By Robert E. Litan The Death of the Dot-coms Spells the Beginning of the End of the New Economy Don't overreact. It would be a mistake, however, to extend such stock-market negativity to the economic impact of the Internet itself. After all, no one disputes the transformative impact of the railroad and the automobile even though thousands of such companies that were once in business aren't any more. Competition winnows out the few firms that are able to survive, ensuring that the benefits of new technology are passed on to consumers. But forget about all those start-ups for a minute.
New technologies do more than just create new firms and consumer products.
They change the way that firms throughout the economy do business. Already, the Internet is making big inroads in countries like Brazil, where banks are radically changing the way they do business by encouraging more customers to go online. Expect financial institutions elsewhere around the world to follow. Was Overhyped Wrong again. The benefits of the Net do not hinge on the survival of any new company that the Net seemingly has created.