UK ‘leads in export of ideas and knowledge’

20 Jun 2007 | News
The United Kingdom is the leading knowledge economy according to the London-based think tank, The Work Foundation.

The United Kingdom is the leading knowledge economy according to the London-based think tank, The Work Foundation.  

The Foundation argues that knowledge services is the one category of economic activity in which the UK appears to be leading the rest of the world.

Analysing official trade figures the Foundation found that in 2005, the UK exported about £75 billion worth of knowledge services, up from £28 billion in 1995, and now accounts for 6.3 per cent of gross domestic product.

This represents a quarter of all UK exports – significantly more than any other major economy.

Ian Brinkley, director of The Work Foundation's knowledge economy programme, said, “In pubs up and down the land, people ask what Britain does these days to make its money. The answer is increasingly apparent that it sells specialist brainpower to the rest of the world.”

Outselling the US

According the Brinkley the UK trades on ideas, knowledge and technology-related industries much more than other big economies do. “We sell more knowledge services as a proportion of overall exports than anyone else, and that includes the US.”

Knowledge services, as defined by the Organisation for Economic Co-operation and Development, span a wide variety of industries and activities that all rely on ideas, high levels of specialist knowledge, and the exploitation of science and technology.

These include; research and development; engineering and technical services; legal, accountancy, consulting and advertising services; income from royalties, licence fees and intellectual property; financial services, such as banking and insurance, computer, information; and communication services, especially electronic publishing, software and gaming, the creative and cultural industries, such as television and media and the audio-visual industry and entertainment.

At the same time, the traditional division between manufacturing and services is breaking down. The manufacturing sector itself generates many knowledge service exports – in business services, royalties and licence fees, technical and trade related services.

Rather than making things, jobs in manufacturing today involve designing, maintaining, advising and financing activities. In 2004, 46 per cent of all manufacturing workers were knowledge and white collar workers; just 11 per cent were unskilled.

Brinkley argues that the idea of a manufacturing-knowledge service see-saw, where if one goes up the other must go down is wrong and outdated. “Our assessment is that the rise in knowledge services has taken place independently of the decline in manufacturing.”

A working metaphor

The Work Foundation, an independent research organisation and consultancy is in itself a metaphor for the UK’s move from manufacturing to services, being set up in 2002 as the successor to the Industrial Society. While the Industrial Society was set up in 1918 to raise the UK’s economic performance, and quality of its workplaces, the Work Foundation aims to develop ideas and knowledge about successful workplaces.

Just over a year ago the Foundation started the Knowledge Economy project with £1.5 million of government funding to define the Knowledge Economy, analyse how it works and predict what its future will be.


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