II. The Fundamentals: Definition and Policy Underpinnings of the New Economy Since their Vancouver meeting in 1997 when Leaders stated, “We agree that electronic commerce is one of the most important technological breakthroughs of this decade,” APEC economies have steadily integrated electronic commerce, the Internet, knowledge-based economy, and now, the New Economy into their lexicon. The APEC Task Force on Electronic Commerce produced the “Blueprint for Action on Electronic Commerce,” and a comprehensive background report in 1998.
The Steering Group on E-commerce was constituted under the Senior Officials Meeting Task Force and charged with reporting annually to Senior Officials on e-commerce activities within APEC. Using the E-Commerce Readiness Guide, economy governments and businesses can assess the preparedness of their economy to participate in e-commerce activities, thereby setting the stage for a discussion of policy direction. In 2000, the Economic Committee forwarded recommendations to Ministers to support development of knowledge-based economies in APEC.
The Collective Action Programs can now be up-loaded for review at the APEC Secretariat’s web-site, and the e-IAP Initiative will include individual action plans and annual summaries, thereby encouraging transparency and peer review. At Brunei in 2000, Leaders recognized both the potential benefits of the New Economy as well as the requirements: “[A]n appropriate policy framework that encourages:
strengthening the functioning of markets; openness to trade and investment; innovation and new enterprises; sound macroeconomic policy; education and lifelong learning; and the enabling role of information and telecommunications infrastructure.” Even before assuming the Chairmanship of APEC in 2001, China indicated its commitment to extend and further substantiate the focus on the New Economy under its tenure. The United States was a key proponent of this work in recent years, and has sought to contribute as much as possible to China’s efforts to address this theme.
To this end the present Report was requested, a request which was amplified by Chinese APEC officials, leading to the invitation by the Economic Committee to submit this Report. What is the “New Economy”? In the APEC region, as elsewhere, policymakers are searching for a definition of the “New Economy”. Why the need for consensus and why the sense of urgency? Policymakers want consensus because the term New Economy is used in so many ways that they cannot assess its value or whether they should embrace it. Many policymakers believe that a clearer and agreed-upon definition would help prioritize domestic and multilateral reforms.
The urgency comes because the New Economy could bring higher economic growth; and indeed in the United States, where the paradigm is most well developed, trend output and productivity have grown faster, employment has been higher, and inflation lower than resource fundamentals and income levels were thought to permit. Economies are afraid of missing out on benefits— - 10-