Knowledge Economy

AAA

DEFINITION of '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.

INVESTOPEDIA EXPLAINS 'Knowledge Economy'

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.

RELATED TERMS
  1. Goldilocks Economy

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

    An investment security that is based on shares of a publicly ...
  3. Tortoise Economy

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

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

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

    A term for the old blue chip industries that enjoyed fabulous ...
Related Articles
  1. How Globalization Affects Developed ...
    Fundamental Analysis

    How Globalization Affects Developed ...

  2. How Education And Training Affect The ...
    Economics

    How Education And Training Affect The ...

  3. Tankan Survey Provides Clues To Japanese ...
    Economics

    Tankan Survey Provides Clues To Japanese ...

  4. What Is An Emerging Market Economy?
    Economics

    What Is An Emerging Market Economy?

comments powered by Disqus
Hot Definitions
  1. Last In, First Out - LIFO

    An asset-management and valuation method that assumes that assets produced or acquired last are the ones that are used, sold ...
  2. Ghosting

    An illegal practice whereby two or more market makers collectively attempt to influence and change the price of a stock. ...
  3. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  4. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  5. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  6. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
Trading Center