Understanding Pillars of a Knowledge Economy

India has been ranked 100 at Knowledge Economy Index (almost at bottom rung) by World Bank’s benchmark Knowledge Index recently. India is much behind other BRIC countries (BRC rightly): Brazil, Russia & China with ranking 54, 77, and 61 respectively.

China, Brazil & India have gone up in their ranking with an increase of 20, 10, & 5 respectively while Russia has shown a decline of 5 positions from the benchmarking year 1995.

We say that we are living in Knowledge era that simply means that knowledge would be key in creating wealth (Like expansion of Industries to large the scale in Industrial era).So it is important for countries to expand the knowledge factor in order to achieve the good economic growth in global knowledge economy. Putting this thought at the core, WorldBank developed Knowledge management Methodology (KAM) which was designed as an interactive tool for benchmarking a country’s position vis-a-vis others in the global knowledge economy.

There are mainly two knowledge indices developed by World Bank Institute of KAM: Knowledge Economy Index(KEI) &Knowledge Index(KI) .
Before understanding KEI & KI, let us have a look at 4 pillars of Knowledge economy. They are

1) Economic incentive and institutional regime,
2) Education and human resources,
3) The innovation system and
4) ICT


KI is the simple average of the normalized performance scores of a country on the key variables in three Knowledge Economy pillars – Education & human resources, the innovation system and ICT (2, 3, & 4 mentioned above).It measures a countries ability to generate, adopt & diffuse Knowledge.

While KEI is the average of the normalized performance scores of a country or region on all 4 pillars related to the knowledge economy.
Each pillar is further divided in three key variables(See the diagram) . Variables are normalized on a scale of 0 to 10 relative to other countries in the comparison group.

India scores 3.12 & 2.94 at KEI & KI respectively. India, among all 4 pillars, gained the highest position (81) at the innovation system with an increase of 13 positions from year 1995.Check ranking of India on other pillars.