Building a knowledge society in Egypt
Nader Fergani, Tuesday 4 Feb 2014
There are ways to transfer Egypt from relying on borrowed money from abroad, to establishing an economy based on knowledge

Some readers who commented on my political articles asked me to refocus my attention from ongoing political quarrels to look at creating a renaissance in Egypt. It is a topic that is close to my heart and writing.

In this article I will heed these suggestions by calling for what I believe is a bigger gateway to Egypt’s revival through creating a knowledge society rooted in the most important resource in Egypt: free, knowledgeable and innovative human beings – as has been the case in Egypt’s long history. This is the complete opposite of what Egyptian governments accomplished before the great revolution of the people. Previous governments adopted sterile economic policies that focused excessively on wealth and gathering funds to spend primarily on immediate needs, even if this meant borrowing and begging.

This does not establish real development but instead binds future generations into paying back the loans with interest, which could result in historic catastrophes not only because the economy continues to be weak, but also by jeopardizing national independence itself – which is exactly what Egypt suffered in the previous era.

The intention of this article is to urge for a detailed plan that is achievable to transport Egypt from relying on borrowed money from abroad to establishing an economy based on a knowledge society according to a specific timeline, such as by 2025. To pave the way conceptually, let’s begin by looking at evolving the definition of resources and the science of economics.

In the early stages of humanity, value was measured by possessing rare minerals and precious rocks (the mentality of Ali Baba’s treasure trove). This primitive thinking evolved into accumulating capital after discovering money and making that a credit for value. When the shortcomings of this feckless materialistic logic became apparent, humanity decided that liberty (in its broader sense, namely freedom of the country to that of the citizenry) and knowledge (the value of a person and society in terms of how much knowledge they generate, including implicit knowledge in literary and artistic innovation) are the substance of fundamental human development.

Accordingly, the science of economics evolved from studying hunting, drilling (extraction) and bartering once monetary systems were created to accumulating capital for production and spending. Today, the focus is on acquiring and producing knowledge. Thus, the narrowest definition of economics at this point is an economy based on capital focused on trading in goods in return for money. The broader concept in real economics is related to production and the effects of economic activity of human beings in terms of education, health, operations and human welfare (where issues of services, unemployment and poverty are key).

Today, the key principle in the science of economics is that all economies evolve to the next level: the economics of knowledge include what is known as real economics. This means everything related to the relationship between human beings and economics, where the importance of education, employment, standard of living and human welfare in general – including freedom – is paramount. According to the latest definitions in economics, gaining knowledge is of particular importance in what is known as the economics of knowledge, which is the goal of any advancing economy, including the global economy itself. There is growing interest in the economics of knowledge and a deluge of scholarly literature on the issue. Today there is even a specialised scientific journal on the subject.

The economics of knowledge focuses on utilising knowledge to create the foundations of human welfare. The term was coined by Peter Drucker as the title of Chapter 12 in his book The Age of Discontinuity (1969) and he attributes the phrase to economist Fritz Machlup. It is rooted in the idea of scientific management development by Frederick Taylor. The knowledge economy develops on earlier ideas such as the information society, and transitions into adapting to the global economy. Knowledge and innovation are resources to create the foundations of human welfare that are as important, if not more so, than other economic resources.

The knowledge society is one where all activities rely on utilising and applying knowledge. It contributes to the development of humanity through production of up-to-date knowledge. What are the reasons for transitioning into a knowledge society as a means to revival?

The era of measuring a nation’s wealth by precious metals, stones and minerals is gone for good. At the same time, measuring humanity’s progress based on financial accumulation is also waning and almost extinct. Meanwhile, acquiring knowledge, especially producing it, is steadily becoming the fundamental standard for humanity’s progress and the key criterion for human progress. In 1990, when the UN Development Programme presented the concept of human development as a necessary correction for development theory that centred on economic growth at the time, knowledge was a cornerstone in new thinking.

In 1999, the World Bank issued its annual world development report titled Knowledge for Development and said that the knowledge gap, not income gap, is the main defining factor for the progress of nations. It noted that the gap in the ability to acquire knowledge between developing and advanced countries is greater than the gap in knowledge itself. The report emphasised, in a notable disengagement from the economics of absolute free economics, on the need of active support by the state and regional blocs in efforts to gain knowledge where knowledge markets are known to have failed. Meaning, the incentive of profit alone is not enough to activate knowledge production and thus, the need for knowledge by the poor and weak in general remains unsatisfying (World Bank, 1998-1999).

History shows that flourishing civilisations and national language are directly connected in this region, like others around the globe, with the unique ability to acquire knowledge. At the same time, the deterioration of civilisations in the region over the past seven centuries occurred in tangent with a drop in knowledge capabilities. A general rule for humanity is: the degree of knowledge acquisition decides the value of the nation as well as its rise and fall. Human beings are the vessels of knowledge. A claim that connects the acquisition of knowledge with importing the latest technological tools and machines is nonsense, and indicates ignorance of the facts.