Changing Values in the New Economy Essay Example | Topics and Well Written Essays - 2000 words

Changing Values in the New Economy - Essay Example Thus globalization of business and the revolution in information technology are the cornerstones of the new economy that has come into existence. The changing circumstances and thought processes in the business environment under the New Economy are undermining the old order and are forcing business to restructure. The emergence of the new economy has also brought changes in the outlook of the investors in that the there has been an increased expectation of return on the capital invested. Investors in the new economy prefer to work on a faster payback of their investments as against their counterparts in the old economy who were satisfied with a nominal and consistent return on their investments and safety of the investments as the deciding factor for any investment decisions. With this background this report analyses the radical changes brought about by the new economy in the outlook of the investors including the institutional investors. Stephen B. Shepard (1997) states that the New Economy has emerged because of the interaction of two broad trends namely the globalization of business and the revolution in information technology. In the New Economy "capitalism is spreading around the world--if not full-blown capitalism, at least the introduction of market forces, freer trade, and widespread deregulation." It boosts productivity, reduces cost, cuts inventories and facilitates electronic commerce. The digital technology is creating new companies and new industries before our eyes. Paper on New Economy from PPI (2000) defines the new economy as knowledge and idea based economy where the key to higher standards of living and job creation is the extent to which innovative ideas and technologies are embedded in services, products and manufacturing processes. The new economy is one where risk, uncertainty and constant changes are the rule rather than the exception. In the new economy there is a transformation process constantly going on which replaces the hierarchical organizations by network learning organizations. It may be interesting to note that almost eleven new companies are created every week in Silicon Valley and one of them went public every five days when the new economic development process started. The new economy has also seen a widespread change in the methods of conclusion of trade transactions, changes in the purchasing methods of consumers and novel methods of meeting the customer needs by innovative approaches in delivering the products ordered over the internet. E Commerce took its root and developed over a short period in the new economy, although initial hiccups were present. The classic example in this type of business is the success of Amazon.com. Thus new business activities using the new technology, media, telecommunication facilities, e commerce and Web portals became inseparable parts of the new economy. 3.0 Outcome of the New Economy: The new economy with the advent of globalization and the rapid development of information technology has resulted in an all round development of various economic sectors. These developments attributable to the modern digital technologies had been a reason for excitement and elation at the end of the last decade. The reported developments were mainly concerned with: the emergence of a knowledge based sector whose huge market and broader