Knowledge-Based Social Entrepreneurship

PALGRAVE STUDIES

IN DEMOCRACY,

INNOVATION, AND

ENTREPRENEURSHIP

FOR GROWTH

Understanding Knowledge Economy,

Innovation, and the Future of Social

Entrepreneurship

KNOWLEDGE-BASED

SOCIAL ENTREPRENEURSHIP

Mitt Nowshade Kabir

Series Editor

Elias G. Carayannis

The George Washington University

Washington, DC, USA

Palgrave Studies in Democracy, Innovation,

and Entrepreneurship for Growth

The central theme of this series is to explore why some areas grow and others

stagnate, and to measure the effects and implications in a trans-disciplinary

context that takes both historical evolution and geographical location into

account. In other words, when, how and why does the nature and dynamics of a

political regime inform and shape the drivers of growth and especially innovation

and entrepreneurship? In this socio-economic and socio-technical context, how

could we best achieve growth, fnancially and environmentally?

This series aims to address such issues as:

• How does technological advance occur, and what are the strategic processes

and institutions involved?

• How are new businesses created? To what extent is intellectual property

protected?

• Which cultural characteristics serve to promote or impede innovation? In

what ways is wealth distributed or concentrated?

These are among the key questions framing policy and strategic decision-mak￾ing at frm, industry, national, and regional levels.

A primary feature of the series is to consider the dynamics of innovation and

entrepreneurship in the context of globalization, with particular respect to emerging

markets, such as China, India, Russia, and Latin America. (For example, what are

the implications of China’s rapid transition from providing low-cost manufacturing

and services to becoming an innovation powerhouse? How do the perspectives of

history and geography explain this phenomenon?)

Contributions from researchers in a wide variety of felds will connect and

relate the relationships and inter-dependencies among (1) Innovation, (2) Political

Regime, and (3) Economic and Social Development. We will consider whether

innovation is demonstrated differently across sectors (e.g., health, education, tech￾nology) and disciplines (e.g., social sciences, physical sciences), with an emphasis

on discovering emerging patterns, factors, triggers, catalysts, and accelerators to

innovation, and their impact on future research, practice, and policy.

This series will delve into what are the sustainable and suffcient growth mech￾anisms for the foreseeable future for developed, knowledge-based economies

and societies (such as the EU and the US) in the context of multiple, concurrent

and inter-connected “tipping-point” effects with short (MENA) as well as long

(China, India) term effects from a geo-strategic, geo-economic, geo-political and

geo-technological set of perspectives.

This conceptualization lies at the heart of the series, and offers to explore the

correlation between democracy, innovation and growth.

More information about this series at

http://www.palgrave.com/gp/series/14635

Mitt Nowshade Kabir

Knowledge-Based

Social

Entrepreneurship

Understanding Knowledge Economy, Innovation,

and the Future of Social Entrepreneurship

Mitt Nowshade Kabir

North York, ON, Canada

Palgrave Studies in Democracy, Innovation, and Entrepreneurship for Growth

ISBN 978-1-137-35406-8 ISBN 978-1-137-34809-8 (eBook)

https://doi.org/10.1057/978-1-137-34809-8

Library of Congress Control Number: 2018967760

© The Editor(s) (if applicable) and The Author(s) 2019

This work is subject to copyright. All rights are solely and exclusively licensed by the

Publisher, whether the whole or part of the material is concerned, specifcally the rights

of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction

on microflms or in any other physical way, and transmission or information storage and

retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology

now known or hereafter developed.

The use of general descriptive names, registered names, trademarks, service marks, etc. in this

publication does not imply, even in the absence of a specifc statement, that such names are

exempt from the relevant protective laws and regulations and therefore free for general use.

The publisher, the authors, and the editors are safe to assume that the advice and

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Neither the publisher nor the authors or the editors give a warranty, express or implied,

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Cover image: © shuoshu/DigitalVision Vectors/Getty

This Palgrave Macmillan imprint is published by the registered company Springer Nature

America, Inc.

The registered company address is: 1 New York Plaza, New York, NY 10004, U.S.A.

This book is dedicated to Levan Levanovich Chekhaidze, teacher and mentor

who ignited my life-long interest in advanced technologies.

vii

Preface

The world is standing at the crossroad of new technology and

knowledge-based epoch. It is dubbed by many as new knowledge era,

fourth Industrial Revolution, post-industrial society, or simply knowl￾edge economy. Drivers of growth in this new economy are advances in

technology, the proliferation of knowledge, and continuous innovation

by corporations and entrepreneurs. Entrepreneurs, in particular, are fue￾ling the growth by propelling innovation, instigating new industries, and

creating jobs. New technologies and explosion of information have cre￾ated a fertile ground for entrepreneurship in the knowledge economy.

Knowledge has already become the primary means of production and a

substantial portion of end products in many industries. This impact of

knowledge as a critical factor in innovation and production process and

its importance as a product component have prompted the emergence

of a new entrepreneurship domain—knowledge-based entrepreneurship.

