NCPA - National Center for Policy Analysis

Tracking The New Knowledge Economy

October 21, 1999

Although it has become a cliché that developed nations have moved into knowledge-based economies, precious little research has been done on that shift.

Now, the Organization for Economic Cooperation and Development has produced a new study which shows the most knowledge-intensive economy at mid-decade was that of Western Germany, not the United States.

  • The knowledge economy accounted for 58.6 percent of business output in Germany in 1996, 55.3 percent in the U.S., 53 percent for Japan, and 51.5 percent in 1995 for Britain.
  • In 1994, the figure for the European Union as a whole was 48.4 percent -- being notably dragged down by Italy.
  • Even in high-tech industries where the U.S. is widely thought to be ahead, the OECD study has America coming in behind Japan and Britain.
  • High-tech industries produce 3.7 percent of Japan's business output and 3.3 percent of Britain's -- but just 3 percent of that of the U.S.

In the OECD as a whole, knowledge-based industries accounted for over half of rich-country business output in the mid-1990s -- up from about 45 percent in 1985.


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