Background and Introduction to the Collaboration

Back to Knowledge and Skills for the New Economy

The term 'knowledge economy' has been used to explain the increased productivity of OECD countries with the fastest growth rates in the 1990s. It is postulated that this has been achieved by several factors:

• Rapid technological change and significant investment has been made in ICT and its diffusion in both new and traditional economic sectors.
• The 'knowledge-based industries,' such as high-technology goods, high- and medium-technology manufacturing, business, and social and personal services, have made an increased contribution to GDP and employment.
• Organizational changes within firms have enabled them to shorten innovation cycles and realize the benefits of ICT investments.
• There is some evidence of short job tenure in highly competitive sectors.

These factors, embedded in the fundamentals of macroeconomic stability, openness and competition, and effective economic and social institutions, signal the emergence of the knowledge economy.

These changes have important implications for education and training. There is a demand for higher skill levels in most occupations. A new range of competences such as adaptability, team work, communication skills and the motivation for continual learning have become critical. All individuals now need access to learning on an ongoing, lifelong basis. This lifelong learning perspective requires a stronger alignment of institutions and policies for the creation of high performance learning system.

For developing countries that wish to move towards the knowledge economy, their education and training systems face a dual challenge. First, they must overcome long-standing problems: expansion of coverage to achieve universal access to basic education; significant expansion of secondary and tertiary provision; and a set of institutional reforms to improve the linkages between education and the labor market. In addition, these countries need to embark on a further set of reforms. These reforms need to raise the quality of education and training through changes to content and pedagogy and through the use of modern technologies; and, to significantly expand access to post-school learning opportunities, especially for adult workers, in a cost-effective way.