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The phrase 'knowledge economy' has acquired currency as powerful as the adjective 'modern' once had. This paper explores the meaning of knowledge-based economy from the perspective of the South and traces the rise of the information sciences and the interplay between information technology and the present globalisation. Particular consideration is given to who is included and who is excluded in this new world order. Being involved in education, the authors are concerned to examine the track record of computer-based applications to education and the prospects for these to achieve the much elusive productivity gains in this field. The paper concludes with an outline of possible directions for the local information technology industry in relations to education.