The Knowledge-Based Economy:

Conceptual Framework or Buzzword? Benoıˆt Godin

ABSTRACT. In the last two decades, concepts have ap- Economy, and the Knowledge-Based Economy.
peared that have influenced and even defined entire science Concepts, however, are often defined and crystal-
and technology policies in Western countries: high technol-
ogy, national system of innovation, information economy,
lized with the aid of statistics.
knowledge-based economy, and the new economy. In all There are at least two kinds of relationship
these policy developments, the OECD, acting as a think tank between statistics and concepts. In one, statistics
for its member countries, has been an important promoter of gives rise to and defines a concept. This was the case
these concepts, turning them into buzzwords. This article for the New Economy. The growth of information
looks at the concept of knowledge-based economy in order to
explore the crucial role of the OECD in its dissemination
and communication technologies (ICT) had been
and, above all, the role statistics have played in shaping measured before, but suddenly it came to be closely
policy discourses. related to a discourse on a new economy in the
Key words: knowledge-based economy, science policy, innova-
1990s, that is, with changes in the way the economy
tion, OECD, statistics, indicators. performs (growth and productivity) (Godin, 2004).
In the other kind of relationship between statistics
JEL Classification: O30
and concepts, a concept gives rise to specific sta-
tistics. This was the case for the Knowledge-Based
Economy. Its main promoter—the OECD—cur-
The relationship between statistics and policy is rently collects nearly sixty indicators aimed at
far from easy to assess empirically, and the measuring the knowledge-based economy.
causal link, if any, difficult to establish. Statistics The early (1960s) concept of a knowledge
are often presented as instrumental for policies: economy and its relationship to statistics was of
they are supposed to enlighten choices made by the first type: the concept originally appeared
policy-makers. But several studies have shown supported by new trends in the economy and new
that statistics serve rather to legitimate policies: data (Machlup, 1962; Porat and Rubin, 1977;
policy-makers used them to objectify choices OECD, 1981, 1986; Rubin and Taylor, 1984). Its
already made. Both theses are probably true to revival in the 1990s, however, has nothing to do
varying degrees, depending on the type of with numbers and everything to do with politics.
statistics, the context and the forces and interests In fact, several authors argue that nothing really
at work. In this paper, I postulate that the new has happened, at least with regard to the
important mediator between statistics and policy centrality of knowledge in the modern economy. I
is concepts, and importantly, specific types of suggest that the concept of a knowledge-based
concepts. economy is simply a concept that serves to direct
It is concepts, converted into buzzwords, that the attention of policy-makers to science and
often influence policy-makers. Recent examples technology issues and to their role in the economy
in the field of science and technology are the and, to this end, a concept that allows one to talk
Information Society,1 High Technology, the New about any issue on science and technology and
generate a large set of statistics under one roof.
INRS This kind of concept I will call an umbrella con-
3465, rue Durocher
Montréal (QUE)
cept. A related, but less controversial, thesis of this
Canada H2X 2C6 paper is that the (resurgence of the) concept of a
E-mail: Benoit.godin@ucs.inrs.ca knowledge-based economy in the 1990s owes a

Journal of Technology Transfer, 31: 17–30, 2006.

Ó 2005 Springer Science+Business Media, Inc. Manufactured in The Netherlands.
18 Godin

large debt to the OECD—and to the consultants it elements or institutions are firms, public labora-
supported. tories and universities, but also financial institu-
This paper looks at (1) where the concept of the tions, the educational system, government
knowledge-based economy comes from, (2) how it regulatory bodies and others that interact with
is defined and measured, and (3) what role statis- the former.
tics played in its development. A full genealogy of There are two families of authors in the NSI
the concept of a knowledge-based economy would literature: those centering on the analysis of
have to go back to the 1960–1970s and the many institutions (including institutional rules) and
authors, mainly in the United States, where buzz- describing the ways countries have organized their
words like Knowledge Society or Information NSI (Nelson, 1993), and those who are more
Economy were invented. This paper is specifically ‘‘theoretical’’, focusing on knowledge and the
concerned with the resurgence of the concept of a process of learning itself: learning-by-doing,
knowledge economy in the 1990s, and with its learning-by-using, etc (Lundvall, 1992). From the
recent causes. This resurgence took place mainly in latter group, the concept of the knowledge econ-
Europe. omy re-emerged.
This paper is divided into three parts. The Lundvall (Denmark) launched the concept of
first argues that the concept of a knowledge- a learning society or a learning economy in his
based economy re-emerged in the 1990s, arising book on NSI. According to Lundvall, ‘‘the most
from limitations in National Systems of Innova- fundamental resource in the modern economy is
tion (NSI), the then-current conceptual frame- knowledge and, accordingly, the most important
work guiding science and technology policies. The process is learning’’ (Lundvall, 1992, p. 1). For
second part examines the OECD’s efforts to Lundvall, however, learning is not located in
promote the knowledge-based economy, and the R&D departments only, as suggested until re-
indicators developed to measure the concept. The cently, but comes also from what he calls routine
third and final part suggests that viewing the activities in production, distribution and con-
OECD as a think-tank is the key to under- sumption. And ‘‘the most important forms of
standing the popularity of the concept among learning may fundamentally be regarded as
member countries. interactive learning’’ (Lundvall, 1992, p. 9), that
is learning from interactions between the
different institutions of an NSI (Lundvall and
Johnson, 1994, p. 26).
1. National systems of innovation
The learning economy involves the capability to
For several decades, economists have been criti- learn and to expand the knowledge base. It refers
cized for their failure to integrate institutions not only to the importance of the science and
into their theories and econometric models technology systems – universities, research organi-
zations, in-house R&D departments and so on –
(Nelson and Winter, 1977; Nelson, 1981). Partly but also to the learning implications of the
as a response to this situation, scholars in the economic structure, the organizational forms and
field of science and technology studies invented the institutional set-up.
the concept of national systems of innovation
(NSI) (Freeman, 1987; Dosi et al., 1988, part 5; It was to Lundvall—nominated deputy director of
Lundvall, 1992; Nelson, 1993; Amable et al., the OECD Directorate for Science, Technology
1997; Edquist, 1997). According to R.R. Nelson, and Industry (DSTI) in 1992 (until 1995)—that the
an NSI ‘‘is a set of institutions whose interac- OECD Secretariat entrusted its program on NSI.
tions determine the innovative performance of In fact, the OECD always looked for conceptual
national firms’’ (Nelson, 1993, p. 4). For B.-A. frameworks to catch the attention of policy-mak-
Lundvall, it ‘‘is constituted by elements and ers. In the early 1990s, it was NSI that were sup-
relationships which interact in the production, posed to do the job: getting a better understanding
diffusion and use of new, and economically use- of the significant differences between countries in
ful, knowledge’’ (Lundvall, 1992, p. 2). These terms of their capacity to innovate, and looking at
 The Knowledge-Based Economy 19

