Glenn Rikowski: Education Incorporated: New Labour, the Knowledge Economy and Education

Glenn RikowskiGlenn Rikowski: Education Incorporated: New Labour, the Knowledge Economy and Education

The Knowledge Economy

Since coming to power in 1997, New Labour has flirted with a number of ideologies as foundations for its project in government in general and education policy in particular. These ideologies included the Learning Society, communitarianism, stakeholder capitalism, the Third Way and the knowledge economy. It was this last perspective on economy, society and education – the knowledge economy – that has endured the longest and deepest in New Labour’s ideological firmament. It has also been the perspective amongst those listed above that has had most significance for education policy. It was ten years ago that the concept of ‘knowledge economy’ began to play a prominent role in economic and education policies, with the Our Competitive Future Report (DTI, 1998). There, the knowledge economy (KE) was characterised thus:

“A knowledge driven economy is one in which the generation and the exploitation of knowledge has come to play the predominant part in the creation of wealth. It is not simply about pushing back the frontiers of knowledge; it is also about the more effective use and exploitation of all types of knowledge in all manner of economic activity” (DTI, 1998, para 1.5 – original emphasis).

The most succinct definition comes from TFPL:

“Knowledge economies are emerging in the western world where knowledge, expertise, and innovation are now the primary asset and key competitive advantage” (TFPL, 1999).

TFPL holds that the KE is at an early stage of development, and as Ruth Rikowski notes ‘we are entering into the knowledge revolution or knowledge economy, and this can be seen to be the latest phase of capitalism’ (Rikowski, 2003, p.160).

Education for the Knowledge Economy

In an emerging KE, education plays a vital role. Guardians of the KE, national governments and their education systems, have to nurture the development of knowledge workers capable of managing and exploiting knowledge and information on a scale hitherto unknown. As Ruth Rikowski points out, “Extracting value form knowledge can only be achieved by the exertion of intellectual labour. This is the key point” (2004, p.7). The task for New Labour and other national governments is to produce the kinds of intellectual labourers or knowledge workers that the KE requires. In this process, education is placed on the chopping block of capitalist development.

Although New Labour’s 10-Year Plan for Children (DCSF, 2007) does not mention the KE directly, it alludes to it when noting that:

“A changing economy means we need to ensure our children and young people have the right skills as they become adults and move into further or higher education, or into work. By 2015, we want all you people to stay on in education or training to 18 and beyond. And when they leave we want them to have the skills they need to prosper in a high skills economy” (para 5:26, p.12).

The KE is a form of ‘high skills economy’. Springate (2004) attempts to delineate what kind of education young people actually need on the basis of New Labour’s KE policy. However, he finds that the KE concept is subject to a number of criticisms (see pp.1517). In the event, he locates three consequences of rapid social change over recent decades for young people: choice; corrosion of community and togetherness; and personalised risk. For Springate, it is the ‘Risk Society’ that appears to function as a better guide for education policy than New Labour’s KE concept.

Gerard MacDonald (2005), however, does provide a wide-ranging analysis of what roles schools should play for supplying the KE with the knowledge workers of the future. He explores the extent to which schools are playing their part in producing the flexible, highly educated, skilled and ICT-savvy young people necessary to become the intellectual labourers in the future KE. With this in view, MacDonald examines how schools teach, their use of ICT, what they teach, and what they do not teach in the British context. He concludes that much needs changing if schools are to address adequately the labour power demands of the KE.

Education Incorporated within, as an Aspect of the Knowledge Economy

What schools, colleges and universities should attempt to do for the KE is only part of the story. The other aspect is that these institutions are part of it; the production of educational services is an aspect of the KE. Thus, any outline of what roles educational institutions play in developing the KE should also acknowledge that they produce goods and services as part of it.

There is a distinction between educational institutions producing forms of labour power for the KE, and educational institutions producing commodities within and as part of the KE. These educational services in commodified form include the following: international student education and training; professional and vocational education and training delivered in the UK and overseas; consultancy and training overseas by UK suppliers; the export of books, equipment, software, materials and content; distance learning and e-learning programmes accessed by foreign nationals; and qualifications, examinations and standards procedures. It is these types of educational services and products that can generate education exports, and which solidify the notion that educational institutions are part of the KE. Indeed, they are archetypal KE commodities, involving the flexible and relatively high skilled labour beloved of KE ideologists and protagonists.

Exporting Educational Services

Johnes (2004) first examined the export of educational services from the UK in some depth. Regarding the global value of education and training exports, he found that these were £10,264.3 million in total in 2001-02. Within this total, examination and professional services brought in £151m; independent primary and secondary schools £217.8 million; educational broadcasting £660 million; educational publishing £931 million; and educational equipment £505 million. Higher education services and the spending of foreign students in the UK brought in the biggest chunk of export earnings: just over £3billion in 2001-02 The UKTI (2007a) noted that the UK’s £10billion of education and training made the UK ‘a world leader in meeting the accelerating demand in this dynamic sector’ (p.1).

Yet this claim was to be gazumped and set in neon lights when the data from Lenton’s (2007) update arrived. Her research for 2003-04 indicated that: “UK education and training exports were worth £28 billion in 2003-04 compared with £19 billion for financial services and £20 billion for the automotive industry” (UKTI, 2007b, p.1).

Lenton showed that for London higher education institutions alone, £4.3billion was brought into the UK by overseas students in fees and spending (2007, p.4). What these data indicate is that educational services are at the core of New Labour’s KE. From this perspective, they must be protected and nurtured. However, it may be that this goal conflicts with the labour power demands of the national (UK) capital, and this aspect will be explored in future work.


DCSF (2007) The Children’s Plan: Building Brighter Futures, Department for Children, Schools and Families, Cm 7280, Executive Summary, December, Norwich: The Stationery Office, 0nline at:

DTI (1998) Our Competitive Future: Building the Knowledge Driven Economy, Department or Trade and Industry, http://www.dti, [Accessed 25th November 1999].

Johnes, G. (2004) The Global Value of Education and Training Exports to the UK Economy, Lancaster University Management School, April.

Lenton, P. (2007) Global Value: The value of UK education and training exports – an Update, September, University of Sheffield, the British Council & Education UK, online at:

MacDonald, G. (2003) Schools for a Knowledge Economy, Policy Futures in Education, Vol.3 No.1, pp.38-49, at:

Rikowski, R. (2003) Value - the Life Blood of Capitalism: knowledge is the current key, Policy Futures in Education, Vol.1 No.1, pp.160-178:

Rikowski, R. (2004) Creating Value from Knowledge in the Knowledge Revolution, Information for Social Change, Issue No.20 (winter), online at:

Springate, I. (2004) What Kind of Education do Young People need for the World that we live in today? Secondary Education, Social Change and Government Policy, November, Hull: Volcom, St. James Enterprise Centre, online at:

TFPL (1999) Skills for Knowledge Management: A briefing paper. Presented at the ‘Skills for the Knowledge Economy: a one day seminar’, RSA, London, 5th July, based on research undertaken by TFPL on behalf of The Library and Information Commission, Executive Summary, TFPL Ltd, London.

UKTI (2007a) Exporting the UK’s Educational Expertise, UK Trade & Investment, URN 07/1155, July, online at:

UKTI (2007b) Education ‘worth £28bn' to Britain, Press Release, UK Trade & Investment, Education & Training Sector, 18th September,

Volumizer, 04/02/08