A knowledge economy: it's all in the mind

JOE 90, the bespectacled schoolboy hero of children's television in the Sixties, must be due a comeback any time now. His original audience, now approaching middle age, will recall that he was a sort of smarter Harry Potter, whose gigantic brain needed only the correct data to identify threats to world peace and bring evildoers to book without resort to shoot-outs or punch-ups.

Already the boy-genius's spirit is stalking Whitehall, where it is an accepted fact that Britain's economic future will be based almost entirely on brain rather than brawn, and that the bigger the brains, the brighter that future will be.

Education Secretary Estelle Morris unveiled plans this month for vocational GCSE and A-level exams as a step towards closing the status gap between academic and workbased subjects. Morris's is just the latest in a long line of 'initiatives' to lay the foundations for a 'knowledge economy'.

This knowledge economy is that rarity in a government with few beliefs: an article of faith. 'We know what a 21st Century society needs - a knowledge-based economy,' Tony Blair told his party conference in September 1999.

Chancellor Gordon Brown is even more enthusiastic. He can hardly write a note to the milkman without some reference to it.

Recent examples include 'the new economy, which depends on knowledge' (December 19, 2001), 'the new information-age economy' (November 15, 2001) and 'skills, knowledge and creativity make the decisive difference' (July 26, 2001). For those too busy working in the real-life economy to have paid much attention, here, in a nutshell, is the thinking (for want of a better word) behind the knowledge economy.

Millions of unskilled and semi-skilled jobs (mainly, though by no means all, manual jobs) have been or will be eliminated by technology. Those that survive will migrate to developing countries where wage rates are lower.

SO the only safe and certain future for our labour market is in deepening 'human capital' - in other words, ensuring that Britain's inventory of 'people product' is of a higher intellectual quality than that of its competitors, and thus capable of 'adding value' to the nuts and bolts manufactured either by robots or by low-paid workers in less happy lands.

Here is the rationale behind vocational A-levels, behind the fraud-riddled and discontinued 'individual learning accounts' project, behind the target of half the entire population attending university.

The picture it paints is not unattractive, especially given the blurring of 'knowledge' jobs with 'creative' employment, with its hidden suggestion that everyone will in future work for Stella McCartney or the Tate Modern.

But there is one problem with the knowledge economy - it doesn't exist.

Take employment. Yes, manufacturing employment has declined, though it never was the biggest at any time. And, yes, we have created millions of new jobs during the past two decades.

But the bulk of these new jobs are not, by any stretch of the imagination, in 'knowledge industries', let alone in 'creative' activities. Indeed, on some measures, the biggest single growth industry has been domestic service. That's right - domestic service.

Writing in 1999, economics expert James Heartfield calculated that cooks, cleaners, nannies, gardeners and the like, funded both publicly and privately, accounted for 14.4% of the total workforce - much the same proportion as in 1861.

He wrote: 'According to the Government annual, Social Trends, domestic service declined until

1978. Since that date, however, British expenditure on domestic service has more than quadrupled in real terms.'

Adair Turner, former head of the

CBI, is also deeply sceptical about the 'knowledge economy'.

Writing last year, he highlighted the fact that the collapsing cost of computer intelligence eliminates or dumbs down many middle-level 'brainy' jobs.

The result is that the future economy is as likely to value 'skills that are essentially subjective, physical and intuitive' as it is to prize 'knowledge processing'.

Turner concludes: 'Many of the most rapidly growing jobs will be in some senses high-touch rather than high-tech.'

Of course, 'high touch' implies a type of human service, whether nanny or restaurant chef, that requires some degree of skill or, if you prefer, 'knowledge'.

But a moment's reflection on the types of jobs almost impossible to automate would throw up, among many others, furniture removal, a task that is no more (or less) a 'knowledge job' now than it was a century ago.

We have been here before. In the early Sixties, the knowledge economy was called the 'technological revolution'. But it was the same illusion, with mystical references to the 'white coat jobs' of the future - all apparently in laboratories and nuclear power plants.

Twenty years on, we had the 'year of information technology' in 1982, and the then youthful Minister, Kenneth Baker, being photographed next to word processors.

There may be excellent reasons for vocational A-levels, degrees in tourism and computer literacy courses for adults. The knowledge economy is not one of them.