Abstract

Knowledge is generally considered to be one of the most important drivers of economic growth. The difference between a knowledge-based economy (KBE) and a resource-based one is that in the former, the main competition between individuals, firms, and countries is the ability to innovate. Other forms of competition, for example through pricing strategies and access to resources, become secondary. Generally, knowledge is information combined with technology that dramatically increases its impact when shared. Organizations such as the Organization for Economic Cooperation and Development (OECD), Asia Pacific Economic Cooperation Forum (APEC), Australian Bureau of Statistics (ABS) and the World Bank Institute (WBI) have developed different KBE frameworks to indicate the extent of countries’ knowledge base and implicitly to guide policy. But these frameworks have little in theoretical underpinnings and applying them universally across all countries in different regions, at different stages of development and with different institutional, social and economic characteristics may be misleading and result in inappropriate policy responses. In this paper we propose a framework that clearly distinguishes input-output indicators of a knowledge-based economy under four important dimensions: knowledge acquisition, knowledge production, knowledge distribution and knowledge utilization, and attempt to adapt them in a practical policy oriented approach for an economy like Brunei Darussalam, which is attempting to transform from a resource-based to a knowledge-based economy.

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