Economics of Knowledge explores the theory and empirical facts needed for rational decisions on knowledge investments, creative processes and management of knowledge based industries and institutions. The accumulation of knowledge through higher education, scientific research and industrial R&D is a key factor in economic and social development. This timely and valuable book focuses on the micro- and macroeconomics of knowledge production, and on the analysis of technical constraints, possibilities of collaboration and incentives for scientists, academic teachers and students. The authors move on to analyze the advantages and disadvantages of centrally controlled and competitive university systems, before concluding with a set of decision-making rules for government, university administrations and industry. This book on a hotly contested subject will be widely sought after by those with an interest in economics, management, operations research, regional science and planning as well as consultants to knowledge based industries. R&D managers of industrial firms will learn a great deal from this book as will managers of universities and research institutes.