From brawn to brain-based economies? Welcome to the Knowledge and Skills section

Have you ever heard the term “knowledge-based economy?“ And about how much knowledge, ideas and skills matter for economic competitiveness - a precondition for economic growth and prosperity? If you are reading this blog you probably have, and probably more than once. Yet what is a knowledge-based economy really? And are the Central and Eastern European countries on their way from brawn-based to brain-based economies?

According to the World Bank’s Knowledge Economy Index 2007, Sweden is the most knowledge-based economy out of some 140 economies ranked. From the countries of Central and Eastern Europe (CEE), Slovenia occupies the 23rd rank, followed closely by Estonia (25th), Hungary (28th), and the Czech Republic (29th). Lithuania, Latvia, Poland and Slovakia did not make it into the first thirty, but are close. What is more, both these Baltic countries made an impressive jump since 1995, according to the index. Romania and Bulgaria rank only behind countries like Barbados, Chile or Malaysia. Slovakia has been the only country out of the CEEs which backslid. index definition, out of the CEEs, Slovenia has the most conducive environment for knowledge to be used effectively for economic (and social) development. This means that its economic and institutional regime provides incentives for efficient use of existing and new knowledge. It has an educated and skilled population that can create, share and use knowledge well. It has an efficient innovation system of firms, research centers, universities or consultants that can tap into the stock of global knowledge and assimilate and adapt it to local needs or create new knowledge. And, last but not least, it has information and communication technology that facilitates creation, dissemination and processing of information. Again, in the CEE environment.

Without going into the nitty-gritty of this index, I used it because it shows a variation in the performance of the countries in the region of my interest. It also indicates that there are interesting stories of change over time. In my blog entries, I would like to tell something more about these stories and about the individual elements of which the Knowledge Economy Index consists. I will write about the skill- and knowledge-formation policies in the countries of the Central and Eastern European region. These include education and R&D policies and reforms but also broader measures targeting the labor market and enterprise support, which foster skill acquisition and utilization in the economy.
However, (and at the same time), my understanding and interpretation of all the above-mentioned issues goes beyond the notion of a high skills economy. Rising productivity in the twenty-first century does not only depend on new technologies, research and development, or the level of funding devoted to education and training, but also on how these are embedded in ´institutional´ and social relations. In line with Brown et al (2001), therefore, I prefer and adopt the concept of high skill society.

Katka Svickova