Knowledge Economy and Proliferation

This article is focused on extending the knowledge economy to Low Income Countries.

As for the reference to proliferation- it will become clear along the next few pages, followed by a list of bibliographical references, should you be interested in reading more.

This article was originally planned as a more detailed (and practical) document, but, due to the lack of time, I decided to just share the core conclusions and the introduction.

My basic approach when presenting a thesis is to share the information I used to formulate or support my idea- and then let the reader decide if (s)he agrees or disagrees.

I would like therefore to start from the end, and outline my thesis:

First point: if you lack all the basic “infrastructural” elements of a knowledge economy, including the availability of “knowledge by-products” to allow an expanded or casual access, you cannot build a viable, self-sustaining knowledge economy

Second point: “seeding” a knowledge economy requires a long-term investment whose benefits would be spread across the economy, but the private sector cannot directly justify investing in something that could actually be beneficial to new competitors, free from the burden of old processes and infrastructure

Third point: a knowledge-based economy requires a structured knowledge management that cannot be simply left to the traditional from father to son (or apprenticeship), as in traditional agriculture or services, but needs a formal foundation delivered by schools, and continuous education- including approaches to identify the value of the knowledge transferred, licensed, or transmitted (the “return on investment”)

Fourth point: a “knowledge building” initiative probably could be financed both by private and public actors, but the nature of a company based on private capital is to expand, not to cooperate

Fifth point: building a knowledge infrastructure requires external “seeding”- in resources or motivation- and then building a self-sustainable knowledge economy

Access to knowledge in developed economies

Brussels, London, Paris, Rome, Zurich share an interesting feature: I always found there some shops selling used books with unusual subjects, at a price low enough (sometimes less than 1 EUR) to allow taking the risk, after a quick browsing in the book shop.

In part, due to the limited shelf space also in university and public libraries, in part for the usual “rotation”- pushing out what is considered to be “currently irrelevant”.

But you can also count on a widespread network of libraries, book shops, and, of course, schools, universities, research laboratories- or the universal, undifferentiated knowledge dump, the Web.

When talking about spreading the knowledge economy, most suggestions end up in “let’s share for free on the Web”- as if everything that was actually used to produce those results were to be irrelevant.

Creating this “knowledge infrastructure” (except for the public libraries) wasn’t just an act of kindness, but a required component of a sustainable economy, at first just to support industrial production.

“Knowledge” is immaterial- but if you look at everyday products such as your mobile phone, you will only need to remove the battery to understand that it is more complex than it seems.

To use your mobile phone, you need “production” people who know about telecommunication engineering, others who know how to produce at a relatively low cost in high volumes, and still others able to package the electronics and the screen so that you can use them.

Finally, you need a common agreement between different parties on the basic standards: communication, transmission, even the placement of keys and letters on your keyboard.

And I am ignoring all the “service” people and types of expertise required to enable your phone to connect to the network, and to allow your phone call to reach whoever you want to call.

The used books are but a by-product of our knowledge-based economies, and, for me, represent a “window on our past”, as you will read in other sections of this article.

On Monday and Tuesday I attended two conferences, one organized and attended mainly from the academic and institutional sector, the other organized by a single corporation, Microsoft.

While both talked about technology, the scope could not have been different: as the objectives diverge.

Celebrating the 50th anniversary of the laser

Actually, laser is an acronym, and therefore some purists would prefer LASER: that we use the lowercase name, also in scientific publications, is a sign of how “ordinary” is a laser.

Yes, I have a laser pointer on my keychain- as a consultant, I almost never found a laser pointer available when it was needed.

The first one that I bought, in the last century? It was more expensive than current entry-level smartphones.

The one on my keychain? It was cheaper than a paperback.

As I already wrote on my blog, the seminar that I attended here in Brussels on Monday attracted my interest first for its content (science) and then for its source, South Africa.

