Urenio Watch Watch: Knowledge Economy

Knowledge Assessment Methodology

In order to facilitate countries trying to make the transition to the knowledge economy, the Knowledge Assessment Methodology (KAM) was developed by the World Bank Institute.

A recently published paper entitled “The Knowledge Economy, the KAM Methodology and World Bank Operations” highlights the importance of the use and creation of knowledge for long-term economic growth. It discusses the concept of the knowledge economy, which is essentially an economy where knowledge is the main engine of economic growth.

The paper introduces the knowledge economy framework, which holistically encompasses elements or pillars such as education and training, innovation and technological adoption, the information infrastructure, and a conducive economic incentive and institutional regime. The framework asserts that sustained investments in these knowledge economy pillars will lead to the availability of knowledge and its effective use for economic production. This would tend to increase the growth rate of total factor productivity, and consequently result in sustained economic growth.

This paper also introduces a simple knowledge economy benchmarking tool, the Knowledge Assessment Methodology (KAM), which was developed by the World Bank Institute. The KAM is a user-friendly interactive Internet-based tool that provides a basic assessment of countries’ and regions’ readiness for the knowledge economy. It is designed to help client countries identify problems and opportunities that they may face, and where it may need to focus policy attention or future investments, with respect to making the transition to the knowledge economy.

The paper is organized as follows: Section 1 underscores the importance of knowledge to economic development. It also presents the knowledge economy framework and provides a brief survey of the literature showing the importance of the knowledge economy pillars for economic growth. Section 2 introduces the Knowledge Assessment Methodology and provides examples of its various modes using an array of countries from around the world. Following this, the features of the KAM that have led to its widespread use, especially in terms of facilitating policy dialogue with country clients are described in detailed in Section 3. Section 4 highlights the key points of the paper.