t silicon prices have decreased over the same period, supporting low inflation and high levels of productivity growth (Kehoe, 2000, p. 20).
For many analysts, "New Economy" refers to the extension of electronic commerce and electronic business (e commerce and e business, respectively) which are based on using the Internet and related technologies for conducting transactions. These transactions include not only retail transactions that might take place at amazon.com between a business and an end customer (business-to-consumer), but also business-to-business transactions involving purchasing, inventory control and accounting. In this New Economy, physical facilities and the concentration of employees in specific departments (such as purchasing) may well be reduced as computers and specialized software automate functions to levels previously unimagined. Certainly the skills and job duties of many employees in Old Economy companies will change as the New Economy becomes more commonplace (Kehoe, 2000, p. 20).
The New Economy and the World Economy
Dow Chemical provides an example of how large corporations from the Old Economy view the New Economy. Dow is committed to maximizing its use of the new economy, but the company is confident that it will always have some Old Economy ways embedded in the organization. For some customers and suppliers, e-commerce will be their preferred way of doing business with Dow; for others, the Internet simply will not gain acceptance (Kawasaki, 1999, p. 248). At this point, for example, the Internet and e commerce is predominately Western in its penetration, with North America accounting for much of the e-commerce that is transacted. Relatively easy access to PCs, relatively high levels of disposable income, and predominantly English-language content are three reasons e commerce, especially business-to-consumer e commerce, is mainly a North American phenomenon. In some of the world's other signi...