It all tells us a good deal about the new economy

It all tells us a good deal about the “new economy”.
The life-cycle of the corporation, it seems, has been speeded up. When we look at the history of that great engine of economic growth in the last century, the car industry, we see how long it took for the hundreds of car-makers of the early 1900s to consolidate into the handful of transnational behemoths – such as DaimlerChrysler and Ford – of today.But what took decades in that industry is being played out at a fast-forward speed of months in the powerhouse of the early 21st century’s economy. Boo may have gone the way of all business flesh, but it proves nothing about the future of e-commerce, just as the demise of De Dion-Bouton or Studebaker did not signal the end of the motor industry. Web firms are still bullishly hiring staff and raising venture capital enthusiastically. The loss of Boo will not stop e-tailing growing about sixfold to about £100bn in transaction value by 2003.And, while the neophytes fight it out at the bottom, we can already see that global giants are emerging. The recent merger of Time Warner and AOL is the clearest demonstration of how the most adaptable of “old” economy firms can benefit and ally themselves with the new.

The Prudential’s egg online banking subsidiary, Dixons’ Freeserve and Tesco’s expertise in online shopping also show that old-fashioned managerial, financial, and warehousing skills – in short supply at Boo – are handy in the new world.Both egg and Freeserve may well be floated off, and there will be no shortage of investors willing to back these and more risky new ventures, undeterred even by the rapid “burn” rate of capital – Boo got through £90m in just over a year. And the productivity revolution brought by the web will continue, too. Just as so many firms bought a Ford van or lorry to improve their productivity, that old-timer the Ford Motor Company now leads the way in exploiting the web – to source components and suppliers, and to cut costs, all contributing to record profits. As we say goodbye to Boo , we can say hello to a much more variegated new economy.. What is it about football that brings out the prehistoric economics in us? Last year Sir Alex Ferguson, the very model of a modern New Labour business person, called for a cap on the salaries of professional footballers.

Now a committee of MPs has urged a quota on the number of footballers who can be imported. What are Derek Foster and his fellow dinosaurs worried about? That these flashy foreign imports will stifle our home-grown talent? Not a chance. What is it about football that brings out the prehistoric economics in us? Last year Sir Alex Ferguson, the very model of a modern New Labour business person, called for a cap on the salaries of professional footballers. Now a committee of MPs has urged a quota on the number of footballers who can be imported. What are Derek Foster and his fellow dinosaurs worried about? That these flashy foreign imports will stifle our home-grown talent? Not a chance.
Manchester United, the most successful team in Europe, have mined a rich seam of young British players, some of whom even come from Manchester. Indeed, we are currently witnessing something of a flowering of young British talent: Joe Cole, Michael Owen and Francis Jeffers, to name but three.