An interesting side to the South Africa’s National Laser Centre is that it is linked with the African Union-sponsored African Laser Centre, along with a network of 6 “knowledge centres” across the continent.

At the seminar the speakers were both from Africa and Europe, and South African speakers stressed the role of their country in helping to develop similar knowledge centres across the African continent.

With a side remark from many of the participants: “cooperation” on research is still seen as a North-South knowledge transfer, not as a joint development.

The uses of lasers are ranging from the medical to the industrial, but the most interesting issue is that laser research spans across our current “human body of knowledge”.

From automatic cleaning of archaeological artefacts, to early cancer detection, to production in micro-batches, to the possible uses in energy production, as one of the approaches for nuclear fusion is based on lasers.

Part of my interest in attending the seminar was that South Africa is actually a nuclear country (i.e. able to produce weapons), that decided not to have nuclear weapons.

Why this is so interesting? Because building the supply chain for any industry as complex as the nuclear industry, with its requirements for the highest precision, complex rules and processes, timely delivery and logistics, and production and waste treatment spanning multiple lifetimes, requires building a knowledge economy.

And the seminar title “Enhancing African – European cooperation in laser science and technology” implies more than just few occasional projects.

Incidentally: also the host country, Belgium, stated that its innovation research entity in Flanders, VITO, originates from the nuclear centre SCK (and are both still on the same site).

Complexity management in the XX century

As I wrote yesterday, until 1939 the US had the 19th standing military (and, few years before, had slightly more than 60.000 men, while the post-WWI Germany had over 100.000).

Developing in a couple of years a multi-million military required converting for few years the economy into a war economy, and adopting to the public sector methods and processes deriving from the private sector, as related in a documentary the late former US Defense Secretary Mc Namara.

Just consider the number of people involved in nuclear weapons programmes such as the Manhattan Project, or Trinity, or the logistics of landing in Northern Africa first, and in Italy and France later.

To be able to deliver what is needed when and where needed, you need not only an efficient transportation system, but, to reduce the costs involved in piling up for later transportation, also to integrate the production cycle into your logistics.

At the beginning of the Cold War, activities such as the production of the first nuclear submarine gave us production and planning methods that are still in use today.

As I wrote above, I consider “nuclear” any country that has all the infrastructural components (human, physical) needed to actually produce weapons.

Countries such as Japan retained the ability, while Italy, in signing and finally ratifying in 1975 the Non-proliferation Treaty (NPT), obtained a “clausola europea”, as called by Sergio Romano, i.e. the possibility of joining a European nuclear deterrent, if and when the EU were to adopt it, as proposed in 1958.

And a flurry of activities in late 1960s generated published rumours in the US about the activities of EURATOM (and, in Italy, at Frascati), and also in the Eastern Bloc after the Patzelt defection (probably both publications were an act of preventive non-proliferation, as the two leading countries were converging on the non-proliferation issue).

But retaining the knowledge infrastructure requires its use: when Italy in 1987 voted to close or convert existing nuclear power stations, eventually the Italian companies willing to retain the expertise set up agreements with companies in other countries.

A prior case of knowledge-decay (no pun intended) was the road networks left behind by the Roman Empire: few centuries later, also without maintenance, they were still in use, but nobody knew how or had a reason to intervene.

Only a social structure built on a larger (in space) and longer (in time) perspective could afford the specialization, the economies of scale that specialization requires, and justify the investment.

Another interesting post-WWII side-effect was the increased urbanization, further expanding the need of feeding and supporting concentrated populations working on industry and services.

Knowledge transfer and knowledge building

Since 1990s, I had the chance to talk around Europe with people involved in setting up industrial facilities abroad, both during my travels and to support startups and SMEs.

The common complaint was: some countries, lacking what I called the “knowledge infrastructure”, accepted the limited concept of knowledge transfer that foreign companies were willing to apply.

Limited to stockpiling components, maybe some “maquilladora” (i.e. assembling), and some limited servicing expertise (operational maintenance).

