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The Essence of the New Economy

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dc.creator Klodt, Henning
dc.date 2001
dc.date.accessioned 2013-10-16T06:16:30Z
dc.date.available 2013-10-16T06:16:30Z
dc.date.issued 2013-10-16
dc.identifier urn:isbn:3894562250
dc.identifier http://hdl.handle.net/10419/2585
dc.identifier ppn:33038676X
dc.identifier RePEc:zbw:ifwkdp:375
dc.identifier.uri http://koha.mediu.edu.my:8181/xmlui/handle/10419/2585
dc.description The New Economy should not be discounted as a temporary stock market phenomenon, but should be recognized as a real and sustainable phenomenon. The basic feature of the transition towards the New Economy is the rising importance of information—both as output and input good—in virtually all sectors of the economy. It would be fallacious to interpret the New Economy as a sector-specific phenomenon. Information increasingly constitutes a crucial input factor both in modern and traditional industries, and the information content of a final output is continuously rising throughout the economy. Present technological change, which is based upon modern information and communications technologies and on biotechnology, measures up to the industrial revolutions of past centuries. It would be premature, however, to identify fundamental trend shifts in aggregate productivity growth, because certain measurement issues are still unsettled and the observation period is still too short. Private firms must develop new business strategies in order to cope with potential market failure resulting from the properties of information goods as public goods, network goods, and experience goods. Bundling and versioning of products, attracting free riders, and —above all— establishing reputation are among the most important business strategies for the New Economy. The New Economy can be expected to reshape the structure of firms and industrial relations. On the one hand, reduced transaction costs will foster small, network-oriented niche suppliers. On the other hand, the New Economy will create substantial firm-size economies of its own—resulting from low marginal costs of information goods and competitive advantages from bundling and the exploitation of reputation. In addition, new types of incentive contracts that can serve to monitor knowledge-intensive activities will gain ground. Since human capital will replace physical capital as the crucial factor of production, improving the qualifications of the labor force is essential to successfully cope with adjustment challenges of the New Economy to the labor market.
dc.language eng
dc.publisher Kiel Institute for the World Economy (IfW) Kiel
dc.relation Kieler Diskussionsbeiträge 375
dc.rights http://www.econstor.eu/dspace/Nutzungsbedingungen
dc.subject ddc:330
dc.subject Lange Wellen
dc.subject Produktivität
dc.subject Information
dc.subject Güter
dc.subject Informationsmarkt
dc.subject Marktversagen
dc.subject Reorganisation
dc.subject Business Network
dc.subject Wirtschaftspolitik
dc.subject Theorie
dc.title The Essence of the New Economy
dc.type doc-type:workingPaper

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