Creating Wealth from Knowledge
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Creating Wealth from Knowledge

Meeting the Innovation Challenge

Edited by John Bessant and Tim Venables

This book illustrates that, although innovation has always mattered in economic development, simply increasing expenditure in creating knowledge may not be the answer: we need to look at the whole system through which such knowledge translates to value creation.
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Chapter 17: Conclusion

John Bessant and Tim Venables


John Bessant and Tim Venables The shift towards knowledge-based economic development is playing out as we write. Moving from local-level exchange of goods and services to ‘world trade’ emerged when trading nations were able not only to exploit natural advantages such as availability of raw materials and energy supplies, but also deploy technologies to minimize the cost of labour, transport and distribution. In the twenty-first century the volume of such trade has grown massively and includes not only physical goods and services but also a high proportion of intangible services. But significantly the balance of trade – especially in terms of manufactured goods – has moved hugely in favour of low wage cost and rapidly growing economies like India and China. The arguments for knowledge economies have been well made but they risk missing a key part of the puzzle. If we are moving to an era of knowledge-based competition, then we need to understand far more about how this model works – and how to build and run a knowledge-based economy. It is too simplistic to see this as a matter of increasing the volume of resources on the input side, hoping that an increase in the absolute volume of knowledge produced will magically convert into competitive goods and services. Quite apart from the direct costs of doing so on the necessary scale, there is the difficulty that this investment will increasingly be diluted by the parallel investments of a growing number of players. Where the world is spending...

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