Recognized but under-appreciated: why the knowledge economy needs blockchain

Recognized but under-appreciated: why the knowledge economy needs blockchain

The idea that knowledge plays an important role in economy is not a new one. Modern economists, in their search for the foundations of economic growth, have come to approach knowledge as having more direct functions in production.

Global economies recognize this, turning their attentions in the past two decades to the so-called “knowledge-based economy”, emphasizing the production, distribution, and use of knowledge. OECD estimates that even before the 21st century, knowledge-intensive sectors such as education, communications and information accounted for more than half of major OECD economies’ GDP. Countries emerging from the global financial crisis, such as the UK, have begun investing more into intangible assets including knowledge-based sectors.

Recognition of knowledge’s value may be clear but the global economy has yet to fully appreciate its true worth when embodied in people, otherwise known as human capital. The Human Capital Index 2016 reported that the global economy “has failed” more than a third of the world’s talent.

Outside of developed nations in Western Europe and East Asia, most of the world has yet to fully utilize their human capital potential despite a clear correlation between an economy’s income level and its capacity to develop and deploy knowledge via human capital.The World Economic Forum’s executive chair Klaus Schwab reflected that:

Today’s transition to the Fourth Industrial Revolution, combined with a crisis of governance, creates an urgent need for the world’s educators and employers to fundamentally rethink human capital through dialogue and partnerships

Knowledge-based enterprises are thriving

Today, there are several online initiatives that in some part address the issue, narrowing the gap between knowledge producers, human capital, and economies

Some major ones such as LinkedIn focus on the workforce aspect, bridging knowledge workers with prospective employers while allowing users to market themselves and connect to or build upon industry networks with user-generated content such as skill-based insights and testimonials. Others, like Quora, provide a way for users to seek advice and solutions from community-identified experts, rated and moderated within the network.

Human capital enterprises such as these have become industries in their own right. In Q3 2016, LinkedIn reported revenues over approaching $1 billion, with a quarter of that coming from ad revenue. Quora only started monetizing through ads in the same year, taking advantage of 190 million monthly users on its knowledge-sharing platform valued at $1.8 billion.

Blockchain innovations in human capital

The criticism of such knowledge-based platforms is that the human capital themselves see little, if anything, of the revenues generated. Worse still, user-generated content and information risk being sold to providers, advertisers, and recruiters. Users generate knowledge yet retain no ownership or share in the rewards.

The blockchain industry was one of the first to address such issues but some problems are more persistent than others. For instance, how is knowledge qualified and quantified? A solution proposed by blockchain startup Knowledge.io hopes to address this issue.It plans to use blockchain innovation to introduce a new way for people to validate an individual’s knowledge and expertise and connect knowledge experts with advertisers. Knowledge.io co-founder Steven Englander spoke of the company’s goal to democratize knowledge-sharing through an incentivized model:

By rewarding people with Knowledge tokens, we are able to provide a decentralized knowledge sharing ecosystem where Knowledge flows between advertisers, partners, and users for the benefit of the entire community’s decision making in areas such as commerce, education, and employment

How blockchain tech can help users control their knowledge

Block chain based knowledge startups  can make it easier for the average user to control their own knowledge and even monetize it. Creating unique ecosystems is certainly one aspect of it but it far from the only one.

Beyond monetization and rewards, the key benefit of an immutable blockchain that tracks learning and records knowledge validation has far-reaching future implications for future generations of learners.

With a public record on their knowledge that cannot be altered, knowledge producers are able to retain ownership of their knowledge, while being able to provide tamper-proof evidence of their knowledge levels.

In the world of today, education and knowledge are often used interchangeably when they are usually not. Recruiters know this best, of course; a student with good degrees may not be suitable for a particular role, while a person with no academic qualifications yet who possesses real-world knowledge may well be better-suited.

Judging such things today is an incredibly complicated process which is not without its faults. Competing against others based on blockchain facts may not be the answer to everything but it is surely a start to a more objective truth when it comes to the acquisition of knowledge and what comes after.

This post is part of our contributor series. The views expressed are the author's own and not necessarily shared by TNW.

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