A Cultural Political Economy of Competitiveness and Its Implications for Higher Education

This on-line version is the pre-copyedited, preprint version. The published version can be found here:

 ‘A cultural political economy of competitiveness and its implications for higher education’, in B. Jessop, N. Fairclough, and R. Wodak, eds, Education and the Knowledge-Based Economy in Europe, Rotterdam: Sense Publishers, 11-39, 2008.



The target is to establish a knowledge-based society. This is a society where activities and decisions across all domains of life are based on knowledge; a society, where research, focused on the discovery, acquisition, utilization, and dissemination of knowledge is in harmony with education; a society where research and education are the underpinnings of a national system of innovation that provides the basis for economic growth, and which is a prerequisite for successful competition of Estonian products and labor in European and World Markets. (Eesti Teaduste Akadeemia 1997: 1)

Today the knowledge society is a central concept for both comprehending contemporary societies and planning their future. In the Baltic Sea region [for example] it has become the tag-mark of development. The whole region seems to understand, and aim towards, a future that, in one way or another, depends on information, knowledge and learning. … The three key-words appear in many different public spaces: researchers attempt to for understand the contemporary society with the help of these concepts, politicians build the future on them, and advertisements sell different products and services with them. (Hakapää 2002: 10)

In his much-acclaimed book, The Coming of Post-Industrial Society (1973), Daniel Bell made three predictions that, if fully realized, would have major implications for the nature and role of universities in the contemporary economic and social order. His first forecast was that, whereas capital had been the dominant factor of production in industrial societies, in post-industrial societies that place would be occupied by knowledge. Second, while industrialism was characterized by the dominance of mechanical technologies and of economic calculation based on cost-reduction and cost-recovery, intellectual technologies and a ‘sociologizing’ orientation concerned with intellectual planning and the public good would prevail in post-industrial societies. Third, he predicted that, whereas the industrial enterprise had been the dominant organization in industrialism, in post-industrial societies this position would be ceded to the university. These predictions have only been partially confirmed at best – with the first being the most widely, if still erroneously, accepted as having been fulfilled. Considering the nature and reasons for their theoretical inadequacy and/or empirical disconfirmation should tell us much about the contemporary economy and the current role of universities.[1]

The first prediction is certainly part of conventional wisdom as the knowledge-based economy has become the hegemonic representation or self-description of the economy as an emerging reality, an object of calculation, and object of governance in contemporary world society. But this does not mean that it adequately describes the dynamics of today’s world market or the role of knowledge in world society. For it misrepresents knowledge as a ‘factor of production’, understates the extent to which every economy is a knowledge economy, and thereby mistakes one societal self-description for a more complex discursive-material reality.

The second prediction has been stood on its head by the dynamic of the world market. For the production and uses of knowledge have become increasingly subordinate to an ‘economizing’ logic oriented to profit-and-loss calculation in contrast to Bell’s optimistic prediction that the organization and purposes of material production would become subject to a sociologizing concern with the public good. Indeed, it is a telling indicator of this inversion that the hegemonic imaginary today is the ‘knowledge-based economy’ (KBE) rather than information society, learning society, or knowledge society (see below). It may also help to explain the drive to ‘economics imperialism’ in the changing hierarchy of disciplines in the social sciences as the profit-oriented, market-mediated logic of capital extends further in the real world into what had earlier been regarded as in one way or another ‘extra-economic’.

The third prediction has been controverted in turn by the extent to which universities are now tending, in different ways and subject to greater or lesser financial, administrative, and ideological pressures, to act more like economic enterprises that aim to maximize revenues, market their education, research, and knowledge transfer capacities, position themselves competitively vis-à-vis other types of supplier of these services at home and abroad, and, additionally, to serve the demands of various local, urban, regional, national, or even supranational knowledge-based economies. Thus, challenging, albeit indirectly, Bell’s emphasis on the sociologisation of knowledge, Castells and Hall write that universities, as major producers of knowledge, have the same role in the ‘information economy’ as coal mines had in the industrial economy (1994: 231). We should also note that, while Bell wrote from within a primarily national perspective, universities now aim to meet not only local, urban, regional, or national demand but also to serve supranational knowledge-based economic and political interests. And, while lip service is often paid to ‘quality of life’ as well – this is generally interpreted in terms of minimizing the adverse impact of market-driven economic activities on private, social and cultural life.

This chapter interprets these three predictions and their relative failure from the perspective of the cultural political economy of capitalism and explains why the reality is much closer to the two ideas expressed in the lead quotations, i.e., a subordination of information, knowledge, and learning to the demands of the expanded reproduction of the globalizing knowledge economy, than to Bell’s expectation that we would see the widening and deepening of a democratic knowledge society. In this way the chapter serves to locate the remaining chapters in terms of three interrelated sets of economic, political, and socio-cultural changes. The first of these is the nature and dynamic of the contemporary world market as a crucial context for the transformation of universities; the second change is the development of a new logic of governance that links the reorganization and reorientation of higher education to its changing economic and political environment; and the third is the changing nature of capitalism. In addressing these three sets of issues in their interconnection, I draw on cultural political economy (hereafter CPE) as an innovative evolutionary and institutional approach to the semiotic and material dynamics of contemporary capitalism (see Fairclough et al., 2004; Jessop 2004; Jessop and Sum 2001; Sum and Jessop 2003, forthcoming; and below). I draw heavily on the cultural (or, more accurately, semiotic) arguments of CPE in discussing hegemonic economic imaginaries and their role in orienting economic, political, and socio-cultural strategies, especially since the mid-1970s. I draw on its semiotic and material moments in my account of the changing dynamic of competition and competitiveness in the KBE, including the changing articulation of the economic and extra-economic conditions that sustain competitiveness in the world market. And, albeit this time drawing more on its material than its semiotic moment, I use it to consider the implications of contemporary economic change for the nature and purposes of (higher) education.


The approach to these interrelated issues suggested here is based on the concept of economic imaginaries that is central to recent work on cultural political economy. This is a broad post-disciplinary current in institutional and evolutionary political economy that makes a ‘cultural turn’ in economic and political studies to enhance their interpretive and explanatory power. The cultural turn is used here as an ‘umbrella’ concept for the wide range of (re-)discoveries in the humanities and social sciences of the role of semiosis in social life: the cultural turn, the narrative turn, the rhetorical turn, the discursive turn, the argumentative turn, the performative turn, the reflexive turn, the visual turn, etc. Semiosis is the most comprehensive term to cover all of these cultural turns because it refers to all forms of social production of intersubjective meaning (which includes oral, textual, visual, musical, practical performance, etc). In this sense, CPE might perhaps have been better termed Semiotic Political Economy. This would at least avoid the mistaken view that CPE involves no more than adding an interest in a separate realm of ‘culture’ to existing concerns with politics, and economics that are also considered in turn as distinct spheres of social life with the result that CPE is held to comprise a simple, mechanical addition of arguments drawn from the disciplines corresponding to these fields. Yet, as discourse theorists have long recognised, semiosis cannot be confined to some arbitrarily abstracted or isolated sphere of ‘culture’ but is a universal and critical dimension of all social life. Previous work in CPE by the present author and his colleagues has drawn mostly on the critical discourse approach associated with Norman Fairclough (e.g., 1992; 2003; for other approaches to discourse analysis, see Blommaert and Bulcaen 2000; Wodak and Meyer 2001; Wodak 2004). But its evolutionary and institutional orientation also means that CPE can be linked to conceptual history in its German variants (Begriffsgeschichte, historical semantics) concerned with the selective coevolution of discursive and structural changes over long periods as well as its Cambridge (Skinnerian) variant concerned with the use of concepts in specific historical contexts to achieve particular purposes (Edling and Mörkenstam 1995; Ekland 2007; Koselleck 1982; Luhmann 1995a; Palonen 1999). In addition, the Vienna School’s ‘discourse-historical approach’ with its emphasis on eclectic ‘thick’ historical contextualization as well as strategies of argumentation has some similarities — as well as major differences — with CPE, especially as the Viennese approach has been applied to such issues in political economy as international competitiveness, unemployment policy, and the entrepreneurial university (see Reisigl  and Wodak 2001; Wodak and Puntscher-Riekmann 2003; Wodak 2004; and, for relevant applications, Mautner 2006; Muntigl et al., 2000).