how globalization and new trends in science and they interact with each other’’ (Smith, 1995, p. 72).
technology affect national systems (OECD, 1992, Indeed, ‘‘knowledge is abundant but the ability to
1994b, 1996d). From the start, the OECD program use it is scarce’’ (Lundvall and Johnson, 1994,
identified the construction of indicators for p. 31).
measuring NSI as a priority (OECD, 1993b), Another consensual view of authors on NSI was
and indeed early on suggested a list of indicators that society simply did not have the appropriate
to this end (see Appendix 1) (OECD, 1997b). tools to measure the knowledge economy. For
But the decision to build on existing work be- Smith, the ‘‘systems approaches have been notable
cause of budgetary constraints (OECD, 1992, more for their conceptual innovations, and the
p. 10) considerably limited the empirical novelty novelty of their approaches, rather than for
of the studies. Nevertheless, the program, con- quantification of empirical description’’ (Smith,
ducted in two phases between 1994 and 2001, 1995, p. 81). ‘‘There are no straightforward routes
produced several reports that looked at flows to empirical system mapping: we have neither
and forms of transactions among institutions, purpose-designed data sources, nor any obvious
among them: clusters, networks, clusters, and methodological approach. The challenge, there-
mobility of personnel (OECD, 1995a, 1997b, fore, is to use existing indicators and methods’’
1999a, b, 2001a, b, 2002a). The program did not (Smith, 1995, p. 70). For Lundvall, ‘‘the most
have the expected impact on policies, however. relevant performance indicators of NSI should
In a recent review paper, the OECD admitted: reflect the efficiency and effectiveness in producing,
‘‘there are still concerns in the policy making diffusing and exploiting economically useful
community that the NIS approach has too little knowledge. Such indicators are not well developed
operational value and is difficult to implement’’ today’’ (Lundvall, 1992, p. 6). Similarly, David
(OECD, 2002a, p. 11). and Foray suggested: ‘‘A system of innovation
If Lundvall has been one of the main authors in cannot only be assessed by comparing some
the literature on NSI, D. Foray (France) is the one absolute input measures such as R&D expendi-
behind the current concept of the knowledge- tures, with output indicators, such as patents or
based economy (Foray, 2000b), as well as OECD high-tech products. Instead innovation systems
work on the subject. His entry into the field started must be assessed by reference to some measures of
while he was consulting for the OECD in 1994– the use of that knowledge’’ (David and Foray,
1996. In an article written with P. David, he crit- 1995, p. 81). ‘‘The development of new quantita-
icized the concept of NSI for being ‘‘neither tive and qualitative indicators (or the creative use
strikingly original, nor rhetorically stirring’’ of existing ones) is an urgent need in the formation
(David and Foray, 1995, p. 14), and for placing of more effective science and technology policies’’
too much emphasis on national institutions and (David and Foray, 1995, p. 82).
economic growth, and not enough on the distri- The OECD gave itself the task of developing
bution of knowledge itself. However, Foray and the appropriate indicators. To this end, it had
David concluded similarly to Lundvall on a first of all to solidify the concept of the knowl-
number of points, among them: ‘‘an efficient edge-based economy. In fact, this concept had
system of distribution and access to knowledge is a previously appeared, and then disappeared, in
sine qua non condition for increasing the amount recent history, as a way of describing the new
of innovative opportunities. Knowledge distribu- economy. J.R. Beniger has identified 75 such
tion is the crucial issue’’ (David and Foray, 1995, buzzwords invented between 1950 and 1984 (see
p. 40). Appendix 2), one of which, first appearing in
Thus, it seems that a central characteristic of an 1962, was the Knowledge Economy (Beniger,
NSI is the way knowledge is distributed and used. 1986). The OECD used several strategies to re-
As K. Smith, author of the OECD (Oslo) manual vive the concept, one of them being the enroll-
on innovation, put it: ‘‘The overall innovation ment of its promoters as consultants. The second
performance of an economy depends not so much most important strategy was using statistics,
on how specific formal institutions (firms, research which helped crystallize the concept by giving it
institutes, universities, etc.) perform, but on how empirical content.
20 Godin

