NCPA - National Center for Policy Analysis

Some Countries Thrive, Some Lag In New Economy Era

June 23, 2000

The Organization for Economic Cooperation and Development has prepared a preliminary report on the question of why some countries have moved rapidly into the New Economy while others have not made the most of new technologies.

The report credits deregulation and enhanced competition for the strides made by the U.S., Australia, Denmark, Ireland, Finland and Norway. It also compares the rates at which some countries added Internet hosts -- computers on which Internet-accessible data are stored.

  • Between September 1999 and March 2000, the U.S. added 25.1 Internet hosts per 1,000 inhabitants.
  • By contrast, the United Kingdom added 5.5, Japan 4.1, Germany 3.0 and France 2.7.

The differences are important because the Internet fosters innovation in virtually every area of human endeavor and in a number of different ways -- for example:

  • By helping to breakdown so-called "natural monopolies" in telecommunications, thereby fostering regulatory reform and competition, and encouraging investments in innovation.
  • By fostering greater networking and cooperation among companies, it quickens the pace at which knowledge and ideas are spread.
  • And by helping make science more efficient and more closely linked to business.

As one indication of the productivity of innovators, the OECD cites the fact that patents granted in the U.S. in the late 1990s grew by 12.5 percent a year -- up from 3.3 percent in the preceding 15 years.

Source: David Wessell, "Arrival of New Economy Is Often Slow," Wall Street Journal, June 21, 2000.


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