The (Un) happiness of knowledge and the knowledge of (Un) happiness: Happiness research and policies for knowledge-based economies

Prometheus: Critical Studies in Innovation

Volumn 25, Issue 3, 2007, Pages 243-266

  Engelbrecht, Hans Jürgen ^a  

^a NONE

Author keywords

Happiness research; Knowledge policy; Knowledge based economies; Productivity; Subjective well being

Indexed keywords

POLICY ANALYSIS; PRODUCTIVITY; QUALITY OF LIFE; RESEARCH;

EID: 34548143395     PISSN: 08109028     EISSN: 14701030     Source Type: Journal    
DOI: 10.1080/08109020701531379     Document Type: Review

References (134)

1. An earlier version of this paper was presented at the International Conference Policies for Happiness, 14-17 June 2007, Certosa di Pontignano, University of Siena, Italy.
2. For a critical survey of the plethora of definitions of the KBE and related concepts see, for example, K. Carlaw, L. Oxley, P. Walker, D. Thorns and M. Nuth, 'Beyond the hype: Intellectual property and the knowledge society/knowledge economy' Journal of Economic Surveys, 20, 4, 2006, pp. 633-90.
3. OECD, 'Special theme: The knowledge-based economy', in OECD, Science, Technology and Industry Outlook 1996, OECD, Paris, 1996, pp. 229-56. The quotation is from p. 229.
4. Dominique Foray, The Economics of Knowledge, MIT Press, Cambridge, MA, 2004. The quotation is from p. ix.
5. D. Foray, 'Optimizing the use of knowledge', in B. Kahin and D. Foray (eds), Advancing Knowledge and the Knowledge Economy, MIT Press, Cambridge, MA, 2006, pp. 9-15.
6. The quotation is from p. 9.
7. Richard Layard, Happiness: Lessons from a New Science, Penguin Press, New York, 2005.
8. Foray, 2004, op. cit.
9. B. Frey and A. Stutzer, 'What can economists learn from happiness research?', Journal of Economic Literature, XL, 2, 2002, pp. 402-35. The quotation is from p. 403, note 2.
10. E. Diener, 'Guidelines for national indicators of subjective well-being and ill-being', Journal of Happiness Studies, 7, 4, 2006, pp. 397-404.
11. The quotation is from pp. 399-400.
12. A key publication is OECD, 1996, op. cit.
13. For a critical exploration of the OECD's central role in propagating the concept of the KBE, see B. Godin, 'The knowledge-based economy: conceptual framework or buzzword?', Journal of Technology Transfer 31, 1, 2006, pp. 17-30.
14. B. Kahin and D. Foray (eds), Advancing Knowledge and the Knowledge Economy, MIT Press, Cambridge, MA, 2006.
15. B. Áasgeirsdóttir, 'OECD work on knowledge and the knowledge economy', in Kahin and Foray (eds), op. cit., pp. 17-23.
16. B. Kahin, 'Prospects for knowledge policy', in Kahin and Foray (eds), op. cit., pp. 1-8.
17. Ibid, p. 1.
18. Ibid, p. 2.
19. Ibid, p. 5.
20. Ibid, p. 7.
21. Foray, 2006, op. cit.
22. Ibid, p. 15.
23. Ibid, p. 14.
24. F. Gault, 'Measuring knowledge and its economic effects: The role of official statistics', in Kahin and Foray (eds), op. cit., pp. 27-42.
25. T. Schuller, 'Social capital, networks, and communities of knowledge', in Kahin and Foray (eds), op. cit., pp. 75-89.
26. Ibid, p. 84.
27. D. Grigorovici, J. Schement and R. Taylor, 'Weighing the intangible: towards a theory-based framework for information society indices', in E. Bohlin, S. Levin, N. Sung and C.-H. Yoon (eds), Global Economy and Digital Society, Elsevier, Amsterdam, 2004, pp. 169-99.
28. Composite indices that try to capture some essential but elusive feature of KBEs have mushroomed. A recent example is the International Telecommunications Union's 'ICT Opportunity Index' (ITU, Measuring the Information Society 2007: ICT Opportunity Index and World Telecommunication/ICT Indicators, 2007). Others include the ITU's 'Digital Access Index', the World Economic Forum's 'Network Readiness Index', the International Data Corporation's 'Information Society Index', the United Nations Development Programme's 'Technology Achievement Index', etc.
29. Grigorovici et al., op. cit., p. 193.
30. See, for example, Clifford Cobb, Measurement Tools and the Quality of Life, Redefining Progress, San Francisco, CA, 2000, available at: http://www.rprogress.org/newpubs/2000/measure_qol.pdf.