2. The knowledge-based economy describe the dynamic system of knowledge devel-

opment and acquisition. New measurements are
The OECD NSI project flirted with the concept
needed to capture the state of the distribution of
of a knowledge economy, as we have seen, hav-
knowledge between key institutions and interac-
ing even temporarily redefined the initial objec-
tions between the institutions forming the NSI, and
tives of the project around knowledge access and
the extent of innovation and diffusion’’ (OECD,
distribution, whereas the original aims concerned
1995d, p. 6). This message was carried over into
institutional factors explaining the efficiency of
the 1995 ministerial declaration and recommenda-
NSI.2 The NSI project also flirted with indicators
tions: ‘‘there is need for Member countries to
on knowledge distribution, but rapidly con-
collaborate to develop a new generation of
cluded, ‘‘it has proved difficult to produce general
indicators which can measure innovative perfor-
indicators of the knowledge distribution power of
mance and other related output of a knowledge-
a national innovation system’’ (OECD, 1996d,
based economy’’ (OECD, 1996a, p. 2).
p. 3). In the end, the concept instead served a
Soon, various committees, working groups and
rhetorical role in NSI papers: in section titles and
people at the OECD appropriated the concept of a
introductory chapters.3
knowledge-based economy: conferences were held
The first step toward the generalized used of the
that included the concept (OECD, 1996b, 1997a),
concept of a knowledge-based economy at the
papers were published in the policy series (STI
OECD came in 1995, with a document written by
Outlook) that attempted to promote it (OECD,
the Canadian delegation for the ministerial meet-
1996f, 2000c, 2002b), and a whole program of
ing of the Committee on Science and Technology
work on new indicators was developed, from
Policy (CSTP). The paper, including the knowl-
which scoreboards were produced (OECD, 1999c,
edge-based economy concept in its title, discussed
2001d).
two themes: new growth theory and innovation
performance (OECD, 1995d). On the first theme,
the Secretariat suggested:
Defining the knowledge-based economy
Economics has so far been unable to provide much In the mid-1990s, the knowledge-based economy
understanding of the forces that drive long-term
growth. At the heart of the old theory (neoclassical) was a fuzzy concept. At the OECD conference on
is the production function, which says the output of employment and growth in the knowledge-based
the economy depends on the amount of production economy, Foray and Lundvall joined forces,
factors employed. It focuses on the traditional factors arguing that the ‘‘economy is more strongly and
of labor, capital, materials and energy (...). The new more directly rooted in the production, distribu-
growth theory, as developed by such economists as
Romer, Grossman, Helpman and Lipsey, adds the tion and use of knowledge than ever before’’
knowledge base as another factor of production’’ (Foray and Lundvall, 1996). According to other
(p. 3). authors, however, the concept was rather a rhe-
torical term, a metaphor ‘‘often used in a superfi-
For the OECD, the work of the organization on cial and uncritical way’’ (Smith, 2002, p. 5). Briefly
NSI built precisely on the new growth theory, stated, it can be said that the term knowledge-
for it looked at the ‘‘effective functioning of all based economy referred to at least two (supposed)
the components of a national system of inno- characteristics of the new economy. Firstly,
vation’’. knowledge would be more quantitatively and
On the second theme—innovation—a dynamic qualitatively important than before. Secondly,
NSI was again suggested as the key to effectiveness. applications of information and communication
But understanding NSI required ‘‘better measures technologies (ICT) would be the drivers of the new
of innovation performance and output indicators’’ economy.
(OECD, 1995d, p. 5). ‘‘Most current indicators of For a ‘‘systematic’’ definition of knowledge-
science and technology activities, such as R&D based economies, we have to turn to the OECD
expenditures, patents, publications, citations, and STI Outlook series. In 1996, the OECD defined
the number of graduates, are not adequate to knowledge-based economies as: ‘‘economies which
 The Knowledge-Based Economy 21

