The crux of the label we use to describe an economic paradigm is that it usually points to the main driver of value: industrial, agrarian, etc. For the last few decades, we’ve tried several ways to describe the current economic paradigm. Two of the most prominent terms that still find use in the daily commentary of pundits are “knowledge economy” and “information economy” — and they’re used almost interchangeably.
What’s odd is that the two terms have completely different meanings.
Information is data. It’s raw and uninterpreted. It can be generated, collected, and even analyzed in massive quantities without much understanding. It’s a commodity.
Knowledge is interpreted data. It’s a good requiring some amount of skill and time to prepare. More importantly, it serves a specific function and is infused with human values.
This is more than a semantic difference. In an information economy, data rules the roost. Value is made by the control and manipulation of all kinds of data: personal data on consumer choices used by retailers, price data on stock market shifts used by Wall Street, metadata on communications used by intelligence agencies. It’s proprietary and closed.
In contrast, a knowledge economy generates value through the interpretation of data, and the application of it to human goals and values. Creativity and aesthetics in all forms dominate. A knowledge economy revolves around knowledge workers: educated, often multidisciplinary, making sense of what computers cannot.
I’ve been chewing this over in the wake of news that a company with about 50 employees and negligible physical assets has sold for $19 billion. That doesn’t seem like it’s about about either knowledge or information.
Network economy? Attention economy? Inequality economy?
(That last one probably deserves some elaboration, in something longer than a quick Monday morning post.)