Knowledge Economy: Why Is It So Important for Developing Nations

Abstract

It is not a mystery that Chinese companies are the leading actors in applying the low-cost company strategy. Business strategists have a well-defined compass: it is either a company chooses to produce cheap products and services via reducing the input costs or they could differentiate their products by tweaking their features or by upgrading their existing products and launching new products and services on a continuous basis. Select few can execute these two strategies simultaneously by making use of a cheap logistics structure, low inventory costs via, for example, just in time delivery. Today, it is difficult to keep up with the Chinese products with the notorious ability of the Chinese companies to employ very cheap labor and the Chinese government’s strategy in holding on to large reserves of American dollars.