are directly based on the production, distribution The idea of the scoreboard followed the con-
and use of knowledge and information’’ (OECD, struction of the STAN database (Structural
1996g, p. 3). A more or less identical definition has Analysis) and its affiliates in the early 1990s. One
carried over into every subsequent document of of the first reports to come out of the new da-
the organization dealing with the knowledge-based tabases was a scoreboard of sixteen indicators
economy. covering R&D, investment, international trade,
In the course of its efforts to define the knowl- employment and structural change (OECD,
edge-based economy, the OECD invented two 1993a). Thereafter, and starting in 1995, an
related concepts that gave it more substance. The Industry and Technology Scoreboard of Indicators
first concerned ‘‘investment in knowledge’’, and the was published every 2 years. It included a series
definition was entirely statistical: ‘‘expenditures of economic and science and technology indica-
directed towards activities with the aim of enhanc- tors, graphically illustrated, ranking countries on
ing existing knowledge and/or acquiring new different dimensions, and with a very brief ana-
knowledge or diffusing knowledge’’ (Kahn, 2001; lytical text (two to five paragraphs per indica-
OECD, 2001c, p. 14). According to the OECD, tor).
investment in knowledge is the sum of expenditures From the scoreboards, the DSTI also pro-
on R&D, higher education and software. The duced compendiums specifically designed for
second newly-coined concept was in fact a variation ministerial meetings: one in 1995 (OECD,
on the (controversial) indicator of high-technology 1995c), and another in 1999 (OECD, 1999d).
intensity: knowledge-based industries. Knowledge- These documents were ‘‘synthetic and attractive’’
based industries were defined as those that had the statistical and analytical documents that ‘‘tell a
following three characteristics: (1) a high level of story readily understandable by generalists and
investment in innovation, (2) intensive use of ac- the press’’ (OECD, 1998b, p. 3). It included a set
quired technology, and (3) a highly-educated of indicators, each presented on one page, with
workforce (Webb, 2000, 2001). graphs and bullet points highlighting the main
But the main conceptual work on the knowl- trends.
edge-based economy at the OECD had to do with The 1999 issue of the compendium dealt with
collecting a whole set of indicators under the the knowledge-based economy. It collected 32
concept of the knowledge-based economy. indicators,4 of which nine were specifically identi-
Recalling Foray and Lundvall’s comment that fied as measuring the knowledge-based economy
evidence documenting trends in the knowledge- (Appendix 3). The indicators showed, among
based economy was in fact anecdotal (Foray and other things, that: (1) knowledge-based industries
Lundvall, 1996, p. 16), the OECD suggested five have been outpacing GDP growth (up to 50% that
categories of indicators to measure the knowledge- of GDP), (2) OECD countries spend more and
based economy: inputs, stocks and flows, outputs, more resources on the production of knowledge
networks, and learning (OECD, 1996g, p. 20). The (8% of GDP, a share as important as that on
first measurement exercise, to which we now turn, physical investments), (3) over 60% of the popu-
appeared in 1999, in the form of a scoreboard of lation aged 25–64 has completed upper secondary
indicators. schooling, (4) OECD economies invested 7% of
GDP on ICT, (5) R&D was expanding (US$500
billion in 1997), (6) the business sector was the
Measuring the knowledge-based economy
main funder and performer of R&D (over 60%).
In the mid-1990s, the DSTI restructured its pub- The statistics were updated in 2000 (OECD,
lication (OECD, 1994a, 1995b). Until then, four 2000b), and the number of indicators increased in
reviews and/or outlooks had been prepared. The 2001 (Appendix 4) (OECD, 2001c).
Secretariat suggested merging the ‘‘Industrial’’ and The work behind the measurement of the
‘‘Science and Technology Policy’’ reviews into one knowledge-based economy was conducted in part
(STI Outlook), to be published every two years. In by the group of National Experts on Science and
the alternating year, a scoreboard of indicators Technology Indicators (NESTI), via a project
would be published. called Blue Sky, launched in 1996 (OCED, 1996a,
22 Godin

b). Six priority areas were identified for the concept and the measurement of these dimensions.
development of a new generation of indicators: On the first comparison, it seems clear that
everyone was dissatisfied with the existing indica-
– Mobility of human resources, tors and suggested new measurements early in the
– Patents, process:
– Innovation capabilities of firms,
– Internationalization of industrial R&D, K. Smith (Smith, 1995):
– Government support to innovation,
– Information technology. – Inter-industry transactions embodying flows of
technological knowledge,
The aim was to develop two types of statistical – Patterns of use of formal scientific knowledge,
products (OECD, 1996a, p. 2). The first were data – Patterns of technological collaboration between
and indicators, published on a regular basis, i.e. firms, universities and research institutions,
yearly. The second were data sets for use in specific – Measures of personnel mobility and related
studies, like those on the knowledge-based econ- interactions.
omy. Two conferences were held, one in 1996 and
another in 1998, where the six above areas were D. Foray (Foray, 2000a, 2000b):
targeted and a program of work was developed for
each, the various programs each being led by a – Basic attributes of the knowledge base,
specific country or group of countries. The criteria – Systems and mechanisms for transferring
for the proposed topics were the following: they knowledge,
must (1) be relevant from a policy point of view, – Effectiveness of the knowledge base.
(2) be feasible in terms of methodology, (3) be not
too resource-consuming, (4) refer to well identified OECD (OECD, 1996g):
questions, and (5) be topics in which the OECD
has a role to play and a comparative advantage. – Knowledge stocks and flows,
However, it was clearly mentioned that: ‘‘budget – Knowledge rates of return,
restrictions (and the burden for respondents) set – Knowledge networks,
strict limits on the possibility of developing new – Knowledge and learning.
surveys. Against this background, the endeavor
for building new data and indicators will consist From an analysis of the OECD scoreboards of
mainly in extracting more and new information indicators, however, one must conclude that the
from the existing stock of data’’ (OECD, 1996e, knowledge-based economy is above all a label.
p. 4). This meant measuring new dimensions of Most, if not all, of the indicators collected are
science and technology using links between exist- indicators that the OECD had already been
ing data rather than by producing new data, measuring for years or even decades, or are
linking of existing data being far less expensive variations on old indicators that had suddenly
than developing brand-new surveys (OECD, become subsumed under the concept of the
1996b, e). knowledge-based economy.6 The documents sim-
ply aligned a series of indicators and fact-sheets
placed under a new umbrella—the knowledge-
based economy. In 1999, nine of the thirty-two
indicators were specifically located and analyzed
3. Frameworks, labels and buzzwords
under the concept—although the document as a
Did the new indicators measure up to their whole was called The Knowledge-Based Economy.
promise?5 The question can be answered by com- By 2001, there were twenty-five. In fact, a simple
paring the output to the recommendations of the reorganization of categories (turning indicators
promoters of the concept of the knowledge-based from the 1999 category ‘‘science and technology
economy, among them the OECD itself, or by policies’’, as well as some from the ‘‘output and
analyzing the definition and dimensions of the impact’’ category, into the ‘‘creation and diffusion
 The Knowledge-Based Economy 23

