Defining and identifying the knowledge economy in Scotland: a regional perspective on a global phenomenon

The development and growth of a knowledge economy has become a key policy aim for governments in all advanced economies. This is based on recognition that technological change, the swift growth of global communications, and the ease of mobility of capital across national borders has dramatically changed the patterns of international trade and investment. The economic fate of individual nations is now inseparably integrated into the ebb and flow of the global economy. When companies can quickly move capital to those geographical locations which offer the best return, a country's long term prosperity is now heavily dependent on its ability to retain the essential factors of production that are least mobile. This has led to a premium being placed on the knowledge and skills embodied in a country's labour force, as it has become a widely accepted view that a country which possesses a high level of knowledge and skills in its workforce will have a competitive advantage over others with a lower domestic skill base. Knowledge and skills are thought to be the basis for the development of a knowledge economy.