31. M. Menou and R. Taylor, 'A "grand challenge": Measuring information societies', Information Society, 22, 5, 2006, pp. 261-7.
32. The quotation is from p. 261.
33. Ibid, p. 265.
34. P. Pruulmann-Vengerfeldt, 'Exploring social theory as a framework for social and cultural measurements of the information society', Information Society, 22, 5, 2006, pp. 303-10.
35. David Rooney, Greg Hearn, Thomas Mandeville and Richard Joseph, Public Policy in Knowledge-Based Economies: Foundations and Frameworks Edward Elgar, Cheltenham, 2003.
36. Rooney has conducted a text analysis of a large body of policy documents from around the world to further substantiate his view about mainstream knowledge policy. See D. Rooney, 'Knowledge, economy, technology and society: The politics of discourse', Telematics and Informatics, 22, 4, 2005, pp. 405-22.
37. Rooney et al., op. cit., p. 9.
38. Ibid, ch. 8.
39. Schuller, op. cit.
40. Rooney et al., op. cit., p. 154.
41. D. Rooney and B. Mckenna, 'Should the knowledge-based economy be a savant or a sage? Wisdom and socially intelligent innovation', Prometheus, 23, 3, 2005, pp. 307-23.
42. Ibid, p. 308.
43. Ibid.
44. Also note that some happiness researchers, for example Helliwell (J. Helliwell, 'How's life? Combining individual and national variables to explain subjective well-being', Economic Modelling, 20, 2, 2003, pp. 331-60), have explicitly commented on the link between Aristotelian philosophy and modern happiness research.
45. R. Easterlin, 'Does economic growth improve the human lot? Some empirical evidence', in P. David and M. Reder (eds), Nations and Households in Economic Growth: Essays in Honour of Moses Abramovitz, Academic Press, New York and London, 1974, pp. 89-125.
46. Layard, 2005, op. cit.
47. For a brief review of this issue see, for example, R. Di Tella and R. MacCulloch, 'Some uses of happiness data in economics', Journal of Economic Perspectives, 20, 1, 2006, pp. 25-46.
48. Veenhoven, one of the pioneers of happiness research, has recently argued that since 1973 happiness has continued to increase in rich countries [R. Veenhoven, 'Quality of life in the modern society measured with happy life years', in Y.-K. Ng and L. S. Ho (eds), Happiness and Public Policy: Theory, Case Studies and Implications, Palgrave Macmillan, Houndsmills, Basingstoke and New York, 2006, pp. 19-44].
49. Using his concept of,happy life years', which is a happiness index adjusted for average length of life, he finds that life in modern society is generally getting better, and he expects this trend to continue. This is not due to the already happy getting happier, but to a reduced number of unhappy persons in the population. In most countries there has been a simultaneous rise in happiness and longevity. However, in the UK and US, happy life years have risen only due to the lengthening of life, not the degree of happiness. Only one country, i.e. Belgium, experienced a decline in happy life years.
50. Layard, 2005, op. cit.
51. Ibid, ch. 5.
52. Helliwell, op. cit.
53. More precisely, the following factors have been found to explain 80% of the variation of happiness amongst 50 countries reported in the World Values Surveys: The divorce rate, the unemployment rate, the level of trust in society, membership in non-religious organisations, quality of government, and the fraction of the population believing in God (Layard, 2005, op. cit., p. 71).
54. Ibid.
55. Ibid, p. 145.
56. R. Layard, 'Happiness and public policy: A challenge to the profession', Economic Journal, 116, 510, 2006, pp. C24-C33.
57. Ibid, p. C24.
58. Layard (Ibid, p. C31) states that 'Broadly, economics says that utility increases with the opportunities for voluntary exchange. This overlooks the huge importance of involuntary interactions between people - of how others affect our norms, our aspirations, our feelings of what is important, and our experience of whether the world is friendly or threatening,.
59. Ng and Ho, op. cit.
60. Ibid, p. 3.
61. Y.-K. Ng, 'Public policy implications of behavioural economics and happiness studies', in Ng and Ho (eds), op. cit., pp. 237-52.
