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Topic Content:
- Differences Between The Old Economy And The New Economy
- Summary
- Evaluation Questions
Old Economy differs from New Economy due to the fact that it relies on traditional methods, rather than leveraging new cutting-edge technology.
Below are some of the Differences Between The Old Economy And The New Economy
Old Economy Vs. New Economy:
| Old Economy: | New Economy: |
| It is time-consuming | Time and distance is irrelevant |
| It is labour-based | It is based on knowledge |
| The time for transactions is very slow | Transaction time is very fast |
| The cost of production is high | Cost of production is low |
| It makes use of mechanical devices | It makes use of digital technology devices |
| Examples of Industries in old economy include agriculture and manufacturing. | Examples of Industries in the new economy include computer and technology-enabled services, e.g. software, biotech, pharmaceutical, customer relationship management (CRM) etc. |
Summary:
The old economy was characterized by an industrial era in which activities were mechanised. Farm activities like subsistence farming and industrial activities without the use of modern and advanced technology were popular during this era.
While in the old economy, manufacturing companies played an important role, in the new economy they have been replaced by service and commodity-oriented firms. Information technologies, the Internet, and high-tech companies, in the backdrop of globalization, are responsible for crafting this entirely new type of economy. Knowledge, skills and ideas are easily accessible in the new economy due to the influence of ICT.
Evaluation Questions:
1. What is Digital Divide?
2. Explain the terms:
(a) Old economy
(b) New economy
(c) List 5 features of old economy and 2 machines used.
(d) List 5 features of new economy.
3. State the differences between old economy and new economy.
