Statistics to Measure the Knowledgebased Economy KBE: The Case of Hong Kong, China 2004 Asia Pacific

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Statistics to Measure theKnowledge-based Economy
(KBE)The Case of Hong Kong, China 2004 Asia
Pacific Technical Meeting onInformation and
Communication Technology (ICT) Statistics30
November 2 December 2004Wellington, New Zealand
Census and Statistics Department (CSD)
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Statistical Framework on KBE

• Growing importance of knowledge in all sectors of
  economic activities
• Demand for indicators to measure the degree to
  which an economy is a KBE
• A framework on KBE needed
• No internationally agreed statistical framework
  on KBE so far

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What is a KBE

• A KBE is a broader concept than an Information
  Society (IS)
• IS concerns the production, handling and
  distribution of information or codified knowledge
• KBE concerns the learning of both the codified
  knowledge and the competencies to this information

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What is a KBE

• The term KBE first coined by OECD (1996)
• Economies which are directly based on the
  production, distribution and use of knowledge and
  information
• APEC definition (2000)
• In a KBE, the production, distribution and uses
  of knowledge is the main drivers of growth,
  wealth creation and employment across all
  industries

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What is a KBE

• KBE also referred to as New Economy or Modern
  Economy elsewhere
• OECD Growth Project (1999)
• Study the underlying differences in growth
  performance of OECD countries
• Results suggested that there is a New Economy
• Some elements regarded as the fundamental
  characteristics of a KBE, e.g. capital investment
  on ICT

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Existing framework on KBE

• Frameworks developed by international
  organizations
• OECD
• APEC
• World Bank
• Frameworks developed by individual countries

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OECD Framework

• KBE framework along with the development of
  science and technology (ST) indicators (1996)
• Measuring knowledge inputs (e.g. RD)
• Measuring knowledge stocks and flows
• Measuring knowledge outputs (e.g. high technology
  industries)
• Measuring knowledge networks (e.g. innovation
  surveys)
• Measuring knowledge and learning (e.g. rate of
  return to investment in education and training)

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OECD Framework

• Further OECD framework (1999, 2001)
• Creation and diffusion of knowledge (ST
  indicators)
• Information economy (information society
  statistics)
• Global integration of economic activity
• Economic structure and productivity

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OECD Framework

• Factors important for a KBE identified in the
  OECD Growth Project (2001)
• Stable and open macro-economic environment with
  effectively functioning markets
• Diffusion of ICT
• Fostering innovation
• Investing in human capital
• Stimulating firm creation

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APEC Framework

• Four dimensions identified by APEC to be
  responsible for the strong economic performance
  of some economies (2000)
• Innovation and technological changes
• Human resources development
• Efficient ICT infrastructure
• Business environment supportive of enterprise
  innovation
• Similar framework for New Economy (2001)

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World Bank Framework

• Programme on Knowledge for Development (K4D) of
  World Bank Institute
• Overall performance of the economy
• Economic incentive and institutional regime
• Education and human resources
• Innovation system
• Information infrastructure

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World Bank Framework

• 69 structural and qualitative variables on the
  above five areas
• http//info.worldbank.org/etools/kam2004
• Comparison of the 69 variables for a group of 100
  economies
• Simplified knowledge assessment scorecards
  consisting of 14 key variables

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Hong Kong Framework

• Statistical indicators on KBE grouped under 4
  major dimensions
• Innovation system
• ICT
• Human resources development
• Business environment

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Hong Kong Framework

• Innovation system
• Indicators to reflect the quantity, quality and
  rate of knowledge and information
  production/creation in the economy
• ICT
• Indicators to reflect the efficiency and
  effectiveness of knowledge and information
  distribution in the economy

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Hong Kong Framework

• Human resources development
• Indicators to reflect the quantity and quality of
  individual equipped to access and use of
  knowledge and information to further
  production/creation and distribution of knowledge
  and information in the economy
• Business environment
• Indicators to reflect a business environment
  conducive to the production/creation and
  distribution of knowledge and information in the
  economy

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Hong Kong Framework

• Criteria for selecting KBE indicator
• International comparability
• Availability
• Relevance
• A total of 80 indicators preliminarily identified

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Hong Kong Framework
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Issues and Challenges

• No internationally agreed framework
• Lack of optimal level for some indicators
• Some indicators in the business environment
  dimension are too general in distinguishing a KBE
  from a non-KBE
• Adoption of small number of break-through
  technologies not fully reflected
• Multi-dimensional analysis vs. an overall index

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Census and Statistics Department (CSD)
Thank You QA