. if the microprocessor ’ s breakthrough in the early 1970s constitutes the starting point, then it will presumably be another couple of decades before any sizeable economic effects are discernible. counting instead from the invention of the computer in the mid 1940s, however, means that we could already be in the beginning of a phase of rising productivity and growth. nevertheless, i believe it is till early to be able to provide an unequivocal answer to this question. what is clear is that electronics and microprocessors have revolutionised telecommunications and household appliances such as tv sets, videos and music equipment. we give little thought to the fact that microchips are now to be found in the simplest kitchen appliances. they are a part of our daily round. bear in mind, moreover, that there are no doubt applications that have not yet been exploited with the more powerful and, above all, cheaper capacity of new computers. electronic techniques were used in the 1970s to produce electronic components and equipment. in the 1980s, computer hardware and programmes were developed, along with various services that made it possible to incorporate computers in many fields. the pressure for change has shifted to software and know - how. in the 1990s software became more standardised and attention focused on attempts to create new infrastructure, for instance by extending the internet. the new infrastructure has enabled globalisation to take a large step forward. a good example of a field where the new technology has been utilised for strong growth is the financial sector. no one now dwells on the fact that the financial sector largely stands or falls with the new technology ; it has become commonplace. tv satellites and the internet have paved the way for new and better means of communication. that in turn has provided a base for the growth of many new types of services. many people now use the internet for bank transactions. buying and selling goods on the internet is still fairly limited but is growing. today, most people in sweden have access to news and entertainment from all parts of the world. firms have had to adapt to new markets and new conditions for distribution. new enterprises and new rules follow in their wake. as the new technology becomes cheaper, it also becomes available for more and more applications. one example is biotechnology, where the conditions for research and product development have changed completely. new companies are now being established. swedish enterprises have quickly gained a leading position in the new fields. sweden can be said to act as something of a european centre for the new information

economy that is expanding rapidly will ultimately generate imbalances and rising prices. that was why the federal reserve had to tighten the monetary stance so that the high growth in the united states would be subdued. my attitude to talk about a ‘ new economy ’ or a ‘ new economic era ’ has been sceptical for a number of reasons. one is that i had difficulty in accepting the idea that economic relations we have observed for decades, perhaps even centuries, could suddenly cease to hold. technologies do change, very quickly at times, but the fundamental economic relationships are not easily overturned. another reason is that history shows that talk of a new economy tends to coincide with periods of strong economic speculation. information technology will be a major engine for growth the fact remains, however, that in recent decades we have seen notable technological breakthroughs with far - reaching economic impacts. to understand what this has meant, we need to go back further than to the birth of the internet. the crucial advance occurred perhaps in the 1970s, when it was suddenly possible to construct a complete computer as a tiny chip - a microprocessor. microprocessors in turn were the fruit of development work lasting several decades. today computers have innumerable applications, partly because they have become so much cheaper. in the past four decades computer prices have dropped by an average of around 20 per cent a year. so a computer with a price tag of 10, 000 kronor today would have cost almost 50 million kronor in the early sixties. see shiller, j. ( 2000 ), irrational exuberance, princeton university press, chichester, west sussex. this has paved the way for computerisation in a wide variety of fields, besides involving something of a revolution in methods of production and patterns of consumption. some observers draw parallels with earlier revolutions in economic history, for example the introduction of steam - engines in manufacturing in the 18th century and the breakthrough for the combustion engine and electric motors in the late 19th century. a closer look at these two earlier industrial revolutions shows that in sweden the impact of the steamengine was delayed. developments here had more to do with the transformation and commercialisation of farming in connection with land reforms. it simply took time to build up the institutional arrangements that made a widespread use of steam - engines possible. sweden did not begin to participate in the first industrial revolution until the middle of the 19th century, when the construction of railways gave steam locomotives a crucial part to play in the new form