(FORTUNE Magazine) – Despite the bluster about the new economy, there's not much that's actually new. Productivity growth is no faster than in the 1960s. Inflation hasn't been tamed (look no further than Wall Street's shock over last month's consumer price index jolt). In fact, there's only one aspect of the new economy that is truly novel: the business ecology--the pattern of launching new technologies that has emerged from Silicon Valley.

Even if the current economic cycle ends in a full-blown stock market crash that makes '73-'74 look like a hiccup, much of the research and development will still be handled in this new way. New technologies will still be rapidly spun off into separate companies, engineers will still be motivated by stock options, venture capitalists will still trawl for ideas, and new technologies will still be launched in a fraction of the time it used to take. As Venture Law Group principal Tae Hea Nahm has argued, these organizational methods will still be vibrant and useful teachings in the long term even if Wall Street ceases to snap up IPOs in the short term.

It's easy to forget just how different this new business ecology is from old product-development methods. The innovators who grew up under the old system definitely remember. In Dealers of Lightning, author Michael Hiltzik recounts the troubles that John Warnock, co-founder of Adobe Systems, endured during his stint at Xerox. Rather than developing products based on Warnock's inventions at Xerox's Palo Alto Research Center, the company would put his findings "under a black shroud for ... five [years]." He got so frustrated by the process that he quit. With pro-duct development cycles measured in decades and few channels for testing new products, even a behemoth like Xerox couldn't afford to introduce many new technologies. Instead, it pitted ideas against one another internally in a bureaucratic tournament, hoping that the fittest would survive.

In fact, this is the type of strong, successful organization in which radical innovation is likely to be hobbled. When competent engineers and managers run old divisions, they often fear change and will think of good reasons why new technology won't work. And the more a company listens to its customers, the less it will be open to rabble-rousers proposing radical shifts. The very things that made Xerox a winning sales organization made it unlikely to adopt ideas like those that propelled Adobe Systems to success. Founded in 1982, Adobe Systems helped usher in the second generation of development in the Silicon Valley system: rapid prototyping, short product-development cycles, early test marketing, options-based compensation, venture funding, early corporate independence, and so forth. It did so without the help of Wall Street and a booming economic climate.

How much of this new ecology could have been developed at any time in the past half-century? The probable answer is, not much. The late-19th-century railroad would have been nearly impossible to manage without the telegraph. J.P Morgan's original investment bank was made possible because of the telephone. (Imagine all the bankers being forced to talk face to face in one room.) And the decentralized venture-startup system of today's Silicon Valley is an extraordinary user of modern technologies. The system would have been impossible before the invention of our modern data-processing and communications technologies.

Now that this model is possible, it will likely endure. The system doesn't rest on the ability to make a fortune rapidly by selling 5% of a tech company in a frenzied IPO. Even after the mania ends, Silicon Valley's system will remain because it's a better business ecology than the legendarily lugubrious model refined at Xerox Parc--a more productive set of processes for rapidly developing and commercializing new technologies. Amid all the hype is something truly new.

J. BRADFORD DELONG is a professor of economics at the University of California at Berkeley, co-editor of Journal of Economic Perspectives, and a research associate of the National Bureau of Economic Research. His e-mail address is delong@econ.berkeley.edu, and his Website is http://www.j-bradford-delong.net.