For anything else, from extraordinary maintenance, to improvement and research, they would need to keep in the loop the supplying company, usually with some form of “IPR licensing” agreement.

Instead, other countries were asking to “groom” local suppliers, through a joint-venture.

The complaint? The local suppliers sometimes started producing under their own label, as they controlled the production process A-to-Z, and started also innovating processes, e.g. to remove expensive automation machinery that required constant tuning, and develop an alternative manual process using relatively cheaper labour.

Overall, the first type of country was just a market, while the second required significant investments.

The difference is often one of perspective- those involved in developing something seemingly as simple as a new shoe “embed” in a single completed product probably hundreds of years of product experience, from how to use leather in a shoe, to its “ergonomy”, to the external appearance.

When you transfer the experience, and try to bill it, you risk getting the feed-back that reportedly Picasso received.

A woman asked him to do made something for her on the spot, and he made impromptu a small sign on paper, then saying something like “50 000 dollars”- when she replied that he had spent only few seconds, he said that she wasn’t buying his time, but his 50 years of experience.

If your aim is to replicate just the results, and maybe develop new ones, you will become able to see the value of the knowledge that you did not acquire only after you tried to evolve it, and will start repeating some of the mistakes that you were told that you would have been done if you did not get the full package of knowledge.

And the only way to have a perception of its value is if,and when, the proponent is able to explain the benefits without transferring too much.

One of the points raised at the laser seminar was: few companies with the expertise needed participate actively in these cooperation initiatives.

The reason? In part, fear of sawing off the branch on which they are sitting, as I saw often in my business activities.

Building the knowledge infrastructure

Few organizations are actually investing on something outside their own control (the future), as most instead manage what they have or plan to have, in the most efficient way.

But countries cannot afford to sit on the fence, as transforming a cultural environment requires working across generations.

After WWII, the Marshall Plan was also part of the conversion toward civilian uses of most of the US economy.

Nonetheless, the buildup of WWII created a certain degree of structural integration (what President Eisenhower called “The Military-Industrial Complex”) that would not be so easy to dismantle, as the only way to close a temporary structure is to remove key “knowledge holders”, the financial support, and the physical and communication infrastructure.

Otherwise, it will end up as an association created to sustain the veterans of a specific war from the 1860s in Italy… still active over one century after: it will find a reason to exist.

The Cold War was, in the end, an economic war, as it forced both blocks on a “chickening out exercise” based on the assumed strength of each one of the contenders (also if it wasn’t really “cold” for many countries).

The countries who were part of the “cold” side were able to develop the human and social infrastructure required to produce a knowledge economy, albeit this did not imply the development of a consumer economy.

Nonetheless, after the official end of the Cold War, countries both on the West and the East of the “Iron Curtain” developed innovations that would simply have been impossible without the knowledge infrastructure.

Also when short on cash, former USSR research centres were still able to send cosmonauts into space, and develop new advanced technologies.

Shimon Peres recounted in the early 1970s the history of the agreement with the US to build a small reactor to desalinate seawater, and all the ensuing negotiations involving international institutions.

Everybody knows what then happened- as Israel is an undeclared nuclear power, reportedly with a significant number of warheads (exceeding the aggregate French+English).

By importing finished products (e.g. planes, technologies), and scientists who would then become part of the local community, in few years the country was able to replicate a similar feat to the one done by the US to prepare for the war in Europe and Asia.

But, clearly, it was beneficial to “import” scientists and technicians that already had the experience, and shared a similar cultural approach, instead of importing temporary loans from abroad.

Introducing the complexities involved in the nuclear industry in a country with limited resources required innovation in both research/production and financing: eventually, transferred also to the civilian economy.

Proliferation and knowledge economy

The current non-proliferation regime is built mainly on containment, by sharing the end results (e.g. nuclear energy production), but limiting access to the creation of the supply chain.

