[1] The key element of value is the greater dependence on human capital and intellectual property as the source of innovative ideas, information, and practices.
A knowledge-based economy relies on the crucial role of intangible assets within the organisations' settings in facilitating modern economic growth.
For companies, intellectual property such as trade secrets, copyrighted material, and patented processes become more valuable in a knowledge economy than in earlier eras.
In the mid-1900s, world economies moved towards a post-industrial or mass production system, where they were driven by the service sector that creates greater wealth versus manufacturing; to the late 1900s - 2000s, knowledge economy emerged with the highlights of the power of knowledge and human capital sector, and it's now marked as the latest stage of development in global economic restructuring.
[10][33] In the final decades of 20th century, the knowledge economy became greatly associated with sectors based in research-intensive and high-technology industries as a result of the steadily increased demand for sophisticated science-based innovations.
[23] In the knowledge economy, the specialised labor force is characterised as computer literate and well-trained in handling data, developing algorithms and simulated models, and innovating on processes and systems.
[37] Therefore, the technical STEM careers, including computer scientists, engineers, chemists, biologists, mathematicians, and scientific inventors will continue to see demand.
[37] Ruggles and Holtshouse argue the change is characterised by a dispersion of power and by managers who lead by empowering knowledge workers to contribute and make decisions.
[38] With Earth's depleting natural resources, the need for green infrastructure, a logistics industry forced into just-in-time deliveries, growing global demand, regulatory policy governed by performance results, and a host of other items place a high priority on knowledge, and research becomes paramount.
Knowledge provides the technical expertise, problem-solving, performance measurement and evaluation, and data management needed for today's competition's transboundary, interdisciplinary global scale.
[41] The knowledge economic hubs include information technology in Silicon Valley, United States; water and agricultural technology in Silicon Wadi, Israel;[42] aerospace and automotive engineering in Munich, Germany; biotechnology in Hyderabad, India; electronics and digital media in Seoul, South Korea; petrochemical and the renewable energy industry in Brazil.
[43] Many other cities and regions try to follow a knowledge-driven development paradigm and increase their knowledge base by investing in higher education and research institutions to attract highly skilled labour and better position themselves in the global competition.