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The Old and the New Economy Characteristics

Introduction

The old and the new economies have different meanings to different people. The old economy can be defined as the form of economy aimed at mass production of products and consumption of the same by people. It was represented by big and well-established companies.

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The new economy on the other hand is characterized by the predominance of intangible assets in the financial and economic infrastructure. Walton (2004) defines a new economy to be characterized by unemployment declines, increasing inflation rate, and High levels of technology, productivity gains to the firms and industries, and an increase in competitive pressures. These forces have played some important roles in the economic success of many countries. For example in the recent success of the United States economy, these forces led to numerous growths in production industries.

Old and new economies comparison

The new economy calls for more service-oriented modes of production as opposed to the labor-intensive mode of production for the old economy. The stocks of the old economies were less volatile as they were supported by well-established and mature industries; this enabled them to pay consistent returns to their investors as they did not have to look for an alternative investment for their money (Whitford 79).

Stocks of the new economy on the other hand have higher volatility since their industries are new and have not stabilized. The new economy industries opt not to pay dividends even when their profits have stabilized and instead they reinvest in industries likely to bring in more earnings. The old economy has been left mainly to be run by the big businesses and the government whereas the new economy has been left to the hands of individuals. The profit motive in the new economy has left individuals like economies.

In the old economies, products that had been produced collectively were used by the consumers physically. There is no concentration on the advancement of the technological know-how but simply based its operations in the long-established industry with crude means of production, unlike the new economies which largely rely on the technology. The new economies have invested heavily in the research of the advanced technology which fits their needs and serves them better.

This shows that the current economies rely on a faster means of production and are efficient at the same time. There is also the aspect of minimization of the time consumed in the production process which is cost-effective to the producer. This will enable the produces to produce more products cheaply and selling them at a relatively lower price hence attracting higher demand which leads to maximization of the profits.

The current economy developed through the evolvement of the skills of the old economy which can be linked together as a means of improving it. There was the perfection of the old economy to increase the production of goods and services in a more advanced means with excellent policies being put in place. There is not much difference due to this reason of the advancement and development of the current economies. The end-user of the products also came to acknowledge the indescribable aspects of the products and uses them accordingly without much emphasis on the physical value. It became a matter of prestige in the utilization of the commodities by the end-user.

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The products of the old economy focus on the scarcity of the materials or products in determining their worthiness unlike in the current economy where the extensive use of the product or materials is the main determinant of the worthiness or price of the commodity (Siebert 112).

The new economy demands the utilization of group effort in attaining the entire efficient, effective, and up-to-date product which will be attractive or demanded by the end-users. The past economy needs to be controlled to acquire the expected results. The old economy valued proximity so much yet the current economy overlooks the issues related to the location.

L ocation is not a major factor to be considered but it’s necessary. The old economy concentrated on the assembly line while the current economy concentrates on the society which demands or requires its products. The old economy also considers the large population while the current economy concentrates on an individual or personal needs. The old bases it’s on activities on speculative motives and the historical flow mathematically. The current economies focus on the experiments and acknowledge the patterns used.

The current economy is everywhere, huge, all-inclusive, and inevitable. This results in the people in an economy are fully supported by the prosperity and the maintenance of the current economy irrespective of their opinions (Mackenzie 142).

The current economy is global unlike the old one. It can be forecasted by factoring in the intermingled economies of other countries irrespective of the adverse politics, ideas, and the type of religion in all the nations. The current economy sidelines the desires of achieving the margin. This is the same desire which had been there before in directing the proceedings of the people such as the spiritual, nationalists, and the ethical in the deliberating even when they were unsure of what to undertake. All the patterns should possess an inner drive which is the spiritual attachment and the religion under the current economy has been developed as the consumerist. Under the current economy, people are taken to be the economic animals.

This has further been concluded that people do not have any other superior urge than their delight and the contentment in their desires both the basic and the luxurious ones in a materialistic means. This shows that the current economy is money-oriented and more economic which eliminates major factors which should be deliberated as well. This simply informs us that the new economy is not new but more of the past type of the economy (Gadrey 38).

There is an ordinary attribute of the new and the old economy where the company’s position prevails over the personal and the autonomous business activity. This position of companies and businesses was enhanced beyond the individuals by the communist and the socialists specifically on issues relating to manufacturing and funding.

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The current economy has achieved its objective in all aspects especially the economies of scale, unlike the old economy.

The small businesses issue

There are possibilities of the current economy of assembling all the end-user of the products globally and be able to establish all of the people as the one huge crowd referred to as the mass as the sole market. There are many elements in the past economies like the niche market and the expertise markets which can’t bring in much and quick profits which is the order of the day in the current economic structure. The small, individual profit-making operations are the key operations on which the current economy depends on such as in the United States. This is what has made the United States be the big economy in the world today (Christensen and Maskell, 85).

The prosperity of these small businesses is because they only concentrated on the little targeted markets, some places, and their expertise markets. Its target was not the unformulated crowd of people who had the same tastes, hence demanding huge production. The businesses were not at any one time subjected to operate on one type of preference of the end-user.

The small businesses were at liberty to operate on their objective markets and on their own time. This does not happen in the current economy. All the upcoming businesses have been sidelined and wiped out under the current economy so-called the new economy by the big businesses which are the corporate states. This has been attained due to the factors such as heavy taxation which is a burden to the small businesses, excessive regulations, and laws. There is also the concept of excessive marketing which is done by use of the central government tax with the view of influencing the small business markets, which finally takes them away.

Conclusion

The new economy also has wiped out the old system of carrying out transactions using gold and silver as a mode of exchange. There is much emphasis on money in the current economy as the main mode of exchange. There is also the concept of stacks which utilizes technology. This technology has been developed to outshine the old system of doing things hence the old economy has been upgraded to the new economy through the application of various means and methods.

Works cited

Christensen , Jens, and Peter Maskell. The industrial dynamics of the new digital economy. Cheltenham: Edward Elgar Publishing, 2003.

Gadrey, Jersy. My New Myth. 9th ed. New York: Routledge, 2003.

Mackenzie, Michael. State policies to enhance the new economy: a comparative analysis. Ottawa: Centre Policy Alternatives, 2005.

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Siebert, Horst. Economic policy issues of the new economy. Canada: Springer, 2002.

Whitford, Josh. The new old economy: networks, institutions, and the organizational transformation of American manufacturing. 6th ed. United Kingdom: Oxford University Press, 2005.

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StudyCorgi. (2022, January 4). The Old and the New Economy Characteristics. Retrieved from https://studycorgi.com/the-old-and-the-new-economy-characteristics/

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