boom and bust
In Australia, New Zealand, the EU, US and other parts of the globe the 1990s saw tremendous movements of capital as -
governments deregulated financial markets, privatised critical infrastructure such as telecommunication providers and built budgets around licensing of radiofrequency spectrum or other intangibles
interest rates fell and the money supply increased. In the US for example 30 Year Treasury Bond rates dropped from 8.17% in 1994 to 5.87% in 1999, while the M3 money supply measure grew by 34%
changes to taxation and pension systems (and demographic trends such as aging of the 'baby boomers') pumped investment money into the economy
businesses sought to lower costs, increase profits, aggrandize their executives or address the tyranny of the quarterly report by engulfing other enterprises
investments were made in new communications infrastructure (in particular digital switches, servers, fibre and radio networks)
expectations built that the "digital economy" - and in particular B2B or B2C electronic commerce - would enable fundamental economic growth (with significantly increased productivity through deployment of new methods and equipment) and result in rapid returns for entrepreneurs who addressed untapped local, regional and global markets.
That movement was reflected in -
unprecedent growth in the availability of venture capital, arguably with too much money under the control of inexperienced managers chasing excessive returns, and uncautious lending by mainstream financial institutions
political and technological triumphalism, with claims of the "end of history", "death of distance", "end of inflation", "death of the corporation", "end of scarcity", "permanent boom" and "end of the business cycle"
a proliferation of enterprises (often characterised as 'dot-coms') that secured significant funding - whether through loans or from investors - that was disproportionate to their historic revenue and likely return on capital
payment of astronomical prices for spectrum, for rollout of infrastructure (much of which has never been utilised) and for consolidation within the communications sector
speculative acquisition of domain names and shares in dot-coms
uncritical adoption by business, academia and government of "new economy" mantras and forecasts regarding such matters as disintermediation, the paperless office, the necessary fusion of content and carriage, the end of media dinosaurs, and frictionless global markets of one.
By mid 2001 many dot-coms were out of business or were trading at small fraction of their peak valuations, several of the major telecommunication groups such as BT and WorldCom MCI were spinning off units or heading towards collapse, cheerleaders such as Jupiter were on the rocks, media conglomerates such as Vivendi were unbundling (or underwater),...