As discussed above, “maquilladora” operations do not create self-sustainable development.

It is interesting to observe that the countries at the top of the technological league are or have been able to produce nuclear weapons or develop and deliver nuclear reactors.

The nuclear energy or nuclear weapons programmes are a visible approach that enables to focus on something long term, build formal knowledge building activities, develop the educational system to ensure a constant supply, and help create all the contributing industries that are critical to high-tech development.

Probably the most important aspect is creating all the “human pipeline” to embark on a long-term project whose results and side-effect will not be necessarily achieved during the lifetime of its participants or initiators, and adopting production and research approaches that require multiple independent activities to converge on a unique result.

Thereafter, once produced, there is the “service industry” to maintain the readiness or infrastructure.

Once in place, all the logistics, research, innovation, production, servicing approaches could actually filter down not only in educational institutions, but also build a “buffer” between the academic-oriented research and applied science, by lowering the cost for new SMEs of the adoption of innovative technologies and processes.

An alternative non-proliferation structure could probably consider this “knowledge supply chain” approach: expressing the willingness to create a nuclear weapon requires creating the “knowledge supply chain” described above, but not necessarily the weapons.

It is probably simpler and more credible to identify the economic and knowledge side-effects of the nuclear weapons industry in the countries that were able to develop a knowledge economy.

And then develop a new charter, such as the one adopted by the African Union jointly with South Africa, to help develop a “virtual knowledge supply chain”, allowing also LICs to become part of the knowledge supply chain of their neighbours, without embarking in programmes that would be economically unsustainable, and avoiding “proliferation by building kit”.

In the end, once the infrastructure (physical or virtual, e.g. via Internet) is in place, nothing forbids having teams working together, split across a whole continent, following the lesson delivered by somebody in another continent.

In the near future, also the physical laboratory could be centralized in a single location, while allowing also physical interaction in the classroom, e.g. by giving students access to telepresence tools, such as those used now to intervene on patients remotely.

And it would be easier to share the knowledge infrastructure across a continent, while keeping the physical structure in a single location.

Reducing both the costs and the proliferation risk, and allowing to share innovation between few continental centres, instead of having potentially dozens of “desert cathedrals”.

Bibliography

Allison, Graham “Nuclear Disorder” Foreign Affairs January February 2010; pages 74-85

Bradley, David “No Place to Hide 1946/1984” University Press of New England/Dartmouth College, 1948/1983; pages IX, 169-194

Cacace, Paolo “L’ atomica europea” Fazi Editore 2004; pages VII, 6

Etzioni, Amitai “Tomorrow’s Institution Today” Foreign Affairs May/June 2009; pages 7-13

Ferguson, Charles “The Long Road to Zero” Foreign Affairs January February 2010; pages 86-94

Freedman, Lawrence “Frostbitten” Foreign Affairs March/April 2010, pages 136-144

Gunnar Folke Schuppert “The Europeanisation of National Governance Structures in the Context of the Transformation of Statehood” in “The Europeanisation of Governance” WZB Berlin 2006; pages 9-57

HelfStein, Scott “Friends Don’t Let Friends Proliferate”, Political Science Quarterly Summer 2010; pages 281-307

Howe, Jeff “Crowdsourcing” Random House Business Books 2008; pages 261-288

Krepon, Michael “The Mushroom Cloud That Wasn’t” Foreign Affairs May/June 2009; pages 2-6

Lieber, Keir and Press, Daryl “The Nukes We Need”, Foreign Affairs November/December 2009, pages 39-51

Peres, Shimon “David et sa fronde” Stock 1971; page 123

Rodman, Peter W “Presidential command” Vintage Books 2009

Thomas, Paul “Le KGB en Belgique” Editions J M Collet 1987; pages 45-52

Weiner, Sharon “Organizational Interest, Nuclear Weapons Scientists, and Nonproliferation”, Political Science Quarterly Winter 2009-2010; pages 655-679

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