RISE OF INFORMATION ECONOMY

The information economy, which has emerged from the increasing integration of
commerce and communication technology, has redefined markets, employment patterns, and professional identities around the world.

This is economy in which knowledge is the primary raw material and source of value. Internet is at the epicentre of this global economy, disseminating information to the far reaches of the world with great efficiency and cost effectiveness.

Traditionally, workers were involved directly in the production, transportation, and distribution of material goods. Increasingly, however, employees create, manage, and disseminate information. Like material goods of the industrial age, information is now one of the most important commodities in the global economy. In addition globalization and technological advancements have defined a global economy that commoditise information, has blurred boarders and have fundamentally changed the way we communicate, sell and buy.

The Information Economy begins with a historical survey of examining the shifts from the industrial and post-industrial eras to the “information revolution” and the successes and challenges created by the shift to the information economy. Among the factors which have enhanced the growth of information economy are global trends, regional expenditures on information and communication technology, and the development of electronic commerce. Information Economy is characterized by an economy largely based on information (Information Revolution) such as:

1. Convergence and integration of communication and data processing and technologies into information Technology (IT).
2. Pervasive influence of IT on economic activity such that the most workers are information workers and most products are information products.
3. Application of IT networks throughout the economic institutions, organizations, and process resulting in a very high degree flexibility, weakening of regulatory control, and acceleration of globalization.

Although the information economy has benefited many individuals and corporations
around the world, new problems and challenges have emerged such as the unequal balance between the technology “haves” and “have-nots” leading to marginalization. On the other hand, many who were formerly on the sociocultural, political, and economic margins of various global societies and regions have emerged as leaders of the information economy. Through communication technology, particularly the Internet and one of its most utilized service, the World Wide Web, the information economy has afforded opportunities for technically astute individuals to become “paper” millionaires through hi-tech start-up
ventures.

The primary technology that acts as the vehicle for the information economy is the Internet which has transformed the way the world communicates. While the Internet is certainly still a very important communicative medium for non- governmental organizations and for millions of people worldwide, through the years the Internet has transformed into the hub of commercial activity that grounds the information economy.

The following link can be of much help in understanding this rise of the Information Economy.

Reference for further reading.

1. Shapiro C. and Varian H. R. (1998). Information Rules: A Strategic Guide to the Network Economy. 352 pp. Cambridge, MA: Harvard Business School Press. [This provides background knowledge on how economic systems work and case studies of experiences in the current information economy.]
2. Jones B. (1996). Sleepers, Wake! Technology and the Future of Work. 4th edition, Oxford: Oxford University Press.
3. Doz Y. L., Santos J. and Williamson P. (2001). From Global to International: How Companies Win the Knowledge Economy. Cambridge, MA: Harvard University Press. [This analyses globalization and its impact on the information economy.]
4. Charles C. A. with Furar L. E. and Aberthal L. M., eds. (1998). Building the Global Information Economy: A Road map from the Global Information Infrastructure Commission. Washington, DC: Centre for Strategic and International Studies.