Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Old Economy

What it is:

Old Economy describes an economy or even a group of industries that does not rely on technology or technological advancement.
 

How it works (Example):

For example, horse farms, bread baking, landscaping and prostitution are old economy industries. Their fundamental processes have remained essentially the same for hundreds of years. To be sure, technology has assisted in the communication and equipment development in these industries, but the primary activities involved are largely the same as they were a hundred years ago.

In financial markets, Old Economy sometimes refers to stodgy blue chip companies.

Why it Matters:

The New Economy is slowly replacing the Old Economy, but as our example shows, many Old Economy industries will endure and have little dependence on technology's whims. Having said that, it is often much hipper to be part of the New Economy.