SOCIETAL IMPACT OF ICT

Information Technology (IT) is playing a crucial role in the society. It has transformed the whole world into a global village with a global economy. As technology has advanced, the way in which privacy is protected and violated, has also changed. Several positive and some negative social implications of IT could be farreaching. IT has already had many direct beneficial effects on society, being used for complicated human and social problems such as medical diagnosis, computer assisted instruction, government program planning, environmental quality control and law enforcement. In this chapter, we will discuss various threats and ethical issues related to IT and their impact on our society in general.

MALWARE: MAJOR ETHICAL ISSUES

Malware stands for Malicious Software. It is a broad term that refers to a variety of malicious programs that are used to damage computer system, gather sensitive information, or gain access to private computer systems. Malware is an unwanted software that any unauthorized person wants to run on your computer. These are known as security threats. It includes computer viruses, worms, trojan horses, rootkits, spyware, adware etc.

Some of them are described below:

1. Computer Virus

VIRUS stands for Vital Information Resource Under Siege. Virus is a harmful program, which enters a computer system and starts replicating itself and then corrupts the executable files and folders causing serious damage to the computer system. It may damage or corrupt data, change data or degrade the performance of your system by utilising resources of computer such as memory or disk space. The virus can also affect or attack any part of the computer software such as the boot block, operating system, system areas, files and application program. Computer virus needs to be attached with some other programs or executable files to move from one computer to another. In other words, they need host to survive and an external action to activate itself. Thus, virus is a self-replicating computer program which installs itself without user consent. E-mail attachments, games etc are examples of programs that generally carry viruses. e.g. Bomber, Whale, OneHalf, KoKo, Eliza etc. Some common types of computer virus are as follows:

(i). Boot Sector Virus

It is also called Master Boot Record Virus. A boot sector virus is a computer virus that infects a storage device’s Master Boot Record (MBR). A boot sector virus usually infects the computer by altering the boot sector program. Also, boot sector mainly infects the hard disks or the floppies.

e.g. Polyboot.B, AntiEXE etc.

(ii). Macro Virus

It is a computer virus that infects applications or programs that contain macros like .doc, .xls, .pps etc and causes a sequence of actions to be performed automatically when application is started or something else triggers it. They hide in documents shared through E-mail and networks. e.g. Melissa.A, Relax, Bablas etc.

(iii). File System Virus

It is also called Cluster Virus or Directory Virus. It infects the directory of your computer by changing the path that indicates the location of a file. It changes the directory, so that when you try to run a program, you first run the virus, e.g. Dir-2 virus

Characteristics of a Computer Virus

•  The characteristics of a computer viruses are as follows:
• ·         The ability to replicate itself.
• ·         The ability to attach itself to another computer file.
• ·         It requires a host program as a carrier.
• ·         It is activated by external action

Symptoms of Computer Viruses Attack

The list of symptoms of computer viruses attack, which indicate that your system is infected with a computer viruses are as follows:

• ·         Odd messages are displaying on the screen.
• ·         Some files are missing.
• ·         System runs slower.
• ·         PC (Personal Computer) crash or restart again and again.
• ·         Drives are not accessible.
• ·         Antivirus software will not run or installed.
• ·         Unexpected sound or music plays.
• ·         The mouse pointer changes its graphic.
• ·         Receive strange E-mails containing odd attachments or viruses.
• ·         PC starts performing functions like opening or closing windows, running programs on its own.

How Computer Viruses Spread?

Computer viruses can spread through E-mail attachments, application programs on your computer or application programs installed from disk drives.

A computer virus spreads from one computer to another in the following ways:

• ·         Using a local network to access infected files lying on other computer.
• ·         Using infected external storage devices such as CD, floppy disk and pen drive.
• ·         Surfing suspicious Websites on the Internet.
• ·         Downloading infected files and gaming software from the Internet.
• ·         Opening infected E-mail attachments.
• ·         Executing an injected file on a computer.

Possible Damages Caused by Virus

The damages caused by a virus, which infect a home computer or a corporate network can be different from insignificant increase in outgoing traffic to the complete network breakdown or the loss of critical data. There are many different effects that viruses can have on your computer, depending on the types of virus.

