The knowledge economy is not something philosophical or imagine by weird people.
It’s real! Here is why.
When we look at the technological periods since our arrival on earth, we see that, chronologically, we have had:
- The Stone Age
- The Bronze Age
- The Iron Age
- The Renaissance
- The Machine Age, with the First Industrial Revolution.
We’re now in the Information Age, in a shift from the traditional industry established by the Industrial Revolution to an economy primarily based upon information technologies.
From Data To Wisdom
Data, information, knowledge, understanding, and wisdom, are words that we’re confronted with daily. Used by thinkers for centuries to describe our civilization, they all have things in common. Do you know what it is?
I will try to make you understand what individually they represent, and what together, they form.
First of all, it’s interesting to understand what the DIKW pyramid is. It represents the structural and functional relationships between Data, Information, Knowledge, and Wisdom.
I think the phrase that would best qualify the DIKW is :
“Typically information is defined in terms of data, knowledge in terms of information, and wisdom in terms of knowledge.”
In my opinion, this one is not complete. We could also add “The understanding”, which, according to Clifford Stoll, comes after the knowledge :
“Data is not information, information is not knowledge, knowledge is not understanding, understanding is not wisdom.”
I think here, an example worth it.
A chocolate chestnut cake
Let’s talk cooking
If we want to cook a chocolate cake made of chestnut cream, we will first look at the ingredients needed. These are data.
Data on their own, have no meaning. The above ingredients taken separately doesn’t tell us that we are dealing with a cake.
But from these data, we can extract information. Information has a meaning — unlike data — but is rapidly perishable.
The pieces of information, extract from the list of data is directly related to the question: Do you have this ingredient in sufficient quantity?
In our example, we don’t have the chestnut cream. And because it is not always the case, it’s a piece of information.
Once we have all the ingredients, we can start reading the recipe. By reading it, we will acquire knowledge.
Knowledge is something reproducible and perishable over the long-term. In this case, no matter what, this recipe will still work, or at least, still be used (until we find that one of his ingredients is incredibly toxic for humans).
One thing for sure, reading the recipe doesn’t necessarily mean you know how to make a chocolate cake. You can possibly return it down on paper, but something is missing. That’s where the understanding comes into play.
Understanding, it’s feeling the egg in your hand breaks in half after little knocks on the edges of a pan. It is the sweet smell of cake. In a word, it is experiencing what we know.
To reveal the cover of a spy, it’s not wise to ask him knowledge questions like:
What did you do a year ago? In what district you lived?
It’s smarter to ask him understanding questions to know if his “legend” is a cover or not:
What shoes does the grocer used to wear? What smells were coming out of your neighborhood?
Finally, wisdom is imperishable. It’s a truth that stood the test of time. It is a self-knowledge coming from the ability to think and act using:
- common sense
If Plato or Marcus Aurelius came today, they could still teach us things we don’t know. If making this cake bring you insight that you think is valuable, you’ve extracted wisdom from it.
With this in mind and knowing that we are in a historical period named the Information Age, you may understand why some thinkers qualify the upcoming one, Knowledge Age.
The Age of Knowledge
Why are we in the information age?
We’ve seen in the space of 30 years an increase in both information storage and transmission coupled with miniaturization in electronic components. All of that has encouraged the development of the Big Data.
Big data is the art of changing a huge amount of data into information. And information is the heart of today’s massive digital companies incomes. So much so that it’s not untrue to say that a barrel of oil is less expensive than a barrel of data.
Facebook, for instance, is now doing $190/yr in revenue per North American user.
“If there is no charge, we are the product.” — Idriss Aberkane
Regarding this, just as oil companies protect their valuable resources, we should protect our data.
Anyway, I think right now we have a foot in the knowledge age. We’ve never been more interested in the functioning of our brain. Just the field of neuroscience alone has only been around for about 70 years, but is already ubiquitous.
Just as in ancient Greeks had this cult for the Human body, I believe that now, we’ve a cult for the Human brain.
Artificial neural networks, inspired by the biological neural network, is the most striking proof. Neuroscientists work now with the world largest company. They are hired to improve both their AI system and their human mind comprehension.
Netflix, for example, is the number one streaming platform. Why?
Because Netflix knows better than you what you might like. And you spend so much time on Netflix because they recognize precisely how to ease your watching. Notably by giving you dopamine from time to time. Also, by relieving you of the task of grabbing the remote control to change the episode.
Netflix don’t just sell video content like the old DVD rental companies. They sell the knowledge attached to it.
The creation, exchange, and usage of knowledge are more than ever rooted in our societies and in our daily consumption.
Why should we be interested in the knowledge economy?
First, it underlines the importance of immaterial exchanges.
