Creating the New Economy

What makes the US different from other advanced economies is the opportunity for newcomers acting as entrepreneurs to start new companies, a few of which will then change the world. This book develops three points. First, the New Economy is real: part micro, part macro, and all digital. Second, its emergence around networked PCs propelled the US resurgence in the world economy during the 1990s. Third, rather than subsiding, the current US lead in information technology (IT) could well increase over the next decade. The reason lies in the clustered linking of venture capital and entrepreneurs in a system that can be stylized as 'the invention of the method of innovation'. The central theme of the book is the vital role played by newcomers, acting as entrepreneurs, to overthrow the old order and blast through the deep tendencies toward stagnation that afflict advanced, affluent economies. Related strands are (1) an update and reappraisal of Joseph Schumpeter's vision of capitalist development, (2) a regional focus on the rebirth of US computing, and (3) a detailed inquiry into the geography of innovation in strategic clusters of venture capital firms and IT knowledge workers. The author provides a sharply etched portrayal of the geography of the new economy. He lists specific case studies of the failure of established managerial corporations to capitalize on inventions, a failure remedied by newcomers. The book recounts traditional and new theories of the entrepreneur and of creative destruction. Primers on venture capital, IPOs, and internet business models are included, as are comparisons of theory and data on the emergence of new 'strategic cities'. Lastly, it offers a brief, readable, detailed, and company-specific history of the PC revolution and the coming of the internet. Economists, geographers, and regional scientists, students and readers interested in the digital economy, the internet, the history of economic thought, and the New Economy and investors will all find this book revealing and enlightening.