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The New Economy in Germany and the United States: Policy Challenges and Solutions

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Author Info

  • David Audretsch

    (AICGS New Economy Study Group - American Institute for Contemporary German Studies, The Johns Hopkins University)

  • Matthias Bank

    (AICGS New Economy Study Group - American Institute for Contemporary German Studies, The Johns Hopkins University)

  • Martin Carree

    (AICGS New Economy Study Group - American Institute for Contemporary German Studies, The Johns Hopkins University)

  • Marcus Dejardin

    (AICGS New Economy Study Group - American Institute for Contemporary German Studies, The Johns Hopkins University)

  • Julie Elston

    (AICGS New Economy Study Group - American Institute for Contemporary German Studies, The Johns Hopkins University)

  • Harmut Fest

    (AICGS New Economy Study Group - American Institute for Contemporary German Studies, The Johns Hopkins University)

  • Andre Jungmittag

    (AICGS New Economy Study Group - American Institute for Contemporary German Studies, The Johns Hopkins University)

  • Georg Licht

    (AICGS New Economy Study Group - American Institute for Contemporary German Studies, The Johns Hopkins University)

  • Gerald Mcdermott

    (AICGS New Economy Study Group - American Institute for Contemporary German Studies, The Johns Hopkins University)

  • Margaret Polski

    (AICGS New Economy Study Group - American Institute for Contemporary German Studies, The Johns Hopkins University)

  • Scott Shane

    (AICGS New Economy Study Group - American Institute for Contemporary German Studies, The Johns Hopkins University)

  • Paul Welfens

    (AICGS New Economy Study Group - American Institute for Contemporary German Studies, The Johns Hopkins University)

  • Juergen Weigand

    (AICGS New Economy Study Group - American Institute for Contemporary German Studies, The Johns Hopkins University)

  • Charles Wessner

    (AICGS New Economy Study Group - American Institute for Contemporary German Studies, The Johns Hopkins University)

Abstract

The American Institute of Contemporary German Studies (AICGS) assembled a group of researchers and policy makers in Germany and the United States to identify research and policy issues posed by the transformation we have come to call the new economy. This paper, which is the product of their collaboration, focuses on three issues. The first relates to defining what exactly constitutes the New Economy. The second issue involves identifying the forces driving the expansion of the New Economy. The third issue pertains to research and policy questions posed by the New Economy. In addressing these issues, the authors generate several key findings. While a common myth is that the Internet and e-commerce constitute the New Economy, we suggest that what is new about the New Economy involves the shift to knowledge and ideas as the source of competitive advantage. There are at least four central aspects that, when taken together, constitute what we mean by the New Economy--(1) globalization, (2) the shift to knowledge and ideas as the source of competitive advantage, (3) the increased importance of regional agglomerations and clusters, and (4) the emergence of entrepreneurship as an engine of growth and development. The forces facilitating the expansion of the New Economy are technological change, especially ICT, but also institutional change, such as reforms in the financial sector. New government policies are required in the New Economy. They enable the creation and commercialization of knowledge. While this study is able to identify the importance that New Economy plays in Germany and the United States, it raises many more questions than it answers. In particular, this study argues for a research agenda that explicitly compares both the similarities and differences that shifting to a New Economy has impacted Germany and the United States, and which types of policies have proven to be the most effective in generating and coping with the New Economy.

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Bibliographic Info

Paper provided by HAL in its series Working Papers with number halshs-00721657.

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Date of creation: 2002
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Handle: RePEc:hal:wpaper:halshs-00721657

Note: View the original document on HAL open archive server: http://halshs.archives-ouvertes.fr/halshs-00721657
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Related research

Keywords: Germany; United States; New Economy; Globalization; Knowledge Economy; Clusters; Entrepreneurship; ICT; Public Policy;

References

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  1. Marcus DEJARDIN, 2001. "Entrepreneurship and Economic Growth: An Obvious Conjunction?," Development and Comp Systems 0110010, EconWPA.
  2. Audretsch, David B, 1998. "Agglomeration and the Location of Innovative Activity," CEPR Discussion Papers 1974, C.E.P.R. Discussion Papers.
  3. Jaffe, Adam B & Trajtenberg, Manuel & Henderson, Rebecca, 1993. "Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations," The Quarterly Journal of Economics, MIT Press, vol. 108(3), pages 577-98, August.
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  7. Ellison, G. & Glaeser, E.L., 1994. "Geographic Concentration in U.S. Manufacturing Industries: A Dartboard Approach," Working papers 94-27, Massachusetts Institute of Technology (MIT), Department of Economics.
  8. Dale W. Jorgenson & Kevin J. Stiroh, 2000. "Raising the Speed Limit: US Economic Growth in the Information Age," OECD Economics Department Working Papers 261, OECD Publishing.
  9. N. Berger, Allen & F. Udell, Gregory, 1998. "The economics of small business finance: The roles of private equity and debt markets in the financial growth cycle," Journal of Banking & Finance, Elsevier, vol. 22(6-8), pages 613-673, August.
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  12. Cohen, Wesley M & Levinthal, Daniel A, 1989. "Innovation and Learning: The Two Faces of R&D," Economic Journal, Royal Economic Society, vol. 99(397), pages 569-96, September.
  13. Robert J. Gordon, 2000. "Does the "New Economy" Measure Up to the Great Inventions of the Past?," Journal of Economic Perspectives, American Economic Association, vol. 14(4), pages 49-74, Fall.
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  15. Klepper, Steven, 1996. "Entry, Exit, Growth, and Innovation over the Product Life Cycle," American Economic Review, American Economic Association, vol. 86(3), pages 562-83, June.
  16. David B. Audretsch, 1995. "Innovation and Industry Evolution," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262011468, December.
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