Some viruses can:

• ·         Monitor, what you are doing on computer.
• ·         Slow down your computer’s performance. Also, can cause the system to hang.
• ·         Download illegal files onto your computer without you being able to delete them.
• ·         Destroy all data on your local disk, alter data in data files and can destroy specific executable files.
• ·         Generates IP addresses randomly and sends those IP address automatically.
• ·         Effects computer networks and the connection to Internet.
• ·         Steal confidential information like password, account number, credit card information by random Emailing.
• ·         Destroys the file allocation table, which leads to the corruption of an entire file system. Thus, arising the need to reinstall the system.
• ·         Reduces the available disk space or memory space by creating duplicate files
• ·         Creates bad sectors on the disk, destroying parts of programs and files.

2. Trojan Horse

A Trojan or Trojan Horse, is a non-self replicating type of malware, which appears to perform a desirable function but instead facilitates unauthorised access to the user’s computer system. It is a code hidden in a program such as a game or spreadsheet that looks safe to run but has hidden side effects. When such program runs, the trojan destroys, damages or alter the data in the background while it seems to function as per the user expectation.

Trojans do not attempt to inject themselves into other files like a computer virus. Trojan horses may steal information, or harm their host computer systems. Trojans may use drive by downloads or install via online games or Internet-driven applications in order to reach target computers.

e.g. Beast, Sub7. Zeus, ZeroAccess rootkit etc.

How Trojan Horses Spread?

Trojans are generally downloaded with some other program or application. Trojans are also spread through E-mail and exchange of disks and information between computers. Trojan, itself is a program that does not need a host to embed itself, e.g. A holi wishing executable application, which appears like any other program wishing you ‘Happy Holi’ but causing great damage in the background.

Possible Damages Caused by Trojan Horses

The damages caused by a trojan horse is similar to that caused by a computer virus. Generally, users are unaware of the damages caused by a trojan horse because it remains hidden and undefected for long periods.

3. Computer Worm

It is a standalone malware computer program that replicates itself in order to spread to other computers. Often, it uses a computer network to spread itself, relying on security failures of the target computer to access it. Unlike a computer virus, it does not need to attach itself to an existing program. Worms squad spread much more rapidly than computer viruses. Worms generally use such part of operating system, which are automatic and usually work in the background. Worms almost always cause atleast some harm to the network, even if only by consuming bandwidth, whereas viruses almost always corrupt or modify files on a targeted computer. Worms are hard to detect because they are invisible files, e.g. MS-Blaster, Sobig Worm, Melissa Worm etc.

Characteristics of a Computer Worm

The characteristics of a computer worm are as follows:

• ·         Self-contained program and does not require a host.
• ·         Activated by creating process.
• ·         Able to replicate itself across network links.

How Computer Worms Spread?

Generally, worms are found on computers that are capable of multitasking and connected by a network. Computer worms are self-sufficient viruses that are capable of propagating themselves without the use of another program or involvement of a user.

Possible Damages Caused by Computer Worms

Some computer worms scan passwords and other sensitive information and send these information back to the creator of the computer worm. Sometimes, computer worms can also install trojan horses or viruses that cause damage to the system.

4. Spyware

It is a type of malware that is installed on a computer without the knowledge of the owner in order to collect the owner’s private information. Spyware is often hidden from the user in order to gather information about Internet interaction, keystrokes, passwords and other valuable data. Spyware is a general term used to describe software that performs certain behaviours, generally without appropriately obtaining your consent first, such as advertising, collecting personal information, changing the configuration of your computer etc.

e.g. Trymedia, Muvens, Live PC care etc.

Impacts of Spyware on your Computer

The various impacts that a spyware can have on your computer are as follows:

• ·         Your PC is start running unusually slow, spyware could be hogging the system’s resources.
• ·         Ads are popping up even when your browser is not opening or they are addressing you by name.
• ·         Your browser’s home page has been changed without doing anything.
• ·         You have invasive toolbars appearing in your browser.
• ·         Your anti-spyware and/or antivirus programs are not working correctly. Like viruses, some spyware will sabotage the programs designed to detect and eliminate them.
• ·         There is a dramatic increase in Internet traffic, soaking up bandwidth on your Internet connection, making it slow.

Preventions of Spyware

Due to the seriousness of spyware and the harm, it can affect your system and personal information, it is highly recommended you to take the given measures to prevent spyware from overtaking your system:

Download and install anti-spyware software Most antivirus applications are effective in identifying different types of malware, including spyware, but may not detect all spyware variants. Once you install the anti-spyware software on your computer, you must keep your anti-spyware application updated to keep up with the latest forms of spyware.

Be cautious when Web surfing The best defense against spyware is not to download it in the first place. Spyware is often installed on your computer when you visit an infected or malicious Website.

