Critiquing Australia's knowledge strategy: how can we better position ourselves in a global community?
| Author | Sharyn Renshaw/Girija Krishnaswamy |
| Position | ACU National, Australia/ACU National, Australia |
| Pages | 44-60 |
Page 44
Global economic activity has been undergoing fundamental transformation with the emergence of a Global Knowledge Economy (GKE) (Sheehan, 1999), an economic structure driven primarily by globalisation and increasing knowledge intensity of economic activity (Houghton, 2002). These primary driving forces are enabled by a complex web of underlying developments; globalisation in itself, driven by market/industry deregulation at both a national and international level as well as by increased accessibility to these markets facilitated through ongoing development in information and communication technologies (ICT) (Houghton, 2002). An increasing level of knowledge intensity is directly driven by the heightened emergence of customer centric, knowledge intensive service industries like financing, consulting and accountancy (Debowski, 2006) and the exponential pace of Information Technology (IT) development (Sheehan, 1999). The unprecedented acceleration of knowledge production, including its storage and diffusion is the direct result of scientific and technological advances (David & Foray, 2002).
These developments not only provide Australian organisations with increased opportunity to access international markets, but consequently also expose them to competition from the same markets (Debowski, 2006). The global market continues to produce a highly IT proficient customer base with expectations of rapid response to information and product queries, access to current on-line product information and online transactions. These expectations, combined with
Page 45
a geographically spread customer base force Australian businesses to adopt rapid responses to compete with global competitors who utilise significant electronic infrastructure to integrate themselves with their customer base, corporate partners, suppliers and manufacturers (Thompson, Strickland & Gamble, 2005).
Strategic response to this environment has seen the emergence of knowledge- based, technology driven enterprises whose primary value is contained within their non-physical intangible assets, specifically focusing upon resource investment and development of Intellectual Capital (IC) to support innovative practices (Li, Pike & Haniffa, 2006). Knowledge stocks at the individual level as Human Capital (eg. employee competence, knowledge and experience held by individuals within the firm), at the group level as Relational Capital (eg. knowledge captured within internal staff interrelationships, external relationships with suppliers/manufacturers, brand image, reputation), and at the organisational level as Structural Capital (eg. assets, infrastructure including that which supports knowledge capture (eg. databases, manuals) (Miller & Whiting, 2005, Afiouni, 2007).
Individual organisational economic success directly contributes to national economic success in terms of both productivity and growth, referred to as Gross Domestic Product (GDP). However, variations in national productivity and growth rates are no longer linked to a nation's availability of natural resources, but rather to the quality of human capital, their knowledge creation capacity and ability to grow and share intangible capital (David & Foray, 2002).
Consequently, an organisation's capacity to compete in this global environment is largely dependent upon government driven strategy and support, primarily through national investment in knowledge creation and diffusion. This effectively translates to necessary focus upon co-ordinated and planned investment in training, education, Research and Development (R&D) and information and communication infrastructure (David & Foray, 2002) at industry, academic and governmental levels.
Concerns regarding Australia's performance within the GKE in comparison with advanced economies (eg. America, Europe, East Asia) were raised in 2001, when the Chifley Research Centre, the Australian Labour Party's official policy development institute commissioned a report into this area. The report examined Australia's performance in three areas that define national knowledge economic capacity education, R&D and investment in ICT drawing upon research analysis conducted by the Organisation for Economic Co-operation and Development (OECD) (Considine, et.al., 2001). Their examination of Australia's investment in Human Capital, specifically, investment in education and work force development, revealed significant deficits. They label "Australia's poor knowledge economy performance" as a consequence of the following Australia's focus upon investment in fixed assets (describing Australia as an "old economy");
Page 46
Australia's reduced funding of public education being well below OECD averages, forcing the rise of private funding; secondary school retention levels lower than OECD averages and low retention of adolescents in vocational education programs; rapid growth in higher education uptake limited to a narrow band of fields (eg. business studies, computing) supported primarily by private rather than public funds, with a decline in the role of engineering, science and research degrees.
Report by the Chifley Research Centre also revealed that whilst there had been an increased investment of GDP in R&D between the years of 1984 to 1995, this investment declined significantly in subsequent years and compared poorly against investments made by other OECD countries. "While a sample of comparable OECD countries increased their R&D expenditure by 4.2% between 1995 and 1998, and US expenditure increased by 5.0%, Australian R&D expenditure fell by 15.4%" (Considine, et. al., 2001). The report highlighted that the contribution of Australia's information industries made to the economy ranked last amongst OECD countries, as a direct consequence of the decline in manufacturing of communications and information equipment. Whilst knowledge intensive goods export rates increased compared with imports, this performance reversed in later years because of the failure to invest in knowledge-based industries (eg. telecommunications, computing equipment, software, services) directly contributing to the nation's negative trade balance and growth in foreign debt.
Whilst these early examinations are alarming, it could be argued that the true primary indicator of a knowledge nation is its ability to recognise these deficits and engage in an ongoing sufficient level of corrective and developmental actions. The following questions therefore are pertinent can Australia take this lesson and learn from it; and has Australia's performance since the Chifley report changed sufficiently to merit the description of "Knowledge Nation" or "Clever Country"?
Debowski (2006) outlines a model of Knowledge Development encompassing five phases knowledge sourcing (bringing together informed knowledge sources); knowledge abstraction (framing insights gained from the sourcing process); knowledge conversion (translating ideas/principles into specific outcomes); knowledge diffusion (the spreading of codified/embodied knowledge); and knowledge development/refinement (ensuring knowledge sustains currency and usefulness). Whilst Debowski applies this model to an organisational setting, it can be applied equally well to a national setting, taking a lead from Wood (2003).
Pivotal to Wood's examination of Australia's knowledge performance is his identification of proposed measures within composite areas. We are using Debowski's framework to sequence and categorise the measures Wood (2003)
Page 47
presents into a broader measurement map. This map is then utilised to examine more recent data in the evaluation of Australia's...
To continue reading
Request your trial