THE CHANGING ENVIRONMENT: GLOBALISATION AND THE KNOWLEDGE ECONOMY

Internationalisation, Globalisation and the Knowledge Economy

Peter Maassen; 8 October 2007

A Knowledge Economy?

• An economy where success is determined more by knowledge than by labour and capital. Knowledge has become the third factor of production in leading economies. (Romer, 1986; 1990)

• For countries in the vanguard of the world economy, the balance between knowledge and resources has shifted so far towards the former that knowledge has become perhaps the most important factor determining the standard of living - more than land, than tools, than labour. Today's most technologically advanced economies are truly knowledge-based (World Development Report, 1999)

• Economies that are directly based on the production, distribution and use of knowledge and information (OECD, The Knowledge Based Economy, 1996)

• An economy that makes effective use of knowledge for its economic and social development. This includes tapping foreign knowledge as well as adapting and creating knowledge for its specific needs (World Bank)

Innovation system

• Researchers in R&D• Manuf. Trade as % of GDP• Scient. & Tech. Pub. p. mil/people

Education and human resources

- Adult literacy rate-Average years of schooling- Secondary Enrollment- Tertiary Enrollment

ICT Infrastructure

- Tel. Lines per 1000 people- Computers per 1000 people

- Internet hosts per 10,000 people

Economics:

• Tariff & Non-tariff barriers• Property Rights• Regulation

Knowledge Economy Index (WB)83 variables, including:

Knowledge Economy Index (WB)

http://info.worldbank.org/etools/kam2006/home.asp

Economics

Innovation

Education

ICT Infrastructure

• Researchers in R&D• Manuf. Trade as % of GDP• Scient. & Tech. Pub. per million people

- Adult literacy rate- Secondary Enrollment- Tertiary Enrollment

- Tel. Lines per 1000 people- Computers per 1000 people- Internet hosts per 10,000

• Tariff & Non-tariff barriers• Property Rights• Regulation

0

5

10

Economics

Innovation

Education

ICT Infrastructure

China Estonia Lithuania Ghana Netherlands Pakistan

Russia Switzerland Norway USA

Knowledge Economy Index (WB)

Knowledge economy index

Tertiary education enrollment

Knowledge Economy and Higher education

Globalisation index 2004(www.foreignpolicy.com)

Knowledge Economy, GDP & Globalisation

Rank Country

1 Ireland

2 Singapore

3 Switzerland

4 Netherlands

5 Finland

6 Canada

7 United States

8 New Zealand

9 Austria

10 Denmark

54 Kenya

55 Turkey

56 Bangladesh

57 China

58 Venezuela

59 Indonesia

60 Egypt

61 India

62 Iran

Knowledge Economy Index & GDP Globalisation Index

• Knowledge (information) becomes the determinant for global competitiveness global competitiveness becomes the determinant in the global economy (Cerny, (Cerny, Castells)Castells)

• Shift in knowledge formation from national into global space?

• Globalisation of science-based innovation industries

• Demilitarisation of high tech companies

• Global growth of information and communication technologies

• International division of (knowledge) labour

The Knowledge Economy & Globalisation (1)

Based on: Salmi, 2002

CHANGE FACTORCHANGE FACTOR OPPORTUNITIESOPPORTUNITIES THREATSTHREATS

Growing role of knowledge

Possibility of leapfrogging in selected areas of economic growth

Resolution of social problems (food security, health, water supply, energy, environment)

Increasing knowledge gap between nations

ICT revolution Easier access to knowledge and information

Growing digital divide among and within nations

Global labour market Easier access to expertise, skills and knowledge embedded in professionals

Growing brain drain and loss of advanced human capital

The Knowledge Economy & Globalisation (2)

Globalisation

• Academic Debate

• Political/Public Debate

• Definitions

• Themes

• Globalisation & Higher Education: preview

The academic debate

• The globalisation sceptics• Nothing really new is happening: world-wide system of nation states already

came into being in the ‘belle époque’ of globalisation: 1890-1914• Organisation of the economy is still predominantly national• What we experience is internationalisation: growing links between discrete

national economies or societies

• The hyperglobalisers• The erosion of national sovereignty • We are experiencing the end of the nation-state• One world, shaped by flows, movements and networks across regions and

continents

• The transformationalists• Profound changes are taking place in societies around the world in social

values, institutions, and practices • states take on new roles and act in a different context

The academic debate (2)HYPERGLOBALISTS

(Kenichi Ohmae)SCEPTICS

(Hirst and Thompson)TRANSFORMATIONALISTS

(Held et al.; Cerny)

What's is new? A global age

Relatively little; new trading blocs; weaker supra-national governance than earlier periods

Historically unprecedented levels of global interconnectedness

Dominant features of the global economy

Global capitalism; elimination of geography; global culture; global civil society

World less interdependent than in 1890s. MNCs not TNCs.