Therefore, you should exercise caution with links to Websites from unknown sources. In addition, you should only download programs from trustful Websites. When downloading a specific program, ensure that you are not downloading pirated software. Spyware can be distributed by exploits, that promote software piracy

Lookout for pop-ups Malware can lure you into installing spyware on your computer by prompting you with a pop-up window. If you see an unwanted or random pop-up alert, do not click “Agree” or “OK” button to close the pop-up window. This will actually install the malware on your computer. Instead, press Alt + F4 or click on the red “X” on the corner on the pop-up alert to close the window.

Keep current with operating system updates Important system updates provide significant benefits such as improved security. Just as with any antivirus and anti-spyware software, not keeping up with operating system updates will make your PC vulnerable to the latest malware threats.

Harden your browser settings Updated Web browsers may help to prevent exploitation by taking several defensive steps against spyware. Most Web browsers will warn you of executable programs and will suggest a safe course of action. In addition to having an updated Web browser, ensure that you have properly configured your browser and that all of your plug-ins and add-ons are updated, including Java, Flash and Adobe products.

Enable your firewall Firewalls monitor the network and are capable of blocking suspicious traffic, which can prevent spyware from infecting your system.

5. Spam

It is usually defined as unsolicited E-mail. Spam is an electronic messaging system used by various commercial organisations to send bulk messages to a large number of addresses. E-mail spam, junk mail or junk newsgroup postings is a widely recognised form of spam.

How to Avoid Spam?

You can use the following guidelines to avoid spam:

• ·         Keep your E-mail address private.
• ·         Using appropriate filters to find and alert you about spam.
• ·         Use alternate style of writing your E-mail addresses on the Web.
• ·         Avoiding the use of your true ID when signing-up to various Websites.

ANTIVIRUS (VIRUS CLEANER)

It is an utility program or set of programs that are designed to prevent, search, detect and remove viruses and other malicious programs like worms, trojans, adware and many more. It is very important to use an antivirus software for users, who use Internet because a computer without antivirus may get infected within few minutes, e.g. Symantec Norton, AVG, McAfee Scan, Quick Heal etc. To remove viruses, perform the following:

• ·         Buy or download an antivirus software.
• ·         Install it.
• ·         Update it with the latest virus definitions.
• ·         Do a complete scan of your system.

What does Antivirus Software do?

Some basic functions perform by an antivirus to protect your computer from malicious programs are as follows:

• ·         Scans files or directories for any malware or unknown malicious patterns.
• ·         Allows you to schedule your scan timings.
• ·         Removes any detected malicious code. You will be notified about an infection and will be asked if you want to clean the file, other programs will automatically do this in the background.
• ·         Displays health of your computer system.
• ·         Scans incoming E-mails for attached viruses.

What does Antivirus Software not do?

Antivirus software cannot protect your computer against:

• ·         Spam.
• ·         Any kind of fraud or criminal activity online not initiated by a virus.
• ·         A hacker trying break into your computer over the Internet.
• ·         It is not effective, if it is switched OFF or not updated with the latest virus signatures.

How does Antivirus Work?

Viruses can be known or unknown to the antivirus software. Thus, antivirus employs different ways to deal with them, which are as follows:

Heuristic analysis It is a method used to detect viruses that are previously unknown to the antivirus programs and also for the new variants of the known virus. It is an analysis that determines the susceptibile of a system toward particular threat/risk using various decision rules or other methods.

Signature verification The virus signature is like a fingerprint, that is used to detect a specific virus, used by antivirus programs. The antivirus, searches for this signature, identifies the virus and removes from your computer. They are also able to detect the variants of a virus because the signature code usually remains intact.

HACKERS AND CRACKERS

A hacker is someone who seeks and exploits weaknesses in a computer system or computer network. Hackers may be motivated by a multitude of reasons, such as profit, protest or challenge.

In the hacking community, hackers have been classified into two categories, namely, white hat hackers and black hat hackers. The hackers that break into the computer security with non-malicious reasons are known as white hat hackers. The hackers who break into the computer security without administration for ulterior purposes such as theft, terrorism etc., are known as black hat hackers.

Cracker is a person who breaks into computer for criminal gain. Cracker’s motivations can range from profit, a cause they believe in general maliciousness or just because they like the challenge. Cracker violates the system integrity of remote machines with malicious intent. Crackers can easily be identified because their actions are malicious.

The main difference between hackers and crackers is that hackers are generally interested in gaining deep knowledge about computers and may use this knowledge for playing mischief. On the other hand, crackers use their knowledge to break secure systems.

