Castells’ Information Society and New Economy

When it comes to ways of communication and share of information, the ferocious discussions of what are new technologies’ capacities, and where the society heading, go on. People constantly ask how to make sense of the new world. Manuel Castells is one of the masters in formulating the technological-sociological debates. To discuss new information technology, one should be careful not to fall into technology determinism. In that sense, Castells said that the information technology revolution did not create the network society but without information technology, the network society would not exist. Network society is a society with new conception of space and time, overcoming the barrier of geography that people can be connected in new ways—instant messaging and the booming of social networking sites. Castells’ term: culture of real virtuality captures the network society’s structure, which is constructed in inclusive, flexible, diversified hypertext that we navigate everyday. In Castells’ words, the virtuality of these hypertexts is in fact our reality, the ways we live and communicate.

Castells gave clear definition of new economy—it is an economy in which companies are working on the basis of internet and in which their organizational and innovation logic is embedded in the Internet or related information technologies. The new economy involved doing things in new ways: to innovate and to manage. In both Castell and Dyson’s articles, they emphasized that knowledge is power in new economy, or in heading the third wave of economy. Knowledge, pieces of organized and meaningful information, has capacities to change people perspectives, and to alter the nature of industry. Castells said that:

The new economy is thus based upon the growth of productivity through knowledge and innovation as well as in the ability to increase our capacity of knowledge-creation, which is directly supported by new information technologies. (p.151)

Knowledge becomes portable and applicable and knowledge becomes specific to the task and the orientation of the problem that you have to solve at every level…The capacity of distributing knowledge, learning from what you do with this knowledge and fitting it back into the system in a self-expanding process, is really an essential feature of the new economy. (p.152)

According to Castells, new economy has three features: (1) new economy is the ability to develop knowledge-based, innovation-based productivity growth. (2) new economy is connected to the fact that competitiveness operates in a global environment. (3) new economy is dependent upon a organizational form-- networking, which is the capacity to assemble resources in a very flexible, adaptable way around projects and then to do these projects.