Lenders are applying tighter credit standards to their customers. Consumer and business sentiment has been poor. Certainly none of these conditions fit with the beguiling portrait that ardent New Economy advocates have been painting. Yet, something does seem different. Productivity has improved significantly during the past several decades, especially in manufacturing industries.
New technologies are surely important, but there are other important factors to consider.
Businesses invest in new technologies when they can put them to use profitably. Competition and property rights are just as important to intellectual property as they are to physical assets. The New Economy is new, not only because of its application of new ideas, but because it relies on some sound old ideas as well.