"Thick" globalization. Interconnectedness is more intense (within economic sectors) and more extensive (across regions)

Driving force of globalisation Capitalism and technology States and marketsMessy: combined forces of

modernity

The fate of the nation-state? Declining and eroding Reinforced and enhancedIt's changing: reconstituted and

restructured

Conceptualisation of globalisation?

As a reordering framework of human action. 

Internationalization and regionalization.

Reordering of interregional relations

Historical trajectory Global civilizationRegional blocs/clash of

Civilizations

Who knows? Global fragmentation and integration.

Central argument The Nation-state is historyInternationalization relies on the

support and acquiescence of states 

Globalisation is transforming state power and world politics.

The normative-political debate

• Anti-globalists• Extremely diversified coalition: no real agenda, only anti-agenda• Successful since Seattle 1999• Position: globalisation as a ‘neo-liberal project’ and destructive to endemic

cultures and the poor

• Globalists• Position: free trade benefits all (although not in an equal way)• Current crises are due to

» Trade barriers in rich countries» Import substitution strategies in (some) poor countries» Undemocratic and corrupt regimes

• Challenges:• Finding new forms of global governance• Fair globalisation

Themes

Transformation: Past realities: New realities: Globalisation equals:

geographical concept (end of geography)

Unconnected localities. The world-system that came into existence around 1900.

Increasing interconnectedness

concept of authority(end of territoriality)

State sovereignty over clearly defined territories

Authority transferred upward, downward and sideways

Deterritorialisation

cultural concept(end of diversity)

Mosaic of cultures without significant routes for cross-cultural exchange

Melange of cultures; existing in harmony or friction

Homogenisation (or polarisation)

social concept(end of nationality)

Nation as the institutional container of society: Identity, solidarity and citizenship based on nationality;

Social organisation and identity structured around a-spatial systems

Cosmopolitanisation

What is globalisation?

• Process of social transformation• A process (or set of processes) which embodies a

transformation in the spatial organization of social relations and transactions, generating transcontinental or interregional flows and networks of activity, interaction and power (Held: 1999).

• A process in which social arrangements (e.g. power, markets, cultures) become disembedded from their territorial context due to the intensification and massification of flows of people, finance, products, services, information and ideas

– But also ….

What is globalisation?

Essential elements in the concept of globalisation

Globalisation is the process in which basic social arrangements (like power, culture, markets, politics, rights, values, norms, ideology, identity, citizenship, solidarity) become detached from their spatial context (mainly the nation-state) due to the acceleration, massification, flexibilisation, diffusion and expansion of transnational flows of people, products, finance, images and information.

The process contains features which are inextricably related to the process: an inner logic (it’s a self-reinforcing process), a global-local nexus (it’s a self-mitigating process due to local reactions on globalisation) and the perils of exclusion (it includes as well as excludes social entities)

It is multidimensional but not uniform: various social arrangements ‘globalise’ in different ways and some social arrangements are more easily ‘detached’ than others.

Its actions and re-actions can be cross-sectoral: flows in one sector impinge upon social arrangements in other sectors and vice-versa. The result is that globalisation in one sector can provoke globalisation of another sector.

Global is different from international both in the sense that it is an integrated whole (instead of an interconnected) and in the sense that it has expanded towards a world-wide scale.

various social arrangements ‘globalise’ in different ways and some social arrangements are more easily ‘detached’ than others.

A paradox?

Themes (2)

Increased Interconnectedness

Deterritorialisation Homogenisation Comspolitanisation

Isolation/ProtectionPolarisation/

Diversification(Extreme) Nationalism

G l

o b

a l i

s a

t i

o n

Themes (3)

Increased internet connections

Less government controlon information provision

Spread of the use of English

Increased interest forinternational developments

Isolation through censorshipLanguage policies protectingnational & local languages

Renewed interest for local relations / fear for

alienation

G l

o b

a l i

s a

t i

o n

Themes (4)

Increased migration

Decreased control on population

growth/composition

Spread and absorptionof other cultures/diaspora

Emergence of multicultural society

Barriers to immigrationAwareness (and protection?)

of own nationalcultures and religions

Xenofobia / Increased protection

of nationals

G l

o b

a l i

s a

t i

o n

Globalisation and Higher EducationA Preview

Globalisation: Globalisation and Higher Education:

Increasing interconnectedness

Linkages, connections and flows in higher education

Deterritorialisation Shifts in governance of higher education

Convergence Threats to diversity and the rationality of standardisation

Cosmopolitanisation The identity of the university and higher education sectors