Development covers a wide range of meaning from national economic growth to individual well-being.The definition and understanding on development has changed immensely over the period as the quest for development experts to define, measure, and amplify the understanding about development continued. Development thinking[1], strategies and theories have also evolved along with change in values of development (Potter, 2002).
Till date, the principles of economic growth remained at the core of development interventions in terms of resource mobilization by state. The idea of economic development again was not sufficient to fulfil the quest to define and measure development in terms of improvement in human-well being. Amartya Sen and Denis Goulet were the prominent thinkers in this field who attempted to challenge economic perspective of development. Goulet introduced the idea of life sustenance, self-esteem and freedom as three key components of development where he claims that income is only sufficient to enhance life-sustenance i.e. meeting basic needs (Thirlwarll, 2002). Amartya Sen went much deeper in introducing freedom as key factor for development. According to Sen, freedom, as one of the basic elements of development, allows a person to choose his/her destiny and also make efforts through set of capabilities and functionings (Sen, 1999). Sen also does not discount income since he considers income as one of the determinants of capabilities and functioning. Muhbub Ul Haq added the perspective of human development which is being advocated through UNDP, and Bruntland commission introduced sustainable development in 1990s incorporating environmental factors.
Though the idea of human development and sustainable development attempted to broaden the scope of development efforts, the economic growth principles still apply to a large extent which can be visible from the fact that financial institutions like World Bank, ADB are major development partners for almost all of the developing country. The discussions above clearly indicate to the fact that main development problem of 21st century is not a growth but distribution of the returns from growth, and improvement in human factor. There is serious need to review our previous development approaches.
In my opinion, our development efforts failed to reach poor because we depended on money based economy. Money based economy which required monetary investment and also measured outcomes in terms of money contributed to broaden the social divides between rich and poor. The person with money had access to the benefits of development interventions, thus, poverty of inequality increased marginally. Here, shifting of development approach to ‘knowledge economy’ might be a solution.
Globally, the presence and operation of ‘knowledge economy’ have been realized among government, development partners, planners, experts and non-government organizations. The knowledge economy is believed to have higher multiplier factor than ‘money economy’ and efficient ways to transfer from one person to other.
It is time to think how ‘knowledge economy’ can be extracted in solving existing development problems so that the multiplier effects could lead to faster solutions to problems of captivating poverty, hunger and low socio-economic profile. The knowledge economy largely relies on research and innovation. Research is a production process and innovation is an output.
Developing countries like Nepal are facing number of problems. Till this date, we depended on ‘money based economic development principle’, thus, we invested money and the results were not as expected. The money only went to richer sections of society, and in turn, the investments increased the level of inequality. Hence, it is time to invest through ‘knowledge economy principles’ in a way that the interventions will remain indifference to the people based on their money and physical assets.
Sen, A. (1999). Development as Freedom: Human Capability and Global Need, New York: Knopf.
Thirlwall, A.P. (2002). Development as economic growth, New York: Oxford University Press (published within a book titled Companion to Development Studies edited by Vandana Desai and Robert B. Potter).
Potter, R.B. (2002). Theories, Strategies and ideologies of development, New York: Oxford University Press (published within a book titled Companion to Development Studies edited by Vandana Desai and Robert B. Potter).
[1] Development thinking is a term used by Potter (2002) as a catch-all phrase indicating sum total of ideas about development, that is, including development theory, strategy and ideology.
I would like to thank DevWorker for posting the blog on such an important and interesting subject. Knowledge economy is one that has the policies, institutions, and capabilities in place to make effective use of knowledge to further its economic and social development. The time has come to review the previous development approaches based on economic growth that emphasized on pouring money for achieving growth and development. Knowledge economy helps to develop entrepreneurship and innovation, research and development resulting in economic restructuring. Hence, developing countries must exploit the opportunities presented by the global knowledge revolution to reduce poverty and promote economic and social development by building on their strengths and by planning appropriate investments in human capital, effective institutions, relevant technologies, and innovative and competitive enterprises. In this way they can capitalize on the knowledge era and make the transition to the knowledge economy.
ReplyDeleteIt is an interesting and must required topic for youths like us and our country's development. To uplift Nepal’s poor people, knowledge is what the country must focus as a primary agenda of the planning documents and it's implementation must be through the red book. The examples of India in generating knowledgeable youth through massive investment in Education sector is what we must apply in our development stream for the overall development of our country. So, all of us have equal responsibilities for advocating the government towards a new development approach i.e Knowledge Economy.
ReplyDeleteThanks to DevWorker for bringing an important topic for discussion. Knowledge economy has been considered to be better option to acquire equitable development outcomes compared to market led and money based economy, for this reason OECD countries may have been chewing this issue since decades. However, economists of these countries are in quest of other better options despite of its substantial advantages.
