What are the characteristics of the new economy?
• New Firms and Increasing Returns: • Hundreds of new start-up firms advanced various aspects of the new information technology. Many of these firms were more ‘hype’ than goods and services and quickly fell by the wayside. But some flourished; Intel (microchips), Apple and Dell (personal computers), Microsoft and Oracle (computer software), Cisco Systems (Internet switching systems), America Online (Internet service provision), Yahoo and Google (Internet search engines), and eBay and Amazon.com (electronic commerce). • Microchip and Information technology: The center of the New Economy is a fast increase in entrepreneurship and innovation based on the microchip. Information technology was been used to connect all parts of the world. • the core element of the productivity speed up is the innovation based on the microprocessor, or microchip. It also of automobile, air travel, the telephone, and tv. • • • Increasing returns to scale: When a firm’s output increases by a larger percentage t