Despite the fact that this rise of entrepreneurship and the impact of

the technology on the economy are generating tremendous new wealth,

the increasing prosperity did not eliminate many of the pressing social

problems the world is still facing. However, in recent years, the rising

awareness of the social challenges, better-educated population and easier

access to knowledge, and the desire to make a difference have given a

surge to the social entrepreneurship. The mission of social entrepreneurs

is to address social issues through entrepreneurial activities. Along with

viii Preface

the expansion of the knowledge economy, social entrepreneurship armed

with new possibilities owing to new technologies is also advancing grad￾ually toward knowledge-based social entrepreneurship.

Knowledge-based social entrepreneurship is still in its early stage of

growth, but signs are appearing that show that the process is speeding

up. While interest in it is growing, its nature, constituting elements,

and determinants causing its germination and evolution are still scantly

studied and require better understanding. Both researchers and prac￾titioners are curious to learn about this new phenomenon and ponder

what makes it different from other types of social entrepreneurship, what

should be the main focus areas to defne its success, how entrepreneurs

can take advantage of it, and how technology facilitates and at the same

time necessitating its proliferation. These are not the only questions that

are critical for grasping the rationale behind its value in solving some

of the crucial and persisting social challenges. Apart from its immediate

surrounding features, catalysts, processes, and factors, it is benefcial to

learn what are the forces behind the growth of knowledge-based entre￾preneurship, in which conditions it sprawls and why it is so invaluable for

both the matured and developing economies.

This book is an effort to shed light on the present understanding

of the knowledge economy, its components, and factors that drive this

economy, advances in technology that is shaping the future, and knowl￾edge and innovation as vital elements in entrepreneurship and business.

It also illustrates and explains why and how entrepreneurs are one of the

main forces behind the present economic growth, and why processes and

strategies are key ingredients in knowledge-based social entrepreneurship.

North York, Canada Mitt Nowshade Kabir

ix

Contents

1 Introduction 1

Part I

2 Knowledge Economy 35

3 Knowledge Society 59

4 Technologies of the Future 91

Part II

5 Knowledge 137

6 Innovation 163

x Contents

Part III

7 Entrepreneurs and Entrepreneurship 207

8 Strategy, Strategy Formulation, and Business Models 245

9 Opportunity Development and Commercialization 281

10 Conclusion 311

References 313

Index 359

xi

List of Figures

Fig. 1.1 Four major waves of economic growth 2

Fig. 1.2 Knowledge entrepreneurship and economic growth 7

Fig. 4.1 Some key advanced technologies 92

Fig. 5.1 Technology makes tacit knowledge more explicable

(Adapted from Kabir 2012) 147

Fig. 6.1 Idea generation in opportunity fnding 172

Fig. 7.1 Social entrepreneurship framework 210

Fig. 7.2 Knowledge based social entrepreneurship framework 212

Fig. 7.3 Entrepreneurship process (Adapted from Kabir

and Carayannis 2013) 220

Fig. 9.1 Technology product development process 288

1

We are witnessing a signifcant transition of the world economy to a

newer phase of development where knowledge is an instrumental force.

Knowledge is the main ingredient in innovation, entrepreneurship is a

variation of innovation, and both of these are engines of economic

growth are not novel concepts. What is unique in the present knowledge

economy is the massive explosion of knowledge, its increasing trans￾formation to a main factor of production, its growing role in enhanc￾ing productivity and competitiveness, and the extraordinary surge of its

importance as the essential resource for the social and fnancial prosperity

of nations.

For centuries, knowledge has been known and perceived as a driving

force behind technological and scientifc progress. It also has always been

deemed as an enabler to the increasingly sophisticated production sys￾tems. The frst Industrial Revolution provided a signifcant boost to the

burgeoning position of knowledge in the production value chain. Its role

has altered again with the emergence of information and telecommuni￾cation technologies (ICT) which ushered the Information Age. In the

next decades, the importance of knowledge in the trade, business, and

manufacturing has thrived and evolved into one of the primary factors

of production in many industries. The rapid development of science and

technology since the early 1990s strengthened the status of knowledge

even more not just as the primary resource in all technology-related

CHAPTER 1

Introduction

© The Author(s) 2019

M. N. Kabir, Knowledge-Based Social Entrepreneurship,

Palgrave Studies in Democracy, Innovation, and Entrepreneurship

for Growth, https://doi.org/10.1057/978-1-137-34809-8_1

2 M. N. KABIR

sectors of the economy but also as the most valuable facilitator of eco￾nomic improvement and social transformation (Fig. 1.1).

Technological advancements and innovation supported by the human

talents and new knowledge have initiated the elevation of living stand￾ards, the evolution of tools in productivity gain, streamlining of man￾ufacturing processes through automation, and the emergence of new

frontiers in the areas from quantum particles to space exploration.