ReplyDeleteAs the author of this post argued development has become contextual, multidimensional, sometimes slippery, rarely tangible, frequently tacit and extremely heterogeneous concept due to continuous changes on governing politics, economic policies and development strategies adopted with the hope to achieve desired development outcomes by developed world economies repeatedly. In such scenario, it is almost impossible for developing world to decide which of the economy to follow in order to achieve 'equitable development' for its population.
If we are advocating 'equitable development' for developing countries like Nepal, knowledge based economy could be better option if and only if government could monitor foreign aid and other financial sources so as to produce skilled human resource which could possibly generate increased output and employment in order to advance production, enhance distribution and strengthen knowledge.
Knowledge economy refers not only to high tech-industries but also refers to new sources of comparative advantages which can be applied all sectors from street vendoring to biotechnology. Equitable development for developing world is not impossible but part and parcel of the problem is that some of the underlying factors/concepts are inherently difficult to pin down. yet, if the governments of developing countries adopt knowledge based approaches through substantial investment on more practical, skill oriented and demand driven education that could ensure access to various resources for poor and marginalized segment of the population and narrow down the widening gap between rich and poor. In this way, equitable development could be achieved through Knowledge Economy.
Thanks to friends for their comments. I think the discussion is building up nicely. The main aspect that we need to consider with 'knowledge economy' is that it covers wider range of areas than mere technological innovations. A farmer in rural Karnali might also generate farming innovations regardless of his access to academic degree or wealth. Knowledge economy is also about putting problems and peoples at the center. It is yet to be discussed whether fiscal budgets can be part of 'knowledge economy' or not.
ReplyDeleteThank you DevWorker for highlighting this approach. I am in full support of it! So much money has been pumped into this country's so called "development" and we have seen very minimal development from it. It is time we took a different road!
ReplyDeleteThank you DevWorker for updating on new development approach,Knowledge Economy. I have couple of queries regarding this approach. First, how this approach creates an environment to retain and import human resource within a country and the second, how money is invested under this approach. Coming through the age of modernization to sustainable development, none the development theory had lasts for more than two decades and these theories were unable to solve the poverty and equity issues. In addition, climate change has emerged as trans-boundary and cross cutting development issue. In this context how this approach, contributes in Nepali development planning to our living better. Or otherwise, it will be old wine in new bottle.
ReplyDeleteThanks Arya for bringing out quiet important areas that require further discussion and elaboration. In my opinion, knowledge economy does not discard to have monetary inputs and returns, but it prefers higher priority on using knowledge as input and output to solve development problems. To enable people to take part in knowledge economy, promotion of education is really important. Yes, we need human resource development and that can be achieved through promotion of education. "Knowledge Economy" reiterates human development and rejects measurement in economic terms. Now, our development efforts are already heavily money-centric so it would be really impossible to separate monetary and knowledge part out. We definitely need monetary investment but there is a need to assess what is the proportion of non-monetary aspects. The environmental and social concerns are the aspects that 'knowledge economy' is sensitive about. Thanks for bringing in discussion. I think we need to discuss in details to work out suitable proportion of knowledge and monetary investments in terms of possible impact they are likely to have on people's lives.
ReplyDeleteI agree with DevWorker, it is impossible to separate monetary and knowledge part. To provide education and skills to people from developing nations financial support is necessary,but it depends how well we utilize that support. Had we utilized all those funds from donors we would have at least been able to fulfill basic needs of people including education. I think, previous development approaches were not in favor of countries like Nepal that is why they have failed to achieve development targets. 'Knowledge Economy' is exactly what we need today. Thanks for posting a blog on such an interesting topic.
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ReplyDeleteOut side Nepal:
ReplyDeleteIf you give a fish to a man he will eat one day but if you teach him how to fish then he can eat fish everyday.
But In Nepal:
If you give a fish to man he will eat one day but if you teach him how to fish , then from next day he will sit in his boat smoke cigarette and listen to dohori songs on the radio whole day, he will do everything except fishing.
Knowledge Economy..well It’s a good concept and a sustainable one compared to other theories of development…but I think its going to be quite a challenge imlplementing it in a country where opportunities are so scarce , citizens have been habited to enjoying free rides and government is changing every six months..
We can take an example of an IT Park in Banepa which was setup around a decade backby Government of Nepal with an investment around 120 Million in order to boost the IT sector of the country by creating skilled human resources in IT sector but it proved to be a complete failure , nothing positive came out of it. Although IT park has the capacity of engaging 144 engineers. Similarly, it has all the facility of electricity, telephone, VSAT and optical fibre cable but still its in a dormant state. Big IT companies are not interested to shift to IT park because government is not providing any special facility for them. Not only is the park failing to attract new companies, it has also been failing to retain companies that had moved in. Java for instance has shifted to Tinkune.
Government blames the lack of coordination among local bodies and local bodies blames the government for all the mess,amidst all this blame shift game, this potentially a great project had to suffer a huge set back.
Thus , this idea of knowledge economy is really a great idea but it has to be properly accompanied by proper government policies ,their proper implementation and proper support from the people.