New Economy

AAA

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.

INVESTOPEDIA EXPLAINS 'New Economy'

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.

RELATED TERMS
  1. Service Sector

    The portion of the economy that produces intangible goods. According ...
  2. Bleeding Edge

    A product or service that is so new it has not been widely adopted ...
  3. Dotcom

    A company that embraces the internet as the key component in ...
  4. Moore's Law

    An observation made by Intel co-founder Gordon Moore in 1965. ...
  5. Tech Bubble

    A pronounced and unsustainable market rise attributed to increased ...
  6. Old Economy

    A term for the old blue chip industries that enjoyed fabulous ...
RELATED FAQS
  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 >>
Related Articles
  1. Budgeting

    The Greatest Market Crashes

    From a tulip craze to a dotcom bubble, read the cautionary tales of the stock market's greatest disasters.
  2. Active Trading

    The Ups And Downs Of Biotechnology

    This volatile sector can provide huges gains, but there's also lots of downside.
  3. Personal Finance

    Is Automation Destroying Intellectual Jobs?

    As more jobs are automated, intellectual jobs that require the human brain remain, but does artificial intelligence pose a threat to these jobs, too?
  4. Economics

    What Do You Need To Know About Inflation?

    When it comes to inflation, there is no shortage of opinions: one side argues the Fed should raise rates, and the opposition says the Fed should stay put.
  5. Stock Analysis

    How IPG Photonics Is Tapping Into The Auto Boom

    The manufacturing process of big industrial companies involves sophisticated laser technology to ensure precision and optimal efficiency in production.
  6. Stock Analysis

    Sierra Wireless Benefits From These Megatrends

    We take a closer look at how Sierra Wireless' transition from 2G to 3G and 4G technologies, has impacted its business today, and the future expectations.
  7. Stock Analysis

    Why Westport Innovations Will Keep Struggling

    The energy sector has been a minefield for investors, with many companies seeing their business models threatened by lower prices for oil and natural gas.
  8. Stock Analysis

    3 Areas 3D Systems Is Working To Improve

    3D Systems has taken a jack-of-all-trades approach to its market opportunity in 3D printing, striving to become a leader in every area in which competes.
  9. Stock Analysis

    Qualcomm's New Buyback Program Is Well-Timed

    Qualcomm announced after market close on Monday that they had approved a new stock buyback program, authorizing to repurchase $15 billion in shares.
  10. Stock Analysis

    Should You Consider Nuance Communications?

    It's been a turbulent few years for Nuance Communications, even as voice-powered virtual assistants continue to rise in popularity and acceptance.

You May Also Like

Hot Definitions
  1. Fiat Money

    Currency that a government has declared to be legal tender, but is not backed by a physical commodity. The value of fiat ...
  2. Interest Rate Risk

    The risk that an investment's value will change due to a change in the absolute level of interest rates, in the spread between ...
  3. Income Effect

    In the context of economic theory, the income effect is the change in an individual's or economy's income and how that change ...
  4. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its revenues. The price-to-sales ratio is an indicator of the ...
  5. Hurdle Rate

    The minimum rate of return on a project or investment required by a manager or investor. In order to compensate for risk, ...
  6. Market Value

    The price an asset would fetch in the marketplace. Market value is also commonly used to refer to the market capitalization ...
Trading Center