Magazine

Table: Now What?


Despite the hype, the New Economy was never about sunny skies forever. Expect faster growth on average--but turbulence, too.

FASTER GROWTH

The 4.1% average annual growth from 1995 through 2000 is probably unsustainable. But the New Economy ought to be able to grow 3.5% a year on average--well above the 2.8% growth of 1973 through 1995.

TECHNOLOGY

U.S. business is devoting an unprecedented 35% or so of its capital spending to info tech. All that money is making companies faster moving. But the tech cycle is notoriously volatile--and now the overall economy is harnessed to it.

FINANCING OF INNOVATION

The breakthroughs that stimulate economic growth depend on venture capital more than they did in the past. When optimism runs high, venture capital is plentiful, and lots of promising companies get funding. But in times like this, when venture capital dries up, innovation withers.

FLEXIBILITY

There's more variance in labor costs, companies' biggest expense. More pay is in the form of bonuses and stock options. And more workers are under temporary contracts. When labor markets are tight, workers capture rich rewards. But they're more exposed in downturns.

DEREGULATION

Relaxed rules increase efficiency and lower prices. But workers and investors suffer when sheltered sectors face rivals. Bungled dereg, as in California, hurts consumers.


Burger King's Young Buns
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

 
blog comments powered by Disqus