Tools for Thought: What Is New and Important About the "E-conomy"

1. Tools for Thought: What Is New and Important About the "E-conomy" Stephen S. Cohen, J. Bradford DeLong, and John Zysman February 27, 2000 Comments Are Welcome E_conomy@uclink4.berkeley.edu

2. Transformative Moments • Eras when advancing technology and changing business organizations transform economies and societies. • Not a leading sector. • Instead, many sectors acquire powerful new tools. • Are we today living through such a shift? • Perhaps... Modern information and communications technologies are tools for thought. • They amplify brainpower in the way the technologies of the Industrial Revolution amplified muscle power.

3. How to Tell the Story of the Information Technology Revolution? • A two-fold story. • Innovations in technology. • Innovations in business organization and practice.

4. The Technology Story • The doubling of semiconductor capability and productivity every-eighteen-months. • A rate that has carried us from the room-sized vacuum-tube computers to the modern Internet. • The complementary surge in the capacity of the communications network to transmit digital information.

5. The Business Organization Story • Changes in... • ...business organization and market structures • ...government regulations and human experience. • Difficulties of measurement. • A new business ecology with... • ...a prominent role for venture capital • ...the start-up and the spinoff • ...new option-based ways of compensating skilled workers and entrepreneurs • but will this new business ecology last?

6. Macroeconomic Implications of the E-conomy • Substantial and unexpected increases in productivity. • Lower natural rate of unemployment. • But at bottom the E-conomy is not primarily a macroeconomic phenomenon.

7. The Most Important Implications of the E-conomy • Resolving the production dilemma • Resolving the innovaon dilemma • A new business ecology? • Global Issues

8. Sustaining the Transformation • Pilgrimages to Silicon Valley • People come to Silicon Valley today much as people came to Manchester at the start of the industrial revolution. • They come to marvel at the accomplishments of new technology, new organizational forms and new industry. • They come to try to understand what this all means. • When they leave, it would be good if they had a framework to structure the information, visions and debates.

9. Sustaining the Transformation • For the past fifty years, governments have by and large gotten policy right. • Policy has been right in two broad directions. • Resources: investments in research, development, and education • Rules: the systems of public and private governance and market organization required to make the market for information technology work

10. Sustaining the Transformation • Resources: investments in research, development, and education • Public investment in science and technology • Public investment in technological education • Rules: the systems of public and private governance and market organization required to make the market for information technology work • Open competition. • Open standards. • Intellectual property.

11. Sustaining the Transformation • How to extend this success into the future? • Public investment in... • ...basic research into science and technology • ...the technological-age education of people • Rule making • Privacy • Security • New property rights • Flexibility and inclusion • Global issues...