Advertising and the Knowledge Economy: An Epoch in an Ever-changing Economic Landscape

The industrial revolution of the mid 18th century instigated a paradigm shift, which saw the transition from manual production methods to mechanical manufacturing techniques. With these industrial enhancements, almost every aspect of life was improved. A plethora of new factories generated thousands of jobs, stimulating the economy and improving the lives of the masses by undergoing a period of sustained growth (Lucas, 2002).

Since then, many individuals have hypothesised about the path ‘future’ economies may take, but none have been more influential than Peter Drucker. In the late 1950’s, Drucker coined the term ‘knowledge worker’, postulating that we would move from a material asset-based economy and adopt an intangible, knowledge-based economy. Surprisingly, we currently find ourselves in the infancy of that exact economy, where our main capital is knowledge and we as workers, think for our living (The Economist, 2013). The short video below, created by B2B Whiteboard summarises what a knowledge based economy is.

In 1994, Castells and Aoyama found that over a period of 70 years, America had experienced an 80% growth rate in information handling occupations as compared to goods handling work (Flew, 2008, p.30). Recently, there has been a sharp rise in the creative industries sector, due to its apparent links to a more dynamic, global, knowledge-based economy (Castells, 2010). Creative occupations are defined as a range of economic activities that are concerned with the generation and exploitation of knowledge and information, including but not limited to professions in advertising, design and publishing. According to a 2011 Department of Culture, Media and Sport report, the creative industry controlled 5.14% of the UK’s total employment with advertising among the top 3 sectors (DCMS, 2011).

I am currently studying at University with the intent to enter the advertising sector upon completion of my degree. A key point I have taken from my studies is that there is a strong focus on market research. “Advertising research is a specialised form of market research that focuses on planning, preparation and placement of advertising,” (University of Florida, 2013) so that as advertisers, we can make informed choices based on facts and insights. It is interesting to note that research is one of the key characteristics of a knowledge workers role.

Breakdown of a Knowledge Workers Time

Off all the tasks identified by the IDC, a total of 82% of a knowledge workers time is dedicated to searching for information and gaining an understanding from the findings. Consequently it comes as no surprise that research conducted by advertising professionals is among the most detailed and comprehensive forms of research (O’Barr, 2007).

As a knowledge industry, it is apparent that advertising is evolving within this new intangible asset-based economy, particularly with the proliferation of new media and ICT’s, greatly increasing the speed at which new knowledge is created (David & Foray, 2002). As a future knowledge worker, it will be important to be not only technologically literate but competent as well. I will be required to focus on details, turn data into workable knowledge and think critically and efficiently.

New research on knowledge worker productivity indicates that knowledge workers often spend up to 40% of their time on activities not directly related to their knowledge work. Given that knowledge workers are quickly becoming an organisations most useful asset, it is vital that businesses develop effective knowledge management strategies to support their employees.

Much like in the beginning of the industrial revolution, the idea of a knowledge economy is still in its infancy, even some 60 years since its birth. However, I strongly believe that those organizations who begin incorporating these ideas into their business models, who educate and train their knowledge workers whilst increasing productivity, will no doubt gain a distinct competitive advantage in future years. In the words of Peter Drucker, “To make knowledge-work productive will be the great management task of this century, just as to make manual work productive was the great management task of the last century,” (Drucker, 1969).

References:

Castells, M. (2010). End of Millennium : The Information Age: Economy, Society, and Culture. Wiley-Blackwell. ISBN 978-1-405-19688-8

David, P. A., & D, Foray. (2002). An introduction to the economy of the knowledge society. International Social Science Journal, 54(177), 9-23 DOI: 10.1111/1468-2451.00355

DCMS. (2011). Creative Industries Economic Estimates: Full Statistical Release. Retrieved from http://www.culture.gov.uk/images/research/Creative-Industries-Economic-Estimates-Report-2011-update.pdf

Drucker, P. (1969). The Age of Discontinuity. New York: Harper and Row.

Flew, T. (2008). New Media: An Introduction (3 ed.). Melbourne, Australia: Oxford University Press.

Lucas, R. E., Jr. (2002). Lectures on Economic Growth. Cambridge: Harvard University Press. ISBN 978-0-674-01601-9.

O’Barr, W. M. (2007). The Role of Research in Advertising. Retrieved from: http://muse.jhu.edu/journals/asr/v007/7.4unit10.html

The Economist. (2013). Thinking for a Living. Retrieved from: http://www.economist.com/node/5380450

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