New Economy


DEFINITION of 'New Economy'

A buzzword describing new, high-growth industries that are on the cutting edge of technology and are the driving force of economic growth. The new economy is commonly believed to have started in the late 1990s, as high tech tools, such as the internet, and increasingly powerful computers, began penetrating the consumer and business marketplace.


The thought that a "new economy" had arrived was evident in the hysteria surrounding the tech-bubble of the late '90s and early 2000s. Without fully considering macroeconomic factors, investors and financial institutions bid up stock prices to unprecedented highs. Although the tech bubble has long since burst, the remaining firms have remained very innovative and at the forefront of technology.

Companies in the new economy are heavily involved in the internet and biotech industries, but the ripple effects of new technologies has spread out to all other industries as well.

  1. Service Sector

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    A term for the old blue chip industries that enjoyed fabulous ...
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  1. What's the difference between old- and new-economy stocks?

    Old-economy stocks represent large, well-established companies that participate in more traditional industry sectors and ... Read Full Answer >>
  2. How has investing in the Internet sector evolved over time?

    Investing in the Internet sector has become more conservative over time. It reflects a more measured approach that shies ... Read Full Answer >>
  3. How have technical skills shifted over the past century in the workforce?

    Several changes have transformed the skills required of the modern workforce. The influence of technological change has undoubtedly ... Read Full Answer >>

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