Converting wealth into knowledge and back to wealth

Some months ago I was invited to give the opening lecture at a workshop in China on connecting science and business in the field of experimental mechanics. ‘Connecting science and business’ was the sub-title of a book I wrote with Bob Handscombe some years ago and ‘experimental mechanics’ is a theme that runs deep through my research. So, I felt honored to be invited and confident that I had something relevant to say. However, probably the most succinct statement at the workshop was made by Professor Jian Lu from City University of Hong Kong quoting Geoffrey Nicholson, the inventor of Post-Its: ‘Research is the transformation of money into knowledge. Innovation is the transformation of knowledge back into money creating value.’

The central role that money plays in life is acknowledged in the saying ‘money makes the world go around’. However, the intertwining of money and knowledge is less widely recognised. Although we talk about a knowledge economy not many people understand what it means or how it functions. The diagram below is an attempt to show how research leads to the creation of private information which needs to be disseminated in order to become public information. Public information becomes public knowledge when it is incorporated into our structured, shared understanding through study and learning. Public knowledge is used in innovation processes to create new technology and wealth, which fuels further research, so that there is a feedback loop.  The diagram is modified from one by Max Tegmark‘s book ‘Our Mathematical Universe‘ and, of course is simplified, perhaps too much, but nevertheless illustrates the process of knowledge creation even if sometimes the whole process functions inside an organisation. In the later situation, the creation of knowledge and the benefits to society are likely to be impeded, at least temporarily.

Information triangle

Information triangle

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