The Knowledge Based Economy Essay Example | Topics and Well Written Essays - 250 words

The Knowledge Based Economy - Essay Example This will facilitate the transition of technological change into productivity gains that will ensure organizational changes and as such, raise flexibility (OECD, 1996). These changes shall be achieved through financial, information and competition changes. Using allocation, the government’s policy would be to upgrade the human capital. The policy would, for instance, provide a broad-based formal education. It will also handle creating incentives for organizations and people to take part in unceasing training and learning. Subsequently, through the policy, it will be easier for the government to match labor supply and demand by the skill requirements (OECD, 1996). Using distribution, the government’s policy would be to enhance knowledge diffusion. In this case, the policy will be geared towards supporting innovation so as to establish â€Å"diffusion-oriented† programs. The policy will lay out a clear framework for the collaborations and hence, promote the diffusi on of new technologies to various sectors in the economy. The policy will also be instrumental in facilitating the development of information infrastructures. All these approaches have both strengths and weaknesses. The use of all these policies will make it possible for the economy of a country to be knowledge-based. As such, it will benefit from all the advantages of a knowledge based economy. However, the policies require huge financial investments.  Using regulation, the government’s policy would be to promote organizational change.

Titled Modern Portfolio Theory or Investment Management Essay

Titled Modern Portfolio Theory or Investment Management - Essay Example Thus, a portfolio may be defined as a combination of securities with varying risk and return characteristics which in turn contribute to the net worth of the investor. (Swisher, 2005) The topic of discussion in this paper is Modern Portfolio Theory or Investment Theory, which may be defined as the concepts that revolve around educating an investor regarding the steps that must be taken in order to develop a portfolio that will speak of rational choices and optimisation of financial resources. Before going any further, it is imperative to point out that investement brings a certain degree of speculation, especially in today's economic scenario where there has been a boom in the information transmission trends due to an increase in the number of people from various quarters flocking towards investing in portfolios. This paper will endeavor to study modern portfolio theory (MPT), in terms of its various elements like Markowitz diversification, the efficient frontier as well as concepts like the Capital Asset Pricing Model, better known as CAPM. The tools used in the course of application of these concepts include the Capital Market Line and the Security Market Line apart from alpha and beta coefficients which help measure mean, variance, risk and returns of the portfolio as a whole. To begin with, the paper will introduce the Modern Portfolio Theory as propounded by Harry Markowitz in the early 1950s, before moving on towards defining the elements like beta, risk and return that are concerned with the various concepts of Modern Portfolio like diversification and Capital Asset Pricing Model or CAPM. (Swisher, 2005) The intorduction of the key elements before discussing and analysing the actual concepts has been carried out so as to ensure that there is full understanding of the tools that will be used in the study of the Modern Portfolio Theory. The paper will progress through a series of headings that are relevant to introduce new topics. These topics are linked with each other through the tools like beta, risk, return, mean and variance, among others. There will illustrations in terms of formulae and diagrams for all sections of the paper. Markowitz and Modern Portfolio Theory Modern Portfolio Theory has come up a practical model for the measurement of the various trends affecting the portfolio market. As a body of concepts and tools, it is concerned with the identification of markets that have high return potential and those which have a heavy risk factor, so as to help the investor choose more wisely. At the same time, the modern portfolio theory also brings us face to face with the fact that it is equally concerned with varying combinations of assets to zero in on the favourable markets and customers. (Markowitz, 1952) Born in the year 1952, the modern portfolio theory was the brainchild of Harry Markowitz who recognised the need for a certain set of parameters within which the obvious diversification trends may be