In the 21st century, knowledge has come to be counted as the new primary delimiter in balances of power in the global system and the decisive factor within it, meaning that power and political authority have come to be tied to the production of knowledge and the capability to use it creatively. The process of transformation towards the stage of a new economy demands assessment and development of four primary focal points in a knowledge economy and these are education and training, infrastructure for information, economic incentives, an institutional system, and a system of innovation. The Arab countries are orienting towards a knowledge economy by improving their educational sectors via the adoption of modern techniques and investment in technological, information and communications infrastructure, and by depending upon robust programmes of research and development, while improving the business environment and that of workers in general. This article focuses on the process of transformation to a knowledge economy taking place in the Arab countries. The first section deals with the nature of assessing knowledge management; the second explores the most significant methodologies for assessing Arab knowledge performance for which we adopted a method of qualitative analysis through a presentation of findings published in global reports dealing with knowledge performance, its indicators and analysis.