62. He regards increased public spending in these areas as a way to overcome the East-Asian countries' 'happiness gap' (i.e. their very low happiness scores despite spectacular economic growth). Also see Y.-K. Ng, 'The East-Asian happiness gap: Speculating on causes and implications', Pacific Economic Review, 7, 1, 2002a, pp. 51-63
63. and Y.-K. Ng, 'Economic policies in the light of happiness studies with reference to Singapore', Singapore Economic Review, 47, 2, 2002b, pp. 199-212.
64. Frey and Stutzer, 2002, op. cit. Also see Di Tella and MacCulloch, op. cit., who provide a shorter but more recent survey covering much of the same ground.
65. Frey and Stutzer, 2002, op. cit., discuss at some length why they regard reported SWB as a satisfactory empirical approximation of individual utility.
66. On this point, see the more extended discussion in E. Diener and M. Seligman, 'Beyond money: Toward an economy of well-being', Psychological Science in the Public Interest, 5, 1, 2004, pp. 1-31.
67. Frey and Stutzer, 2002, op. cit.
68. Diener and Seligman, op. cit.
69. They note that mental health is an area where economic indicators and SWB can easily move in opposite directions, i.e. costs associated with treating mental illnesses can increase GDP, while the prevalence of mental illnesses reduces SWB (Ibid, p. 17). This trend will only increase in future should more people receive treatment.
70. Ibid, p. 16.
71. B. Frey and A. Stutzer, 'Should national happiness be maximized?', Institute for Empirical Research in Economics, University of Zürich, Working Paper No. 306, March 2007.
72. Layard, 2005, 2006, op. cit.
73. For details, see Frey and Stutzer, 2007, op. cit.
74. D. Kahneman and A. Krueger, 'Developments in the measurement of subjective wellbeing', Journal of Economic Perspectives, 20, 1, 2006, pp. 3-24.
75. Kahneman and Krueger also propose their own alternative SWB indicator, or rather misery indicator, the U-Index (for 'unpleasant' or 'undesirable'). This indicator is fundamentally connected to time allocation, measuring the proportion of time that people spend in an unpleasant state. Kahneman and Krueger regard this measure as particularly well-suited for cross-country comparisons.
76. Diener, op. cit.
77. According to Diener (Ibid), indicators of subjective well-being and ill-being can be used for the evaluation of policies in such diverse areas as health care, public health, social services, parks and recreation, work life, transportation, families, and the environment.
78. However, the most extreme policy conclusions are not presented by Layard but by various authors of books on 'affluenza' written for a wide audience. See, for example, Clive Hamilton and Richard Denniss, Affluenza : When Too Much is Never Enough, Allen & Unwin, Crows Nest, NSW, 2005.
79. Diener and Seligman, op. cit., p. 24.
80. See OECD, 1996, op. cit.
81. R. Reich, 'The challenge of decent work', International Labour Review 141, 1-2, 2002, pp. 115-22.
82. For a discussion of the similarities and differences of the concepts of the KBE and the learning economy see, for example, B.- Å. Lundvall, 'The learning economy: Challenges to economic theory and policy', in G. Hodgson (ed.), A Modern Reader in Institutional and Evolutionary Economics: Key Concepts, Edward Elgar, Cheltenham, 2002, pp. 26-47.
83. Helliwell, op. cit.
84. P. Fortin, 'From productivity to well-being: Keep the focus on basic skills', International Productivity Monitor, 11, Fall 2005, pp. 3-6.
85. Ibid, p. 3.
86. Frey and Stutzer (2002, op. cit., p. 412) reference some research that suggests that the impact of income inequality on happiness varies between countries (Americans, for example, have less aversion to income inequality than Europeans). However, they also note that the impact of income inequality on happiness is a so far under-researched topic.
87. Fritz Machlup's seminal book The Production and Distribution of Knowledge in the United States (Princeton University Press, Princeton, NJ), alerting fellow economists to the importance of knowledge production and distribution in the US economy, was published in 1962.
