Advancing Knowledge and the Knowledge Economy. Edited by Brian Kahin and Dominique Foray. Cambridge, MA: MIT Press, 2006. 504 pp. $38.00 (ISBN 0-262-61214-3).

The complete review will be published in the Journal of the American Society for Information Science and Technology

Developed nations, and developing nations, are in the midst of transforming their economies from industrial economies to knowledge economies. These transitions result in economies where knowledge (in all its forms: human capital, technology, innovation, and even value networks) are the central and critical sources of competitive advantages. Knowledge becomes that which is centrally traded and exchanged, created and communicated, leveraged and transformed. Worldwide continued interest in the field of knowledge management is testament to the realization that there is a need for critical thinking on how to advance our knowledge about managing, living, and thriving in these new economies. Advancing Knowledge and the Knowledge Economy pulls together a collection of cutting-edge thinking on critical issues related to thriving in knowledge economies. Topics covered include: measuring knowledge, knowledge communities, the changing role of institutions in knowledge economies, the role of place in knowledge economies, new models of innovation, control and cooperation, and emerging cyber infrastructures. This book grew out of support for conferences by the Organization for Economic Cooperation ad Development (OECD), and the Digital Society and Technology Program and the Digital Government Program of the National Scientific Foundation. The book has seven sections and 25 chapters, which I only briefly review here.

Three chapters set the stage for the book’s motivation, the key themes covered, and the OECD’s work on transforming economies to knowledge economies. Brian Kahin opens the book with a discussion of the prospects for a knowledge policy. Kahin’s main argument is that while there is a real need for knowledge policy, the transformational effects of knowledge economies are too new to understand their individual or broad societal impacts. Discussions of knowledge policy thus remain balkanized and isolated. Knowledge policy discussions continue to remain fragmented across academic disciplines and there is a real need to take a holistic perspective at the issue of knowledge policy…Dominique Foray, the co-editor of the book, lays out the major themes covered by contributors of the book in the second chapter. He addresses the deployment of Information and Communication Technologies (ICTs) as knowledge instruments. This is followed by a discussion of the peculiarities of institutions that create and transmit knowledge. Issues such as the patent system, the role of incentives for inventors, knowledge spillovers, trust building mechanisms, division of labor, and the role of universities, are addressed here. Other themes are the co-evolution of technologies and institutions, knowledge division and dispersion, saliency of public knowledge, and open and distributed systems of knowledge…Ásgeirsdóttir, Deputy Secretary General of the OECD, discusses the work of the OECD on cultivating knowledge economies. Ásgeirsdóttir puts forth four simple, yet salient, messages to guide the development of knowledge economies. The messages are: (1) good economic fundamentals are critical for stimulating knowledge economies, (2) development of knowledge economies is dependent on four pillars: innovation, new technologies, human capital, and enterprise dynamics, (3) globalization impacts the four pillars of knowledge in significant ways, and (4) there is a need for innovations in organizational practices and knowledge management to realize the benefits of the knowledge economy.

The next section of the book, Measuring Knowledge, contains two chapters. Chapter 4, by Fred Gault, addresses the role of official statistics in measuring the economic effects of knowledge. He discusses challenges faced when using official statistics to measure knowledge-based economies…Chapter 5, Assessing Innovation Capacity, by Reinhilde Veugelers, evaluates the Lisbon strategy developed to enhance the development of knowledge economies in the European Union…

Knowledge Communities, the next section, contains three chapters. Chapter 6, by Bengt-Åke Lundvall, discusses why we need to pay serious attention to learning within communities and the micro social capital dynamics of community-based interactions when measuring economic performance of knowledge economies…Chapter 7 by Tom Schuller, also of a conceptual nature, focuses on knowledge networks using a social capital lens…The final chapter in this section is Knowing Communities in Organization by Patrick Cohendet. The chapter begins by outlining the characteristics, properties, and limits of knowing communities in organizations…

The next section discusses the changing role of institutions. In Epistemic Infrastructure in the Rise of the Knowledge Economy, Margaret Hedstrom and John L. King trace the changing nature of epistemic infrastructures, most notably describing the changes to libraries and museums…Chapter 10, by Robin Cowan, outlines the role of universities in the knowledge economy. Cowan begins the chapter by conducting a historic tour of the changing role of university missions and goals from historic times to the present…Chapter 11, The Impact of ICT on Tertiary Education, by Kurt Larsen and Stephan Vincent-Lancrin, looks at the role of e-learning technologies. Specifically, the authors examine the role of e-learning techniques in furthering tertiary education…The authors make the radical claim that e-learning techniques might, “live up to its more radical promises in the future and really lead to the invention of new ways of teaching, learning, and interacting with a knowledge community made up of learners and teachers” (pg. 167), I remain skeptical of this, but am cautiously hopeful. The final chapter in this section is by David Mowery and Bhaven Sampat. The authors discuss the Bayh-Dole Act of 1980, which has been held as a model for piece of legislation geared at promoting university-industry technology transfer and the international effort to imitate the act…

