The New Economy: Beyond the Hype, looks past the elation and gloom to help policymakers think and act with the facts. It explores the causes of the discrepancy in economic performance in the OECD area. It shows that while technology has had a pervasive and profound effect on economies and societies, it alone was not the reason for fast growth. What counts more is how that technology is put to work.
Productivity is a key factor; if it shows an increase, then faster rates of non-inflationary economic expansion can be achieved. ICT seems to have facilitated productivity enhancing changes in both new and traditional industries, but only when accompanied by greater skills, and changes in the organisation of work. Importantly, growth is not the result of a single policy or institutional arrangements, but a comprehensive and co-ordinated set of actions to create the right conditions for future change and innovation.
The book argues forcefully that whatever the outlook for the business cycle, we are now faced with a new economic environment. It urges policymakers to adopt a comprehensive growth strategy combining five policy areas that can engage ICT, human capital, innovation and entrepreneurship in the growth process alongside policies to mobilise labour and increase investment for the long term. Naturally, good fundamentals – macroeconomic stability, openness and competition, as well as sound economic and social institutions, and proper social protection – are a prerequisite for success.
©OECD Observer No 228, September 2001