04/12/23 1

Open Education and the Open Knowledge Economy

Michael A. PetersUniversity of Illinois at Urbana-Champaign

04/12/23 2

The Knowledge Revolution

Seven key elements of “Knowledge Revolution”

Increased codification of knowledge and development of new technologies

Closer links with science base/increased rate of innovation/shorter product life cycles

Increased importance of education & up-skilling of labor force, and life-long learning

Investment in Intangibles (R&D,education, software) greater than Investments in Fixed Capital in OECD

04/12/23 3

The Knowledge Revolution -2

Greater value added now comes from investment in intangibles such as branding, marketing, distribution, information management

Innovation and productivity increase more important in competitiveness & GDP growth

Increased Globalization and Competition

Trade/GDP from 38% in 1990 to 57% in 2001

Value added by TNCs 27% of global GDP

Constant Change and Competition Implies Need for Constant Restructuring and Upgrading

04/12/23 4

Enhancing contributions of public research

Old model: Funding basic research

Government funding of basic research, often though institutional funding (i.e., block grants).

Universities have autonomy in setting research objectives

New model: Governing the science system

Link government funding to social and economic objectives Priority-setting New funding

Universities accountable for research spending and results Competitive awards Evaluation (ex-ante, ex-

post). Encourage multi-disciplinary

research and links to industry Centres of excellence Public/private partnerships

04/12/23 5

Baseline qualifications – A world of change Approximated by the percentage of persons with ISCED 3 qualfication born in the period shown below (2004)

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04/12/23 6

Growth in university-level qualifications - Approximated by the percentage of persons with ISCED 5A/6 qualfication born in the period shown below (2004)

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04/12/23 7

The earnings advantage of education- Relative earnings of 25-64-year-olds with income from employment (upper secondary education=100)

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Males below upper sec Females below upper sec.

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Males Tertiary-A Females Tertiary A

04/12/23 8

Enhancements in human capital contribute to labour productivity growthAverage annual percentage change (1990-2000)

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Hours worked Level of education

Hourly GDP per efficient unit of labour Labour productivity