The knowledge economy is where intellectual skills, knowledge, understanding and ideas are central to economic activity and more important than physical effort
The pharmaceutical industry is a good example
It is the idea that we use our brains to make our living rather than our hands and manual labour
It is about how new technologies have helped transform the way we think and act
Ideas and knowledge can drive economic growth, and the government has estimated that over 60% of production is created by knowledge workers
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Implications to businesses
More emphasis on R&D (Research and Development)
A need to invest in new technology and communications and keep updating
A need to adapt to rapidally changing markets
Employees may need training and updating
Managers will need to keep up with new developments
New ideas will need protecting
There will be more competition from both home and abroad
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Implications to the wider economy
Education becomes more important
Retraining of those with non transferrable skills is necessary
Certain skills such as IT and science need encouraging
Investment is needed in infrastructure such as broadband and transport
IPR (Intellectual Property Rights) need to be protected
Areas of structual decline need investment and help
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