Knowledge Economy



A system of consumption and production that is based on intellectual capital. The knowledge economy commonly makes up a large share of all economic activity in developed countries. In a knowledge economy, a significant part of a company's value may consist of intangible assets, such as the value of its workers' knowledge (intellectual capital). However, generally accepted accounting principles do not allow companies to include these assets on balance sheets.


Lesser-developed countries tend to have agriculture or agriculture and manufacturing-based economies, while developing countries tend to have manufacturing or manufacturing and service-based economies, and developed countries tend to have service-based economies.

Most countries' economies will consist of each of these three major categories of economic activity, but in differing proportions relative to the wealth of that country. Examples of knowledge economy activities include research, technical support and consulting.

  1. Goldilocks Economy

    An economy that is not so hot that it causes inflation, and not so cold that ...
  2. Seed Stock

    An investment security that is based on shares of a publicly traded, agriculture-based ...
  3. Tortoise Economy

    An economy that is growing slowly or not at all over time. The classic example ...
  4. Black Economy

    The segment of a country's economic activity that is derived from sources that ...
  5. Economy

    The large set of inter-related economic production and consumption activities ...
  6. Old Economy

    A term for the old blue chip industries that enjoyed fabulous growth during ...
  7. New Economy

    A buzzword describing new, high-growth industries that are on the cutting edge ...
  8. Tiger Economy

    A nickname given to the economies of Southeast Asia. Some of the tigers are ...
  9. Lion economies

    A nickname given to Africa's growing economies.
  10. TIMP (acronym)

    'TIMP' is an acronym that stands for 'Turkey, Indonesia, Mexico ...
Related Articles
  1. How Globalization Affects Developed ...
    Fundamental Analysis

    How Globalization Affects Developed ...

  2. How Education And Training Affect The ...

    How Education And Training Affect The ...

  3. Tankan Survey Provides Clues To Japanese ...

    Tankan Survey Provides Clues To Japanese ...

  4. What Is An Emerging Market Economy?

    What Is An Emerging Market Economy?

  5. What's the difference between old- and ...

    What's the difference between old- and ...

  6. Perfect Competition

    Perfect Competition

  7. Mixed Economic System

    Mixed Economic System

  8. An Analysis Of Social Security Benefits ...

    An Analysis Of Social Security Benefits ...

  9. How the Cost of Living Affects Your ...
    Personal Finance

    How the Cost of Living Affects Your ...

  10. What Exactly is a Socialist Economy?

    What Exactly is a Socialist Economy?

comments powered by Disqus
Hot Definitions
  1. Cash and Carry Transaction

    A type of transaction in the futures market in which the cash or spot price of a commodity is below the futures contract price. Cash and carry transactions are considered arbitrage transactions.
  2. Amplitude

    The difference in price from the midpoint of a trough to the midpoint of a peak of a security. Amplitude is positive when calculating a bullish retracement (when calculating from trough to peak) and negative when calculating a bearish retracement (when calculating from peak to trough).
  3. Ascending Triangle

    A bullish chart pattern used in technical analysis that is easily recognizable by the distinct shape created by two trendlines. In an ascending triangle, one trendline is drawn horizontally at a level that has historically prevented the price from heading higher, while the second trendline connects a series of increasing troughs.
  4. National Best Bid and Offer - NBBO

    A term applying to the SEC requirement that brokers must guarantee customers the best available ask price when they buy securities and the best available bid price when they sell securities.
  5. Maintenance Margin

    The minimum amount of equity that must be maintained in a margin account. In the context of the NYSE and FINRA, after an investor has bought securities on margin, the minimum required level of margin is 25% of the total market value of the securities in the margin account.
  6. Leased Bank Guarantee

    A bank guarantee that is leased to a third party for a specific fee. The issuing bank will conduct due diligence on the creditworthiness of the customer looking to secure a bank guarantee, then lease a guarantee to that customer for a set amount of money and over a set period of time, typically less than two years.
Trading Center