5.3.6 The Knowledge Economy
Completion requirements
5.3.6 The Knowledge Economy
Does globalization lead to more wealth for everybody?
What is the "knowledge-based economy"? As more manufacturing jobs are automated by machines or outsourced to places where labour is cheaper, what work will people do to maintain their standard of living? One important area is the
knowledge — based economy —€” the use of knowledge to produce economic benefits. More specifically, it refers to high technology business such as computer software, telecommunications, and educational and research facilities.
The knowledge economy is booming all around the world . People in almost every country have access to the same ideas and information because of technology; therefore, they have the same opportunities to prosper. 99% of Canadian students say they have access to the Internet outside of school, either through a computer or tablet or smartphone. Information is everywhere and learning, or learning how to learn, has never been more important.
India and China produce millions of college graduates a year. By 2020, 40% of all college graduates in the world will be from India or China. Because of their high rates of education, especially in science and technology, employment in the knowledge economy in Asia is booming. In Canada and the United States, far fewer students complete college or university. But does that mean the people of China and India will all be rich and the people of Canada and the United States will all be poor?
The economy is not a zero sum game. In other words, people in one country making more money does not mean the people in another country will be poor. The Canadian government found that, after NAFTA, Canada, United States and Mexico all benefited from "the gradual shift of capital, technology, and new job opportunities in all three countries with the resulting rise in productivity and increasing standards of living."
Adam Smith predicted that by giving people all over the world the freedom to buy and sell, wealth would grow for everyone. Although short-term job losses occur in some areas, everything balances out in the end.
In "The Next Wave of Offshoring", in the Far Eastern Economic Review, Robyn Meredith stated,
In Shanghai and Kuala Lumpur, in Delhi and Bombay, white-collar denizens of the offshoring boom now gather at hip bars and pricey restaurants. It is as if the exuberance of Silicon Valley has moved to Asia. They spend their new paychecks on trendy Western clothes, trips abroad, and new cars. Every month, two million more Indians and five million more Chinese carry cell phones as their countries grow richer. Young college graduates job-hop for ever-higher pay. The future has never looked brighter.
What does this mean for Canadians?
The knowledge economy is booming all around the world . People in almost every country have access to the same ideas and information because of technology; therefore, they have the same opportunities to prosper. 99% of Canadian students say they have access to the Internet outside of school, either through a computer or tablet or smartphone. Information is everywhere and learning, or learning how to learn, has never been more important.
India and China produce millions of college graduates a year. By 2020, 40% of all college graduates in the world will be from India or China. Because of their high rates of education, especially in science and technology, employment in the knowledge economy in Asia is booming. In Canada and the United States, far fewer students complete college or university. But does that mean the people of China and India will all be rich and the people of Canada and the United States will all be poor?
The economy is not a zero sum game. In other words, people in one country making more money does not mean the people in another country will be poor. The Canadian government found that, after NAFTA, Canada, United States and Mexico all benefited from "the gradual shift of capital, technology, and new job opportunities in all three countries with the resulting rise in productivity and increasing standards of living."
Adam Smith predicted that by giving people all over the world the freedom to buy and sell, wealth would grow for everyone. Although short-term job losses occur in some areas, everything balances out in the end.
In "The Next Wave of Offshoring", in the Far Eastern Economic Review, Robyn Meredith stated,
In Shanghai and Kuala Lumpur, in Delhi and Bombay, white-collar denizens of the offshoring boom now gather at hip bars and pricey restaurants. It is as if the exuberance of Silicon Valley has moved to Asia. They spend their new paychecks on trendy Western clothes, trips abroad, and new cars. Every month, two million more Indians and five million more Chinese carry cell phones as their countries grow richer. Young college graduates job-hop for ever-higher pay. The future has never looked brighter.
Reflect
What does this mean for Canadians?
-
Should we embrace the knowledge-based economy?
-
Should all people try to become better educated so they can take advantage of this sector of the economy?
-
Should we trust that it will all balance out, according to the idea of the invisible hand?