88. D. Lamberton, 'The knowledge-based economy: A Sisyphus model', Prometheus, 15, 1, 1997, pp. 73-81.
89. Ibid, p. 79.
90. P. Drucker, 'Knowledge-worker productivity: The biggest challenge', California Management Review, 41, 2, 1999, pp. 79-94.
91. See, for example, E. Bryjolfsson and L. Hitt, 'Beyond computation: information technology, organizational transformation and business performance', Journal of Economic Perspectives, 14, 4, 2000, pp. 23-48.
92. Layard (2005, op. cit.) has pointed out that management practices often reduce happiness by creating stress, especially if pay is performance-based while performance cannot be assessed objectively or easily, which seems typical of much knowledge work. In such situations people often get obsessed with how they rank compared to their peers.
93. Diener and Seligman, op. cit.
94. For a survey of findings on well-being effects resulting from work, see Diener and Seligman (Ibid). In general, people must have a feeling of control over what they do and work must be an outlet for one',s creativity. People seem to be most happy when they experience what psychologists call 'flow', i.e. being lost in a task that stretches a person without defeating him/her. Flow is a state of intensive and focused concentration in which enjoyment is maximised [K. Lakhani and R. Wolf, 'Why hackers do what they do: Understanding motivation and effort in free/open source software projects'
95. in J. Feller, B. Fitzgerald, S. Hissam and K. Lakhani (eds), Perspectives on Free and Open Source Software, MIT Press, Cambridge, MA, 2005, pp. 3-21].
96. Daniel Cohen, Our Modern Times: The New Nature of Capitalism in the Information Age, MIT Press, Cambridge, MA, 2003.
97. Ibid, p. 39.
98. Synonymous with or closely related to information overload are terms like 'cognitive overload', 'sensory overload', 'communication overload', 'knowledge overload', 'information fatigue syndrome', 'infoglut', 'information deluge', 'data smog', 'analysis paralysis', and 'information pollution'.
99. M. Eppler and J. Mengis, 'The concept of information overload: A review of literature from organization science, accounting, marketing, MIS, and related disciplines', Information Society, 20, 5, 2004, pp. 325-44.
100. A. Edmunds and A. Morris, 'The problem of information overload in business organisations: A review of the literature', International Journal of Information Management, 20, 1, 2000, pp. 17-28.
101. See J. Gantz, D. Reinsel, C. Chute, W. Schlichting, J. McArthur, S. Minton, I. Xheneti, A. Toncheva and A. Manfrediz, The Expanding Digital Universe: A Forecast of Worldwide Information Growth Through 2010, IDC, Framingham, MA, 2007.
102. Malcolm Gladwell, Blink: The Power of Thinking without Thinking, Little, Brown and Company, New York and Boston, 2005.
103. Veenhoven, op. cit., pp. 39-40.
104. It is possible that in modern societies people are simply more aware of how they feel. However, even if there has been a real rise in rates of depression, that can still co-exist with a rise in average happiness: 'Modernization can be to the advantage of a majority, but can come at the expense of a minority, who are pushed into depression; ...' (Ibid, p. 40).
105. Hodgson (G. Hodgson, Economics and Utopia: Why the Learning Economy is not the End of History, Routledge, London and New York, 1999) puts changing work practices and industrial relations at the centre of his search for possible KBE futures and sketches no less than seven scenarios.
106. Frey and Stutzer, 2002, op. cit.
107. Layard, 2005, op. cit., p. 68.
108. Foray, 2006, op. cit., p. 11.
109. Layard, 2005, op. cit., ch. 6.
110. R. Weehuizen, B. Sanditov and R. Cowan, 'Sorrow shared is not (necessarily) sorrow halved: The productivity effects of innovation including spillovers from stress', paper presented at the 2006 IAREP-SABE Conference: Behavioural Economics & Economic Psychology, Paris, France, 5-8 July 2006.
111. UNU-MERIT, Press release: 'Mental health problems threaten the knowledge economy', 1 November 2006, available at: http://www.merit.unu.edu/ publications/pressreleases/20061101_mental_health.pdf.
