Who are the knowledge workers?

Knowledge workers are taking over the world. In America our counterparts already make up around a third of the workforce. Our numbers are fewer in Australia and New Zealand, but we’re catching up. Things are similar in other rich countries.

The massed ranks of knowledge workers are increasing rapidly. In just about every developed economy, most developing countries – and even in some undeveloped ones — knowledge workers now make up the fastest-growing employment group.

Throughout the developed world knowledge workers already outnumber industrial and agricultural workers. In more advanced countries they outnumber these two groups added together. America now has roughly as many knowledge workers as service industry workers. In most rich countries knowledge work is by far the most important economic sector both in terms of economic and political clout.

Knowledge worker is a new idea

Amazingly, the idea that people can earn a living by dealing purely with knowledge has only been around for 50 years. Writer and management expert Peter Drucker is often credited with inventing the term. He first used the term ‘Knowledge Worker’ in his 1959 book “Landmarks of Tomorrow”. But Drucker modestly claims to be only the second person to use the phrase saying the honour belongs to Fritz Machlup a Princeton economist.

Nevertheless, Drucker popularised the term and has spent many of the last 40 years expanding on the original idea and explaining its wider implications. His material is almost always worth reading.

Although the term ‘knowledge worker’ is widely used and people generally understand what the term implies, there is still much misunderstanding about its exact meaning — even among knowledge workers.

One common misconception is the term applies exclusively to people working in the information technology industry or are employed elsewhere in industry to use the products created by IT workers. While it’s true to say that almost all IT workers are knowledge workers, they are only a subset of that grouping.

Anyone who makes a living out of creating, manipulating or spreading knowledge is a knowledge worker.

This definition covers a wide range. Teachers, trainers, university professors and other academics are clearly included. Writers, journalists, authors, editors and public relations or communications people can all be categorised as knowledge workers – we’ll put aside for one moment any arguments about whether the knowledge created by these people is accurate. Lawyers, scientists and management consultants can all be described as knowledge workers.

One key difference between knowledge workers and other white-collar workers is the level of education and training. There may be some knowledge workers who don’t have a formal tertiary education or high-level training – but they are a minority.

As a rule, knowledge workers have a minimum of a university undergraduate degree, but that’s not always the case. Older knowledge workers tend to have less formal qualifications than younger knowledge workers. That’s partly because higher education wasn’t so ubiquitous when they started out — university isn’t the only path to knowledge.

Another reason is that practical experience counts for a lot. But the key here is knowledge workers each individually posses their own substantial personal reservoir of accumulated knowledge that they apply on a daily basis in their work.

Compared with other groups of workers knowledge workers tend to be well paid – some are extremely well paid. There are unionised knowledge workers, but on the whole they don’t tend to be organised in that sense. This can lead to forms of genteel exploitation: few knowledge workers get paid overtime yet most are expected to voluntarily work for considerably more than the basic 40 hours a week.

Knowledge workers are mobile

On the other hand, knowledge workers are more mobile than industrial workers and can often take their expertise elsewhere at the drop of a hat. They often do. Any employer who abuses knowledge workers’ professionalism is likely to see their most important assets walk out of the door one evening and never return. This applies as much today as it did when there were more jobs around.

Few governments have come to terms with the implications of having a highly mobile, highly educated, knowledge workforce. Just as knowledge workers can quickly find a new employer if necessary, most can move freely between countries. Any nation that doesn’t look after its knowledge workforce can expect – over the long term – to lose it.

This is particularly applicable in New Zealand, which operates a so-called progressive income tax system that, at times, appears to be deliberately designed to alienate knowledge workers. To understand this, compared the marginal and absolute rates of income tax paid by most New Zealand knowledge workers and you’ll notice they are substantially higher than in most competing nations.

When the first draft of this post was written (it first appeared in a different format in 2001, see this blog’s about page) the same could be said of Australia. Since then Australia has moved to correct it’s tax system and is currently attracting 40,000 New Zealanders each year, the majority of those emigrants could be classed as knowledge workers.

Back in the 1960s there was a lot of talk about a ‘brain drain’. If anything the flow of knowledge workers migrating to more benign economies is accelerating.

Drucker distinguishes between various classes of knowledge worker. High-knowledge workers include professional groups such as doctors and teachers deal mainly in the realm of the mind while the knowledge technologists work with their hands and brains in the IT industry, medicine and other areas. Although both categories of knowledge worker are growing, the bulk of growth comes from this second group.

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