Knowledge Economy

Knowledge has frmly established as the primary factor of production in

today’s knowledge economy where humans and ICT are the two central

mediums of knowledge activities necessary for innovation and technolog￾ical progress to occur. The knowledge economy is an economic system

based on intellectual capital and knowledge production, consumption,

and dissemination (OECD 1996). In this new economy, technological

advancement, new knowledge, and human capital work as the basis of

growth. As of today, most developed nations have shifted to knowledge

economy while many others are in transition. High technology presence

in the production systems, high demand of niche knowledge, availa￾bility of a sophisticated innovation system, existence of a large pool of

WAVES OF ECONOMIC GROWTH

Steam-powered

machines, Textiles

Electrical energy,

Steel, Rail,

Automobiles

Information &

communication

technology,

Computers/Internet,

Single machine

automation

Knowledge economy,

AI, Robotics

1st Industrial

Revolution

2nd Industrial

Revolution

3rd Industrial

Revolution

4th Industrial

GROWTH

Revolution

1780 1840-1870 1935-1950 2000-2010

TIMELINE

Fig. 1.1 Four major waves of economic growth

1 INTRODUCTION 3

workforce with higher education, particularly, in science and technol￾ogy sectors, a thriving entrepreneurial sector supported by institutional

regime, and advanced ICT infrastructure are indicators that demonstrate

an economy dominated by knowledge.

In post-industrial realm, ICT, knowledge-related activities, intangible

assets, and human ingenuity are the key components that further new

knowledge. The engine of the economic expansion in this new reality

is the high technology-dependent sectors that utilize knowledge exten￾sively. However, lately, the other industries are also displaying a substan￾tial reliance on knowledge for their growth. The saliency of knowledge

and tasks related to it are steadily surging in every sector whether it is

farming, trading, construction, or manufacturing.

Knowledge Economy Defnition In knowledge economy, ideas, infor￾mation, and knowledge are input resources; the research and devel￾opment processes are highly knowledge-intensive; and the products,

services, and commodities are new information, intellectual properties,

and technological innovations. The fuidity of knowledge fow through￾out the production process and the industries shift from labor-inten￾sive production to automated processes managed by skilled knowledge

workers or robots characterize the knowledge economy. The observable

factors this economy demonstrates are the active commercialization of

knowledge, proliferation of knowledge-intensive jobs, granular segmen￾tation of skills, adoption of advances of technology by consumers and by

industrial processes, and educated human capital (Jessop 2000; Castells

1997).

The knowledge economy is where knowledge is the main production

factor for manufacturing goods and services, and the growth of the econ￾omy is maintained by knowledge-intensive activities that expedite the

advancement of technologies and science, boost wider technology adop￾tion in the society, and prompt frequent obsolescence of older technolo￾gies (Powell and Snellman 2004). The dynamics that contribute to and

sustain knowledge economy include intellectual properties, knowledge

workers and technologies and technology-related infrastructure, govern￾ment policies, governmental and non-governmental institutes, and inno￾vation system conducive to creativity and entrepreneurship. World bank

has identifed the following four different pillars that support a knowl￾edge economy (Chen and Dahlman 2005).

4 M. N. KABIR

• Market-oriented institutes and economic environment—Developed

economic institutes and sound economic policies supportive of the

free market in resource allocation and utilization that foster creativ￾ity, innovation, and knowledge fow.

• Skilled and educated workforce—The education level and absorp￾tive capacity of the employees conform with the increasing need for

new skills and knowledge.

• High-level innovation capabilities—Organizations such as educa￾tional systems or frms engaged in R&D are capable of extracting,

integrating, applying, and sharing knowledge at a level adequate to

create new knowledge.

• Advanced ICT infrastructure—For smoother information fow,

seamless interaction between knowledge holders and practical

knowledge exchange modern telecommunications and information

systems are necessary and must be available.

The prominence of knowledge-related activities such as knowledge

acquisition, integration, and creation of new knowledge and its effective

dissemination throughout all economic activities are aspects that illus￾trate the knowledge economy. These knowledge-related activities infu￾ence improved production processes, effcient use of resources, better

delivery network, and innovation in every aspect of the economic value

chain. Social development, improvement of living standard, and distrib￾uted wealth creation are possible to attain in a knowledge-based econ￾omy at a level which far outpaces the capability of natural resource-based

economic development. Many advanced and transitory economies have

experienced remarkable growth since the ushering of knowledge econ￾omy thanks to their market supportive policies, meticulous planning,

targeted investment in skills and vocational development, upgraded

educational system, the creation of effective public institutions, and the

establishment of knowledge and technology-based industry sectors. In

last three decades, several middle-income countries owing to their prag￾matic and focused policies, enhanced technology-related educational

base, and concerted efforts in developing knowledge-based sectors have

succeeded to transfer their economies to the developed country level.

Notable among them are Taiwan, Korea, Singapore, Ireland, Israel, and

Estonia. A couple of other countries that are not lagging far behind in

their practices and capacity building in the quest for the creation of a

knowledge society are Chile and Malaysia (KEI 2012).