The transition to the knowledge economy in advanced capitalist democracies: a new index for comparative research

Sebastian Diessner, Niccolo Durazzi, Federico Filetti, David Hope, Hanna Kleider and Simone Tonelli

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: This article sets out to develop a new index capturing advanced capitalist democracies’ transition to the knowledge economy. Reviewing how the notion has evolved in the literature, the article proposes a definition of the knowledge economy based upon two key elements—technology and (high) skills. These are operationalized in six indicators and combined through Bayesian latent variable analysis to produce a new Knowledge Economy Index, covering twenty-two countries from 1995 to 2019. A descriptive exploration of the index provides important insights for the emerging body of work on the knowledge economy in comparative political economy. The index is the first to provide a comprehensive measure of the knowledge economy that accounts for both technology and skills across space and time. As such, it paves the way for future research examining the causes and consequences of the transition to the knowledge economy in advanced capitalist democracies.

Keywords: knowledge-based economy; labour markets; skills; technological change (search for similar items in EconPapers)
JEL-codes: O33 P51 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2025-03-23
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Published in Socio-Economic Review, 23, March, 2025. ISSN: 1475-1461

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