0202
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The Importance of Transferring into a
Knowledge- Economy and Anticipated Social
Effect
August 2009
Department of Economic Development | Planning & Studies Division | Studies Directorate | Social Studies Section
The Importance of Transferring UAE into a knowledge-Economy and Anticipated Social Effects
The Importance of Transferring into a KnowledgeEconomy and Anticipated Social Effect
Executive Summary:
This study explores the concept of knowledge economy, definitions, theoretical bases
and background, describes its characteristics and requirements, and reviews means of
measuring levels and soundness of knowledge economy. The most important of these
measuring tools, is World Bank Knowledge Economy index (KEI). The study also
examines some of the most famous applications of the knowledge economy, namely:
e-Government, e-Commerce, and e-Learning. It reviews as well, the best
international practices in application of knowledge economy, taking into account the
social dimension, as it addresses the positive and negative social dimensions and
implications of the knowledge economy, where successful experiences tend to avoid
negative social impacts, and maximize the positive social effects of the Knowledge
economy.
One of the negative effects of the knowledge economy, is that it is connoted with the
widespread unemployment, due to the reliance on technology-intensive techniques,
which leads to the abolition of some existing posts, and the transfer of some
employees to other jobs which they cannot practice; with the exception of those only
have certain qualifications, training or familiarity with modern technology. The
application of the knowledge economy, leads to the emergence of what is known as
cyber crime, and increases stress on individuals and their sense of loneliness and
isolation, and threatens their national identity, under the pressure of globalization.
The positive social impacts for the application of the knowledge economy are
multiple, including: The returns of this economy are bigger and faster than those of
the traditional economy, thus the rate of economic and social development would be
accelerated. Human beings are the main propelling factor in the development
process; and thus the application of the knowledge economy would result in further
Department of Economic Development | Planning & Studies Division | Studies Directorate | Economic Studies Section
The Importance of Transferring UAE into a knowledge-Economy and Anticipated Social Effects
development of people, and meeting their social needs. The applications of the
knowledge economy will allow teleworking and (working at home), which will
bring about more advantages for women in particular, and other benefits for society
in general, including reduction of pollution and traffic congestion.
The reliance of knowledge economy on technology-intensive application, well suits
countries that with deficient human resources; where one worker for example, may
produce tens of software programs. The knowledge economy helps to integrate
marginalized groups in the society, such as those with special needs, who may
participate in the production process; as this economy is based on mental effort rather
than muscular effort. Knowledge economy is compatible with the requirements of
sustainable development, particularly in the area of environmental conservation, as it
seeks to harness technology to develop alternative, less polluting and more
environmental friendly sources of energy.
The study reviews the role of national women in view of the adoption of knowledge
economy, as they resemble the heart of the family which constitutes the nucleus of
society. It examines how women would fit into this economy and discuses the need
of the state for national women to play a significant role in the knowledge economy,
without jeopardizing their main role as mothers and their other social duties.
The study sheds light on the rank of the UAE according to the World Bank index;
finishing first among Arab countries, and acquiring the 42nd place worldwide,
consistent with the latest index report, issued in 2008. Though this rank was
considered a high one, but it was not satisfactory for the UAE, with its level of
significant achievements in all areas.
The study observed many challenges faced by the UAE in transferring into the
knowledge; most importantly, is the ability to develop human capital and citizen to
lead the process of transition towards the knowledge economy.
Department of Economic Development | Planning & Studies Division | Studies Directorate | Economic Studies Section
The Importance of Transferring UAE into a knowledge-Economy and Anticipated Social Effects
Results
1. The knowledge-based economy, is not just a modern branch of the economy, but
is rather, an entire transition, from an economy based on the industry, to an
information-based economy.
2. The concept of the knowledge economy is not a new concept; scientists have dealt
with it since the eighteenth century, but it began emerged in its modern shape by
the end of the twentieth century.
3. The knowledge economy is characterized by increasing returns compared to the
traditional economy, due to the value-added generated in all stages of the
production process, which provides opportunities for further and faster growth.
4. The most important element of the knowledge economy is the human being,
represented by human capital formation. The process of development in this
economy considers human beings as means and ends at the same time.
5. The world has to measure the level of application of the knowledge economy,
through several standards measures; most notably is the World Bank index (KEI),
which is based on 12 sub-indicators to measure knowledge economy.
6. The UAE occupied the 42nd position worldwide in 2008 in the application of the
knowledge economy, according to the World Bank index; and acquired the first
place in the first Arab World, while Denmark assumed the first place worldwide
according to the same index.
