The knowledge economy and the digital economy

The world is currently experiencing the fourth industrial revolution 4.0, which is a digital revolution improveing productivity and production levels by fundamentally changing the way manufactured goods and services are designed, produced and used. Developing countries could take advantage of their backwardness in terms of technology and gain significantly on frontier countries and thus experience rapid productivity and income catch-up. 

With this regard, knowledge economy achieves, the objective of economic and social development through the efficient use of knowledge, which requires the integration and localization of foreign knowledge, as well as the adaptation of local knowledge to meet the specific needs of the economy and the society in general. The knowledge economy rests on four pillars: education and training, information and technology infrastructure, the innovation system, the economic incentive system, and the country's institutional system. Innovation is at the heart of the knowledge economy, which is the engine of economic growth in the age of the fourth industrial revolution.  Many Arab countries have made the knowledge economy a major theme in their development plans, confirming their commitment to sustainable development.

Keeping pace with the technological progress that has created unprecedented global material wealth in record time is the focus of the digital economy (or internet economy) as a knowledge economy.  The most important recent trends in the digital economy include automation and robotics, blockchain, artificial intelligence, the Internet of Things, 3D printing, cloud computing and data analytics.  As a result of these new technologies, the labor market will undergo a massive transformation, including the disappearance of jobs in some sectors and the creation of new jobs in others.  In Arab countries, the transition to the digital economy will require new skills, new social protection policies and a new balance between work and leisure.  Investing in digital transformation also means investing in education to transform it into a modern learning and skills set.  In many Arab countries, ambitious sector plans are being developed to accelerate digital transformation and anticipate the hoped-for technological future.

Through a variety of capacity-building programs and specialized training, the Arab Planning Institute aims to raise awareness of the importance of the knowledge economy and digital transformation in Arab countries and to encourage Arab governments to reform education and training system.