Turning to CPE as currently understood, in previous work, Fairclough, Jessop, and Sayer (2004) have approached the cultural turn in the social sciences from the viewpoint of critical semiosis. They argue that semiosis is causally effective as well as meaningful. Events and processes and their emergent effects can be interpreted and, at least in part, explained by semiosis. Thus it is important to study the role of semiosis in the construal and construction of economic and political realities, hence in making and remaking the social world. A key feature of CPE in this context is its application of the evolutionary mechanisms of variation, selection, and retention to the analysis of economic imaginaries, in regard to theoretical paradigms, policy paradigms, and their interaction as well as its concern with the form-determined, socially-mediated institutional dynamics of (different stages and varieties of) capitalism in a changing world market (see also Jessop 2004; Sum and Jessop 2003).

Informing this approach is recognition of the hypercomplexity of the natural and social worlds and the impossibility of observing and explaining these worlds (and their interaction) in real time. This requires continuing processes of complexity reduction as a condition of ‘going on in the world’ – with each process entailing a focus on selected aspects of the world, leading to different kinds of lived experience, and entailing different chances of ignoring other aspects of reality that are crucial to the success of specific strategies, projects, or policies (on complexity and, especially, complexity reduction, see Jessop 2007b; Luhmann 1995b; Rescher 1998). Applied to economic analysis, for example, at what orthodox economics misleadingly describes as the macro-level, CPE distinguishes the ‘actually existing economy’ as the chaotic sum of all economic activities (broadly defined as concerned with the social appropriation and transformation of nature for the purposes of material provisioning) from the ‘economy’ (or, better, ‘economies’ in the plural) as an imaginatively narrated, more or less coherent subset of these activities. The totality of economic activities is so unstructured and complex that it cannot be an object of calculation, management, governance, or guidance. Instead such practices are always oriented to subsets of economic relations (economic systems or subsystems) that have been discursively and, perhaps organizationally and institutionally, fixed as objects of intervention. This involves ‘economic imaginaries’ that rely on semiosis to constitute these subsets. Moreover, if they are to prove more than ‘arbitrary, rationalistic, and willed’ (Gramsci 1971: 376-7), these imaginaries must have some significant, albeit necessarily partial, correspondence to real material interdependencies in the actually existing economy and/or in relations between economic and extra-economic activities. These subsets are always selectively defined – due both to limited cognitive capacities and to the discursive and material biases of specific epistemes and economic paradigms. They typically exclude elements – usually unintentionally – that are vital to the overall performance of the subset of economic (and extra-economic) relations that have been identified. Such exclusions limit in turn the efficacy of economic forecasting, management, planning, guidance, governance, etc., because such practices do not (indeed, cannot) take account of excluded elements and their impact. Similar arguments would apply, with appropriate changes, to so-called meso- or micro-level economic phenomena, such as industrial districts or individual enterprises.

Imagined economies are discursively constituted and materially reproduced on many sites and scales, in different spatio-temporal contexts, and over various spatio-temporal horizons. They extend from one-off transactions through stable economic organizations, networks, and clusters to ‘macro-economic’ regimes. While massive scope for variation typically exists at an individual transactional level, the medium- to long-term semiotic and material reproduction requirements of meso-complexes and macro-economic regimes narrow this scope considerably. The recursive selection of semiotic practices and extra-semiotic processes at these scales tends to reduce inappropriate variation and to secure thereby the ‘requisite variety’ (constrained heterogeneity rather than simple uniformity) that supports the always relative structural coherence of economic activities. Indeed stable semiotic orders, discursive selectivities, social learning, path-dependencies, power relations, patterned complementarities, and material selectivities all become more significant, the more that material interdependencies and/or issues of spatial and intertemporal articulation increase within and across diverse functional systems and the lifeworld. Yet this growing set of constraints also reveals the fragility and, indeed, improbability of the smooth reproduction of complex social orders. This highlights the importance of retaining an appropriate repertoire of semiotic and material resources and practices that can be flexibly and reflexively deployed in response to emerging disturbances and crises (cf. Grabher 1994; Jessop 2003).

Economic imaginaries at the meso- and macro-levels emerge as economic, political, and intellectual forces seek to (re)define specific subsets of economic activities as subjects, sites, and stakes of competition and/or as objects of regulation and to articulate strategies, projects and visions oriented to these imagined economies. Among the main forces involved in such efforts are political parties, think tanks, bodies such as the OECD and World Bank, organized interests such as business associations and trade unions, and social movements; the mass media are also crucial intermediaries in mobilizing elite and/or popular support behind competing imaginaries.[2] These forces tend to manipulate power and knowledge to secure recognition of the boundaries, geometries, temporalities, typical economic agents, tendencies and counter-tendencies, distinctive overall dynamic, and reproduction requirements of different imagined economies (Daly 1991; Miller and Rose 1993). They also seek to establish new structural and organizational forms that will help to institutionalize these boundaries, geometries, and temporalities in an appropriate spatio-temporal fix that can displace and/or defer capital’s inherent contradictions and crisis-tendencies. However, because of rival economic imaginaries, competing efforts to institute them materially, and an inevitable incompleteness in specifying and securing their respective economic and extra-economic preconditions, each ‘imagined economy’ is only ever partially constituted. There are always interstitial, residual, marginal, irrelevant, recalcitrant and plain contradictory elements that escape any attempt to identify, govern, and stabilize a given ‘economic arrangement’ or broader ‘economic order’ (Malpas and Wickham 1995; Jessop 2002).

Nonetheless, relatively successful economic imaginaries have a performative, constitutive force.[3] On the one hand, their operation presupposes a substratum of substantive economic relations and instrumentalities as their elements; on the other, where an imaginary is successfully operationalized and institutionalized, it transforms and naturalizes these elements and instrumentalities into the moments of a specific economy with specific emergent properties. For economic imaginaries identify, privilege, and seek to stabilize some economic activities from the totality of economic relations and transform them into objects of observation, calculation, and governance. Technologies of economic governance, operating sometimes more semiotically, sometimes more materially,[4] constitute their own objects of governance rather than emerging in order to, or operating with the effect that, they govern already pre-constituted object. This chapter focuses on the hegemonic economic imaginary in contemporary capitalism – the knowledge-based economy – and explores its implications for theoretical and policy paradigms, especially its translation into policies for skills and higher education.


