It is widely recognized that most industrialized countries are experiencing a transition to knowledge-based economy. The distinguishing feature of the KBE is the pervasive presence of knowledge as both an input and output throughout the economy. In the KBE, the ability to create wealth is increasingly dependent on the effective management of knowledge, that is, the organizational capability to create, acquire, accumulate, disseminate, and exploit information and knowledge. In the World Bank report (1998/1999), knowledge is crucial for development because everything we do depends on knowledge and that knowledge has overtaken resources as the most important factor determining a nation's standard of living. Knowledge knows no boundaries. Nowadays, it is no longer individual countries, which are "knowledge societies". The whole world is one big "knowledge society", with countries linked to one another via fast growing information technology (Toh, 1999 : 77-78). The nature of economic activity itself has changed drastically; technology and information, as well as knowledge, have become the major engines of productivity and economic growth. To adopt to these changing circumstances and ensure sustained development, regional institutions should pool their efforts to realize the tremendous potential that resides in knowledge-based industries and thereby fuel the region's growth and development in this century.
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