Knowledge and Place, the next section, comprises of two chapters. Andrew Wyckoff and Martin Schaaper address the dynamics of global competition for highly skilled workers. This chapter is my favorite from the collection. The authors rightly note that the US is a nation at risk due its weak preparation of students in areas of reading, mathematics, and science…Chapter 14, by Jan Fagerberg, discusses the role of knowledge in enabling for development across the globe. The chapter discusses the current thinking by leading scholars on the role of knowledge for development…

In New Models of Innovation, Eric von Hippel opens the section by discussing the democratizing of innovation…Stefan Thomke, a former student of von Hippel, discusses the role of experimentation in innovation and technology change in Chapter 16. Thomke outlines the need for experimentation in discovery, especially the need to learn from experiments…In Chapter 17, W. Edward Steinmueller carries the discussion on user involvement to its next natural stage – the management of innovation platforms. Platforms, for products and services, have been around for a while. What has changed in recent times is the degree of modularity, ease of assembly (and disassembly), reuse of components, and emergence of standards, which has made the management of platforms less cumbersome…The final chapter in this section is by Carliss Y. Baldwin and Kim B. Clark. The authors focus on the issue of designs, the instruction set crafted out of knowledge than transforms resources into consumable products and services of value. The authors argue that the concept of designs (i.e. how they are architected, deployed, completed, and generate value, etc) is significant enough
to warrant a call “to integrate the study of designs across disciplines and make them the focus of unified scientific research in their own right” (pg. 300); I could not agree more.

The next section, Models of Control and Cooperation, contains five chapters. Chapter 19, by Dietmar Harhoff details the current dynamics of the patent system, namely the issue of quantity versus quality, and calls for policy changes to improve the incentive system associated with gaining patent rights. Iain M. Cockburn, in Chapter 20, conducts an excellent exposé of the issues of blurred boundaries between open scientific resources and commercial exploitation of knowledge using the case of biomedical research…In the next chapter, Josh Lerner and Jean Tirole build on the comments on Cockburn by addressing the economics of technology sharing…In the next chapter, Josh Lerner and Jean Tirole build on the comments on Cockburn by addressing the economics of technology sharing. The authors provide a brief historic overview of the open source software movement that has called into question several fundamental economic theories. The authors provide a brief historic overview of the open source software movement that has called into question several fundamental economic theories…Chapter 22, by Arti K. Rai, discusses the dynamics of open and collaborative research in the context of biomedical research. The field of biomedical research is undergoing fundamental changes; there are serious pressures to move from a secretive and closed model of research to one that is open and collaborative…Brian Fitzgerald closes out this section by examining the evolution of open source software. Brian discusses how the open source model called for a shift in the software engineering tensions, and what one might envision the dynamics of the next generation of open source software movement look like for software developers.

The final section of the book contains two chapters on the topic of cyber infrastructure. Paul A. David discusses the challenges faced in leveraging our rather technically sophisticated cyber infrastructure for scientific collaboration. David rightly notes that technical challenges that will not prevent us from exploiting the infrastructure for scientific development, but social and policy, also known as the soft, issues that need to be addressed. C. Suzanne Iacono and Peter A. Freeman close out the book with a discussion of socio-technical challenges the scientific and policy communities will face as the cyber infrastructure continues to evolve.

Overall, this is a highly dense, interesting, and current collection of thinking on the topic of knowledge economies. I enjoyed reading this book. This book will be an excellent supplemental text for graduate courses in the areas of information systems, group and team studies, knowledge management, industrial economics, and technology management. The book is well-organized and the chapters flow logically. The book can be appreciated by both novices and experts in a wide array of disciplines, and its readership could include students, researchers, policy makers, and even curious minds that have an interest in economic development. While the book is quite dense already, I would have liked to see more references made to the mainstream knowledge management, knowledge organization, and even anthropological studies on the development of economies. These references are absent for the most part. This is a major shortcoming. At the very least, I would have expected the editor to state, even if only briefly, why that literature was ignored or not considered salient to the arguments laid forth in the book. The other concern I found is that the collection of authors, each of whom is highly accomplished and noteworthy, did not represent a globally representative group. I would have liked to see comments from authors in knowledge economies that have not yet developed or are struggling with the issues that the book points to. Bringing the perspective of these authors in the book would have made it a more comprehensive and engaging read. These limitations aside, I still feel energized about my own research agenda, in the area of knowledge management and complex informational problems, and the zeal for doing research that furthers the development of sustainable knowledge economies. The editors should be commended for doing an excellent job assembling this valuable scholarly product.

4 Responses

  1. Good review

    I agree with the wish to see more on KM in the development context. have a look at George Sciadas(ed.), Monitoring the Digital Divide…and Beyond available on

    There is more on development and indicators in OECD(2007), Integrating Science and Technology into Development Policies.

    The Chapter 4, that you noted in your review was reprinted in N. Janardhan Rao (2007), KNowledge-Based Economy, An Introduction, Hyberdad: The ICFAI University Press (2006).

    Fred Gault.

  2. Hi Fred –
    Thanks for the comments. I also have two chapters (both prior papers) published by the ICFAI University Press.

  3. Hi —


    Most of this is settled territory, well covered in the late 50s and early 60s by Fritz Machlup.

    What has changed dramatically in the 21st Century, is the fast rise and growing importance of value networks and network analysis to not only business, but whole economies, civil societies and the global environment.




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