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The OECD economies are increasingly based on knowledge and information. Knowledge is now recognised as the driver of productivity and economic growth, leading to a new focus on the role of information, technology and learning in economic performance. It has also brought about calls for more emphasis on research and innovation, training and flexible structures of work.l
Knowledge, as embodied in human beings (as human capital') and in technology, has always been central to economic development. But only over the last few years has its relative importance been recognised, just as that importance is growing. The OECD economies are more strongly dependent on the production, distribution and use of knowledge than ever before. Output and employment are expanding fastest in high-technology industries, such as computers, electronics and aerospace. In the past decade, the high-technology share of OECD manufacturing production (Table 1) and exports (Figure, p. 8) has more than doubled, to reach 2025%. Knowledge-intensive service sectors, such as education, communications and information, are growing even faster. Indeed, it is estimated that more than 50% of GDP in the major OECD economies is now knowledge-based.
Investment is thus being directed to hightechnology goods and services, particularly information and communications technologies. Computers and related equipment are the fastest-growing component of tangible investment.2 Equally important are more intangible investments in research and development (R&D), the training of the labour force, computer software and technical expertise. Spending on research has reached about 2.3o of GDP in the OECD area. Education accounts for an average 12% of OECD government expenditures, and investments in job-related training are estimated to he as high as 2.5% of GDP in countries such as Germany and Austria which have apprenticeship or dual training (combining school and work) systems. Purchases of computer software, growing at a rate of 12% per year since the mid1980s, are outpacing sales of hardware.' Spending on product enhancement is driving growth in knowledge-based services such as engineering studies and advertising. And balance-of-payments figures in technology show a 20% increase between 1985 and 1993 in trade in patents and technology services.
It is skilled labour that is in highest demand in the OECD countries (Table 2, p. 8). The average unemployment rate for people with a lowersecondary education is 10.5%, falling...