What's New About the New Economy?
By Macreena A. Doyle
Whether you're caught up in it or feeling left out of it, discussion
of the "new economy" is everywhere. Entire enterprises have
sprung up -- from round-the-clock CNBC on TV to stock-tracking capabilities
of hand-held wireless computers -- to fill the seemingly unending need
for speed in the "information age."
But is the "new economy" really new? What are the opportunities
and challenges it presents? And how do we prepare students not only
to participate in it, but also be leaders?
According to Associate Professor of Economics Steven Horwitz, "The
'newness' of the economy is a matter of degree rather than a difference
in kind. Usually people say it's an 'information' or 'knowledge' economy.
However, markets have always been about the discovery and use of knowledge.
Even producing old-fashioned material things involves bringing together
dispersed and often tacit knowledge in one place, in order to engage
in production, not to mention the roles that economic institutions such
as prices, property rights and contracts play as knowledge-conveying
shorthands. And more fundamentally, all acts of physical production
are simply rearranging molecules in ways that better match what people
value. Knowledge and information have always been central to markets."
Michael Martinez '93, associate editor of the Washington, D.C.-based
Kiplinger's Personal Finance Magazine, disagrees. "There is a new
economy," Martinez says. "It's a service-based economy that
uses the Internet to reach consumers, whether via the computer, handheld
interactive TV or cell phone. These services can be anything from simple
news reports all the way to a complete suite of organizational and productivity