A TRULY NEW ECONOMY IS COMING

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A TRULY NEW ECONOMY IS COMING

INTRODUCTION

Since 1946, the first computer emerged in the USA; computer has experienced development progress that is from electronic tube to transistor to integrated circuit to super-integrated circuit. “The computer is essentially a simple device that distinguishes zeroes from ones in a reliable and rapid way.”(Matti Pohjola, 1999) This invention brings out the third industry revolution, which is called information technology revolution. Liking former two industrial revolutions, this third revolution is changing society and the world economy in many ways. Broader use of information technology (IT) has improved productivity and raise the quality of life, to lower prices, to create jobs and eliminate them, and give rise to new economics. The application of IT is leading human being into a total New Economy stage-digilization era.

Definition of New Economy
Alan, Greenspan, (Chairman Federal Reserve Bank, USA) defined: “Computers have created an enormous new capacity to capture, analyse and disseminate information…indeed it is the proliferation of information technology that throughout the economy that makes the current period so different from the preceding decades.” There are two statements implicit in this remark:
“1. There has been for some years a sharp rise in the rate of productivity growth over historical levels: between 1995-99, US productivity grew at 2.6% per annum, compared to 1.4% per annum 1974-90.
2. Computers are responsible for this upsurge.
Extrapolating these growth rates into the future, optimists would say that we stand on the brink of a New Economy in which living standards will double every generation.”(V.K.Borooah)

Background
It is clear that people have seen some great changes in the US economy since 1995.In accordance of the chart of “Contributions to US Output Growth”: the USA labour productivity has gone up from 1.4% to 2.6% per year: an extra $10...