But it does mean that innovations in data processing and communication are likely to shape the organization of the economy, and of the rest of society as well. Let me make four observations about four challenges that it looks like we face as we turn from the end of the second to the beginning of the third millennium, as our new information technologies begin to have a bigger and bigger effect on our world. But we also now have a much more unequal world than the past. The imbalance in the diffusion of technology over the past two centuries has been extraordinary. Our world is now being knit together by data processing and communications technologies.
Information processing makes possible new ways of organizing production.
Data communications means that there is no reason why a lot of white-collar work cannot be done anywhere in teh world. There is an opportunity to use these new technologies to diffuse technology and productivity. Second, the change in what Manuel Castells calls the technological paradigm is going to carry with it a profound change in industry structure, and in political regulation of industry as well. Now this is not the first time we have seen massive economies of scale and network externalities. A hundred years ago the Gilded Age saw the origin of large-scale industrial enterprise taking advantage of economies of scale, and the consequent problem of how to reap the benefits of both competition and efficient scale.