Socio-Economic Transformation as a Function of Knowledge Distribution Differentials

Differential distributions of knowledge at the national, societal, industry, organizational, and individual level can be argued to explain different types, rates, and dynamics of socio-economic transformation. At a national level, although there is debate as to how knowledge relates to national economic productivity, it is widely accepted that national knowledge advantages are a worthy socio-economic goal. In America the industrial base that produces ICT has increased, although whether this has led to a sustainable increase in productivity is hotly debated. Malaysia and the UK have launched government initiatives aimed at becoming more knowledge based. India has become a world leader in call centers and software houses, and is moving onwards and upwards to chip design. Less-developed countries see the Digital Era as a way of potentially 'leap-frogging' more developed, but more institutionalized nations. For example, Slovenia has developed a sophisticated form of e-government, while schools in Africa use the Net to aid education.

These variations in policy making are courtesy of different interpretations of the drivers of this latest revolutionary era, which range from 'new economy' to 'digital economy' to 'information economy' to 'knowledge economy'. In turn these varying interpretations result in differences between national economies in terms of the speed and type of knowledge transformation, the extent to which that transformation is ICT enabled and the extent to which the changes are socio-economically and ecologically sustainable. This is the case now, but will become increasingly so, as access to capital and cost of labor differentials narrow, and as over time the knowledge economy becomes more competitive (see, for example, how the move in India from software design to chip design is creating a demand for higher salaries and causing less emigration).

Within nations, the cost of broadband and cheap access to the Internet varies between and within institutions and communities. Communities, including some surfers in an area of the UK, are using a single broadband connection, and hence the costs of a single broadband connection, in association with wireless technology to allow all of the community to surf the Net, in this case, while they surf the seas. Within households there are digital generation gaps, some of which favor highly ICT-literate young children who have known no different, whereas in others, silver-surfers, who have more time to keep abreast of advances in ICT functionality, rule the digital equipment within the household. At the level of society, there are differences regarding access to, and participation in, the creation of different amounts and types of knowledge. Political influences affect access to the Internet in China. Poverty dramatically reduces, but does not exclude, access to the Internet in Africa.

In terms of a global world, India and South American countries find it difficult to protect national knowledge embedded in centuries-old herbal medicine against Western pharmaceutical firms. Poor crop yields combined with poverty and corruption are forcing some African countries to consider the use of genetically engineered crops, which will alter their nation's organic knowledge base in ways that will affect their ability to sell to a non-GM-tolerant area such as Europe in the future. The U.S. is considering the European ban on GM foods as a form of trade protectionism. Meanwhile, for some, GM foods are the answer to their humanitarian prayers.

Governments try, albeit largely in vain, to protect society from gambling and pornography on the Net, where the virtual nature of the activities makes addictions easier to form and harder to break. The privacy of people is affected by cookies, which track every Internet user's virtual movements. Soon Internet functionality is likely to be available, which can trace a user's geographic location. Mobile phones, while turned on, serve to track every geographic move their owners make and, when used, allow the nature of their social interaction to be monitored. Your mobile phone might soon tell you that you are a few miles from your best friend and a few miles from your favorite chain of coffee shops and will direct you both there, ordering your favorite drink on the way and charging your account automatically. Mobile phone companies are increasingly inundated by requests from UK police forces for information that has already, in at least one murder case, provided vital incriminating evidence, placing murdered and murderer in the same location within a crucial time span.

At an industry and organizational level, the Digital Era is increasingly not the exclusive domain of high-tech companies or developed countries, albeit it is currently biased towards both. All types of companies are embracing the digital, information, and knowledge era in different ways and at different speeds, creating a range of performance. Highly traditional companies such as Michelin are chasing new customers over the Internet by providing them with information on hotels and restaurants in digital format for free. Commodity companies such as cement transporters are using Knowledge Management Systems to differentiate their companies, in this case to make use of organizational knowledge on how the weather affects the shipping of this climate-sensitive product. Dot.com bubble survivors such as e-bay and NCSoft, among other bigger corporate names, are showing that the new e-business models can be profitable and successful in certain economies and societies. In e-bay the business model often means customers generate the company's strategy. Different definitions and uses of knowledge alter how, and how much, advantage is accrued by organizations.

While such knowledge differentials are part of competition, improved services and products, and a new society, they also create tensions. Economically, at a national level, knowledge has implications in terms of global competition. A national economic policy of attracting foreign investment to support 'high-tech' work, such as silicon-chip manufacturing, can backfire when that work gravitates to lower cost countries, as happened to this industry in Scotland, because in reality such work might be 'high-tech', but it involves little knowledge input by workers. Another example is the speed at which Indian call centers have been able to provide a service to UK companies that frequently exceeds that of UK-based call centers, in that it is more knowledge based and costs less.

