The knowledge economy, or knowledge-based economy, is an economic system in which the production of goods and services is primarily driven by knowledge-intensive activities that contribute to the advancement of technical and scientific innovation. The key element of value in this paradigm lies in the increased reliance on human capital and intellectual property as primary sources of innovative ideas, information, and practices. Organizations are called upon to leverage this "knowledge" in their production processes to stimulate and consolidate their business development. This approach is characterized by reduced dependence on physical inputs and natural resources. A knowledge-based economy is founded on the crucial role of intangible assets within organisations as an enabler of modern economic growth.
Knowledge-based economy in the context of Quaternary sector
The quaternary sector of the economy is based upon the economic activity that is associated with either the intellectual or knowledge-based economy. This consists of information technology; media; research and development; information-based services such as information-generation and information-sharing; and knowledge-based services such as consultation, entertainment, broadcasting, mass media, telecommunication, education, information technology, financial planning, blogging, and designing.Other definitions describe the quaternary sector as pure services. This may consist of the entertainment industry, to describe media and culture, and government. This may be classified into an additional quinary sector.
The term reflects the analysis of the three-sector model of the economy, in which the primary sector produces raw materials used by the secondary sector to produce goods, which are then distributed to consumers by the tertiary sector.
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