of knowledge’’ category) was responsible for the How can we explain the situation? Do we really
increase. All 59 indicators from the scoreboard, need such fuzzy concepts? Do we really need
however, were now analyzed as measuring the another concept en lieu et place of the previous but
knowledge-based economy in the introductory more or less identical one? To explain the perva-
text. siveness and popularity of these concepts in the
If we now look at the OECD definition of official literature, we must examine the policy
knowledge-based economies (‘‘economies which process and the role of the OECD in this process.7
are directly based on the production, distribution The OECD is a think-tank, not an advocacy
and use of knowledge and information’’), we think-tank looking for media exposure, but a
would expect to find indicators on the production research think-tank that feeds policy-makers. It
as well as the distribution and diffusion of uses two strategies to this end. The first is insti-
knowledge. And indeed, several indicators dealt tutional, and concerns the activities below:
with the production side of knowledge, as has
always been the case with science and technology – Organizing conferences and workshops to
indicators (R&D, human resources, patents). But discuss policy issues.
the few that concern distribution and diffusion – Publishing books, reports, studies and journals,
either concentrated on ICT, or were still measured brief texts (for ministers) and press releases.
using input and activity indicators rather than – Setting up committees and working groups
outputs and impacts. It is clear that the indicators composed of national delegates.
draw on available data sets, and that the knowl- – Sharing workload with member countries.
edge-based economy is above all a rhetorical – Inviting or hiring national bureaucrats to join
concept. the organization.
In fact, a critical analysis of the concept re-
veals the following three rhetorical moves. Firstly, Academics are regularly enrolled in these
the concept is justified with the same arguments activities. They are consulted or invited to partic-
as those on NSI, information society or New ipate in various forums to ‘‘enlighten’’ bureaucrats
Economy: knowledge and ICT are said to be and share ideas. With regard to statistics, for
important factors that bring about important example, the OECD: (1) digests academics’ works
changes in the economy (Godin, 2004). One finds by reading (and citing) recent studies, inviting
here a network of concepts that feed at the same academics as speakers to workshops and confer-
source and which reinforce each other. Secondly, ences, and hiring them as consultants or staff
the content of the concept is composed of a (Godin, 2004); (2) internationalizes its statistics (as
synthesis or collection of recent ideas in the field well as official national statistics) to make them
of science and technology studies. Like the NSI comparable between countries, and constructs
literature that brought together the latest ideas on standards, rankings, and policy targets (Godin,
tacit learning, learning-by-doing, user-producer 2005).
interactions, diffusion of technologies, clusters It is based on this material that a second strat-
and networks, the concept of the knowledge- egy is developed, a rhetorical strategy: organizing
based economy collected fashionable ideas from and packaging the previous material into a con-
new growth theories, NSI and the information ceptual (or policy) framework with buzzwords and
society. Thirdly, the two previous moves combine slogans as labels. Figures and graphs are also used
to make the concept an umbrella concept: the liberally to facilitate reading. Such a strategy was
knowledge-based economy is a term that now one of the factors for the success of the National
covers statistics in all areas of science and tech- Science Foundation Science Indicators publication
nology, broadly defined—R&D, ICT, education, in the 1970s (Godin, 2003), and dates back to the
etc. Therefore, it is very fertile ‘‘theoretically’’ and beginning of this century, at the very least
empirically, and can be used for any issues in (Mitchell, 1919):
science and technology—and anywhere: titles of
whole reports; chapters or introductory sections; Secure a quantitative statement of the critical ele-
lists of indicators; and ... policies. ments in an official’s problem, draw it up in concise
24 Godin

