Is The New Economy Socially Sustainable?

by Manuel Castells, Professor of Sociology, University of California at Berkeley, USA.

At the turn of the millennium, the revolution in information technology has ushered in a new economy. This economy, originated in the United States, and more specifically in the American West Coast, is spreading throughout the world, in an uneven, yet dynamic pattern. It is essentially characterized by the key role of knowledge and information in spurring productivity and enhancing competitiveness; by its global reach; and by its networked form of business organization. Well managed, this new economy may yield an extraordinary harvest of human creativity and social well being. However, several major contradictions threaten the stability of this new economy: the volatility of global financial markets; the institutional rigidity of business, legislation, and governments in many countries; increasing social inequality and social exclusion throughout the world, limiting market expansion and triggering social tensions; and the growing opposition to globalization without representation on behalf of alternative values, and legitimate concerns on the environmental and social costs of this model of growth. Information technology offers great potential in helping to supersede these contradictions at the dawn of an emerging socio-economic system. But the speed of technological innovation requires the parallel development of institutional and cultural innovation, away from bureaucracy but closer to people, to ensure the sustainability of the new economy, and to spur the new wave of technological creativity.