Cyber Crime

It is defined as a crime in which a computer is the object of the crime (hacking, phishing, spamming) or is used as a tool to commit an offense (child pornography, hate crimes).

DATA BACKUP

Backup is a process of making an extra copy of your data and storing it in a different location on your computer. This copied data can be used in case of emergency. Though backing up data regularly is must but it is being overlooked.

The following points emphasise the necessity of backup:

• ·         The data can be damaged due to the magnetic field.
• ·         Since, computer storage medium is fully magnetic.
• ·         The data can be damaged due to virus infection.
• ·         The data can be damaged due to natural disaster.
• ·         The data can be damaged due to failure of operating system.
• ·         The data can be destroyed due to electrical hazards.

Where to Backup Your Files?

The following are some storage devices and locations to consider:

• ·         CD (Compact Disc)
• ·         DVD (Digital Versatile Disk)
• ·         External hard disk
• ·         USB flash drive
• ·         Memory stick

How to Backup your Data?

You can take the backup of your data by performing Copy and Paste operations. However, now-a-days most operating systems also provide a backup tool to take backups of the data on the computer.

Types of Data Backup

There can be two types of data backup which are as follows:

(i). Full Backup

It contains complete backup of a specific database or set of file groups or files and logs to allow for recovering data and is stored in compressed form. There are some limitations to it. Since, the volume of data is large, the process is slow and it is not possible to take overnight backup due to constraints in time and storage space.

(ii). Differential Backup

It is a type of backup that contains only the data or files that have been altered or created after the last full backup. This is known as the base of the differential or the differential base. This type of backup is taken almost immediately after the base backup and are generally smaller and faster than base backup. After a period of time, as a database is updated, the size of the data in differential backups increases. This makes the process of both data backup and restoration slower. Occasionally, provide a new differential base for another series of differential backups.

Online Data Backup

Online backup is a very convenient method for restoring data, it can be done from anywhere in the world. It is the type of offsite data backup. In online data backup, any files or folders are backed up onto a remote server through the Internet. In this type of backup, providers automatically copy the selected data to a remote hard driver. You can easily restore your data in case of data loss by connecting to the remote server.

Advantages of Online Backup

The advantages of online backup are as follows:

1.      Data is available anywhere in the world at any time.

2.      Provides a high level of security as your data is encrypted before it is sent to the remote server.

3.      No hardware to maintain or repair the backup.

4.      Keeps your backup safe from threats, such as theft, fire, earthquake and other such disasters as the backup is stored on a remote server.

5.      Backups are done automatically, making your time more productive.

DATA RECOVERY

Getting back the lost and inaccessible data is known as data recovery. Data recovery particularly recovers data in the following cases of data loss:

·         Formatted or Inaccessible drive.

·         Drive not booting.

·         Missing/Deleted files or folders.

·         Corrupt or damaged partition table.

Once the data get corrupted, then entire processing is suspended. It is not beyond the imagination if such circumstances occur, the whole business is likely to be affected. In such situation, the data recovery tools are inescapably needed. Windows operating system provides build-in backup and restoring utility program in system tools, which can be used as per user’s convenience. There are other softwares available in market, e.g. Recuva, Puran File Recovery, SoftPerfect File Recovery, Wise Data Recovery etc.

INFORMATION SECURITY PROVISIONS IN E-COMMERCE

Information security is the practice of defending information from unauthorised access, use disclosure, disruption, modification, perusal, inspection or destruction.

Now-a-days, we use E-Commerce to perform monetary transactions online because of convenience and security it provides.

According to the survey which was conducted by Ernst &. Young in 1999, many people used the Internet, but they did not perform any financial transactions. There were mainly two reasons that restricted users from performing online financial transactions which are as follows:

(i) Need to check the goods before purchasing them.

(ii) Reluctance of users to provide credit card information because of security concern.

Information security plays an important role in the growth of E-Commerce. E-Commerce security is the protection of E-Commerce assets from unauthorised access, use, alteration or destruction. Some key security measures over E-Commerce are as follows:

·         Privacy Ensures that individuals maintain the right to control what information is collected about them, how it is used, who has used it, who maintains it and what purpose it is used for.

·         Integrity Ensuring that information is not altered by unauthorised persons.

·         Authentication Ensuring that users are the persons they claim to be.

·         Non-repudations Ensuring that the originators of messages cannot deny that they infact sent the messages.

·         Confidentiality Ensuring to protect against unauthorised data.

·         Availability Ensuring that authorised parties are able to access the information when needed.

