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The essential difference is that in a knowledge economy, knowledge is a product, in knowledge-based economy, knowledge is a tool. This difference is not yet well distinguished in the subject matter literature. They both are strongly interdisciplinary, involving economists, computer scientists, software engineers, mathematicians, chemists, physicists, as well as cognitivists, psychologists and sociologists.
People would be educated, informed, and prepared. Competition would exist in the form of becoming knowledgeable, and increasing awareness about a topic sought out by the individual.
• The economics are not of scarcity, but rather of abundance. Unlike most resources that become depleted when used, information and knowledge can be shared, and actually grow through application.
• The effect of location is either diminished, in some economic activities: using appropriate technology and methods, virtual marketplaces and virtual organizations that offer benefits of speed, agility, round the clock operation and global reach can be created; or, on the contrary, reinforced in some other economic fields, by the creation of business clusters around centres of knowledge, such as universities and research centres. However, clusters already existed in pre-knowledge economy times.
• Laws, barriers, taxes and ways to measure are difficult to apply solely on a national basis. Knowledge and information "leak" to where demand is highest and the barriers are lowest.
• Knowledge enhanced products or services can command price premiums over comparable products with low embedded knowledge or knowledge intensity.
• Pricing and value depends heavily on context. Thus the same information or knowledge can have vastly different value to different people, or even to the same person at different times.
• Knowledge when locked into systems or processes has higher inherent value than when it can "walk out of the door" in people's heads.
• Human capital — competencies — are a key component of value in a knowledge-based company, yet few companies report competency levels in annual reports. In contrast, downsizing is often seen as a positive "cost cutting" measure.
• Communication is increasingly being seen as fundamental to knowledge flows. Social structures, cultural context and other factors influencing social relations are therefore of fundamental importance to knowledge economies.
The American dream is a white picket fence, 2.5 kids, a 10 ton SUV, and a mortgage. You will go to a job that you ultimately end up hating, for 40 to 50 years of your life. You will make a career out of misery. Most of us will work for higher-ups, and reach middle management if we’re lucky, only to be given a retirement plan and told to “Get the hell out,” while we still have some of our mental faculties. In between hating your life and going to work, you will substitute material possessions for happiness. You will find great deals at Wal Mart, eat food at an Applebee’s, buy a Mercedes-Benz, and maybe get a hot tub. These will make you feel like you have accomplished the life dream. Unfortunately, not all of us feel this way.