With the acceleration of globalization, open markets, competition, goods, services, new technology, capital and knowledge create new economies and cause new demands in terms of business world practices, business organizations and business-management relations.
The new economy is often expressed as an effective use of information and communication technologies in an environment where human resources in general are available. This transformation in economic activities will be accompanied by the transformation of the information and communication technology sector.
One of the most important benefits of the new economy is that it allows for higher growth and higher employment. Employee-employer relationships in the new economy may not be constant. Workers throughout an entire life may not want to stay at a single company. He/she may want to work in different positions in different companies. The way to guarantee employment in the new economy and to ensure continuity in the income is to facilitate the transition of the worker from one work to another, business mobility. Companies in this sense can provide higher work experience.
The new economy also has a significant impact on development processes. The growth of the country, its welfare, population, natural resources, development strategies should be developed in relation to this new reality. Development efforts in the new century will be completely different from the past century. Indeed, both developing and developed countries have to build and design their strategies in accordance with the new reality. The most important elements that the new economy will need are financial depth, external openness, competition and flexible market regulation and financial activity.
The financial system is of critical importance as an important element of the new economy calls for the transformation of business, consumer and government activities and new investments. The financial system should be effective in defining good and weak opportunities. Institutions of the financial system need to support risky and innovative efforts without risking the economy as a whole. This can only be accomplished with the financial depth. In this sense, financial intermediaries serve as institutions that transfer funds from the financial sector to the real sector. By providing credits as a whole, they provide services that match the financial expectations of the real sector.
As far as financial depth, financial transparency is also necessary for a country’s economy to adapt to new economy. The new economy’s productivity efforts come from the global environment, especially in the services sector. Services sector performance and prices, telecommunications and logistics services are also important in this sense. This also requires liberalization of services sector. Liberalization provides a widespread dissemination of information and communication technologies and the Internet. It is the clearest evidence that early-liberalized countries are today’s technology leaders.
Yet a competitive and flexible environment encourages new thinking, reveals innovative efforts, and attempts to meet market demands with new approaches. Flexibility and competition are important for both manufacturing and labor markets. Competition is also necessary to reduce the cost of technology at the same time.
Another element of the new economy is financial activity. Financial efficiency requires state participation in new economies. The tax management, customs procedures, etc. regulations that will facilitate their business life are needed. In these arrangements, effective use of information and communication technologies provides financial balance.
Traditional policies on development and growth should now be considered in the light of the new economic paradigm. Policies at both macro and micro level should be developed and strengthened to maximize opportunities in the new economic environment. Of course, the new economy should not be expected to automatically reduce poverty. Poor countries are deprived of the investments necessary to benefit from the new economy. New investment strategies and public policies need to be developed.