The View
The Future Is Knowing
How universities can power the knowledge economy, using Finland's education system as an example.
By Dr Bibi Alajmi, Associate Professor, Kuwait University and Member, QS Global Advisory Committee (Middle East)
"Universities and colleges are no longer seen as institutions solely responsible for teaching and research."
“The shift toward a knowledge-based economy has redefined what it means to be 'educated'."
As countries around the world move toward a knowledge-based economy, a critical question emerges: Are higher education institutions (HEIs) fulfilling their mission? More specifically, are they equipping graduates with the skills and competencies needed to thrive and support this economic transition?
Many governments have focused on enhancing ICT infrastructure and updating regulations. Yet, in many cases, educational systems have not kept pace. While literacy remains a fundamental goal, the demands of a knowledge-based economy require a comprehensive rethinking of educational frameworks.
A knowledge-based economy places human capital at the center. It is powered by creativity, innovation and the generation and application of knowledge. As such, it demands an education system that cultivates a workforce skilled in both scientific expertise and broader, transferable competencies. These include problem-solving, digital literacy, collaboration and lifelong learning, which are qualities essential for navigating and driving continuous economic transformation.
Developing such a workforce requires more than marginal improvements; it calls for systemic educational reform. Universities and colleges are no longer seen as institutions solely responsible for teaching and research. Increasingly, they are expected to act as drivers of regional economic, social and cultural development. HEIs are where talent is developed, ideas are patented and innovations are commercialised. As such, they are under growing pressure to rethink curricula, retrain staff and align institutional strategies with the demands of the modern economy.
The new economy also values intangible capabilities: agility, creativity and resilience. These traits cut across all disciplines and are especially critical in fields like engineering, where technical skills must now be complemented by business acumen, communication, teamwork and digital fluency.
Among countries with leading education systems, Finland stands out as a compelling example of transformative reform. While we are aware of the challenges currently facing Finland’s education system, such as demographic shifts, teacher shortages and increasing demands on higher education institutions, it remains one of the most recognised and respected models globally. Finland’s sustained commitment to equity, innovation and continuous reform provides valuable lessons for countries seeking to align their educational systems with the needs of a knowledge-based economy.
Finnish education emphasises critical thinking and problem-solving over rote memorisation. Students are encouraged to analyse information, think independently, and apply their learning in real-world contexts. This pedagogical approach supports the development of lifelong learning and adaptability, key attributes in an innovation-driven economy.
Historically, Finland’s education system has undergone significant structural reform. During the 1970s and 1980s, the system was characterised by centralised planning, external examinations and long-term national strategies that defined the educational landscape. In the 1990s and 2000s, a major shift occurred toward decentralisation. Authority was increasingly devolved to schools, fostering greater autonomy, curricular flexibility and educational innovation at the local level.

In his widely read book Finnish Lessons: What Can the World Learn from Educational Change in Finland?, education expert Pasi Sahlberg emphasises that we must always remind ourselves of the true aims of education. First, to build a good economy; and second, to preserve the cultural identity of the country. He strongly criticises approaches that rely heavily on excessive content, constant testing, long school hours, heavy homework loads and private tutoring. These, Sahlberg argues, are “GERM”—standing for the Global Education Reform Movement—that can destroy any educational system built upon them. He considers such practices non-pedagogical, warning that they exhaust both teachers and students and ultimately weaken the educational process as a whole.
Sahlberg also warns against burdening students with isolated and overly specialised knowledge that is only relevant to niche fields, what he calls "isolated knowledge". Instead, he advocates for active learning that cultivates creative thinking, moral awareness, communication skills and the development of each student’s unique talents. He stresses that requiring students to master abstract or disconnected information is often enough to alienate them from those fields altogether. In his view, a student’s ability to generate new ideas is more important than simply receiving new information, and teaching creative thinking is no less important than teaching reading, writing and arithmetic.
This educational philosophy, centred on holistic student development rather than test performance or content overload, has become a cornerstone of Finland’s reputation as a global leader in education, and a model worth studying as countries around the world move toward building knowledge-based economies.
However, transforming higher education for the knowledge economy also requires reforming how institutions themselves manage knowledge internally and externally. This is where knowledge management (KM) offers essential tools and insights.
While national reform efforts like Finland’s offer strong models of education transformation, deeper structural changes are still needed in many higher education institutions (HEIs) worldwide. One often overlooked yet critical area of reform is the integration of KM into institutional practices and educational delivery. As a knowledge management expert and a graduate of Rutgers University, The State University of New Jersey, USA, 2011, I have seen firsthand how KM transforms organisations into learning ecosystems capable of innovation, adaptation and sustained performance, qualities that are indispensable in a knowledge-based economy.

The shift toward a knowledge-based economy has redefined what it means to be “educated.” It is no longer sufficient to graduate with subject-specific knowledge alone. Today’s graduates must also possess a broad set of transferable, future-ready skills, such as creativity, digital fluency, critical thinking, collaboration and the ability to continuously learn and adapt. These are exactly the kinds of capabilities that knowledge management helps cultivate, both at the institutional and individual level.
KM is not just about storing and sharing knowledge, it is about creating a culture, “ba”. This is where knowledge is constantly evolving, where individuals learn from one another and where systems are in place to turn ideas into innovation. By embedding KM into educational systems, universities can train students not only in knowledge but also how to manage knowledge, how to find it, question it, co-create it and apply it in new contexts. These are the core competencies of the modern knowledge worker.
Higher education institutions must therefore begin to operate not just as providers of instruction but as dynamic, knowledge-centred organizations. KM encourages a shift from individual knowledge silos toward collaborative learning cultures that integrate people, processes and technologies. This human-centred approach strengthens institutional memory, improves research and teaching outcomes and better prepares students for the demands of the knowledge-based economy.
Moreover, as demand for education continues to rise in the new economy, it is increasingly unclear how traditional institutions will meet this demand without transforming their internal models. Knowledge management offers a strategic framework for navigating this uncertainty. It allows universities to become agile learning organisations that not only transfer knowledge but continuously evolve through its production and application. In this context, KM is not a peripheral practice, it is central to reforming higher education to equip graduates with the types of knowledge and skills the future demands.
To conclude, reforming higher education for the knowledge-based economy is not a theoretical exercise—it is an urgent, strategic imperative. Nations that succeed in this transition will be those whose universities evolve into agile, knowledge-driven institutions that prepare students not just for jobs, but for creating the future. Integrating knowledge management at every level—from governance to pedagogy—may well be the key to unlocking this transformation.