Discussion of the knowledge-based economy as an economic imaginary and/or economic reality is complicated by two theoretical and practical issues. First, different disciplines draw on different theoretical paradigms to discuss it. This is reflected, for example, in the contrasting concepts of knowledge economy and knowledge society, which draw respectively on economics and sociology. Each of these two concepts is associated with a broader set of cognate concepts that produce distinctive types of imaginary. The former considers knowledge in terms of factors of production, intellectual property, the skills-based economy, national systems of innovation, the knowledge base, the knowledge-driven economy, knowledge management, knowledge transfer, the learning economy, the learning organization, the learning region, etc. The latter sees it in terms of a collective social resource, the intellectual commons, the division of manual and mental labour, technical and organic intellectuals, the information society, post-industrial society, lifelong learning, the learning society, etc. (cf. Jessop 2002, 2007; and, for a general survey that contains 57 definitions of knowledge economy, knowledge based economy, knowledge society, and cognate terms, see Carlaw et al., 2006).

Second, cross-cutting the distinction between knowledge economy and knowledge society is that between theoretical and policy paradigms. Wallis and Dollery differentiate them as follows:

[p]olicy paradigms derive from theoretical paradigms but possess much less sophisticated and rigorous evaluations of the intellectual underpinnings of their conceptual frameworks. In essence, policy advisers differentiate policy paradigms from theoretical paradigms by screening out the ambiguities and blurring the fine distinctions characteristic of theoretical paradigms. In a Lakatosian sense, policy paradigms can be likened to the positive heuristics surrounding theoretical paradigms. Accordingly, shifts between policy paradigms will be discontinuous, follow theoretical paradigm shifts, but occur more frequently than theoretical paradigms since they do not require fundamental changes in a negative heuristic[5] (1999: 5)

That this distinction is recognized by persons situated at the interface of the academic and policy worlds is evident from the complaint of a key independent scholar and OECD policy adviser, Bengt-Åke Lundvall, lamenting, in relation to his concept of ‘national innovation system, ‘how it has “degenerated”, how it has been “abused” and “distorted” while travelling from the academic to the policy world, compared with the connotations he originally intended for it’ (2006:  2, 10, 14; as cited by Ekland 2007: 17).

This distinction (and its conflation) helps us to situate and understand the explosive interest in the KBE. For this theme is not just a matter of theoretical and empirical curiosity for disinterested observers but is being actively translated into a wide range of policies and this, in turn, affects the ways in which the contemporary economy is described, examined, and explained. Indeed, as Godin (2006) shows, the concept of the KBE, as developed above all by the Organization of Economic Cooperation and Development (hereafter OECD), has suggested that:

[t]he concept of a knowledge-based economy is simply [one] that serves to direct the attention of policy-makers to science and technology issues and to their role in the economy and, to this end, a concept that allows one to talk about any issue on science and technology and generate a large set of statistics under one roof. This kind of concept I will call an umbrella concept. A related, but less controversial, thesis … is that the (resurgence of the) concept of a knowledge-based economy in the 1990s owes a large debt to the OECD – and to the consultants it supported. … [Indeed,] viewing the OECD as a think-tank is the key to understanding the popularity of the concept among member countries (2006: 17-18; cf. Miettinen 2002, Eklund 2007; and Jones, this volume).

These remarks on the transfer of ideas and arguments between theoretical and policy paradigms reinforce the importance of distinguishing between them in order to avoid misunderstandings about the nature and role of discourses about the knowledge based economy. Indeed, in the absence of this distinction, two complementary fallacies can arise. The first is that the theoretical status of the concept of the KBE, when viewed largely from the perspective of the ideas that inform the policy paradigm, will be dismissed on the grounds that it is merely a political concept or, worse still, an essentially incoherent buzzword (cf. Godin 2006) The second is that, when assessed in terms of the demands for analytical rigour appropriate to a scientific concept, the policies proposed to promote the KBE will be dismissed as inconsistent efforts at ‘muddling through’ and as bound to fail on these grounds alone. What gets missed here is the constitutive or performative force of the policy paradigm in helping to shape the emergence, provisional stabilization, and eventual consolidation (if any) of the knowledge-based economy as an actually existing phenomenon. This confirms the overall importance of the potential disjunction, mutual influence, and, indeed, interpenetration of theoretical and policy paradigms – a topic that is particularly suited to a cultural political economy analysis.

The significance of this distinction for present purposes is seen in a recent paper by Peters, who noting that concepts have histories and family resemblances, argues that this also applies to the ‘knowledge society’ and ‘knowledge economy’:

These twin concepts while displaying similar characteristics – among them the attempt to describe society or economy in terms of dominant axial principle from which other societal or economic trends can be inferred – belong to different disciplines and discourses. To all intents and purposes these are separate and parallel discourses that are not cross-threading — in each case the trajectories of the disciplines seem to be powered by their own problematics, by the set of problems thrown up by the discipline rather than any external pressures, and they seem particularly impervious to radical cross-disciplinary borrowing or analysis. Where they do come together is in the area of policy, in policy studies, in actual policies or policy discourse, where the master concepts borrowed from the sociology and economics of knowledge have come to help shape and define policy templates for economic and social development and well being. At the level of policy the same demands for theoretical consistency or disciplinary rigor or internal consistency do not seem to operate; rather the easy dualism of the knowledge society and the knowledge economy is embraced without difficulty or contradiction. While there is, of course, some analysis of trends and even the collection of relevant data, these twin concepts are empirically underdetermined. They operate more like performative ideologies with constitutive effects at the level of public policy. And there are a whole series of self-legitimating sibling concepts spawned by policy analysts and think-tanks that now roll off the tongue of any sociology undergraduate: ‘information society’, ‘learning society’, ‘information economy’, and, more recently, ‘learning economy’ (Peters 2006: 1).

Three interrelated conclusions follow from the above discussion. First, having accepted the prima facie usefulness of the distinction between the two types of paradigm, it is important not to conflate them or reduce one to the other but to explore their changing articulation in different contexts. Second, we must resist the temptation to derive immediate policy lessons from theoretical paradigms and/or to subject policy paradigms to a purely theoretical critique. Third, from a CPE perspective, the distinction poses interesting questions about (a) the relative hegemony or dominance of different paradigms (or, as I call them here, economic imaginaries); (b) the discursive and material factors and forces that introduce variation, shape the selection, and consolidate the retention of hegemonic, sub-hegemonic, counter-hegemonic, or marginal accounts of the economy, its dynamic, and its conditions of existence; and (c) the performative force of economic imaginaries in shaping the actually existing economic realm. Together these issues will affect the changing discursive and material boundaries of the economic and extra-economic and their changing implications for economic performance. This could well be reflected in turn in changes in the scope, scale, and relative primacy of different policy fields. This has particular significance, as we will see, for the role of education, knowledge creation, and knowledge transfer to competitiveness.


