The knowledge economy, knowledge based economy (EBC) or knowledge industry, is the sector of the economy that uses knowledge as a fundamental element to generate value and wealth through its transformation to information. It covers areas such as education, research and development, high technology, computing, telecommunications, robotics, nanotechnology and the aerospace industry. Since the end of the 20th century, investment in intangible capital has grown considerably even to a greater extent than tangible capital (machinery, raw materials, etc.).
In reality, the Knowledge Economy does not generate value and wealth through its transformation into information; it creates added value in the products and services in whose process of creation or transformation it participates. Knowledge is much more than mere information. Information is processed data with a general utility, while knowledge means ways, methods and ways to approach and solve problems; means among many other things, " Know-how ", "Know Who" or tools or means of production to produce in turn, or more knowledge or products and services with added value, useful and quantifiable for society.
The Knowledge Economy is structured on a material basis that has allowed great changes on economic, social and political activities. The new material base applied to production is constituted by the electronic-digital computer that has reconfigured the social relations of production, distribution and exchange in the world.
In this way, contemporary capitalism presents a Knowledge Economy where the activities of creation, adaptation, diffusion and depreciation of knowledge has grown at a very fast pace. In this Knowledge Economy a new industrial development pattern is structured where new industries arise (software and telecommunications) and traditional industries are rejuvenated by the productive application of new technologies.
In the economic-political level, employer-employee relations have been forced to change according to the demands of these new conditions. The economic policies of the countries especially the developed countries have been oriented towards investment in research and technological development, education, health and in the constitution of national innovation systems as a fundamental element for the development of the country.
The so-called globalization has been possible thanks to these technological achievements of the electronic-computer sector that has allowed a new division of labor based on global production chains assigning a certain activity by means of subcontracting and the like between producers, distributors and buyers..
The profitability of knowledge is only possible when it has been codified, transforming itself into codified knowledge (model, general rules, etc.) and remaining available for any agent to work with it, for their individual or collective benefit.