The New Economy. What does it mean? Online shopping? The mania for get-rich-quick dot.com shares? Yes - but the New Economy is much more than that.

The best way to grasp how far the New Economy goes beyond these crazes is to look at some very old economy examples. Like the railways.

The building of the rail network a century and a half ago generated a similar stockmarket mania and gushing prose about the death of distance. But when the froth cleared, rail had made mass urbanisation possible, because food could be transported into cities over much longer distances.

Railways led to the standardisation of time between different towns. And from clock-time followed clocking in, the assembly line and in the end mass production.

The New Economy will have just as immense an impact. It is not only about easier shopping. Not about doing the things we do already faster or cheaper. It will bring about far-reaching changes that could be literally life-enhancing and will reshape our societies.

For example, the potential of the biotechnology industry has been transformed by information technology and the Internet. Biological engineering dates back to neolithic times; but soon we will have mapped the complete human genetic code. This would not have been possible without massive computer power, and without today's ease of communication between different research centres.

We cannot begin to predict the medical consequences of modern biotechnology and gene therapy. They are as far beyond the reach of our imaginations as cheap antibiotics, or other fruits of technology like cheap electric light in every home, lay beyond the dreams of 19th century futurologists.

The Internet has also made globalisation happen. It means it is genuinely possible for companies to operate anywhere in the world. For the first time we can think of almost everywhere on this planet as linked.

It's fashionable to look only at the dark side of globalisation and claim it is nothing more than exploitation. Some campaigners argue that multinationals destroy jobs at home and mistreat their workers abroad. They paint trade and investment as pure evils.

This is dangerous nonsense. In reality we have an unprecedented chance for poor countries to share in economic progress. Technology makes it possible to link them to the world economy as never before, and make sure they too can prosper.

That means they have to grow through trade, through investment from abroad. The future is not at all predetermined. It's up to us to grab these opportunities, not block them. Still, the New Economy is inescapably global.

Whatever happens, it will be breathtakingly fast. It took radio 37 years to reach a global audience of 50 million, and TV 15 years. It took the world wide web just three years after the commercial development of the web browser in 1994. There were only 300,000 computers linked to the precursor Internet in 1990. it is approaching 100 million, and the volume of Internet traffic is doubling every hundred days.

Worldwide, total computer power has been growing at a rate of 35 per cent a year throughout my lifetime, compared to the 5 per cent a year growth delivered by steam engines and their successor electric engines in any comparable period between 1869 and 1939.

We have never seen anything on this scale before.

Big changes - and they don't come any bigger - always create losers as well as winners. The ugly greed on show on the stockmarket and the increase in inequality in recent years are reminders that the New Economy isn't entirely benign.

Nor is it a miracle cure for all economic problems. It hasn't abolished the danger of boom and bust. It doesn?t mean interest rates never have to rise because inflation is low. It won?t prevent the stockmarket from ever crashing.

But after all, what was so great about the Old Economy? The fact remains that this is the best opportunity we will have in our lifetimes to improve the living standards of all.

To ignore the New Economy, or to reject it, is to miss the chance to shape it. That would be a pity, because it is certainly going to reshape all our lives.

Copyright Diane Coyle, 2000.