The idea of the ‘information economy’ as a distinct stage in economic development may well have emerged first in Japan. The term was introduced there by Tadeo Umesao in the 1960s but did not really take off until the late 1970s, by which time both ‘information economy’ and the parallel idea of ‘post-industrial economy’ had also been firmly established elsewhere in East Asia and in many advanced western capitalist societies (cf. Dordick and Wang 1993; Masuda 1981; May 2002). The first wave of information economy strategies were mainly focused on investment in information and communication technologies (ICTs) rather than the move to a knowledge-driven or knowledge-based economy. Typical of these was the American National Information Infrastructure programme launched in 1991, which was rapidly followed by many Western European economies and the European Union. A broader notion of information economy developed in Japan and other East Asian economies. This was linked to the exhaustion of export-led growth based on catch-up dynamics, which prompted various intellectuals, think tanks, business leaders, and policy-makers[6] to search for new bases for competition. The solution was not only to invest in information and communication technologies but also to upgrade to an innovative, information-based economy; in later discourses and strategies, this idea would be expanded to the more encompassing notion of the knowledge economy. The first explicit information economy and/or KBE strategies in East Asia were the ‘Intelligent Island’ strategy in Singapore and Malaysia’s ‘2020 Vision’ — both of which were presented in 1991. Other East Asian countries followed, including Japan’s High Performance National Information Infrastructure [NII] Plan (1994), Taiwan’s NII 2005 (1994), South Korea’s NII 2003 (1994), Vietnam’s IT 2000 plan (1995), and Smart Philippines (2000). Despite the similar timing in East and West, Asian models and strategies tended to be more comprehensive, going beyond ICTs to broader economic and, even more importantly, extra-economic dimensions of innovation-led growth (for an outline of information economy strategies in this period, see Ducatel, Webster, and Herrmann 2000). Nonetheless, the overriding conclusion to be drawn from this period is the key role of economic narratives and associated imaginaries in identifying turning points and/or crises and in reorienting technology, industrial, and wider-ranging economic policies.

To illustrate this conclusion and the earlier arguments about economic imaginaries, I present three brief case studies drawn from Western experience. The first concerns the growing sensitivity of US policy-makers and stakeholders to the importance of innovation and knowledge as strategic assets. The second is the ‘national system of innovation’, which was the precursor of the KBE as the dominant economic imaginary in the OECD and its transfer to member states and other economies. Its significance for our purposes is that, although ‘the OECD always looked for conceptual frameworks to catch the attention of policy-makers’ (Godin 2006: 18), the national system of innovation failed in this regard. So the third case turns to the knowledge economy and knowledge-based economy, which has proved very successful as an economic imaginary.

From Industrial Competitiveness to Knowledge-Based Economy

Almost as soon as it became the undisputed hegemonic power in the capitalist world following the Second World War, the United States has experienced agitated and ongoing debates about its alleged lack of economic competitiveness. These have co-existed with equally angst-ridden concerns about threats to its national military security, whether from the Soviet Bloc, China, or, most recently, asymmetric warfare waged by terrorist networks (on the role of these twin myths in legitimating government support for industry in a regime officially opposed to ‘socialistic’ or ‘communistic’ state intervention in the market economy, see Belabes 1999). Worries about competitiveness prompted Congress to establish in 1978 the Office of Technology Assessment to assess the competitiveness of American industries. Its remit covered industry and market structures, the nature of work forces, availability of materials and components, supporting infrastructures, the environment for innovation and technology diffusion, business and economic conditions, government policies and interactions with the private sector, and international trade relations. In 1983, in response to the perceived threat of Japan as Number One and other indicators of technological, industrial, and financial decline, President Reagan set up the President’s Commission on Industrial Competitiveness Commission. Two key outcomes were the Young Report (President’s Commission 1986, see also Young 1988) and a ‘Council of Competitiveness’ to act as a national ‘forum for elevating national competitiveness to the forefront of national consciousness’ (Council on Competitiveness 2007). Commissions on competitiveness have continued to report regularly since 1983, with the most recent at the time of writing being the Palmisano Report, 2007). The Council is also very active, focusing on national innovation and identifying the importance of action to promote this in three main fields: talent, investment, and infrastructure. Regarding talent, the focus is on education and training to enable ‘talented people’ to acquire ‘cutting-edge skills’ so that they can create ‘new ideas and innovative technologies’ and ‘keep the economy strong and growing stronger’. A particular concern has been lack of competitiveness in ‘such critical fields as science, engineering, math and technical skills’ and hence on measures to build ‘a world-class workforce by initiating programs to encourage diversity in the S&E [i.e., science and engineering] pipelines and excellence in math and science education in America’s schools at all levels’ (Council on Competitiveness 2001). This in turn is reflected in a whole series of policy recommendations concerning the reorganization of grade school education, further and higher education, and life-long learning (see below). In addition, at all levels from the North American Free Trade Area down through the federal state, regional blocs of states, states, metropolitan regions, and cities to towns and neighbourhoods, we find concerted efforts to promote competitiveness in these and other areas.

National System of Innovation

‘National System of Innovation’ (or, sometimes, ‘National Innovation System’) is a paradigm that is actively promoted internationally by, even if it did not originate in, the OECD (cf. Albert and Laberge 2007; Ekland 2007; Freeman 1995). It refers to the flow of technology and information among people, enterprises and institutions that is held to be central to continuing innovation on the national level. The concept emphasizes the contribution of a complex web of relations among private, public, and third sector actors in the NSI, including enterprises, universities and government research institutes at national, regional, and local level that contribute to the production and, even more importantly, diffusion of new technologies and the wider knowledge base that supports their adoption in economically useful ways (cf. Freeman 1995; Lundvall 1992; Nelson 1992; OECD 1997). It has been closely linked in the work of the OECD with the concepts of learning economy and learning region (Foray and Lundvall 1996; Lundvall 1992; Lundvall and Johnson 1994; Maillat and Kebir 1999).

In a study of Finland in the OECD context with implications extending beyond the Finnish case, Miettinen (2002) has explored ‘national system of innovation’ as a metaphor performing several rhetorical functions. He argues that it simplifies, persuades and reorients thinking about the interrelationships between science and society; it incorporates tacit value schemes and promotes a vision; helps forge consensus, mobilizes various actors in particular ways; and it contributes to shaping events along lines prescribed by model. He adds that these functions can be performed in part because the definition of the NIS is loose, allowing different actors to impute different meanings to the term. At the same time, the associated vision of increasing the country’s economic competitiveness, often resonates with broader political trends in society. After presenting the Finnish case, Miettinen develops an ‘epistemology of transdiscursive terms’, i.e., terms with significant rhetorical functions that flourish at the interface between science, public discourse, and politics and thereby provide the basis for textual interlacing and circulation of self-referentiality In the language deployed above, these are terms that have a key bridging role in linking theoretical and policy paradigms, facilitating the translation between them but also disguising important differences in their form and function. In particular, he identifies six key functions that they perform (see Box 1.1).