form, illuminate the tables with a chart or two, bind and concepts on science and technology, and any
the memorandum in an attractive cover tied with a indicators, into a conceptual framework, i.e., all
neat bow-knot (...). The data must be simple enough under one roof. This is a fertile strategy for rapidly
to be sent by telegraph and compiled overnight.
producing new papers and discourses, and alerting
policy-makers to new trends. But what impact has
The rhetorical strategy was motivated by several
the concept had in recent history? Three possible
factors. Linked as it is to the policy process, the
areas of influence could be explored.
OECD has to feed ministers regularly for their
The first is policy. The concept has probably
meetings. An easy way to do this is to turn readily
helped to sustain, or at the very least give in-
available academic fads into keywords (or buzz-
creased visibility to, science and technology poli-
words), then into slogans in order to catch the
cies. In a context of budget constraints, and after
attention of policy-makers. Buzzwords and slogans
a decade of haphazard trends in R&D invest-
help sell ideas: they are short, simple, and easy to
ments, buzzwords such as the knowledge-based
remember. At several places in its documents, the
economy helped re-launch discourses on science
OECD recognized that its indicators were ‘‘not
and technology. Several recent new science and
adequate to describe the dynamic system of
technology policies now include the concept of
knowledge development and acquisition’’ (OECD,
knowledge-based economy or, simply, knowl-
1995d). But they probably appeared sufficiently
edge.8
‘‘objective’’, simply because they were quantitative,
The second area of possible impact is statistics.
to draw the attention of policy-makers, politicians
To date, however, the concept of the knowledge-
and the general public to matters of science and
based economy has had a very limited impact on
technology.
statistics. Traditional statistics and indicators,
A second factor explaining the OECD strategy
based on input and activity data sets, still domi-
is the rush to publish. The OECD publishes
nate the measurement of science and technology
biannual, yearly and biennial reports, among them
and, above all, the concept of the knowledge-
those for ministers’ conferences, where timeframes
based economy. Certainly there have been some
are very tight. Umbrella concepts are very fertile
efforts in new fields (i.e., mobility of person-
for producing documents. They synthesize what is
nel)—although none really fruitful yet—but there
already available, what comes from day-to-day
has been far less effort on the central and new
work conducted in other contexts and, above all,
characteristics of the supposed knowledge-based
what is fashionable, often at the price of original
economy, like tacit knowledge. The major inno-
work.
vation remains simply the collection of several
It remains that the concept of the knowledge-
indicators from different sources under a new
based economy is a rhetorical concept. Certainly,
label.
important methodological difficulties await any-
Where the concept has been most effective,
one interested in measuring intangibles like
however, was in spawning other concepts. The
knowledge. But the objective of a policy orga-
concept of the knowledge-based economy recently
nization is not, above all, accuracy, but influence.
gave rise to another concept, now much in vogue
As Foray and Lundvall once suggested: ‘‘One
in the OECD and among its member coun-
function of the notion of the knowledge-based
tries—knowledge management (OECD, 2000a):
economy is to attract the attention of statisticians
and other experts in the field of social and eco-
Once there was a focus on the production, trans-
nomic indicators’’ (Foray and Lundvall, 1996, p. mission and use of productive knowledge, a policy
18). interest of the 90s, the need for knowledge man-
agement, and its understanding was an obvious
next step (...). Knowledge management covers any
intentional and systematic process or practice of
4. Conclusion creating, acquiring, capturing, sharing and using
productive knowledge, wherever it resides, to
The knowledge-based economy is an umbrella enhance learning and performance in organizations
concept: it allows one to gather existing ideas (Foray, 2001, p. 2).
 The Knowledge-Based Economy 25

Under the directorship of its Center for Educa- management practices were defined very loosely
tional Research and Innovation (CERI), the (see Appendix 5).
OECD recently launched a project on the eco- Nevertheless, from recent history, we can pre-
nomics and management of knowledge. In line dict without much hesitation that the buzzword of
with OECD recommendations, some countries the next few years will be knowledge management,
have now initiated surveys on knowledge man- and the same rhetorical strategies will be applied
agement practices (Edler, 2002; Statistics Canada, anew. In fact, the same authors that participated in
2002), and the European Commission will soon the OECD writings on the knowledge-based
launch a survey of innovation-management economy continue to contribute to the new work,
methodologies (CEC, 2003). The surveys aim to among them Lundvall and Foray. A case of
measure the kinds and uses of knowledge institutional coherence but, above all, a marvelous
management practices in firms, the reasons for case-study in progress on the semantic fertility of
doing their use, and the budget allocated to the concepts and the rhetorical side of science and
activities. To date, however, the results are far technology policies.
from original. Learning that a majority of firms
(86% in the case of Canada) manage some aspect
of their knowledge, for example, is not particularly
informative,9 and is even less so since knowledge Appendix

Appendix 1
Indicators of knowledge flows in NSI (OECD, 1997b)

Type of knowledge flows Main (source of) indicator

Industry alliances
Inter-firm research co-operation Firm surveys
Literature-based counting
Industry/university interactions
Co-operative industry/university R&D University annual reports
Industry/University co-patents Patent record analysis
Industry/University co-publications Publications analysis
Industry use of university patents Citation analysis
Industry/University information-sharing Firm surveys
Industry/University institute interactions
Co-operative industry/institute R&D Government reports
Industry/institute co-patents Patent record analysis
Industry/institute co-publications Publications analysis
Industry use of research institute patents Citation analysis
Industry/institute information-sharing Firm surveys
Technology diffusion
Technology use by industry Firm surveys
Embodied technology diffusion Input-output analysis
Personnel mobility
Movement of technical personnel among industry, university and research Labor market statistics university/institute reports
26 Godin

Appendix 2
Modern societal transformations identified since 1950 (Beniger, 1986)