112. Ibid.
113. There seem to be only a few studies so far that directly explore the hypothesis that causality runs from happiness to economic outcomes. Examples are C. Kenny, 'Does growth cause happiness, or does happiness cause growth?', Kyklos, 52, 1, 1999, pp. 3-26
114. and C.Graham, A. Eggers and S. Sukhtankar, 'Does happiness pay? An exploration based on panel data from Russia', Journal of Economic Behavior & Organization, 55, 3, 2004, pp. 319-42.
115. See Eric von Hippel, Democratizing Innovation, MIT Press, Cambridge, MA, 2005
116. and E. von Hippel, 'Democratizing innovation: The evolving phenomenon of user innovation', in Kahin and Foray (eds), op. cit., pp. 237-55.
117. Von Hippel, 2006, op. cit., pp. 242-4.
118. See, for example, G. Hertel, S. Niedner and S. Herrmann, 'Motivation of software developers in Open Source projects: An internet-based survey of contributors to the Linux kernel', Research Policy, 32, 7, 2003, pp. 1159-77
119. Lakhani and Wolf, op. cit.
120. J. Lerner and J. Tirole, 'The economics of technology sharing: Open source and beyond', in Kahin and Foray (eds), op. cit., pp. 369-89.
121. Yochai Benkler, The Wealth of Networks: How Social Production Transforms Markets and Freedom, Yale University Press, New Haven and London, 2006.
122. See my analysis of the paradigmatic social production project SETIηome (H.- J. Engelbrecht, 'Exploring the determinants of global "social production" of information and knowledge: Insights from SETIηome,' mimeo, Department of Applied and International Economics, College of Business, Massey University, Palmerston North, New Zealand, April 2007). I find that in rich countries there is indeed statistically significant evidence of a positive correlation between the level of SWB and social production in terms of SETIηome. One interesting issue raised by Benkler is that of the importance, or otherwise, of social capital. He argues that it is not a prerequisite for social production, which mostly involves only very weakly connecte0d communities or even total strangers.
123. Foray, 2006, op. cit., p. 14.
124. Y. Benkler, 'Sharing nicely: On shareable goods and the emergence of sharing as a modality of economic production', Yale Law Journal, 114, 2, 2004, pp. 273-358.
125. The quotation is from p. 281.
126. Ronald Inglehart, Díez-Medrano Basáñez, Loek Halman and Ruud Luijkx (eds), Human Beliefs and Values: A Cross-Cultural Sourcebook Based on the 1999-2002 Values Surveys, 1st edition, Siglo Veintiuno Editores, Mexico, 2004.
127. See Ibid, Fig. 2, p. 14.
128. R. Inglehart, 'Cultural change and democracy in Latin America', paper presented at Conference on Contemporary Catholicism, Religious Pluralism and Democracy in Latin America, Notre Dame University, 31 March-1 April 2005, p. 11.
129. The responses to the questions are also available by gender, as well as by age, education, income group etc. (see Inglehart et al., op. cit.). For example, there are clear differences in the responses to the science and technology related questions by gender, with the percentage reported being higher for males than females (except for Ireland).
130. Note that Diener and Seligman (op. cit.) and Diener (op. cit. argue that use of more specific SWB measures in addition to an overall measure of SWB will often be desirable.
131. Technopolis, Strategic Evaluation on Innovation and the Knowledge Based Economy in Relation to the Structural and Cohesion Funds, for the Programming Period 2007-2013, Synthesis Report, a report to: The European Commission, 2006, available at: http://ec.europa.eu/ regional_policy/sources/docgener/evaluation/pdf/strategic_innov.pdf.
132. OECD, Economic Policy Reforms: Going for Growth 2006, OECD, Paris, 2006.
133. To name but two recent examples: The international conference Is Happiness Measurable and What Do Those Measures Mean for Policy, University of Rome 'Tor Vergata', Rome, 2-3 April 2007
134. and the second OECD World Forum on Statistics, Knowledge and Policy Istanbul, 27-30 June 2007.