  • They must have a minimal traditional epistemic function in the sense of providing a representation or empirically anchored account of aspects of reality.
  • They serve as epistemic organizers, synthesizing earlier accounts and providing a new angle on things. Suitable terms and metaphors are used in organizing one’s perspective, integrating various themes that formerly were separated. They provide a sense of inter-connection or holism.
  • They supply a world-view or a diagnosis of an era, a function that is also central to the integrative power of the conceptual framework.
  • They serve as boundary-crossers by engaging various social groups and institutions in shared discussion. That is why they are called transdiscursive (they cross between and link different discourses).
  • They serve ideological and consensus-creating (or vision-carrying) functions.
  • They help mobilize and empower a multiplicity of actors under what the participants themselves come to perceive as a common banner.

Box 1.1 Six social-epistemic functions of transdiscursive terms

   Source: Adapted and extended from Miettinen (2002: 137)

Having framed the problem in this manner, Miettinen argues that transdiscursive terms must be loose to provide the interpretative flexibility needed to accommodate different interests expressed by actors across different domains, such as government, university and industry. The credibility of a term will in part depend on linkages with scientific communities because political viability derives from the semblance of scientific credibility. It follows that the tension between the epistemic reality-representing function of the term and its future-oriented rhetorical and discursive organizing functions has to be contained to prevent the puncturing and consequent collapse of the metaphor. This risk is illustrated from the OECD’s recent admission in a review paper, that ‘there are still concerns in the policy making community that the NIS [sic] approach has too little operational value and is difficult to implement’ (OECD 2002: 11, cited in Godin 2006: 19). This failure is one factor behind the rise of the KBE as an alternative concept. Thus Dominique Foray, one of the OECD consultants behind the new term, criticized the concept of National System of Innovation for being ‘neither strikingly original, nor rhetorically stirring’ (David and Foray 1995: 14) and for placing too much emphasis on national institutions and economic growth, and not enough on the distribution of knowledge.

Knowledge-Based Economy

Every economy is a knowledge economy but not every economy has been called a knowledge economy, let alone finds itself so labelled by its most prominent spokespersons as one of its most significant contemporary self-descriptions (on the polyvocal nature of self-description of society, see Luhmann 1987, 1990, 1995b). Indeed the knowledge economy label is relatively new. The first post-war usage of the concept (if not the exact phrase) occurred in the 1960s and 1970s in several national contexts and was based mainly on the speculative extrapolation of contemporary trends into the future, typically focusing on trends in the most advanced national economies as if other economies would simply follow their path with a greater or lesser time lag. So we find references to the post-industrial economy, information economy, knowledge economy, and so on (for a comprehensive list of 75 such terms, which were introduced at various times from 1950 to 1984, see Beniger 1986; cf. Carlaw et al., 2006). In many cases the emphasis fell more on the role of information than of knowledge. More recent uses of the terms ‘knowledge economy’ and ‘knowledge-based economy’ (plus related abbreviations and acronyms such as the K-economy and KBE) are less concerned with forecasting the future than with the empirical description and quasi-prescriptive benchmarking of central features of actually existing economies. Related theoretical paradigms seek to establish the novelty of the KBE by identifying its distinguishing features in terms of some combination of the reflexive application of knowledge to the production of knowledge, the key role of innovation, learning, and knowledge transfer in economic performance, and the increasing importance of the intellectual commons and/or intellectual property rights in contemporary competition. In turn the hegemonic policy paradigm is especially concerned to establish the reality of the KBE through the compilation and repetition of statistical indicators, through the development of benchmarks and league tables, and through the elaboration of an interwoven set of useful concepts, slogans, and buzzwords. These can then be applied to generate a relatively simple set of policy prescriptions and legitimations to be applied to many sectors, many scales, and many countries.

The key document was published by the OECD in 1996 under the title The Knowledge-Based Economy. This was followed in 1997 by guidelines for competitiveness in the form of National Innovation Systems. This prompted institution-building within and across the public and private sectors at many scales and in regard to many spheres bearing more or less directly on competitiveness in a knowledge-based economy. Within larger firms, knowledge management became a key discipline and knowledge audits were conducted regularly to identify strategic knowledge assets (Malhorta 2000); governments established knowledge ministries, departments and agencies; national states began to map their ‘national innovation systems’ (NIS) and take measures to strengthen them; standardized vocabularies were promoted to guide public and private sector debate (cf. American National Standards Institute and Global Knowledge Economics Council 2001). This was taken further in 1990s with the production of competitiveness indexes, such as the 1992 World Competitiveness Report published by the World Economic Forum and the Institute for Management Development in Geneva (WEF and IMD 1992, and subsequently).  This highlighted ‘the softer side of competition’ in a KBE, i.e., the role of value-adding through the creation, the management and the transfer of information (ibid. 4). There is now a global growth industry that produces multiple competitiveness rankings for countries, regions, cities, and so on, each of which employs different statistical and other sources, directed at economic actors and policy-makers around the world (for discussion, see Lall 2001; Bristow 2005; Oxley et al., 2007).

Godin has identified the leading role of the OECD in promoting the KBE as the key site of competition and the key focus of competitive strategies. He explains this in terms of the OECD’s efforts to respond to the inadequate rhetorical appeal of ‘national system of innovation’ and ‘learning economy’ by reviving and consolidating the idea of the knowledge-based economy and, on this basis, identifying the importance of knowledge management and knowledge transfer. He notes above all the OECD’s enrolment of the promoters of the KBE concept (e.g., Lundvall and Foray) as consultants and, even more importantly, the production of statistics to give the concept some empirical content and plausibility (Godin 2006: 19). He emphasizes that a new approach was needed in order that the OECD could influence the policy process and notes that the rhetorical appeal of the KBE concept depends on its ‘easy translation of readily available academic fads into keywords (or buzzwords), then into slogans in order to catch the attention of policy-makers’. In addition, the OECD and policy-makers in its member states are under continuing pressure to publish.

The OECD publishes biannual, yearly and biennial reports, among them those for ministers’ conferences, where timeframes are very tight. Umbrella concepts are very fertile for producing documents. They synthesize what is already available, what comes from day-to-day work conducted in other contexts and, above all, what is fashionable, often at the price of original work (Godin 2006: 19, 24).

A key factor in reinforcing the ability of memorable buzzwords and slogans to sell ideas is their association with ‘a plethora of figures and graphs’ (Godin 2004: 684). These have a spurious scientific authority as well as intuitive persuasive force even though the OECD itself occasionally concedes that its indicators did not adequately capture the complex, dynamic nature of knowledge development and acquisition (e.g., OECD 1995). For, as Godin notes, this presentational strategy appeals to the typical OECD readership: ministers, policy-makers, journalists etc. Thus, writing on the OECD’s promotion of the idea of the ‘New Economy’, Godin argues that

[t]he strategy developed at the DSTI [i.e., Directorate for Science, Technology, and Industry] to integrate productivity into its statistics and reports was three-fold. First, digest all available academic work in order to imitate their methodology. Second, internationalize the (academic and national) statistics to make a convincing case for its member countries. Third, organize the discourse into a policy-oriented framework, using buzzwords. In the present case, it was new growth theories and the New Economy that were the buzzwords. But over the OECD history the latter also shared their popularity with others: high technology, national system of innovation, globalization, knowledge-based economy, and information economy (Godin 2004: 688).

