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The New Economy
The past decade has brought about a revolution in the world of business and the way in which
organizations, old and new, must operate. Accelerating changes in technology and the explosion in the
use of the Internet have led to the establishment of a "new economy," characterized by e-commerce,
virtual teams and a global marketplace. 'Emerging growth' technology companies, focusing on new
developments in wireless telecommunications, networking technology, media streaming, and
business-to-business Internet services, are continually 'pushing the envelope', opening opportunities
for new ventures and forcing traditional companies to adapt.
There have been dramatic increases in the speed of change and the demand for response. As a
result of "Internet time," or "web speed," changes that once took years now routinely occur in a matter
of months. Rapid technical change has put increased emphasis on the need for individuals and
companies to 'learn to learn', in order to keep up with new developments.
There is also an increased demand for companies and individuals to innovate in order to adapt to
change in the globally extended business environment, and stay ahead of competition. The metaphor of
the Internet--that success is achieved through connectivity--has lead to an emphasis on relationship
building and alliances; calling for the ability to create effective 'win-win' partnerships. Companies are
relying more and more on strategic alliances and "outsourcing" to conduct key aspects of their
business. As a result, the boundaries between synergistic companies have become more flexible,
leading to the notion of the 'extended organization'.
The Silicon Valley Phenomenon
Perhaps no area characterizes the developments associated with the new economy more than the
Silicon Valley in San Francisco's Bay Area. In addition to the well-known industry leaders that were
established there--such as Cisco Systems, Intel, Hewlett Packard, Apple Computer, Sun
Microsystems and Oracle--thousands of smaller companies have prospered in its unique business
culture. Stories of the spectacular success of Silicon Valley start-ups have made headlines around the
world, sending other countries scrambling to replicate the Silicon Valley phenomenon in their own
homelands.
Innovations in business models, business practices and organizational structure in Silicon Valley
have created a business context which has been able to sustain an unprecedented period of relative
growth and prosperity. The Silicon Valley culture is optimistic, possibility focused and oriented
toward the future. It is also one that embraces diversity, of all types. Silicon Valley companies are
highly customer-oriented and quick to adjust, taking a "hands on" approach and emphasizing the
"bottom line." They are primarily focused on creating value, not only through technology
developments, but also by establishing and leveraging relationships and alliances. Innovative
investment strategies (characterized by the emergence of the "angel" investor) have created a climate
that is highly incentivized. People are willing to take greater risks because the potential rewards are
tremendous.
This culture has encouraged an explosion of start-up companies, which while inherently "risky,"
also have many benefits. In addition to possibilities of a big payoff, start-ups offer dynamic
opportunities and a diversity of activities--people get to wear "different hats." Start-ups have a more
casual culture than traditional organizations, which is less restrictive, less stratified, and emphasizes
ideas more than position or authority. There is generally a high degree of mutual respect between team
members, regardless of their roles; and they have greater responsibility, autonomy and ownership
(everyone has a "chunk" of the company). This leads to a greater sense of self-fulfillment and
achievement (proving yourself to yourself and others), and of having personal impact (i.e., What you
are doing makes a difference).
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