The knowledge economy represents a new domination by a longstanding factor of production. New insights and technological innovation have always shaped economic activity, but the rate of technological change and the proportion of knowledge as a factor of production and as a product have grown greatly in recent decades. This chapter describes the knowledge economy and explains how it makes it more likely that producers will have postive returns to scale – in other words, that profits will increase as the level of production grows. These features have profound implications for the international dimensions of the knowledge economy, as illustrated by branding and supply chains.