Personal Finance
A prosperous new century
December 28, 1999: 6:32 a.m. ET

Flourishing economy, unparalleled technological advances seen in 2000s
By Staff Writer Nicole Jacoby
graphic graphic
NEW YORK (CNNfn) - Refrigerators that take milk orders, cell phones that penetrate even the most remote of countries, and a flourishing world economy.
    Sometimes utopian, often farfetched, predictions about the 21st century run the gamut. But if there's one thing analysts, economists and stock market strategists seem to agree on, it's that the future looks bright.
    "We are really entering somewhat of a golden age here,” said Maureen Allyn, chief economist at Scudder Kemper Investments.

    Driving that positive outlook are technological advances that rival -- if not exceed -- leaps made during the industrial revolution.
The invisible hand of technology

    Undoubtedly, one of the most significant technological shifts of the 21st century will be the disappearance of the Internet.
    That's right. After years of being touted as the next big thing, the World Wide Web is set to become history in the new millennium.
    "Right now, the biggest barrier to the Internet is the Internet itself," said Scott Alexander, senior online editor for Yahoo! Internet Life. "It can be intimidating. You need to know a lot to get onto the Web. But all that is going to change... eventually you won't even think of it as the Internet anymore.”
    Technologies of earlier decades have gone through similar transformations. Like the Internet, motor technology was first embraced by avid hobbyists who liked to tinker and enjoyed coming up with new uses for the invention, such as stirring a pot or blending ingredients. 

    "They actually sold motors on their own," said Alexander. But "eventually, you had these devices that had motors in them and you sort of forgot they were there."
    Similarly, the Internet enthusiasts of this generation are destined to forget that the appliances of the future -- refrigerators that take milk orders when the last carton sours and portable music players that download the latest top 40 hits as they are released -- are actually connected to what we know today as the World Wide Web.  
More boom than bust

    It's these types of innovations -- along with flat panel displays, nanotechnology and genetic engineering -- that some economists believe will drive one of the biggest boom periods in history.
    "I really do believe this technological revolution qualifies as a big one that is going to have a long-lasting impact," said Scudder Kemper Investments’ Allyn.
    In addition to "virtually no inflation whatsoever for a very long time," Allyn anticipates an unprecedented jump in productivity and a "huge rise in living standards" across the globe.
    And others in the field tend to agree.
    "This is not a cyclical boom,” said Delos Smith, economist and senior business analyst for the nonprofit Conference Board. "This is a special time that does not happen very often... and the macroeconomic numbers do look gorgeous.”
Power to the individual

    Perhaps one of the brightest trends of the 21st century is the one toward individual empowerment. Consumers, investors and employees all promise to benefit from technological advances that simultaneously bolster choice and simplify lives.
    In a world where almost any type of information is instantly available, and costly middlemen play no role, the average Joe is set to come out ahead.
    "Customers are becoming much more creative and much more powerful,” said Chris Selland, vice president of Internet computing at the Boston-based technology consulting form Yankee Group. "It doesn’t matter what industry we’re talking about. Companies now have to figure out what a customer wants and figure out how to deliver it (rather than the other way around.)”
    The same holds true for the financial arena.
    "The tools and the knowledge that the average investor has in even two years will look like what the seasoned professional has today,” said Matt Andresen, president of the electronic exchange Island ECN.  "...And the cost will be so much lower that access to markets will increase.”
    But whether these perks will trickle down to the less fortunate both in and outside the United States remains to be seen.
The great equalizer?

    Some enthusiasts believe technology will be the great equalizer, narrowing once and for all the gap between the haves and the have-nots.
    "This is an opportunity for some of the developing nations to really leapfrog,” said Alexander. "It just depends how the government treats it.”
    Countries currently lacking proper telecommunications infrastructures, for instance, may skip landlines altogether and set up satellite transponders instead. Alexander envisions a world in which African farmers use wireless technology to access weather data, order seeds and bid on livestock.
    But others are less optimistic.
    "There will definitely be parts of society that are left out,” said Smith.
A society in transition

    And no matter how rosy a future the experts paint, there are bound to be bumps on the road to prosperity.
    "The price we have to pay for all this is someplace," said Allyn. "Early in the century, we're going to see a real good old-fashioned panic of the kind we haven't seen in a long time." That hysteria, she believes, will be the natural fallout from years of debt accumulation.

    The human price may be even more costly. While the individual is sure to gain from the anticipated technological changes, adjusting to new realities may add new pressures.
    As the world becomes increasingly competitive, workers will have to learn new skills to keep apace with new technologies and deal with bigger workloads as they become more "efficient.”
    They may also have to live with the fact that colleagues they once considered average are better off than they ever will be.
    "Right now, we have a huge difference between rich and poor. But that’s fairly typical of a time when you have huge change. The people who adapt quickly get a disproportionate amount of the early returns,” said Allyn.
    That windfall should become more widespread as the current transformation reaches its culmination in the next millennium. As information becomes more readily available and barriers to entry come down, more people will have the opportunity to succeed in the open marketplace -- be it in commerce, financial services or the media.
    "More doors will be open to people, but that also means competition will get much greater,” Selland said. "People who win will really win. It’s the rising tide that lifts all boats, but some boats will go much higher than others.”
Emerging monopolies

    Perhaps one of the most ironic developments of the 21st century will be the re-emergence of the monopoly.
    As consumers become more demanding and reduced barriers of entry create fierce new competition, companies will feel pressure to stay afloat. Mergers are likely to result in a wide array of industries, as innovation and economies of scale become important catalysts for success.

    "You already see this happening in the financial sector,” said CyBerCorp chief executive and founder Philip Berber. Technology "is lifting the veil of secrecy under which traditional players have been operating for centuries and none of them want to be left at the altar.”
    Marriages in other sectors are sure to follow, especially where standardization benefits the consumer.
    "Microsoft isn’t forcing products down people’s throats,” said Selland. "They are successful in part because customers like standardization.”
    But consolidation won’t necessarily translate into less choice for consumers, as niche markets are expected to exist alongside dominant exchanges.
    "There will always be people who want to pay for something different,” said Selland, be it high-end sports cars, strawberry-colored computers or pralines from Switzerland. Back to top


Track your stocks

Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney