Internet Promises

Article excerpt

The prospect of a new economy has been one of the great opinion generators of the times. Optimists, according to Robert E. Litan and Alice M. Rivlin's Brookings Institution conference report The Economy and the Internet: What Lies Ahead, are of the opinion that the Internet will enhance productivity and generate more prosperity. Pessimists doubt it will have any fundamental effect on the economy.

The papers Litan and Rivlin summarize are generally of the optimistic persuasion. Patricia Danzon and Michael Furukawa, for example, see large, Internet-driven cost savings in transactions processing, particularly in the healthcare sector, and Jane Fountain notes the vast potential savings for disseminating Government information on-line. Charles Fine and Daniel Raff not only find significant potential cost savings, but suggest that cars may one day be purchased much like the "Dell model" in computers: "... customers specify exactly what features they want and buy a product that is built to suit their tastes."

Litan and Rivlin also note that "in the longer run, the increasing transparency of prices and the widening reach of markets provided by the Internet [are] likely to be a continuing global force for greater efficiency," but that such efficiencies might show up more as a larger range of choices offered consumers and greater convenience in shopping for one's choice. …