Knowledge economy?

Articles from August 2013
What if President Park gets what she wants. Does it affect private schools in anyway? Do we need to “get ready”, as in when the government changes direction all the rules get revisited.

Let us first understand what is a Knowledge Economy.

Some links for you to read:
Knowledge Economy
2004 paper
Some criticism

This term was being thrown around since the 90′s, back when I was still studying at University.

Since my Korean is limited to the point that I cannot read newspapers, let me just focus on what I can find.  A promo piece.

“One of the key points of the creative economy is to foster future growth engines and create jobs through the convergence of the IT industry and future-oriented industries and of the broadcasting and communications industries,” said Park, explaining her vision of a creative economy.

As you might see from this comment, she might not understand what Knowledge Economy really means. She is using Knowledge and Creative as facsimile, which they are not.

She continues:

”The future of Korea lies in the efforts of creative businesses and talented workers like you,”

If you had the patience to read through all of that, you probably are interested in these concepts and might know a few things about them. My first problem is that Knowledge Economy is a Macro-Economic concept, and Macro-economics aggregates (or tries to) Micro-economics in such a way that the individual becomes just a number. You can guess from my tone, I am not a big fan of Macro-economics.  Macro-economics was created to help governments find a way to manage their countries by using “levers” of the economy, and establish policies to further their goals (most of the time focused on growth and fighting unemployment).  Since governments (or those in power) rely on votes from the populace, their incentives are quite simple and clear.

Therefore, when people talk about the Knowledge Economy, it is nothing more than a box to put a type of labor in. You have Agriculture (Food), Production (Stuff), and Services (Brains). But that doesn’t seem to be good enough. Now, we need to distinguish between Production, Mass-Production and the Knowledge economy. Let’s look at the definition:

“The knowledge economy is the use of knowledge (savoir, savoir-faire, savoir-etre) to generate tangible and intangible values.”

Isn’t that just Services? Of course, a cleaning lady is not a Knowledge worker! (I disagree, she “knows” how to clean better than me!). Therefore my simple conclusion is that it is just a smokescreen for something governments don’t yet understand and are trying to control.

The real problem is “Creativity” or at least the fundamental characteristics. They are the exact opposite to what government represents. How can a government try to control something that is uncontrollable, fluid? They try very hard with “public education”….. Luckily, in the Korean Constitution, it is clearly written that people have the freedom to be educated, in any way they want.

South Korea – Constitution 
Article 31 [Education]
(1) All citizens have an equal right to receive an education corresponding to their abilities.
(2) All citizens who have children to support are responsible at least for their elementary education and other education as provided by law.
(3) Compulsory education is free of charge.
(4) Independence, professionalism, and political impartiality of education and the autonomy of institutions of higher learning are guaranteed under the conditions as prescribed by law.
(5) The State promotes lifelong education.
(6) Fundamental matters pertaining to the educational system, including schools and lifelong education, administration, finance, and the status of teachers are determined by law.

Let’s look at Knowledge and Creativity, first.

Knowledge is thus acquired through education and experience.
Creativity is thus a phenomenon whereby something new and valuable is created.

Not the same, is it.

Knowledge is something that can be controlled, supported, enhanced by governments, but creativity comes from the Individual. Knowledge can be aggregated, Creativity cannot.
I would even like to postulate that any individual with sufficient intellect can gain knowledge in any field, but not creativity. Knowledge deals with what we know, where creativity explores what we don’t know. We don’t know what we don’t know until we positively experience the fact that we don’t know. Knowledge is certainty, creativity is taking chances and pushing the envelope. Creativity without knowledge cannot achieve much, Knowledge without Creativity doesn’t progress. Society needs individuals who can both acquire Knowledge and be courageous (or desperate) to be Creative.  Intelligence goes well with Knowledge, but is not that important with Creativity (smart people are often very boring).

How do we handle this within the educational system? Korean’s public education system is, simply put, inadequate to deal with creativity. They do try, I must admit, but having 30+ kids in the classroom might not be that conducive for creativity, and the emphasis on sciences and languages don’t help much either.  Korea’s culture might also have some issues efficiently allocating resources to individuals who display traits to maximize creative output, demonstrated by the immense expenses on the private education system.

So we have two problems. A government that doesn’t run an efficient public school (is that even possible?), but supports the lowest common denominator and parents who all want their children to be prodigies of the future (but preferably in a stable job like doctors or lawyers, not artists).  The only arts supported are the classical arts by people who can afford it.  It always amazes me if I do see creative Korean people capable of creeping out of the woodwork to show what they can do.

My personal experience with Korean children shows me that these kids ARE creative, because they are constantly pushed to do so, at a very young age.  Once they hit elementary school, it slowly fades away. I think the fundamental problem is that Koreans do not understand the basic concept of diminishing returns. Diminishing returns simply states that at a certain point, an increase of input creates a decreased output. Another interesting micro-economic concept is Opportunity Costs. The opportunity cost is the “cost” incurred by not enjoying the benefit that would be had by taking the second best choice available.

The problem is that one hour spend studying might have been better spent resting (aka sleeping). Our brain is not an infinite machine that can keep on running (even though it does, but you know what I mean).  A growing brain, like that of a child, is incredibly responsive to its surroundings.  By constantly putting it under pressure, you are slowly leaking future potential growth. The brain, in sleep mode, performs incredibly important “re-structuring”, to enhance it’s own ability to process information. (FYI )

When you ride your bike, the more you ride it, the stronger YOU get, but you also need to maintain that bike, or initial small damages (lack of grease, twisted metal, used break pads, ..) can culminate in much bigger problems (accidents). The brain maintains itself by sleeping. Isn’t it more fun to ride a bike that just flows compared to one where you feel the drag of all the little issues slowing you down, or makes you feel ….insecure? Exactly.

There we have it. To really achieve a full functioning “Knowledge Economy”, a government needs to think on how they can help kids BE knowledgeable AND creative. A balance needs to be struck.  I love how parents sacrifice so much for their children, but too much is too much.

How does this affect private schools?
I do believe that the current generation is waking up from their educational disillusionment. Already, America and Europe are suffering from having an over-educated (aka wasted time) populace that cannot find a job (over-specialization). South Korea is heading exactly the same way, if it is not there already. Schools will have to adapt to bring more result driven programs that won’t exhaust children before they reach their peak (yes, bike pun intended).
The current hagwon system is not maintainable, since it supports the test-taking culture, except maybe for those parents that remain in the belief that their children are prodigies waiting to be discovered (ad infinitum).

In my own experience, South Korea’s mentality might not be ready for the alternative just yet. A reality where skills are measured to their future potential, and education is adapted to those skills. Einstein is not Edison, they both have different skill-sets, both were capable of maximizing their skill set appropriately. (Kill creativity) and also (Pre-school investment)

Korean parents are still very focused on measurable output (aka testing till they drop), mostly an effect of the constant fear Koreans have ingrained into their minds through cultural pressures, and the need for higher social status. Is the next generation going to change the course or stay the course? Only time will tell.

To maybe end this long winded babble. I find Education to be the single most under-researched topic in Economics. The only people doing research in education are educators, which is silly. You don’t ask plumbers to do research in architecture, they cannot have an objective mindset about what they are researching. I have already stated in the past that I find the research done in the field of education are not up to standards of other sciences.

Maybe on a final note

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