7. There are many applications in knowledge economy, most notably the egovernment, e-commerce and e-learning.
Department of Economic Development | Planning & Studies Division | Studies Directorate | Economic Studies Section
The Importance of Transferring UAE into a knowledge-Economy and Anticipated Social Effects
8. Most developed countries were able to apply the knowledge economy at very high
levels, while developing countries are still groping for its application. This created
what is known as the technological gap between developed and developing
countries.
9. There are many positive and negative social effects resulting from the application
of the knowledge economy. The challenge before the state and society is to
avoided the negative impacts and maximize positive effects.
10. Great responsibility lies on national women, as an important part of the family,
to integrate national economy into the knowledge economist State has paved the
way for women and enabled them to play this role, through a variety of strategies
(the most important is the Economic Vision 2030), and many mechanisms (such
as the provision of scholarships, and opportunities for postgraduate studies).
11.The UAE succeeded in applying most of the knowledge economy requirements,
especially e-government and e-commerce, while still groping in others, such as elearning.
12. Many challenges face the UAE in the application of the knowledge economy in
its endeavor to compete with developed countries; the most important is the
ability to develop national human capital of citizens able to lead the process of
transition towards a knowledge economy.
Recommendations:
1. The development of national human capital in line with the latest international
standards and practices in this area, through the improvement of pre-university,
graduate and post-graduate education, to meet the requirements of the knowledge
economy. Launching heavy investment in the educational process, which includes
building schools, universities, technical universities and institutes, together with
Department of Economic Development | Planning & Studies Division | Studies Directorate | Economic Studies Section
The Importance of Transferring UAE into a knowledge-Economy and Anticipated Social Effects
development of curriculum, introduction of technological devices in schools, and
intensification of interest in research and development, in order to reach to a
knowledge society capable of leading the country towards the optimal
implementation of knowledge-based economy.
2. Exploring successful experiences of countries in application of the knowledge
economy, and benefit from, according to the needs of the UAE economy and the
requirements and peculiarity of the community. Several mechanisms to achieve
for accessing that include, for example: sending scientific missions (including
elite young citizens) to countries with good experiences, and setting partnership
between local research institutions and their peers in those countries.
3. The knowledge economy drives societies towards globalization, which threatens
national identity, values and customs of those communities; so the civil society
organizations must work towards consolidating national identity among young
citizens, and strengthening values and habit, through communication between
these institutions and the youth. Seminars, workshops, awareness-raising
campaigns and summer camps are effective tools, to help young people immune
against all the negative social impact of globalization.
4. Localization of technology is required, not just transferring of technology. This
could be achieved with cooperation between the State and the national private
sector, by several mechanisms such as: Increasing spending on research and
development, intensifying efforts in training young citizens using scientific
methods in the process of specialized training and lifelong learning.
5. The establishment of a Higher National Committee overseeing the transition to a
knowledge economy, consisting of (government, private sector and civil society
organizations), and maximizing the positive social impacts of the knowledge
economy, such as the possibility of teleworking (working at home), particularly
for special groups such as the disabled and women with special circumstances.
Department of Economic Development | Planning & Studies Division | Studies Directorate | Economic Studies Section
The Importance of Transferring UAE into a knowledge-Economy and Anticipated Social Effects
This would enable achieve the advantage of being incorporated into society, add
to the productive work of the national economy, help avoid negative social
impacts, combat cyber crime in cooperation with the concerned authorities and
alleviate technological unemployment among citizens through offering
specialized courses to qualify them to meet the requirements of the modern labor
market.
6. Developing the remote areas in the country and providing them with modern
requirements and techniques in various fields, in such a way that these areas
wouldn’t impede the State’s adoption of the knowledge economy achieving
comprehensive balanced development. This role can be played by the
Government in cooperation and coordination with the national private sector.
7. Adopting unified legislations to regulate e-commerce, and developing its required
network and infrastructure, which would accentuate its importance as one of the
key applications of the knowledge economy; and contribute to the diversification
of the economic structure of the State.
8. Non-governmental organizations (NGOs), and women associations in particular,
should assume key roles in the integration of national females in the knowledge
economy, and enabling them overcome the challenges they faced, in relation to
customs and traditions; and the social, maternal, and working roles of women in
the knowledge economy. These issues could best be addressed by awarenessraising campaigns, training courses as well as establishment of nurseries, to help
women play their part in serving their country, without prejudice to their duties
towards their families.
Department of Economic Development | Planning & Studies Division | Studies Directorate | Economic Studies Section