These three studies, illustrative of many other economic imaginaries, suggest four key conclusions on the power of economic imaginaries in the emergence, selection, and retention of theoretical and policy paradigms. First, during any period of economic discontinuity, many alternative economic imaginaries may be proposed, each based on a specific ensemble of economic categories linked in turn to wider vocabularies. Second, some of these economic imaginaries may be more resonant than others in a given conjuncture. This will depend in part on the ease of any interchange between theoretical and policy paradigms — reflecting the need both for scientific authority and for easy communicability to lay decision-makers — and in part on the centrality of the organizations and institutions that mediate between these worlds and undertake the necessary translation. Only when the theoretical and policy paradigms promoted by central organizations and institutions lack resonance and/or are held to have manifestly failed when pursued for significant periods does it become possible for marginal or counter-hegemonic forces to provide alternative economic imaginaries. Even here, if the central organizations and institutions are sufficiently powerful, they may persist in their error(s) and seek to repress or, at least, marginalize alternative imaginaries and policy proposals.[7] Third, where, as in the case of the KBE, theoretical and policy paradigms tend to reinforce each other because theoretically-justified policy paradigms are widely adopted and, more importantly, acquire a performative and constitutive character, then the relevant economic imaginary will be retained through normalisation and institutionalisation. But this will depend on the capacity of the economic imaginary to envisage potentialities in a relatively fluid conjuncture, to orient the actions of critical social forces towards their realization, and to provide means to consolidate this movement once it is initiated. And, fourth, from the viewpoint of a critical cultural political economy, this depends in turn on the capacity of the economic imaginary, once translated into economic strategies and appropriate economic and extra-economic policies, to regularize and stabilize the course of capital accumulation within specific spatio-temporal fixes, including their facilitation of the displacement and/or deferral of associated contradictions, conflicts, and crisis-tendencies elsewhere and/or into the future (cf. Jessop 2002, 2004).


As part of the general CPE approach, competition is regarded as a complex process that cannot be fully grasped in real time by market actors or economic observers, that the factors and forces bearing on competition are therefore semiotically construed in the first instance by those concerned, that these factors and forces will be construed differently from the viewpoint of different economic imaginaries, and that the relation between economic and extra-economic factors in this context will also vary. CPE also claims that those economic imaginaries that get selected and retained also have a constitutive power in shaping economic orders and the manner of their embedding in wider ensembles of social relations (or social formations), i.e., that they can involve not only construal but also construction. These claims are especially important for theoretical and policy paradigms concerned with the KBE and the conditions making for competitiveness in this ‘new’ form of capitalist accumulation regime. For economic competitiveness is an essentially contested, inherently relational, and politically controversial concept. There are many ways to define it, many modalities of competition, and many sites of competition. Definitions of competitiveness and their associated discourses are liable to change. Thus mercantilist notions from the 17th century can be contrasted with 1890s imperialism or recent worries about structural competitiveness or innovation-competitiveness (see Reinert 1995; Cho and Moon 2000; Porter 1990). Indeed, as these examples suggest, different ideas of competitiveness are linked with different economic imaginaries. During the mercantilist period, for example, economics was regarded strongly as a matter of political calculation because it concerned state policies to control trade in order to increase financial reserves and because the economy was not yet seen (rightly or wrongly) as a distinct system with its own economic logic (Magnusson 1994). In the classical imperialist period, global economic competition was mediated through state enclosure of territory abroad for military-political as well as geo-economic purposes (Ten Brink 2007). The transition from classical imperialism to a more liberal post-war order (in the shadow of US hegemony), competition focused more on domestic growth and multinational foreign investment, leading to conflicts between techno-nationalism and techno-globalism (Ostry and Nelson 1995; Ruggie 1982). And, with the rise of the current neo-liberal transnational financial order and ongoing reorientation towards the globalizing knowledge-based economy, competition has been restructured again, this time over innovation policies and how best to subordinate the extra-economic to the ‘demands’ of economic competition (Jessop 2002).

The rise of the KBE as the hegemonic economic imaginary was neither a fateful necessity nor an arbitrary act of will. It resulted from the operation of the usual evolutionary mechanisms of variation, selection, and retention as the social forces backing one or another economic imaginary compete for support in a particular, complex conjuncture. This was the crisis of the dominant post-war accumulation regimes, including Atlantic Fordism, East Asian exportism, Latin American import substitution, and, albeit less obviously capitalist, state socialism in the Soviet Bloc and in mainland China. Economic crises normally disorient social forces and lead to great variation in discourses addressed to their nature, causes, responsibilities, management, and possible long-term solutions. In some cases this involved efforts to define the crisis in political as well as economic terms, requiring a radical break in the form of political regime in order to radically modify the balance of forces and pursue ‘necessary’ structural reforms (e.g., Thatcherism); in others, it was sufficient for the economic crisis to be defined in terms of a loss of competitiveness in a changing world market that required new economic strategies supported by appropriate policy adjustments (e.g., the Nordic economies). These crisis interpretations are subject in turn to both semiotic and material selection, in terms of the initial resonance among personal, organizational, and meta-narratives as well as social forces’ differential capacity to access and control the key sites and media in and through which competing discourses are communicated. Resonant discourses that are also widely disseminated to key social forces and get translated into effective strategies and policies will eventually be retained. This involves even more important material mediation in so far as these strategies and policies must be (seen to be) effective within the spatio-temporal horizons of the social forces who matter in a given social formation. Where economic imaginaries satisfy these semiotic and material tests, they are likely to be retained in three key areas: (a) incorporation in habitus, hexis, personal identity, organizational routines, institutional rules, (b) objectification in built environment, material and intellectual technologies, and (c) continuing expression in economic strategies, state projects, hegemonic visions. In general, the wider the range of sites (horizontal and vertical) where resonant discourses are retained, the greater is the potential for effective institutionalization. This in turn should lead to relative structured coherence across institutional orders and modes of thought and in relatively durable patterns of social compromise among key actors.

Seen in these terms, three sets of changes have occurred in the transition from the economic imaginaries associated with Atlantic Fordism, Asian exportism, import substitution, and state socialism to the currently hegemonic economic imaginaries that are oriented in different ways to a globalizing knowledge-based economy.

  • The first change is a shift from imaginaries that treats macro-economics primarily in national terms to imaginaries that are oriented to multiple, interpenetrating scales of economic organization up to and including the world market.
  • The second change concerns the expansion of the ‘economic’ to include an increasing array of factors and forces that were previously considered ‘economically irrelevant’.
  • The third change involves the widening of ‘extra-economic’ factors and forces that are now considered ‘economically relevant’.

The education system figures in all three areas. For it is increasingly construed in post-national terms and is being reorganized on this basis at various scales; it is increasingly construed as a directly economic factor (education is now located within the profit-oriented, market-mediated economic or, at least, subject to commodification and/or evaluation in terms of market proxies); and, where it is located outside the market or quasi-market economy, it is nonetheless increasingly seen as an extra-economic factor that bears directly and ever-more critically on economic competitiveness.

