The Effect of Knowledge Components on Economic Fragility
摘要
Economic fragility erodes social contracts, weakens resilience, and deepens poverty, often locking economies into cycles of instability and conflict, which impairs the capacity of governments and societies to address internal and external shocks effectively. This study investigates how a knowledge-based economy, driven by innovation, new technologies, and the strategic use of existing and emerging comparative advantages, can boost economic competitiveness, reduce fragility, cushion the impact of shocks, and alleviate political and social tensions. Analyzing the top 42 knowledge-producing countries from 2013 to 2021 via the Generalized Method of Moments (GMM), the research demonstrates that four pillars of a knowledge-based economy, Institutional and Economic Regimes, Innovation, Education and Human Resources, and Information and Communication Technology (ITC), significantly diminish key aspects of economic fragility, such as Economic Decline and Poverty, Uneven Economic Development, and Human Flight and Brain Drain. These findings highlight the pivotal role of knowledge-based components in curbing fragility, prompting recommendations for policymakers to: strengthen transparent, accountable, and sustainable institutions to create robust legal and operational frameworks for knowledge-driven activities; prioritize targeted investments in education and skills to stem elite migration and brain drain; enhance innovation and R&D infrastructure through funding and policies that encourage collaboration among academia, industry, and government; and advance digital infrastructure and ITC access to close information gaps and bolster economic resilience, especially during crises.