, its use comes at a cost. Everyone must learn to acquire knowledge, absorb it and transform it into skills for use. In the knowledge economy, commodity knowledge is increasing, but the use of knowledge assets must be effectively protected because ownership is one of the first requirements to ensure the motivation for creativity and protect the exploitation of intellectual resources.

1.2. SOME OUTSTANDING FEATURES OF KNOWLEDGE ECONOMY

From many approaches, current popular documents point out different characteristics. Among them, some characteristics attributed to the knowledge economy are not really convincing. For example, economic structure shift, “blurred” economic cycle, high competition... However, there are four outstanding and different characteristics compared to previous economies.

1.2.1. Scientific and technological knowledge together with highly skilled labor is the first productive force and the decisive development advantage.