Innovation, Entrepreneurship and the New Knowledge Economy: A New Orthodoxy?

This paper constitutes a critical examination of the current manta of development policy, "Innovation, Entrepreneurship and the New Knowledge Economy," and the focus on geographic clusters of IT and biotech firms upon which it is predicated, in the light of theories of cognition and learning. It underscores the policy orientation to which it leads: the emphasis on formal knowledge as opposed to tacit or clinical knowledge; on formal education as opposed to on-the-job training in the process of production; and on innovation as a distinct process, separate from production or even from fashion and design.  As such, the policies which it fosters are likely to make it a self-fulfilling prophecy, increasing the demand for highly educated workers (both to develop the new technologies and then to staff them), narrowing the opportunities for skills developed in other ways, outside educational institutions, and skewing innovation toward newer high tech industries and away from more traditional industries which might progress technologically and economically if comparable funds were invested in developing their technologies and certifying and upgrading the skills which already exist there.  The paper draws upon current policy debates in Brazil to illustrate the tensions that the emphasis on the " new knowledge" economy is generating.