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4. What Is Meant By 'the New Economy'? Identify Some Of The Advantages And Disadvantages Of The New Economy. Use Examples.

3216 words - 13 pages

Speed. Connectivity. Intangibility. These concepts form the powerful trinity which is redefining both the social and the economic landscape of the twentieth century (Davis, S., C. Meyer. 1998, 5). Underlying this economic revolution is the increased importance being placed on Information and Communication Technologies (ICT), which the Wall Street Journal declared 'is changing everything about the economy' (Togati, T. 2006, 1). In describing these changes a grand narrative has emerged, a fashionable 'buzz' term that has become an instant, inescapable clique- the New Economy (Rifkin, J. 2000, 4). The New Economy however does not produce a tight definition and versions differ in specific predictions and possible implications. Depending on the narrator, 'invocations can take the shape of a utopian vision of innovative social and economic forms, or a dystopia view of inclusion and exclusion with new class divisions and power redistributions between groups, regions and nations' (Lofgren, O., R. Willim. 2006, 1).As the New Economy paradigm is not articulated clearly by a single idea or author, to hypothesize its implications, any discussion must begin with a clear and precise description of what is really meant by the New Economy. This essay will discuss the New Economy vision in terms of Speed, Connectivity and Intangibility- three underlying features with which all writers identify:Kevin Stiroh (1999) Vice President and Head Banking Studies Function Federal Reserve Bank of New York views 'globalization and computerization (to be) powerful forces that are reshaping the modern economy in a way that is fundamentally different from earlier industrial periods.'The Organisation for Economic Cooperation and Development (OECD) (2000) identifies Speed as a key dimension. Since everything is connected and transmitted faster due to the advancements in technology, communication is instantaneous; the medium has transformed our sense of time.The new economy is being shaped not only by the development and diffusion of computer hardware and software, but also by much cheaper and rapidly increasing electronic connectivity (Smith, C. 2001).Rifkin (2000) and Hartley (2002) highlight the emphasis on the intangible (especially information, ideas, and solutions). Where the old economy was asset based, the new economy emphasises that 'value no longer lies in 3-dimensional objects in space,' furthermore that 'wealth is no longer vested in physical capital but rather in human imagination and creativity'The New Economy has also been defined according to what other writers believe to be its key features- the Information Economy (Alberts and Papp), Intangible Economy (Suarez-Villa), Knowledge Economy (Drucker), Network Economy (Castells), Weightless Economy (Rifkin) and Access Economy (Rifkin) (Gallagher, 2007, 4). Whatever the New Economy may be labelled, it is evident that there is increasing reliance on ICT mediums. Are these 'radical' forces powerful enough to truly change...

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