The Economics of Knowledge Versus Information

What’s the bare minimum number of dots needed to draw a star?

The answer to this question raised by Dr. James Nitit Mah sheds light on a topic of growing importance: knowledge versus information. We will get to the answer later on. It is undeniable that we are in a golden age of information. Never before in human history have we had such easy access to information. The smartphone and the Internet has put virtually all information at the fingertips of any person.

The last print version of Encyclopedia Britannica was the 32-volume 2010 edition, which weighs 129 pounds and cost over $1,000. Today, print encyclopedias have been replaced by free access to Wikipedia. In 2014, a printed version of Wikipedia would have equaled 1,000 volumes of 1,200 pages each – more than 1 million pages in all – or about 80 meters of shelf space. As of April 2018,there were 5,623,668 articles in the English Wikipedia. Wikipedia continues to grow, increasing by over 20,000 articles a month.

As of 2018, there are 2.53 billion smartphone users worldwide. Besides access to free sites like Wikipedia, mobile devices also facilitate the growth of online education course providers such as Udemy and Coursera. Between the two of them, they have over 50 million students.

Yet it is important to understand the distinction between information and knowledge. Information is not knowledge. Information is the data. Knowledge is the processing of that data for useful purpose. Dr. James Nitit, President and Founder of Intellegend Corp, has spent his life mentoring successful businesspeople. He discusses this important distinction.

If we think of information as dots on a piece of paper, the myriad disparate bits of information we hear, see and read about create a paper filled with clouds of dots. Yet connecting those dots is what is critical, insists Dr. James Nitit. Going back to the original question of the minimum number of dots needed to draw a star, the answer is five…one for each point. Dr. James Nitit had the honor of meeting Steve Forbes, Chief Executive Officer of Forbes Publishing, the world’s leading global business magazine, and spent time discussing their common viewpoints. During this golden opportunity to interact with a titan of industry, the two discussed how people from entrepreneurs to economists are struck with FOMO (fear of missing out) and thus collecting as many dots as they can. They both agreed that it is only the significant dots that matter.

This is an illustration that in today’s economy of knowledge, more information is not necessarily better. In fact, finding the key pieces of information to come to a correct knowledge is more difficult with all the noise. Dr. James Nitit believes the key five elements for success include: integrity, generosity, courtesy, dedication and accountability. He also explains in further detail how to attain true wisdom from knowledge.

1. Practice Makes Perfect…to a Point

Information without knowledge is useless. Knowledge without practice is also useless. Practice takes the knowledge and translates it into the real world. But how much practice is really needed? The standard industry answer is 10,000 hours to become world-class, as popularized by author Malcolm Gladwell in his 2008 book titled “Outliers: The Story of Success”. But more nuanced studies found this not to be the case. A Princeton study found that practice accounted for various degrees of difference in performance depending on the domain. The good news the study found that in professions it only made a 1% difference. That means that success in business or entrepreneurship isn’t wholly dependent on mindless repetition. Again, the quality of the knowledge and the dedication of what you do with it is more important than sheer quantity.

2. Achievement is Not Accountability

In today’s social media era of selfies and Stories, the focus tends to be on what each person has done. Where they ate. Deals they signed. New items they purchased. Places they visited. These “me-focused” activities tend to be devoid of both generosity and courtesy. Yet true success in business comes not from achievements, but from accountability, Dr. James Nitit reminds us. You can see this on a typical resume, he continues. Job candidates will spend far more time writing about where they went to school, the degrees they studied, the awards they won, the jobs they worked at, the volunteer gigs they had stints at. All these are fine, but what’s lost in all of this is that all these datapoints of information do not demonstrate the most important factor of accountability. True knowledge is the ability to be accountable for yourself and for the results you can get. Hiring candidates based on achievements alone may lead to sub-par employees. Hire and surround yourself with people who are willing and eager to be accountable.

3. Focus on What’s Really Important

Finally, crucial to surviving in an age where we are deluged with an overflow of information is the ability to block out the noise and focus on what’s truly important. Dr. James describes a successful entrepreneurs’ ability to understand sensory feeling. This helps to prevent sensory overload from too much information. He points to the concept of “neuroplasticity” where the human brain can re-wire itself to adapt easily to change. This same concept is important in helping our minds avoid the paper with a multitude of meaningless dots, and can help us hone them down to the minimum five essential dots that would be needed to create a star. The ability to focus can lead to integrity. While one definition of integrity is about honesty, another lesser use of the word refers to “a state of being whole and undivided”.

The new economics of knowledge is one where learning to connect the five essential dots will lead to lasting success.

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