Have We Learned from the New Economy?

prostoalex writes "The new issue of Fast Company magazine looks at the so-called New Economy in retrospect. There were some myths about the Internet that were not true, or could be considered true only partially in the brief history of the Internet boom, there were people who got burned and those who nicely cashed out and then there were those who had to start a new life because of the Internet."

Comments

Lesson Number One

[rm007]

The big lesson to learn from the new economy was that the basic rules of economics still applied. Sure there were a lot of innovations that transformed many industries, but the basic laws of supply and demand still held true. The basic requirement that businesses had to generate revenue in order to survive still held true. It seemed that every time you looked around during the 90s there was another new economy: the information economy, the digital economy, the attention economy, the experience economy etc. etc. but these were all put forward by people who didn't know anything about economics.

Re:Lesson Number One

[master control progr]

Exactly right. What makes this situation worse is that we abandoned "Old Economy" (Capital intensive, like manufacturing) in favor of these "New Economy" industries (which require almost no capital to get into), and now we're getting our asses kicked by India and China. It's going to get worse, too.

Re:I know what I learned

[Bull999999]

Most people use this system.

1. Hype
2. ????
3. Profit
4. Greed
5. Lose everything

Or

1. Wait until it's "safe" to invest (when the market's near the top)
2. Invest
3. Lose everything

What does it matter?

[gowen]

It doesn't matter what we've learned, because like every other economic bubble, by the the next one has come along everyone will either:
i) think they know why this one is going to be different or
ii) will have forgotten the lessons of this one anyway

What I learned from the New Economy

[KarmaOverDogma]

As far as politics, money and corruption is concerned:

The more things change, the more they stay the same (ref: "Golden Rule" - he who has the gold, makes the rules).

I know the above comment is cheap, but IMO, one thing that *hasn't* changed in the "new economy" is that (white-collar) crime still pays for too many high powered execs and that corporate accountability is hard to enforce.

Again, IMO, this is one of the reasons more people lost their jobs, in high-tech or anywhere else, than was neccessary.

New Economy is the myth

[b-baggins]

The whole notion of a "new economy" is the myth. Economics will be what it always has been: People offering something that other people want/need. The only thing that changes is what is offered.

Those who understand that have successful internet businesses. Those who don't have failed internet businesses.

This is well known stuff

[fruey]

The business paradigm didn't change overnight, bad business didn't become good because of a web site, and you still had to make more money than you were spending in the reasonably short term...

The whole phenomenon was down to greed. I worked on a big project, and it happened like this:

1. A good idea started
2. Good people got hired
3. Investors dumped in a load of money
4. Stuff got too big too quick
5. People on stupid salaries started thinking they had to change stuff all over the place, new logo new this new that
6. The web visitors just said no thanks had enough - it wasn't working like it used to
7. The site that is left is no more, but you can see the changes here:

Links: what was left The new look The old look country site

The idea was OK, but by the time a load of stupid shit like free email, instant messaging and all that was tacked on, it just didn't work any more, cost way too much money...

But we had a great launch party for Orientation Morocco, let me tell you!

What I've learned from all this:

[michael path]

The one thing I get to take with me after taking a job in 1999 at age 19 to make more money than I ever expected to, through being both fired and laid off in 2003, is that continued education and awareness of the outside world have been paramount towards any career success I have.

The Internet continues to be my preferred source of education. I've taken online classes through a community college. Newsgroups have helped me solve most of the problems I have at work, and I look sharper for it. I've regularly used online news sources to keep me aware of what's new in the world, given that local news anchors have more brilliance in their smile than their skulls.

Aside from my service costs, the Internet remains as free as Al Gore intended :)

-m.

Lessions learned

[Bull999999]

I think that people who wants to play the market should take a class in accounting or similar courses to learn to read financial statements. I took several accounting courses in hopes of opening my own business someday and I was suprised to find that GAAP allows enough flexablility to inflate or deflate the "earnings" by the companies. I also learned that Statement of Cash Flow often times are more important the Income Statement or Balance Sheet. (A company yachet may be counted as an asset but does nothing to brining in money and most likely to be sold under the book value if company needs cash).

All the day traders I knew during the boom didn't know how to read the financial statements. They just relied on advises of some hot shot, other day traders who knew no better, and their gut feelings.

We were conned - had nothing to do with technology

[SmilingMonk]

This may come as a bit of a surprise, but the "new economy" was a ruse. It was a way of separating your investment dollars from your wallet and giving it to the IPO underwriters, investment bankers, and Vulture Caplitalists. PBS Frontline ran a series of programs that illustrate this point very well.

One of the key indicators of just how well the ruse worked is that 60% of the working public was in one way or another invested in "Wall Street" during the late 1990's. The last time this many of the "regular working public" invested was during the 1920's.

Another, perhaps clearer indicator of how well the ruse worked is looking at just how much money was drained from the US economy (ie: your wallets and mine): $3.3trillion.

It's tragic, really. The technology was in some cases quite good. eBay roars along. Dell digitized their entire business model. And governments around the world have started to adopt Open Source works as the foundation from which to build upon. But greed extracted a huge price on the economy and our ability to reinvest those dollars in continued Research and Development.

Programming is a means to an end

[Anonymous Coward]

The thing most out-of-work programmers and undergrad students haven't yet grasped is that programming is not an ends of itself. You don't make a decent living as a programmer; you make a decent living using programming to develop something that has utility to someone willing to pay money for it. Simply pronouncing your C++/Java skills and hoping someone gives you a problem to solve doesn't qualify you for an $80k/yr job. People who will succeed in software from here on out will have to be focused on finding innovative things to do (hint: more free software ain't it) and hoping nobody has patented it first.

Unfortunately, most of the low-hanging fruit has been picked and society's need for programmers is much, much less.