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Measuring the Contribution of the “Knowledge Economy” to the Economic Growth Rate: Comparative Analysis

Abstract

The formation and development of the “knowledge economy” is an important characterization of the modern global world, and this process depends a lot from the development of education and science, which ensure the production and transfer of knowledge. In this regard, the dimension of the influence of this aggregated sector on the dynamics of the development of the economy as a whole is of importance. The purpose of the research is to determine the size of the sector “knowledge economy” in the European Union and some countries for comparison, as well as assess the contribution of this sector, measured by different methods in the rate of economic growth. The methodology of the study is a structural analysis, on the basis of which it becomes possible to single out the content of the “knowledge economy” sector and obtain a “structural formula” for assessing the contribution of this sector to the economic growth rate. The result of the application of this methodology was that it was possible to identify an overestimated estimate of the “knowledge economy” according to the Eurostat methodology, which takes into account the types of activities by the number of employees with a certain level of education, and the scale of the “knowledge economy” sector was comparable with the location of countries in terms of per capita income. Having considered the discussion regarding the experience of carrying out institutional reforms of education in the European Union, we come to the conclusion that the competence-based approach to basic education is limited in solving the problem of training personnel with higher education. The unreasonableness of institutional reforms that adjust education to the current tasks of the business, replacing the teacher with a computer, has a number of significant limitations that will not affect the measurement key, but can lead to a quality that will subsequently affect the rate of economic growth not upward.

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Notes

  1. 1.

    Source: World Bank https://data.worldbank.org/indicator/NY.GDP.MKTP.KDhttps://data.oecd. org/rd/researchers.htm.

  2. 2.

    A conservative is an economic agent engaged in activities of the opposite direction, or an innovator. It is aimed at existing products, markets, services, technologies, methods, processes, projects in the case that can only slightly improve them, but does not create completely new listed objects.

  3. 3.

    The effect of the globalization of scientific knowledge is understood as its dissemination with the lowest transaction costs due to scientific communication and the ability to quickly build up knowledge in some areas, having received relevant information about the research.

  4. 4.

    Eurostat: https://ec.europa.eu/eurostat/cache/metadata/Annexes/htec_esms_an8.pdf.

  5. 5.

    Ibid, p. 3-4.

  6. 6.

    ISCED: http://uis.unesco.org/sites/default/files/documents/international-standard-classification-of-education-isced-2011-en.pdf (ISCED level 5—short-cycle tertiary education, 6—bachelor’s or equivalent level, 7—master’s or equivalent level, 8—doctoral or equivalent level).

  7. 7.

    Although many researchers believe that in science, a negative result is also an important result.

  8. 8.

    Source: these types of activities were selected according to Eurostat https://appsso.eurostat.ec.europa.eu/ nui/submitViewTableAction.do Further for calculations GVA is reduced to 2010 prices using the GDP deflator. The sum of the indicated types of activities on added value makes up the aggregated sector of the ‘knowledge economy’.

  9. 9.

    OECD, Education at a Glance 2018: OECD Indicators, OECD Publishing, Paris. URL: https://doi.org/10.1787/eag-2018-enhttps://www.vestifinance.ru/articles/127510.

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Correspondence to Oleg Sukharev.

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Sukharev, O. Measuring the Contribution of the “Knowledge Economy” to the Economic Growth Rate: Comparative Analysis. J Knowl Econ (2020). https://doi.org/10.1007/s13132-020-00690-w

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Keywords

  • “Knowledge economy”
  • Education
  • gross domestic product
  • European Union
  • “Structural formula”
  • Institutional reforms of education