The measurement of the business and economic environment over the past 100 years has been based on the rationalist principles started by Frederick Taylor and his Scientific Management methods. This approach, which breaks down aspects of any system, business or economic, tries to describe a complicated set of activities through measurement. This approach has worked well during the Industrial Economy.

The Knowledge Based economy appears to be working in a different way with measurements such as intangible assets or 'e-Capital' trying to describe the difference between the traditional measurement systems and value in the new economy.

The Knowledge Based economy is more complex where cause and effect can be hard to determine. This paper contrasts the two economies to highlight a number of differences using a model (Cynefin) for understanding the dynamics of each type of economy.

It also attempts to provide a new perspective on the two economies. Often, by looking at a problem from a new perspective, new ways of solving it can be found.