Old and New Economy

Economy could be old or new, depending on the technology employed. An economy involves a social system of production, exchange, distribution, and consumption of goods and services of a country. This could be measured through the exchange rate, inflation, unemployment rate, national debt, GDP, the balance of trade, etc.

Old Economy:

The old economy may refer to the economy of the 20^th and 19^th centuries which were dominated by manufacturing and agriculture industries. Most activities were mechanised, without the use of modern information and communication technologies (ICT).

It is still identified with developing nations and those countries that do not have access to modern technologies.

Examples of old-economy industries include steel, agriculture, and manufacturing.

Features of Old Economy:

1. Time-Consuming: It takes a longer time to get things done.

2. Labour-Based Economy: It takes many people to finish a task in the old economy, unlike in the computer age where a click and press can accomplish complicated tasks. A lot of physical labour was also required for tasks. e.g. subsistence farming.

3. Method of Production is Mechanical: The old economy is mechanically driven and operated with engine power.

4. It is Constrained by Space, Time, and Distance: It is limited locally. It is not international. You cannot widen your horizon.

5. Means of Communication are Slow: Letter writing, trumpeting, gong, smoke signal, etc.

6. The system is Full of Errors: In typing or writing letters, designing by hand, etc., there will be many errors.

Limitations of Old Economy:

a. Time-consuming/waste of time.

b. Costly.

c. Time constraint.

d. Tedious.

e. Less effective.

f. Requires human effort all the time.

New Economy:

The new economy is the economy that is built on more advanced (modern) ways of doing things. It is characterized by the rapid shift from mechanised activities to digital activities, carried out with the aid of information and communication technology.