The Information city, the New Economy, and the Network Society

CHAPTER 11: THE INFORMATION CITY, THE NEW ECONOMY, AND THE NETWORK SOCIETY
Summary of the chapter
In this chapter the Writer examines the interactions between the transformation of the economy and the cities in which we live.
The “New Economy” as defined by the Writer, is one in which companies, or firms, or entrepreneurs around the world organize and innovate through, by, and with the Internet, and with those things that the Internet represents.
The fundamental basis of the “New Economy”:
Productivity: According to the Writer, the “New Economy” is essentially based on productivity growth - productivity growth that’s “built upon our ability to do things in a new way with the use of new information technologies.”
In the new economy, the author claims that “people learn to learn” by constantly feeding back knowledge and information into the process of production, management, and distribution, thereby creating “a possibility for constant learning”.
Competitiveness: This is defined as the competition for increasing market share in a globally interdependent environment - by individuals, countries, regions, or firms. This global interdependent system is “new” and enabled by technology. It allows core activities of the economy, including capital markets, large multi-national corporations, key management processes, science and technology, and highly skilled labor to collaborate in real-time on a planetary scale.
Performance: The Writer puts forward the argument that performance in the new economy necessitates that entities take on a new organizational form – that’s networking. Networking is the capacity to assemble resources in a very flexible, adaptable way around projects and to do these projects. When projects are completed, the resources are disassembled and reorganized for other projects – thereby making the project, the unit.
The performance aspect, he argues, is so compelling and “real” that those organizations that are unable to transform themselves into networks, will gradually die out.
The working of the New Economy:
Impact on capital: The writer claims that what happens in this (globally linked and interdependent) financial market, determines everything you do regardless of how innovative you are and how good your products or ideas are. “The only thing that counts ultimately is what the global financial markets think of you”.
The writer provides several examples of how a ‘connected and real-time’ economy has led to changes in societies, enabling individuals and groups taking advantage of the global system – creating possibilities for individuals for instance to move savings from anywhere in the world to anywhere else at electronic-speed.
Impact on Labor: The impact on labor (of this new global economy) has been profound. The newly realized “flexibility” in labor markets and employment, due to access to a global resource pool, has meant “the end of stable employment in the same company, of a predictable career pattern for the rest of your life.”
The Writer points out that “talent, highly skilled labor (has) become a key resource for productivity growth and the key resource for any company. How to produce, attract, retain such labor in the network is indeed a key challenge for companies today.
The writer talks about the evolution of two distinct kinds of labor; the “self-programmable” labor that has the culture and educational capacity to re-program itself throughout its life, and the “generic” labor that understands instructions and executes.
Innovation: The author defines innovation to be the ability to create new products and processes and to think about new relationships between the economy and society. He goes on to point out that the culture of innovation, is the culture of sharing, and not of hiding innovation. It is based on open-source and win-win situations at every level.
The new economy has transformed the way and the pace at which innovation takes place in this globally connected and competitive workplace.
This need to innovate faster and better has also resulted in the creation of “territorial networks” (across the globe) bringing together concentrations of people in specialized domains, making available the necessary “synergy” to innovate.
Challenges of the new Economy for Cities:
The Writer identifies four key challenges:
Individualization and fragmentation of society
Increasing divide between people with vastly different cultures and educational background
Multiculturalism
Territorial divide between places that are connected throughout the world in dynamic networks.
How can cities face these challenges?
Rapid urbanization is a reality, and cities must set themselves up to face the associated challenges and opportunities. Cities have throughout history, been the “seedbeds” of innovation. In the Information Age, cities have become the centers of the new economy and of this new cultural capacity. Cities are also transforming, as they now become global networks of cities connecting each other – creating a world of “cooperating” cities as opposed to “competing” ones.
The Writer makes some key recommendations for the development of cities in the New Economy:
Development of cities as “cultural centers”, offering good educational facilities, good nightclubs, good ideas, good places to live, and then attract young entrepreneurial talent who actually will be the creators of wealth and opportunity.
Cities should make innovative use of technologies, such as public service use of new technologies – in social services, health, education, transportation etc. In this way, the public sector will in fact, help create markets for new technologies.

My comments on the write-up
The rapidly growing, dynamic, and no-end-in-sight globalization process, fuelled by the information technology revolution, has had a profound impact on commerce, societies, cultures, and the individual.
The New Economy is a reality that will continue to transform our workplace and our lives in times to come – further increasing the pace of innovation, as well as creating the need for enhanced skill-sets, talent pools, and an even more dynamic workforce!
While the New Economy continues to pose challenges, asking civilization to adapt accordingly, it is also creating enormous opportunities for regions and parts of this world that now have mass-scale access to ‘current’ information and knowledge – thanks to the underlying information and communications technologies, and have helped bridge the gap.
These regions, countries, and cultures can take advantage of this information and knowledge to ‘ramp-up’ for the future – assuming there’s a willingness to ‘improve’ in these societies, supported by progressive and meaningful governmental policies!