We have a better understanding of palpable stuff: what can kill us, what we can eat. That’s why it’s hard to perceive immaterial exchanges like knowledge. Nonetheless, these remain paramount.
Then, it describes how to be a part of it.
Whether it is acquiring, use or transmit knowledge, we could all enjoy some first principles. As with the actual physics owes to the general relativity, the present learning owes to the knowledge economy and its first principles.
What is the Knowledge Economy?
Homo sapiens means human that knows. We define ourselves as a species that share knowledge above sharing material goods. And yeah, our ancestors exchange services way before trading palpable stuff.
I think that a good deal for the first humans was learning how to do a fire well ahead of obtaining a starter kit composed of pieces of wood, rocks, and a silex.
In the same vein, the most influential cities of all time, like the round city of Bagdad, Alexandria, Machu Picchu to name but a few, built their power in the immaterial world of knowledge.
Today’s oil-selling Baghdad is much less radiant that the Islamic Golden Age Bagdad in 762. At the time, Bagdad was a mecca for astronomy. Any good caravanner who had an astrolabe would come to Bagdad to update it with all the new observations.
The astrolabe was to Bagdad what the iPhone 1 was to Apple. Even though they both sold material goods, what have made and makes Apple rich is not the price of raw materials taken separately, but the knowledge derived from them.
The essential difference between Bagdad now and the 8th century Bagdad holds in one sentence. Today Bagdad digs the ground while Bagdad used to dig the sky. Knowledge is infinite, unlike petrol!
The 3 rules of the Knowledge-Economy
In this respect, it might be interesting to look at the 3 Rules that have made the knowledge economy.
1. Exchanges are at positive-sums
If I share with you a slice of Pepperoni pizza, I ended up with less pizza. If I share with you a slice of Knowledge pizza, Fortunately, I don’t lose this knowledge. Otherwise, my brain would look like a dry raisin.
“When we share a material good, we divide it. When we share an immaterial good, we multiply it.” — Serge Soudoplatoff.
2. The combination of knowledge is not linear.
1kg of rice + 1kg of rice = 2kg of rice.
If I decide to share a knowledge with you, this one will not just add itself to your previous amount of acquaintance. This one will interact with others and probably generate other ideas.
There is this concept of idea sex popularized by entrepreneur James Altucher. Idea sex is the process through which ideas “mate” to produce new ideas. It describes what Anne-Laure Le Cunff named; The combinational creativity.
For this purpose, we can see our state of knowledge and our friend’s one as two gardens in bloom. When you interact with him, A bee enters the game and do his pollinator’s duty.
As a result, It generates fruits, which, for a knowledge interaction, stands for ideas. Ideas can then grow new plants of knowledge.
3. Exchanges take time.
The only downside is that we can’t immediately obtain immaterial goods (unlike physical ones).
To upload knowledge in our brains, we need time and attention.
The Dr. Idriss Aberkane created a formula to qualify this exchange :
To buy knowledge, we must pay attention multiplied by times. An At—the dollar of the knowledge economy—represents an hour at our maximal concentration.
«What does “maximal attention” means?»
We reach maximal attention when we are fully immersed in an activity. In positive psychology, we name it the flow state. It’s a feeling of energized focus, full involvement, and enjoyment in the process of an action. Idriss describes it as the moment you didn’t realize that you’ve missed the train station cause you’re too absorbed in reading a book.
It’s pretty fun to imagine a store of knowledge with shelves full of skills that we can acquire.
In this fake store, we could imagine each skill with a prize in At. Some are pretty basic and don’t need much At, like the alphabet. Other are hard and so cost a lot of At, like the general relativity.
In fact, it is quite conceivable to say that to buy an acquaintance you’d better have to fall in love with it.
Love can do
The Satin bowebird looks like this :
As you can see, his feathers have a blue sheen, remarkably charming to the female. To emphasize this one, the Satin bowebird populate its nest with blue pieces of plastic.
When this little guy is in love—besides the huge amount of time spent to prepare the nest—, he can unscrew bottle caps, an extremely tedious task for a bird. It is the same for humans. When we love somebody/doing something, we can give a high level of attention, and an awful lot of time, all with pleasure.
What it means is that, in the knowledge economy, we can easily spend much more At when we love something.
All top successful people love what they do, which gave them this incredible resilience: an out of the ordinary ability to getting punched in the face without cave-in.
There’s still a lot say about the knowledge economy. I’ve done my best to broadcast what I think are the most powerful aspects.
Actually, I see the knowledge economy as a mental model underneath the vast universe lurks behind the word “Knowledge”. To learn, to produce, to create, to transmit, in my opinion, all these areas can benefit from the wisdom given by the knowledge economy.