transformation of an industry sector, the sector-level trade patterns of an economy, and its policy environment. Finally, the Report distills common themes from 16 case studies from 12 members of APEC prepared for this Report. Nominally following a “template,” these mini case studies come from both official APEC sources as well as independent researchers and address how businesses, civil society, and governments are being transformed by the technologies of the New Economy—or are being held back from that transformation by the state of the domestic and international policy environments. A New Emphasis on Transformation What underpins the New Economy?
In recent years, the rise in globalization and usage of information and communications technologies (ICTs) precipitated what was likened to a new economic paradigm dubbed “The New Economy.” The initial euphoria over the Internet and ICTs subsided to a more reasonable level of expectation more recently and some demurred that the New Economy was simply a fad. The quantitative and qualitative assessment contained in this Report shows that the potential for transformation that is the hallmark of the New Economy remains substantial, and that policy underpinnings are needed to support and universalize the value of the technologies. So, the New Economy is all about transformation.
The definition of the New Economy stipulates that structural policy reforms make networked technologies immensely valuable for generating productivity. The outcome of this mix of policy and technology is transformation in the way markets, firms and individuals operate and make decisions. The transformation is toward more productive use of scarce resources, be they money, inputs like steel, lumber or water, or hours of labor. This is important and challenging for policymakers, in part because adjusting to a new way of doing things often entails displacement of old ways of doing things – displacement of people and vested corporate interests that is. This transformation is continuous.
The only thing constant in a New Economy is more constant improvement. Productivity rises because unproductive activities are more easily identified and harder to justify and perpetuate in the presence of greater awareness. But often human nature and certainly bureaucratic nature longs for permanence, for present and future conditions that will not change. This has never been possible, though some think that the past offered such security. The reader will notice that several factors are not the focus of the analysis.
Perhaps most notable is human resource development (HRD), which is not among the cardinal policy domains the Report identifies for securing the transformations of the New Economy. There is much work underway in APEC and other forums on HRD, both general and targeted to technologies as well as to the New Economy. While it is clear that the four domains of policy are necessary, albeit not sufficient for the New Economy to emerge, there is little or no analysis to ensure that policymakers understand the role for structural economic policies in determining relative productivity growth (manifested, for example, in the digital divide) and - 3-