The application of knowledge – as manifested in areas such as entrepreneurship and innovation, research and development, software and design, and in people’s education and skills levels – is now recognized to be one of the key sources of growth in the global economy. Countries such as Korea, Malaysia, Finland, China and Chileillustrate the rapid progress that can be made over relatively short periods of time by pursuing coherent strategic approaches to building their country’s capabilities to create, access, and use knowledge.
The KAM was designed by the Knowledge for Development Program to proxy a country’s preparedness to compete in the knowledge economy using 148 structural and qualitative variables. The comparison is undertaken for a group of 146 countries, which includes most of the OECD economies and more than 90 developing countries.To allow for a flexible cross-country comparison, each variable is available in both actual and relative value (normalized on a scale of 0 to 10 relative to other countries in the comparison group.)
The unique strength of the KAM methodology is its cross-sectoral approach, allowing the user to take a holistic view of a wide range of relevant factors rather than just focusing on one area. The variables serve as proxies for the 4 pillars of theKnowledge Economy framework:
An economic and institutional regime to provide incentives for the efficient use of existing and new knowledge and the flourishing of entrepreneurship;
An educated and skilled population to create, share, and use knowledge well;
An efficient innovation system of firms, research centers, universities, consultants and other organizations to tap into the growing stock of global knowledge, assimilate and adapt it to local needs, and create new technology;
Information and communication technology to facilitate the effective creation, dissemination, and processing of information.
Included in the KAM are several variables that track the overall performance of the economy. These variables help to illustrate how well an economy is actually using knowledge for its overall economic and social development.
The KAM offers several pre-set display modes for simple visual representations of a country's Knowledge Economy readiness. A country can be assessed and compared with others on the aggregate performance on each of the KE pillars or the overall Knowledge Economy and Knowledge indexes for 1995,2000 and the most recent available year. The KAM also makes possible customized country analysis and cross-country comparison on the indicators hand-picked by the user. This allows for capturing various aspects of a country's ability to generate, diffuse and apply knowledge for economic development.