Security Provisions

To protect the consumers as well as business right and to ensure safe E-Commerce, there are certain security provisions for E-Commerce which are as follows:

(i). Encryption, Digital Signatures and Certificates Encryption is a technique of converting a message or information in encoded form to prevent unauthorised persons from reading it.

Similarly, Internet provides another security provision, called digital signature. A digital signature authenticates electronic documents in a similar manner, a handwritten signature authenticates printed documents. It is an electronic form of a signature that can be used to authenticate the identity of the sender of a message and also ensures that the original content of the message or document that has been sent is unchanged. A digital signature is issued by a Certification Authority (CA) and is signed with the CA’s private key, it typically contains the owner’s public key, the owner’s name, expiration date of the public key, the name of the issuer, serial number of the digital signature and the digital signature of the issuer. Another provision to ensure the security of data in a Website is a digital certificate. Digital certificate is the attachment to an electronic message used for security purposes. The common use of digital certificate is to verify that a user sending a message is who, he or she that claims to be, and to provide the receiver with the means to encode a reply. It provides a means of proving your identity in electronic transactions. The digital certificate contains information about whom the certificate was issued to, as well as the certifying authority that issued it.

(ii) Secure Socket Layer (SSL) SSL is a standard security technology for establishing an encrypted link between a server and a clienttypically a Web server and a browser etc. SSL allows sensitive information such as credit card numbers, social security numbers and login credentials to be transmitted securely.

(iii). PCI, SET, Firewalls and Kerberos PCI (Peripheral Component Interconnect) is a computer bus for attaching hardware devices in a computer. These devices can take either the form of an integrated circuit fitted onto the motherboard itself, called a planer device in the PCI specification or an expansion card that fits into a slot. SET (Secure Electronic Transaction) protocol, which is developed by Visa and Mastercard uses encryption for privacy and digital certificates to verify the three parties -the bank, the customer and the merchant. It ensures secure transactions online.

 A firewall can either be software-based or hardware-based and is used to help to keep a network secure. Its primary objective is to control the incoming and outgoing network traffic by analysing the data packets and determining whether it should be allowed through or not, based on a predetermined rule set. Firewalls protect the server from any virus attack and hackers. There is another technique by which the system can be protected, i.e. kerberos protocol composed of cryptography to restrict the illegal users. Kerberos is a third-party authentication that validates the clients over the network and provides secure communication or access to network resources.

SOCIAL NETWORKING

It is a grouping of individuals into specific groups, like small rural communities or a neighborhood subdivision, if you will. A social networking service is an online service, platform or site that focuses on facilitating the building of social networks or social relations among people.

e.g. people who share interests, activities, backgrounds or real life connections. When it comes to online social networking, Websites are commonly used. These Websites are known as Social Sites. The most popular social sites are currently Facebook, MySpace, Orkut etc.

These Websites provide users with simple tool to create a custom profile with text and pictures. Typical profile includes basic information about user, atleast one photo and possibly a blog or other comments published by the user. It may include videos, photos albums, online applications as in Facebook or custom layout (in MySpace). After creating a profile, user can send message to other users and leave comments directly on friends’ profiles. These features provide the building blocks for creating online communities. These Websites also provide an important linking element between users that allow friends to communicate directly with each other.

INFORMATION AND COMMUNICATION TECHNOLOGY (ICT)

It is the study of technology used to handle information and communication. ICT includes different communication devices, such as radio, television, cellular phones, computer hardwares, softwares etc., as well as various services and applications associated with them, such as video conferencing and distance learning. Basically, ICT is the technology, which supports activities. Such activities include gathering, processing, storing and presenting data.

Benefits of ICT

ICT has become an integral part of our daily life. And, it has benefited the common man in various ways in every field of life. Some of them are as follows:

In Education

The main purpose of the strategy for ICT implementation in education is to provide the prospects and trends of integrating ICT into the general educational activities. Some benefits of ICT in education are as follows:

1.      There is no time boundation on an individual for getting educated by a teacher. A person can attend a class anytime and anywhere.

2.      Teachers can create interactive classes and make the lessons more interesting.

3.      Generally, students find images and graphical representation of concepts, more interesting as compared, to the theoretical knowledge. And, using ICT, teachers can explain even the most complex concept in a very simplified manner using graphics, videos and animations.

