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Author(s): NICOLAE, S[imona] This Publication has to be referred as: Nicolae, S. (2009). The Knowledge-Based Society-a Consequence of the Entropy - Value Theory (2009). 0079-0081, Annals of DAAAM for 2009 & Proceedings of the 20th International DAAAM Symposium, ISBN 978-3901509-70-4, ISSN 1726-9679, pp 040, Editor B[ranko] Katalinic, Published by DAAAM International, Vienna, Austria 2009

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DAAAM INTERNATIONAL VIENNA VIENNA UNIVERSITY OF TECHNOLOGY Austrian Society of Engineers and Architects IAV 1848

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Annals of DAAAM for 2009 & Proceedings of the 20th International DAAAM Symposium, Volume 20, No. 1, ISSN 1726-9679 ISBN 978-3-901509-70-4, Editor B. Katalinic, Published by DAAAM International, Vienna, Austria, EU, 2009 Make Harmony Between Technology and Nature, and Your Mind will Fly Free as a Bird Annals of DAAAM International

THE KNOWLEDGE-BASED SOCIETY-A CONSEQUENCE OF THE ENTROPY - VALUE THEORY

NICOLAE, S[imona]
Abstract: The Knowledge-Based Society has started to affect the work and lives of the most of human resources. People need particular skills to work effectively and the workplace and other structures need to be properly organized to take the greatest advantage of the Knowledge-Based Society. The main aim of this paper is to show how the model of value based on entropy can be applied into a knowledge-based society and how much this kind of society is a consequence of this theory. Key words: human capital, entropy-value theory, labor-value theory, knowledge - based society, utility-value theory construct a conscious future strategy. Everything has been reduced to "now". This system of values based on marginal utility has its good parts but is insufficient for a sustained human development. At least in the long term and at least regarding the human resource that in a Knowledge-Based Society is called human capital. We have arrived this way at the key element of KnowledgeBased Society namely the human capital that is the only vital input in this kind of society. Human capital can be defined as the knowledge, skills, competencies and attributes embodied in individuals that facilitate the creation of economic, social and personal wellbeing. Human capital is closely linked to the quality of the worker and explains why one worker is more productive with the same capital equipment than another. But this concept does not have a static dimension. It involves the lifelong acquisition of professional abilities that have to be used and processed this being so to enable the obtaining a maximum yield in the future processes in which will be involved. This is actually the main difference between the society based on human capital and the society based on labor force. While the first combines Entropy-Value Theory with Utility-Value Theory the second combines Labor-Value Theory with Utility-Value Theory. In what follows we will present the key points of the Entropy-Value Theory as they were set out by the founder of this theory, Professor Paul Bran.

1. INTRODUCTION
The Knowledge-Based Society is not a relatively new concept for the most developed countries and become more and more a real challenge for the developing ones. Theoretically, the concept dates from 1945 when F.A. Hayek wrote an article entitled "The Use of Knowledge in Society" which highlighted the importance of the knowledge in society. He said: we need to remember only how much we have to learn in any occupation after we have completed our theoretical training, how big a part of our working life we spend learning particular jobs, and how valuable an asset in all walks of life is knowledge of people, of local conditions, and of special circumstances (...) If we can agree that the economic problem of society is mainly one of rapid adaptation to changes in the particular circumstances of time and place, it would seem to follow that the ultimate decisions must be left to the people who are familiar with these circumstances, who know directly of the relevant changes and of the resources immediately available to meet them. (Hayek, 1945) The technological revolution of Automation, already under way, requires a tremendous increase in the number of trained and educated people. Already the short supply of such people is the major limiting factor on the rapid growth of our economy and of our principal industries. We need not worry, therefore, about our ability to absorb these millions of college-trained people; we have to worry principally about increasing their number and quality fast enough. (Drucker, 1957) Today this concept has become more broadly and its importance not require arguments anymore. But, what has led to such an important extend of this concept? What is the cause of such a phenomenon? One of the answers probably lies in the very economical and political evolution of the world. We have passed from a human being as a tool, led by the famous slogan, heard until recently in Romania: "we do not think we work, to the selfsufficient human being type of: live the moment, its valuable if I like it and not ultimately "the king consumer. This latter concept, too often underlined in the market economy, has given to the consumer the impression that has a kingdom at his feet ready to serve him any time. Day or night! The bombardment of advertising has also created, in addition to otherwise desirable behaviours, false dependencies of product. The vortex of information has not left any chance for human brain to examine the needs he has perceived and to

2. THE ENTROPY-VALUE THEORY MODEL AND THE KNOWLEDGE-BASED SOCIETY

Entropy Value Theory was developed by the Professor Paul Bran since 1990 but its final form would see the light of printing at the Economic Publishing House in 1995 as "Economy of Value". For our approach we consider useful only the presentation of the mechanism of obtaining the value and the comparisons made by Professor Paul Bran between Entropy - Value Theory and the other two theories of value, Labor Value Theory and Utility Value Theory. This being so, we try to demonstrate to what extent the knowledge society is a consequence of the Entropy Value Theory. The scientific theory in the economic field has replaced the support of value called labor, expressed by socially necessary working time, by the support called utility or satisfaction. In the Entropy-Value Theory, the author has chosen a more general type of physical support: low entropy, or degree of organization existing in simple systems (elementary forms of matter: substance, free energy, information) or in complex systems (plants, animals, etc.) The assumptions underlying the construction of the model are: - The inputs of potential from natural processes (Pn), social processes (Ps) and economic processes consumption - type (Pes), all of them being "produced" in period T0; - Three successive processes: production (in t1),