In some situations, digital knowledge is such an unusual resource, it can create equality and opportunity where none existed before, but on the other hand there are many barriers to access. For example, SchoolsNet, an Internet education initiative in Africa, links a limited number of schools, creating an economy of scale in teaching in a country that cannot afford very much face-to-face teaching. However, the initiative suffers from there being very little general African-based Web content available and from the lack of resource to rapidly expand even this low-cost project. The digital gap and differences in labor flexibility and resource currently play a strong part in distancing different social realities. But will equal access to ICT and the narrowing of differences in labor costs over the globe result in uniform cultures? It is doubtful, as an essential part of being human is opinions and ideas, meaning history will never end and social differences will always exist.

At a social level, such differentials can lead to difficult ethical, moral, and political dilemmas. The new millennium has been characterized by terrorism and the transfer of information about the production of weapons of mass destruction (WMD) in part through the Internet, and countered in part using satellite equipment and crossinstitutional and national intelligence. The media reporting of the situation has been characterized by the Internet. Reactions to such events result in the rapid creation of many new websites. The media is able to give the public rapid and direct access to information relevant to the situation and debates surrounding the issues. The release in the UK of the dossier on the threat posed by WMD, thought by Western intelligence to be present in Iraq, was followed within minutes by the whole document being placed on the globally available UK government and BBC websites. The government website crashed from heavy use and the BBC site saw much traffic. The BBC has a 'Web-library' associated with its news programs. Another intelligence document was accused of having been plagiarized from a PhD thesis over the Internet.

At an organizational level there is the issue of when to patent knowledge and/or embed it into a product or service to gain ownership and when to allow knowledge to develop freely in an unrestrained environment to be captured commercially at a later date. There is also the issue of creating the appropriate work environment. Become too virtual and paperless, and perhaps the ability to work together through trust is compromised. Become too face-to-face, and the self-organizing and efficiency aspects of ICT remain un-harnessed.

Issues arise from this reality. In this information-rich environment, there is much knowledge-free political 'spin' put on current affairs, as well as information overload and hence richness. The dynamics of knowledge in the Digital Era have thus moved to the extremes of the continuum of content-laden and content-free. There is also the dilemma of access, for example, making sensitive information freely available in democratic, Internet-based, and media-friendly countries to promote a cause, when its 'free' availability in less-than-democratic, restricted-Internet, media-unfriendly countries can compromise that same cause when given a different spin in that country.

Equally, governmental institutions can be slower at political and military intelligence than the media, which is now so diverse and in so many places, courtesy of the Internet and other ICTs, albeit sometimes less accurate. The Internet ensures information arrives more quickly to the masses, but frequently at the cost of quality. Meanwhile, wars in the new era might be fought just as much on the opening up of communication channels such that countries have free access to knowledge, as they will be on conventional, albeit digitized warfare, which itself brings new management problems. Completely new types of wars are likely in the future, as cyber terrorism becomes a new threat in the borderless world of the Internet where knowledge is so critical to the normal running of society. Speed and access compete with accuracy and quality.

The argument central to the stance taken within this chapter is that socio-economic transformation in the Digital Era can be perceived as being the complex and cumulative outcome of differential national, societal, organizational, and personal access to and interpretation of: knowledge content, the transformation of knowledge, contexts that make certain types of knowledge more or less attractive, the uses knowledge is put to, and the ownership of knowledge. This view—that what counts is the differential distributions of knowledge—when combined with the illustrations of socio-economic trends, serves to raise questions of what good national knowledge socio-economic policy and good organizational management should look like in the Digital Era. To some extent, and within the constraints of the theoretical angle taken, these questions are answered in the later section on implications.

In exploring the implications of knowledge differentials at the society-economy interface, it is necessary to take a view on our role as humans in creating and controlling both the Digital Era and the knowledge dynamics that operate at this interface. It is generally accepted that the Digital Era is neither 'out there' in some kind of technological deterministic fashion that emerges without human intervention, nor can its path be controlled through managing individual, organizational, or institutional choices and actions (Orlikowski, 2000). This is so because the social complexity of the system is such that no single human or group can be in complete control of the knowledge base of other people and because technology is socially constructed, both in terms of its design and use. Unfortunately, however, the widespread acceptance of this so-called 'enacted' and integrated view of the Digital Era leads us no further towards understanding the nature of the tension between social construction of technology and technological determinism, such that it can be guided to our sustainable advantage, if not the planet's. Also, the view does not contemplate how, in the future, technology might take on a form that makes it able to live a life of its own.

In summary, it is clear is that in the current socio-economic environment, knowledge is created and disseminated at ever-increasing speeds, in ever-increasing volumes, over greater distances and in many guises. Consequentially, the pace of change within social life has become faster, and life has become more complex and interrelated. The importance of understanding socio-economic transformation in terms of knowledge is increasing at the same rate as the pace of change is increasing. Despite, however, knowledge being theoretically upheld as the basis of national, social, organizational, and individual advantage, in everyday practical terms, advantage seems ever more difficult to understand, let alone achieve and even sustain. Worse still, there is little broad theory that explains this phenomenon beyond the tension between technological determinism and social construction. A theory is needed that can explain: the speeding up of knowledge transformation, its unequal distribution at any moment in time, and its changing distribution over time. Within this theory, knowledge needs to be defined as that which allows us to relate to the socio-techno-economic world we are part of through communities of practice and interest, which are differentially distributed across the world.