The OECD has had a key role in linking and promoting all three sets of changes so that they tend to be mutually reinforcing within the limits of a world market that is still governed in the shadow of sovereign national states, some of which are, of course, more powerful than others. It is primarily concerned with securing an appropriate balance between competition and cooperation between developed capitalist economies in regard to the economic strategies of enterprises as well as the economic and economically-relevant policies pursued by governments at different scales. Established as part of the post-war international regime of embedded liberalism, the OECD faced problems in the late 1960s and early 1970s around the declining economic performance of advanced capitalist economies and the best ways to insert emerging economies into the world market. Its initial response to the unfolding economic crisis was to call for greater flexibility compared to the rigidities of an Atlantic Fordism based on mass production and mass consumption, big business, powerful unions, and big government; it then called for greater structural and/or systemic competitiveness[8] in terms of extra-economic as well as economic institutional arrangements (although this was framed primarily within the old economic imaginary); shifted again, this time to recommendations about how to improve national systems of innovation (the start of a shift towards the KBE), to subsequent calls for a learning economy (an even stronger shift in this direction), and, finally, for measures to effect the transition to the knowledge-based economy as the next stage in capitalist development. At each step, the nature, scope, and significance of the extra-economic as well as economic factors making for competitiveness has tended to expand. This holds not only for firms as they seek to identify an ever-widening range of sources of dynamic competitive advantage (and disadvantage) and to capitalise upon the former and eliminate the latter; but also for the economic and extra-economic policies to be pursued by policy-makers and associated stakeholders on all scales from industrial or central business districts through cities and regions to nations and supranational blocs. A key element in all areas is the promotion of entrepreneurialism and an entrepreneurial culture supported, in more recent policy paradigms, by calls for investment in social capital and for the promotion of good governance. The extensive range of indicators of competitiveness that now enter into the construction of the benchmarks for technological, structural, systemic, and future-oriented growth competitiveness is a good index of this transformation in theoretical and policy paradigms.


The initial crisis in/of Fordism prompted a critique of education as failing to meet the needs of a changing economy and redefined labour market. This was associated with an increased emphasis on inculcating flexibility and adaptability as a short-term response to the vagaries of the business cycle and greater volatility in the labour market (Robins and Webster 1989). Flexibility and flexible learning were also linked to organizational change, especially with the rise of open and distance learning enabled by new ICTs and new methods of context-situated and problem-oriented teaching and learning. Later, there was a broader emphasis on the role of education in promoting the globalizing, knowledge-based economy through the development of human capital. This was linked to growing concern with the certification of transferable as well as specific skills in schools, post-compulsory education, and on-the-job training. Training and lifelong learning became a central component of economic as well as social policy in all advanced capitalist economies and they were tied to the growing consensus that successful competition depends on building the knowledge base and human capital.

These trends are evident at all levels of education from schools through further and higher education to on-the-job training and career-linked lifelong learning and thence to ‘universities of the third age’ for older people. A cross-national survey some ten years ago of general discourses and proposals for educational reform identified a new orthodoxy based on:

(1) improving national economies by tightening the connection between schooling, employment, productivity, and trade; (2) enhancing student outcomes in employment-related skills and competencies; (3) attaining more direct control over curriculum content and assessment; (4) reducing the costs to government of education; and (5) increasing community input to education by more direct involvement in school decision-making and pressure of market choice. (Carter and O’Neill 1995, summarized by Ball 1998: 122)

Thus schools were increasingly expected to enable children to become enterprising subjects and develop their personal skills and capacity for team-working. They were also expected to provide the basis for the transition to work and to forge closer links with future employers. As Mulderrig (this volume) indicated for the British case, a growing emphasis was placed on the development of technical, personal, and life skills that would be useful in employment. This is reflected in a proliferation of programmes to integrate education and work through more vocational training, partnerships, work experience, training credits, and so on. Linked to this is the extension of the new managerialism and audit culture into schools (as well as universities) with its emphasis on quasi-markets, internal cost centres, performativity, targets, benchmarking, staff appraisal, etc. (Clarke and Newman 1997; Fairclough 1993; Mautner 2005; Power 1997).

The tightened connection between schooling, employment, productivity and trade is reflected in a cross-national reorientation of the notion of skill, with increasing emphasis on key skills, lifelong learning and employability, as technology, corporate restructuring and volatile markets are believed to have ended the Fordist fantasy of jobs for life (Lauder et al. 2001). Education has become integrated into the workfarist project that downgrades the Keynesian state’s commitment to full employment and now emphasizes its contribution to creating conditions for full employability. Thus responsibility for becoming employable is devolved to individual members of the labour force, who should acquire the individual skills, competencies, flexibility, adaptability and personal dispositions to enable them to compete for jobs in national and global labour markets. They may be largely responsible for this as enterprising individuals investing in their own human capital or as equal citizens entitled to support from the state and social partners to improve their skills. In all cases there should be increasing cooperation between colleges, universities and other learning providers and the world of work. Thus employers and practitioners are involved in curriculum development, managers are drawn into educational governance and agenda-setting, mobility between the academy and non-academic worlds is encouraged, and colleges and universities deliver lifelong learning through advanced professional programmes, continuing professional development, part-time, evening, and distance teaching, remedial and second-chance courses, and so on (Teichler 1999: 85).

Notwithstanding this cross-national policy discourse convergence, there are still marked differences in take-up and implementation. Brown et al. (2000) report, for example, that, where economies were dominated by a belief that the future lay in a post-industrial service economy, there was a polarization between education and training for high-skilled elites and for a flexible, low-skilled service sector. The latter sector also had relatively low investment and generated output more through long working hours than increasing productivity. Conversely, where manufacturing was still accorded a key role in accumulation strategies, the state emphasized intermediate skills and the need for education and training to link industry and services. This was coupled with high capital investment to harness skills for a high- productivity economy. The USA and UK exemplify the first model; the second is illustrated by Germany.[1]

Turning more directly to further and higher education, there has been a great emphasis on shifting university teaching and research from its ivory-towered intellectual isolation back into closer and more continuous contact with the economy, the state and the community as vital co-producers and consumers of useful knowledge. This is especially clear in technology, the sciences and medicine, and has also penetrated the social sciences so that it is not merely graduates but faculty members themselves who are expected to develop extensive links with users in industry, business, the professions, government and local communities. There is growing emphasis on external fund-raising, patenting, technology transfer, research parks, commercial spin-offs, science and technology parks, incubators, consultancy services – amounting to the emergence of a veritable ‘academic capitalism’ in liberal economies that encourages entrepreneurial universities and transforms faculty members into enterprising bearers of intellectual capital (Slaughter and Leslie 1997). This change was encouraged in the USA (the principal cheerleader for the knowledge-based economy in the 1990s as a response to the perception of declining industrial competitiveness) through changes in federal funding for research, enabling universities to keep the intellectual property in their discoveries, as well as through the more general extension of the scope and duration of intellectual property rights. Universities are also encouraged to commercialize their research. This was intended to encourage academic entrepreneurialism, to subsidize corporate R&D, and to facilitate regional economic development. Similar patterns can be found in other university systems.

