NEW ECONOMY

New economy is a buzzword that describes the new, high-growth industries with
state-of-the art technologies that are the driving force of GDP (gross domestic product)
growth. The new economy is the transition from a
manufacturing-based to a service-based economy. The new economy was born in
the United States in the 1990s, and within a few years in the other advanced nations too.
Within a decade, many of the emerging economies also underwent a similar economic
metamorphosis.
Hi-tech and the Internet have not only changed how we rest, work and play, say some
economist, they have also changed the fundamental laws of economics. Automation has
dramatically changed the employment prospects of the blue-collar worker, the way we
shop is vastly different today. Hailing a taxi by raising an arm is something children
under 10 will probably never have to do as adults. A larger number of economists agree
that some changes have occurred, but insist that what makes an economy tick remains the
same.

The
Internet and the new economy
According to a number of economists, the emergence and rise of the Internet as a
business medium – ecommerce (electronic commerce) – had dramatically changed
economic rules.
In this novel economy, they claimed, former business valuation techniques were
invalidated by the resulting rapidly-changing business environment.
Breaking down the new economy
The tech bubble eventually popped, billions of dollars were lost, and hundreds of
companies crashed. However, the ones that survived are today mega-innovative
multinational Goliaths with cutting edge technology.
Businesses in today’s so called new economy are heavily involved in online activities and
biotech industries. Their massive clout has created ripple effects of new technologies that
are finding their way into virtually every industry.
Are we in the NEW ECONOMY?

Five ways technology can help the economy

Most studies in the field have indicated that information and communications technology

is a key factor in the economic and social development of the countries because it has

positive effects on economic growth, productivity, and employment. According to some

authors ICT can influence economic growth through several significant channels,

namely: the production of goods and services within the ICT sector directly contributes to

the creation of value-added goods and services in the economy; the use of ICT goods and

services as inputs in the production of other goods and services; increasing productivity

in the ICT sector contributes to increasing the overall productivity of the economy; the

use of ICT in other sectors of the economy contributes to improving its efficiency and

productivity.
1. Direct job creation – Best Policy Practices assesses innovation and technology

diffusion policies, identifies “best policy practices” and makes country-specific

recommendations. It presents evidence on the extent to which new technologies are

transforming the structure of OECD economies and enhancing their ability to grow

and create wealth and jobs. Economic activity is becoming increasingly

knowledge-based: jobs are shifting from low to high-skilled workers; productivity

and employment growth depend on the conditions for economy-wide diffusion of

new products and processes. While aggregate productivity and employment growth

remain modest in most countries, those firms that combine technological change,

organizational change and up skilling display strong economic performance. With

globalization, the innovation and production systems of different countries are

becoming increasingly interdependent; opening up new opportunities while at the

same time accentuating the need for restructuring and adaptation. Countries differ

with respect to where they stand in this process of structural adjustment, because of

different starting points, technological and industrial specializations, institutions,

policies and attitudes to change.

2. Contribution to GDP growth - The diffusion and adoption of ICT and the expansion

in ICT production has brought about significant effects on countries growing

economy. Through clarifying the contribution of ICT in economic development,

going over the trends in ICT production, and examining the contributions to
productivity growth and GDP. Example, Singapore has undergone a great deal of

economic growth since it gained political independence in 1959, and this is made

evident through their 8.4% per annum real GDP growth, and how the country's

income level successfully went beyond the average level articulated by the OECD.

With this growth, the country also improved and expanded their manufacturing

endeavors, specifically those that involved the production of ICT goods.

3. Emergence of new services and industries - Information technology has always

played an important role in the services sector of the U.S. economy. In recent

years, however, services industries have stepped up their acquisitions of

computers, telecommunications equipment, and other such products

dramatically. The ICT industry is expected to play a central role in driving

growth for Egypt’s economy in the coming years. To achieve this, the

government has mapped out a plan for development with a number of key aims,

which include improving the quality and accessibility of mobile, internet and

government services offered to citizens; utilising ICT infrastructure to improve

government efficiency, with a special focus on health, education and tourism;

and facilitating the creation of a large and diverse export-focused industry. With

services and industries now the predominant mode of economic activity, a

productivity payback from information technology is absolutely essential to

keep the economy on a longer term path of sustainable growth.

4. Workforce transformation- Managing this workplace transformation involves

setting goals that together will form a “smart office” strategy. One good place to

start is figuring out what are the types of experiences and environments. Worker

mobility is a mega trend, especially for Millennial — 64% of whom work

somewhere other than their main site during a typical day, reports Deloitte. And

they’re not alone; altogether 80–90% of the US workforce would prefer to

telecommute at least part time, according to the same study. Fortunately, there’s

more than one path to achieving workplace transformation. We’ve learned that

engaging Millennial — or really any set of valuable workers — takes a

combination of flexible workforce policies and smart, cutting-edge technology.

5. Business innovation- Today, technological aids are increasingly employed to

improve and amplify the innovation process. Now new social methods,

especially crowdsourcing, have fundamentally altered how innovation is

achieved and even who does it. New networked technologies, particularly ones

based on social media, have greatly increased the richness and reach of

innovation programs. Technology in business allows organizations to improve

both the performance and overall effectiveness of products, systems and

services, which, in turn, enables businesses to expand quickly and efficiently.

Use the Internet and advertising sources.