Year Transformation Source

1950 Lonely crowd Riesman, 1950

Posthistoric man Seidenberg, 1950
1953 Organizational revolution Boulding, 1953
1956 Organization man Whyte, 1956
1957 New social class Djilas, 1957; Gouldner, 1979
1958 Meritocracy Young, 1958
1959 Educational revolution Drucker, 1959
Postcapitalist society Dahrendorf, 1959
1960 End of ideology Bell, 1960
Postmaturity economy Rostow, 1960
1961 Industrial society Aron, 1961, 1966
1962 Computer revolution Berkeley, 1962; Tomeski, 1970; Hawkes, 1971
Knowledge economy Machlup 1962, 1980; Drucker, 1969
1963 New working class Mallet, 1963; Gintis, 1970; Gallie, 1978
Postbourgeois society Lichtheim, 1963
1964 Global village McLuhan, 1964
Managerial capitalism Marris, 1964
One-dimensional man Marcuse, 1964
Postcivilized era Boulding, 1964
Service class society Dahrendorf, 1964
Technological society Ellul, 1964
1967 New industrial state Galbraith, 1967
Scientific-technological revolution Richta, 1967; Daglish, 1972; Prague Academy, 1973
1968 Dual economy Averitt, 1968
Neocapitalism Gorz, 1968
Postmodern society Etzioni, 1968; Breed, 1971
Technocracy Meynaud, 1968
Unprepared society Michael, 1968
1969 Age of discontinuity Drucker, 1969
Postcollectivist society Beer, 1969
Postideological society Feuer, 1969
1970 Computerized society Martin and Norman, 1970
Personal society Halmos, 1970
Posteconomic society Kahn, 1970
Postliberal age Vickers, 1970
Prefigurative culture Mead, 1970
Technetronic era Brzezinski, 1970
1971 Age of information Helvey, 1971
Compunications Oettinger, 1971
Postindustrial society Touraine, 1971; Bell, 1973
Self-guiding society Breed, 1971
Superindustrial society Toffler, 1971
1972 Limits to growth Meadows, 1972; Cole, 1973
Posttraditional society Eisenstadt, 1972
World without borders Brown, 1972
1973 New service society Lewis, 1973
Stalled society Crozier, 1973
1974 Consumer vanguard Gartner and Riessman, 1974
Information revolution Lamberton, 1974
1975 Communications age Phillips, 1975
Mediacracy Phillips, 1975
Third industrial revolution Stine, 1975; Stonier, 1979
1976 Industrial-technological society Ionescu, 1976
Megacorp Eichner, 1976
 The Knowledge-Based Economy 27

Appendix 2
Continued

Year Transformation Source

1977 Electronics revolution Evans, 1977

Information economy Porat, 1977
1978 Anticipatory democracy Bezold, 1978
Network nation Hiltz and Turoff, 1978
Republic of technology Boorstin, 1978
Telematic society Nora and Minc, 1978; Martin, 1981
Wired society Martin, 1978
1979 Collapse of work Jenkins and Sherman, 1979
Computer age Dertouzos and Moses, 1979
Credential society Collins, 1979
Micro millennium Evans, 1979
1980 Micro revolution Large, 1980, 1984; Laurie, 1981
Microelectronics revolution Forester, 1980
Third wave Toffler, 1980
1981 Information society Martin and Butler, 1981
Network marketplace Dordick, 1981
1982 Communications revolution Williams, 1982
Information age Dizard, 1982
1983 Computer state Burnham, 1983
Gene age Sylvester and Klotz, 1983
1984 Second industrial divide Piore and Sabel, 1984

Appendix 3 Appendix 3
Indicators for the knowledge-based economy: (OECD, 1999d) Continued

1. Knowledge-based economy c. Technological alliances

a. Investments in capital and knowledge d. Co-signatures and co-inventions
b. Human resources (education)
5. Output and impact
c. GERD
a. Scientific publications
d. Fundamental research
b. Patents
e. Business R&D
c. Innovation
f. R&D in manufacturing industries
d. Productivity
g. R&D in services
e. Share of knowledge industries in added value
h. Innovation
f. High technology trade
i. Venture capital
g. Technological balance of payments
2. Information and communication technologies (ICT)
a. ICT spending as a percentage of GNP
b. Use of computers
c. Internet and e-commerce
d. ICT sector Appendix 4
e. Innovation in ICT Indicators from the OECD STI scoreboard: (OECD, 2001c)
3. S&T policies
A. Creation and Diffusion of Knowledge
a. Public R&D/GNP
Investments in knowledge
b. Socio-economic objectives of R&D
Domestic R&D expenditure
c. Share of public R&D
R&D financing and performance
d. R&D financial flows between sectors
Business R&D
e. Public support to R&D
Business R&D by industry
f. Business R&D by size
R&D in selected ICT industries and ICT patents
g. Tax subsidies
Business R&D by size classes of firms
4. Globalization Collaborative efforts between business and the public sector
a. R&D abroad R&D performed by the higher education and
b. Patent ownership government sectors
28 Godin