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consumption (in t2) and again the production (in tn); - The externalization of the action of Entropy Law by entropy loss triangle The mechanism of obtaining the value is carried on as follows: 1. Attracting potential from the processes taking place either outside the company (processes from the environment and society) or from the consumption process in which the firm has entered during the t0 moment, when its internal elements have been charged with economic potential services - type; 2. Processing the potential attracted (Pn, Ps, Pes), under the specific laws and principles of production, achieving, within the limits determined by the coefficient of transformation pt2, economic potential product-type (Pept1) and entropy loss; 3. It follows the consumption process from t2 moment. This process takes the potential product-type and converts it according to the principles of consumption under the limits given by the coefficient of transformation pt2. This process generates economic potential services-type (Pes) and entropy loss. 4. The mechanism for obtaining the value comprises one more production process in tn in which the potential services type resulted from the previously consumption process is transformed and conserved again in a new product taking into account the transforming index ptn. The rest of the potential remained from the entered potential in t0 and noted with Per is considered the real physical support of the product value obtained in the production process in t1. (Bran, 1995) The link between this theory and the other two, well known in fact, is pointed out in the same paper: if in the Labor - Value Theory the result of the production process from t1, at Pep level, is the value of the product, for the Entropy Value Theory is only an intermediate level for the physical support of the value. This intermediate character is given by the fact that in the production process of t1 is not reflected the contribution of all factors and processes: economical, environmental and social ones. Going further, the level of potential removed by the consumer from the consumption process and preserved in services, level recognized as the value of the product (from t1) by the Utility-Value Theory, can not be the physical support of the final value. It is also, an intermediate value. In the last step it is necessary to give a final recognition, also, to the potential services - type through a new process of transformation-conservation production - type (a sort of utility of services) to get real and final support of the value for the product (from t1). Also, we will point out the amplitude of the loss of potential during the three economic processes: production t1, consumption t2, production tn. The basic idea, which is useful to our analysis, is that for preserving as much as we can from the natural, economic and social potential we use, we should look into the future analyzing the past. When well understand that the time does not stop and it is not reduce at only now, and the mankind is evolving along with it, we will try to exploit to a maximum all what the environment gives us, and, so, the relay of the generations will be carried further efficiently. Education and training are crucial to economic and social changes. The flexibility and security needed to achieve more and better jobs depend on ensuring that all citizens acquire key competences and update their skills throughout their lives. (Commission of European Communities) Lifelong learning supports creativity and innovation and enables full economic and social participation. Human capital building, producing the most productive human capital, requires a workforce that is mentally flexible and receptive to new technologies and to the organizational changes. Education is a key investment in human capital. It helps a person to achieve and apply his/her abilities and talents. Precondition for investing and spending money on education and healthcare, either by a private person or by the state, rests on a belief that in this way one increases the income and productivity in the long run. (Obradovic, 2008) The information and lifelong learning are very dynamic, binding the human resource constantly to review and revision his attitude confronting the new. Moreover, as these two elements to transform into knowledge is required activation of the human cognitive ability. Information, as sum of structured and formatted data remains passive and inert until the human resource is able to interpret and to process it. If we examine education, science, health care, through the glasses of value, we will see only the expenses for the staff in schools, research institutes, art workshops, hospitals, etc, being unable to notice also the natural and social potential that is pumped into economy through these services (Bran, 2005) and well remain the slaves of the Labor - Value Theory and, perhaps, only well think that we are in the centre of the Utility - Value Theory.

3. CONCLUSION
The ability to invent and innovate, that is to create new knowledge and new ideas that are then embodied in products, processes and organizations, has always served to fuel development. (David & Foray, 2002) Differences in productivity and economic growth between countries are becoming less connected with their natural resource endowment and more connected with the quality of their human capital and, also, with the quality of their factors of production. Life means change and change means life in a knowledge based society. If the human resource will try to get the best from all type of resources that interact with, and, also, will try to apply further the potential services-type obtained from the consumption process, all his activities will become valuable. Making a choice it has to be much more linked to a future efficiency and less more linked to a momentary satisfaction. The domain that has to do, equally, with the Entropy-Value Theory and with the Knowledge - Based Society is Education. We need to learn throughout our lives but the efficiency of the learning programs has to be adapted to the labor market needs. In this way, the potential services type obtained from these programs will be transformed and transferred into human capital skills as the most efficient factor of production. I intend to continue the research upon the proposed subject of this paper that, I hope, will raise the awareness of the Entropy-Value Theory role in the spread of the knowledge based society in Romania. The big problem consists in the importance of political decision that will determine, through education, to what extent, the Entropy-Value Theory will be taken into account in all types of choices that humans will make.

4. REFERENCES
Bran, P. (1995). Economica Valorii (Economics of Value), Ed. Economic, ISBN 9739648779, Bucharest, Romania David, P. A. & Foray, D. (2002). Economic Fundamentals of the Knowledge Society, Available from: http://129.3.20.41/eps/dev/papers/0502/0502008.pdf Accessed 2009.04.02 Drucker, P.F. (1957). America's Next Twenty Years, Harper & Brothers, New York Hayek, F. A. (1945). The Use of Knowledge in Society, American Economic Review, XXXV, No. 4, (September 1945) pp. 519-30 Obradovic, S. (2008). Education and Economic Growth, Lex ET Scientia, Vol. 2, No. XV, (February 2008) p.197-205 *** (2007) Towards Common Principles of Flexicurity: more and better jobs trough flexibility and security. Commission of the European Communities, Commission Communication, 359