Knowledge as a Key to Wealth
Googling and outsourcing are not merely buzzwords and popular terms of our times. They rather reflect technical and economic developments that have become a part of our daily lives. As information is available faster, this also changes the order of wealth. This aspect is, inter alia, discussed by Alvin and Heidi Toffler in their publication “Revolutionary Wealth”. But how does this new order of wealth differ from “familiar” economics? Is knowledge really the decisive key to wealth? Which risks do these developments harbour?
Knowledge — value creation — economy
Knowledge drives wealth creation — because it is inexhaustible. There is no limit to its quantity. What does that mean? When you grow rice in a field, I cannot grow rice in the same field at the same time. By contrast, we can use the very same knowledge — how to grow rice — at the same time and it does not decrease. The more people use knowledge in their work, the more knowledge do they tend to create. Knowledge is more mobile than any other product, and it can be abstracted and condensed to symbols. It tends to leak and is difficult to protect. It is non-linear so that minor insights may result in major returns. And, above all, it is intangible. Intangible factors have always been integrated with tangible goods. The Peruvian economist Hernando de Soto explains that a piece of land is not “property” in material terms as long as there are no “intangible” ownership rights or societal norms ensuring that. These intangible factors are like the protective rind surrounding the flesh of a watermelon. Companies like Google are just a rind and do not have a tangible core. Still, they are worth several billions of dollars. In advanced economies, intangible factors leave capitalism’s tangible basis of property behind — a moneyless economy, so to speak. That sounds rather utopian and does