The transition from industrial (traditional) to new (information) economy

At the end of 20th century a new economy and a new information society emerged, as a result of achieving the third and the transition to the fourth scientific and technological revolution. The basis of this new economy lies in the transition from the industrial production to the production based on information and technology. The new economy contributes to changing the character of the factors of production, the structure of the value produced the motives of production, the workers’ position (robots replacing slaves) etc. Besides labor, capital, land and entrepreneurship, information appears to be the fifth and the most important factor of production. The Internet is becoming the foundation of the new economy and contributes to changing the way people learn and do research, as well as to reducing the burden of administration, changing the way of competition, reducing operating costs crossing national borders and leading to the process of globalization of the world economy into an integral entity. Some basic characteristics of this new economy are the following: the information basis of production, rapid changes of products, flexible production systems, network organization of production, integration, services backed by products, skills and knowledge generalization, education, knowledge and talent becoming the most important factor of the socio-economic growth and development, etc. The new economy leads to a number of advantages when compared to the traditional one. However, it also has a number of negative consequences: pollution indebtedness of underdeveloped countries, widening the gap between the development level of regions, countries and individuals, growing inflation unemployment etc. But the new economy is objectively conditioned and the task of each national economy is to determine the most favorable way of its incorporation into this new economy (globalization)