Appendix 4 Appendix 4
Continued Continued

A. Creation and Diffusion of Knowledge Technology and knowledge-intensive industries

Public funding of biotechnology R&D and Structure of OECD economies
biotechnology patents International trade by technology intensity
Environmental R&D in the government budget International trade in high and
Health-related R&D medium-high-technology industries
Basic research Comparative advantage by technology intensity
Defence R&D in government budgets
Tax treatment of R&D
Venture capital
Human resources
Appendix 5
Human resources in science and technology
Knowledge management practices. Statistics Canada (2002)
Researchers
International mobility of human capital Leadership
International mobility of students Knowledge management practices were a responsibility of
Innovation expenditure and output managers and executives
Patent applications to the European Patent Office (EPO) Knowledge management practices were explicit criteria for
Patent families assessing worker performance
Scientific publications Knowledge management practices were a responsibility of
B. Information Economy non-management workers
Investment in information and communication Knowledge management practices were a responsibility of
technologies (ICT) the knowledge officer or knowledge management unit
Information and communication technology Knowledge Capture and Acquisition
(ICT) expenditures Firm captured and used knowledge obtained from other
Occupations and skills in the information economy industry sources such as industrial associations,
Infrastructure for the information economy competitors, clients and suppliers
Internet infrastructure Firm captured and used knowledge obtained from public
Internet use and hours spent on-line research institutions including universities and
Access to and use of the Internet by households government laboratories
and individuals Firm dedicated resources to detecting and obtaining
Internet access by enterprise size and industry external knowledge and communicating it within the firm
Internet and electronic commerce transactions Firm encouraged workers to participate in project teams
Price of Internet access and use with external experts
Size and growth of the ICT sector
Contribution of the ICT sector to employment growth Training and Mentoring
Contribution of the ICT sector to international trade Firm encouraged experienced workers to transfer their
Cross-border mergers, acquisitions and alliances knowledge to new or less experienced workers
in the ICT sector Firm provided informal training related to knowledge
management
C. Global Integration of Economic Activity Firm encouraged workers to continue their education by
International trade reimbursing tuition fees for successfully completed
Exposure to international trade competition by industry work-related courses
Foreign direct investment flows Firm offered off-site training to workers in order to keep
Cross-border mergers and acquisitions skills current
Activity of foreign affiliates in manufacturing Firm provided formal training related to knowledge
Activity of foreign affiliates in services management practices
Internationalization of industrial R&D Firm used formal mentoring practices, including
International strategic alliances between firms apprenticeships
Cross-border ownership of inventions
International co-operation in science and technology Policies and Strategies
Technology balance of payments Used partnerships or strategic alliances to acquire
D. Economic Structure and Productivity knowledge
Differences in income and productivity Policies or programs intended to improve worker retention
Income and productivity levels Values system or culture intended to promote knowledge
Recent changes in productivity growth sharing
Labor productivity by industry Written knowledge management policy or strategy
 The Knowledge-Based Economy 29

Appendix 5 CEC, 2000, Innovation in a Knowledge-Driven Economy, COM

Continued 567.
CEC, 2003, Innovation: Forthcoming Policy Studies – Innovation
Communications Management and the Knowledge-Driven Economy.
Workers shared knowledge by preparing written Commisariat du Plan, 2002, La France dans l’e´conomie du
documentation such as lessons learned, training manuals, savoir: pour une dynamique collective, Paris: Groupe de
good work practices, articles for publication, etc. travail Vignier.
(organizational memory) David, P. and D. Foray, 1995, ‘Assessing and Expanding the
Workers shared knowledge by regularly updating databases of Science and Technology Knowledge Base,’ STI Review 16.
good work practices, lessons learned or listings of experts Dosi, G., 1988, Technical Change and Economic Theory, Lon-
Workers shared knowledge in collaborative work by project don: Pinter.
teams that are physically separated (‘‘virtual teams’’) Edler, J., 2002, German Pilot Study, Fraunhofer Institute for
Incentives Systems and Innovation Research, Karlsruhe.
Knowledge sharing was rewarded with monetary incentives Edquist, C. (ed.), 1997, Systems of Innovation: Technologies,
Knowledge sharing was rewarded with non-monetary Institutions and Organizations, London: Pinter.
incentives European Union, 2003, Third European Report on Science
and Technology Indicators: Towards a Knowledge-Based
Economy.
Foray, D., 2000a, ‘Characterizing the Knowledge Base: Avail-
able and Missing Indicators’, in OECD, Knowledge Man-
agement in the Learning Society, Paris: OECD, pp. 239–257.
Foray, D., 2000b, L’e´conomie de la connaissance, Paris: La
Notes Découverte.
1. And its variants: information economy, digital economy, Foray, D., 2001, Terms of Reference for a Project on Design,
global village, etc. Implementation and Exploitation of an International Survey
2. Compare OECD (1993b) with OECD (1994b). of Knowledge Management in the Private Sector, DSTI/
3. Including, for the first time in an OECD statistical publi- ICCP/IIS/RD (2001) 5, Paris: OECD.
cation, bibliometric indicators. Foray D. and B.-A. Lundvall, 1996, ‘The Knowledge-Based
4. For an overview of the results of the NESTI program, see Economy: From the Economics of Knowledge to the
OECD, (2002c). Learning Economy,’ in OECD, Employment and Growth in
5. This is not peculiar to the OECD. The European Union the Knowledge-Based Economy, Paris: OECD, pp. 11–32.
subtitled its Third European Report on Science and Technology Freeman, C., 1987, Technology Policy and Economic Perfor-
Indicators (European Union, 2003). A similar strategy is also in mance, London: Pinter.
vogue in policy documents: see, OECD (1998a, 1998b, 1998c, Godin, B., 1998, ‘Writing Performative History: The New New
1998d; 1999b). Finally, academics behave similarly: for exam- Atlantis’ Social Studies of Science 28 (3), 465–483.
ple, and contrary to its claims, D. Foray did not totally succeed Godin, B., 2003, The Emergence of Science and Technology
in distinguishing the traditional economics of R&D and inno- Indicators: Why Did Governments Supplement Statistics
vation from the knowledge-based economy, at least with regard with Indicators? Research Policy 32 (4), 679–691.
to the policy issues. See: D. Foray (2000a, b). Godin, B., 2004, ‘The New Economy: What the Concept Owes
6. Policy-makers are no exception, however. Buzzwords are to the OECD,’ Research Policy, 33, 679–690.
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‘‘Triple Helix’’. For critical analyses, see Godin (1998) and Technology: 1920 to the Present, London: Routlege.
Shinn (2002). Lundvall recently imitated the strategy of the Government of Canada, 2002, Canada’s Innovation Strategy, I.
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