4.      An individual can learn on pace he/she is comfortable.

5.      Learning resoures can be accessed remotely.

In Healthcare

Some benefits of ICT in healthcare are as follows:

1.      Automated hospital information systems can help to improve quality of care.

2.      Decreased^ costs of treatment.

3.      ICT has significantly enhanced the services being provided and brought behavioural changes.

4.      This technology helps doctors, hospitals, the general public and all other medical care providers.

5.      Pharmaceutical industry is the industry that enjoys the biggest benefits of ICT.

6.      ICT has made E-Health possible.

In Governance

Some benefits of ICT in governance are as follows:

1.      Enhancing good governance practices, being more responsive and governing more effectively. 2. The Internet gives governments the opportunity to offer public services and to provide information and policies more efficiently.

2.      ICT has helped in providing better response to customers and effective management.

3.      The extensive use of the Internet has provided an opportunity to the government to offer services and information in an efficient manner.

Impacts of ICT on Society

Information and communication technology has created a huge impacts on human society, which are described below:

1. Knowledge Based Society : A knowledge based society refers to the type of society that lays maximum emphasis on knowledge. It refers to societies that are well educated and therefore, rely on the knowledge of their citizens to drive the innovation, entrepreneurship and dynamism of that society’s economy. The excessive use of information communication technologies has benefited the richer class people as they can afford to avail the computer learning. The ICT has led to the unity of the people who have the digital knowledge and separated those who do not have such knowledge.

2. Infomanla : It is the compulsive desire to check or accumulate news and information via phone or computer. This symptom is also referred as not giving importance to anybody because of being completely involved in their E-mail or phone. Informania is simple defined as the distraction caused in life due to the technologies and other source of information. e.g. Common example, for infomania is checking the E-mails and keep on looking in browsers for any information during the holidays.

3. Digital Unity : Now-a-days, information and knowledge has become an important driving force in the society as compared to land, capital or labour. Therefore, it has become important for the society to manage and maintain the knowledge based intellect. Digital unit is the ability of individuals to access and use information and communication technology. It ensures that everyone in society get equal share of technology.

4. Digital Divide : It is an economic and social inequality according to categories of persons in a given population, in their access to use or knowledge of information and communication technologies. The excessive use of ICT has led to digital unity of the computer intellects in urban areas and divided the people who do not have the digital knowledge.

VIRTUAL SCHOOLS

A virtual school is a learning environment offered entirely on the Internet. All student services and courses are conducted through Internet technology. The virtual school differs from the traditional school through the physical medium that links administrators, teachers and students. It refers to an institution that is not “brick and mortar” bound.

Advantages :

The advantages of virtual schools are as follows:

1.      Individualised instruction for all students.

2.      Lessons can be taught in a way that benefits students with various learning abilities.

3.      More time can be spent on lessons that are more difficult for students.

4.      Flexibility for the students to learn whenever and wherever they want.

5.      Students are self-directed and mature quicker as they manage their studies.

6.      Students can access learning 24 hours a day and learn at their own pace.

Disadvantages

The disadvantages of virtual schools are as follows:

1.      Undisciplined students will not succeed in the online environment.

2.      Puts more stress on the parents to provide guidance and tutoring.

3.      Parents need to monitor the student all day long as opposed to dropping the student at school where the student is monitored by teachers and staff.

4.      Students are more isolated and might not developed properly socially.

5.      Students would not receive personal one-on-one time with teachers.

EMERGENCE OF KNOWLEDGE ECONOMY

A knowledge economy is one in which knowledge is the key resource. It is neither a new idea that knowledge plays an important role in the economy, nor it is a new fact. All economies, however simple are based on knowledge about how, e.g. to form, to mine and to build and this use of knowledge has been increasing, since the industrial revolution. ‘Capitalism is undergoing an important transformation from a mass production system where the principal source of value was human labour to a new era of innovation mediated production, where the principal component of value creation, productivity and economic growth is knowledge. The knowledge economy is the story of new technologies that have combined with intellectual and knowledge assets- the ‘intangibles’ of research, design, development, creativity, education brand equity and human capital to transform our economy. The emergence of knowledge economy can be characterised in terms of the increasing role of knowledge as a factor of production and its impact on skills, learning organisation and innovation.

Characteristics of Knowledge Based Economy

The characteristics of knowledge based economy are as follows:

1.      There is an enormous increase in the codification of knowledge, which together with networks and the digitisation of information, is leading to its increasing commodification.

2.      The transition to a knowledge based system may make market failure systemic.

3.      Initiative, creativity, problem solving and openness to change are increasingly important skills.

4.      Learning increasing central for both people and organisations.

5.      Learning involves both education and learning-by doing, learning-by using and learning-by interacting.

6.      Codification is promoting a shift in the organisation and structure of production.