In Our Current Economic Society, is What We Earn Dependent on What We Learn?

A knowledge-based economy is an economy that depends on technology and information to drive the economy. It represents a shift from the industrial economy where labour is the main driving force of the economy. It specializes in consumer and producer services such as the advertising, finance, entertainment and others.

Globalisation, therefore, shapes the knowledge-based economy. It allows labour, capital and technology to be mobile. Globalisation forces the economy to be competitive in order to survive. Individuals thus have to improve their skills and upgrade themselves in order not to lose their jobs. Hence, it is true that what you earn depends on what you have learnt. However, the government plays an important part in providing education or attracting Multi-national Corporation into the country to invest. What an individual earns may be much higher or lower than what he learns depending on the direction the economy is heading.

A knowledge-based is a continuously changing one. Technology is rapidly improving and capital equipments may suddenly become obsolete. Firms are forced to lower production cost to improve their competitive edge. A knowledge-based economy is more service-orientated as it sells ideas or information instead of goods. With improvement in telecommunications, countries can gain information and technology easily. Knowledge is rapidly acquired and easily obtained. With an increase in knowledge, people are becoming more educated and hence knowledge itself has become inexpensive. Gone are the days where a university graduate was hard to find. In today's society, people are becoming more skilful and thus the economy has become more competitive since skilled labour is widely available. This lowers the cost of skilled labour. This is evident in China as it produces 23 million graduates every year. Moreover, these skilled workers are willing to work for a lower income. Unskilled workers are the ones most badly hit. Due to the structural shift in the economy, their skills become easily replaceable by machines doing the manual labour. Years of knowledge in that industry become wasted. The unskilled workers in this case will lose their jobs to people who have the sills to adapt to the new economy.

Income, in the past, is based more on the amount of work a person puts in. The longer a person works, the higher paid he is. However, in today's society, knowledge is more important than effort. The brain is more important than brawn. High our paying jobs are those that require high-order thinking and critical analysis. The top management are the ones that make the major decisions and are paid the highest although they do very little manual labour. Due to the cheap labour in China, most manufacturing industries are relocated there. However, their headquarters are still based in cosmopolitan cities like New York and Tokyo where the major decision-making is made.

However, income no long depends on what you learn also. Innovation becomes more important. The ability to come up with new knowledge and technology is the skill that is highly sought after. Since knowledge becomes widely available, even highly skilled labour can become replaceable unless they upgrade their skills and seek to improve themselves. The highly paid worker is one whose innovation skill is not easily replaceable.

The government also plays an important role in affecting the income earned by individuals. Steep income tax can erode the purchasing power and discourage efforts. The government's ability to attract multi-national corporations to invest will create more employment and hence increase income. The government should also place greater emphasis on education so that its people will be highly skilled and remain employable.

Since the knowledge-based economy is ever changing, its demand for different services also changes rapidly. Hence, the ability of the economy in response to these changes is crucial to sustain its economic growth and income. Individuals should seek to acquire skills in the particular industry to remain employable. For example, a decline in manufacturing industry in Singapore saw a lost of jobs in the manufacturing sector. However, there is an increase in jobs in the service sector as Singapore moves toward a knowledge -based economy.

In the recent years, research has shown that "Emotional Quotient" is more important than "Intelligent Quotient" in work. "EQ" shows a person's ability to communicate with others as well as how he reacts to different situations. This is more important than "IQ" as working effectively will result in higher efficiency in the workplace. Thus, what you have learnt become less important.

According to Thomas Friedman, the author of "The World is Flat," the whole world is on equal playing field. There is less inequality in the global arena. Today new economy giants such as India and China are catching up with America economically.

Comparatively advantage is the key to economic growth. China is able to produce almost everything at a cheaper price than other countries and hence their Gross Domestic Product (GDP) is one of the highest in the world. India is one the major outsourcing centre and they too are experiencing rapid income increase. Hence, a competitive economy will lead to a greater employment opportunities and an increase in income for the individuals in that country.

I disagree that what you earn depends on wage you have learnt as the application of the knowledge and ability to come up with new ideas is more important. It provides the individual with a competitive edge over others. This process must be continuous as others are catching up at the same time. The ability to make ones' skills irreplaceable and highly valued is the factor that will lead to much higher income.

In my final analysis, it is true tat in today's knowledge-based economy, what you earn depends on what you have learnt because of the increasing importance on knowledge and information. However, the ability to tap into this new area of development is crucial. Governments should provide individuals with the necessary infrastructures as such research and development hubs or improve communication network so that individuals can tap into this unlimited pool of knowledge. The government should also provide patents and copyrights to companies that innovate so that the economy's competitive edge would not be easily eroded. This will protect the income of the individual. Finally, individuals themselves should upgrade themselves constantly and embrace the motto of life long learning so that they can always be a step ahead of others.