Overall, in the words of Etzkowitz, a leading researcher on the ‘triple helix’ interface between university, business and the state, writing at an early stage in this transformation:

Virtually every country that has a university, whether it was founded for reasons of education or prestige, is now attempting to organize knowledge-based economic development. … As the university becomes more dependent upon industry and government, so have industry and government become more dependent upon the university. In the course of the ‘second academic revolution’ a new social contract is being drawn up between the university and the wider society, in which public funding for the university is made contingent upon a more direct contribution to the economy (Etzkowitz 1994: 149, 151)

Two apparently contrary but actually complementary strategies are being adopted here. On the one hand, the state is asserting the importance of education in the realization of national economic interests; and, on the other hand, it is conceding greater autonomy to educational institutions in how they serve these interests (Marginson 1999). But this autonomy is being exercised in the context of the hegemony of the knowledge-based accumulation strategy, the increasing participation of the bearers of this strategy in the shaping of education mission statements, the increasing financial dependence of further and higher education on third-party revenues deriving neither from the state nor from students, and the growing dependence of university revenues on student fees, business research contracts, third mission activities, and university branding strategies relative to the share of income as block grants from government agencies. The first strategy ‘involves a reaffirmation of the state functions of education as a “public good”, while the second subjects education to the disciplines of the market and the methods and values of business and redefines it as a competitive private good’ (Marginson 1999: 122). Together, these strategies serve to reinforce the primacy of accumulation within the organization of education and to promote differentiation in the higher education sector between top research universities at the cutting-edge of the knowledge-based economy that engage in world-class international research cooperation and others that tend to specialize in cost-effective mass credentialisation and opportunities for life-long learning at a more local or regional scale. At both ends of this increasing stretched out spectrum, however, there is emphasis on close links to the users of research and education to ensure, as far as possible, that economic needs are being served.

Again, there are different routes to this reconfiguration. In the USA, universities have long been encouraged to operate as business firms and to be entrepreneurial. Pressures in this direction have nonetheless been reinforced from the 1980s onwards with the result that many universities have reoriented their activities from teaching towards research to generate patents and royalties. Moreover, because they must still teach, American universities must resort to continuing efforts to cut costs and boost efficiency by standardizing and commoditizing education, casualising and flexibilising intellectual labour, and selling on-line lecture courses. In Europe, the European Round Table is promoting a neoliberal agenda that sees education and training as ‘strategic investments vital for the future success of industry’ and has proposed measures to strengthen the comparatively weak influence of business on the curriculum and adapt it to the needs of industry through the development of private-public partnerships (Levidow 2001). This has also been encouraged by the EU itself in the hope of increasing the international market share of EU education and to reduce the duration and costs as well as the inefficiencies in mass higher education (Bologna Declaration 1999; see also Fairclough and Wodak, this volume). Overall, there is now a much enhanced global competition for talent — from recruitment of students at all levels through researchers in universities, research centres, and enterprises to skilled knowledge workers, the ‘creative class’, and high-flying and effective entrepreneurs.

All of this has important consequences for university governance in relation to internal management, accounting, audit, learning modes, incentives, career tracks, and so on as well as in relation to external partnerships, knowledge transfer, political guidance, and government controls. Thus the traditional model of university governance, depicted most famously in the Humboldt model (on which see Ash, this volume), is being challenged by demands for greater accountability to a multi-tiered state system, all manner of business interests from small- and medium-sized firms to national and international champions, and, more generally, to the treadmill of competitiveness across a wide range of scales and in relation to an ever-expanding range of economic and extra-economic factors.


This chapter has pursued three main objectives. First, it aimed to introduce a new approach to the political economy of the restructuring and reorientation of universities in advanced capitalist social formations. This approach has been presented as ‘cultural political economy’ and draws equally on critical discourse analysis (CDA) and critical political economy. Its key innovation from the viewpoint of CDA is its emphasis on the variation, selection, and retention over time of alternative economic imaginaries and their contribution to the construction as well as construal of actually existing economies and their extra-economic conditions and supports. Conversely, its key innovation from the viewpoint of political economy is to resist the naturalization of economic categories, structures, and processes at the same time as showing the continued importance of the historically specific economic logic of an economic order that is primarily organized as a profit-oriented, market-mediated system with all that this implies for the modes of competition, the changing forms of economic competitiveness, and the continuing struggle to secure the extra-economic as well as economic conditions for competitiveness within and between economic spaces. Second, it has applied the cultural political economy approach to the emergence of the knowledge-based economy as the hegemonic economic imaginary of the current stage of capitalism — locating this in relation to the crisis of the main forms of economic growth in the post-war period, not only within the advanced capitalist economies but also in Latin America, East Asia, the Soviet bloc, and Mainland China, as well as in relation to the role of organizations and institutions charged with developing theoretical and policy paradigms that draw on and contribute to new economic imaginaries. And, third, it has indicated some of the implications of this transformation in economic imaginaries and their translation into economic policies and new forms of competitiveness for the education system in general and higher education in particular. However, as the other contributions to this collection are more directly focused on these implications, the third aim has been presented in a less detailed manner. It remains, therefore, to invite readers to consider the implications of the rise of the KBE imaginary and its translation into business strategies, state policies, and ‘common sense’ for the increasing primacy of economic goals in the education sector. The chapters that follow provide much material for reflection on this question.


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[1] In writing this paper, I have benefitted from comments by Eva Hartmann, Norman Fairclough, Ngai-Ling Sum, and Ruth Wodak. The usual disclaimers hold.

[2] I am not suggesting here that mass media can be completely disentangled from the broader networks of social relations in which they operate but I do want to highlight the diminished role of an autonomous public sphere in shaping semiosis.

[3] Indeed, there is no economic imaginary without materiality (Bayart 1994: 20-1). Some commentators have noted a superficial similarity between my notion of economic imaginary and Castoriadis’s use of social imaginary. While agreeing with Castoriadis on the creative role of imaginaries in making sense of the social world and, where backed by power, in ‘instituting’ that world, as well as the critical role of radical imaginaries in opposing the instituted world, the theoretical contexts of our respective accounts mean that they have different ontological, epistemological, and methodological bases and different implications for the relevance of Marx’s critique of political economy and the nature of politics (cf. Castoriadis 1979).

[4] Although all practices are semiotic and material, the relative causal efficacy of these elements will vary.

[5] For Imre Lakatos (1978), a research programme provided rules about what paths of inquiry to pursue (positive heuristic) and which to avoid (negative heuristic). [The clarificatory endnote in this quotation was inserted by Bob Jessop.]

[6] Key figures here, in addition to East Asian intellectuals, think tanks, business strategists, and officials were two Western thinkers, Alvin Toffler (1980) and Daniel Bell (1973, 1989).

[7] Thus Karl Deutsch notes that one measure of power is the ability not to have to learn from one’s mistakes.

[8] On structural competitiveness, see Chesnais 1986; on systemic competitiveness, Messner 1996; Esser et al., 1996. See also STI Review (published by the OECD).

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