Old Economy and New Economy – JSS3 Computer Studies Lesson Note (First Term)

The old economy is the business system of the pre-technological period, while the new economy is the digital, technology-driven and knowledge-based business system of today.

Behavioural objectives

By the end of the lesson, students should be able to:

1. define the old economy and the new economy;
2. state the features of the old economy and the new economy;
3. explain the limitations of the old economy;
4. state the benefits of the new economy;
5. differentiate between the old economy and the new economy.

What is an economy?

An economy is the system by which people produce, sell, buy and use goods and services.

• Goods: things we can touch, such as rice, shoes and phones.
• Services: work done for others, such as teaching, banking and transport.
• Business transaction: an exchange of goods or services for money.
• Technology: tools and machines, especially computers and the internet, used to do work faster and better.

What is the old economy?

The old economy is the business or economic system of the pre-technological period, before computers and the internet were widely used.

What are the features of the old economy?

• Time consuming: tasks such as posting letters or counting money by hand took a long time.
• Labour-based: most work was done by human effort.
• Mechanical: work used simple machines, not computers.
• Constrained by distance: buyer and seller had to be in the same place.
• Constrained by space: business needed a physical place such as a shop, market or office.
• Constrained by time: business took place only during opening hours.

What are the limitations of the old economy?

• Technology: there was minimal use of technology in the old economy.
• Distance: it depended on physical contact, so transactions could not take place if there was a distance barrier.
• Space: it needed physical space, such as marketplaces and offices, before transactions could take place.
• Time: time decided when transactions took place. Nobody could trade when the market was closed.

What are examples of the old economy in Nigeria?

• Market trading: buyers walk to the market stall to see and pay for goods.
• Bank counter: customers queue inside the bank to deposit or withdraw cash.
• Letters: messages sent by post take days or weeks to arrive.
• Paper records: traders keep accounts in exercise books and ledgers.

What is the new economy?

The new economy is the business system based on digital technology, the internet and knowledge, in which work is not limited by time, space or distance.

• Key idea: information and skills, more than physical labour, create wealth.
• Globalisation: the linking of businesses and people across the world, which digital technology makes easier.

What are the features of the new economy?

• Digital: information is stored and sent as electronic data.
• No limits: there is no limitation due to time, space and distance.
• Continuous research: businesses keep studying and improving products and methods.
• Technology-driven: computers, phones and the internet run most activities.
• Knowledge-based: skills and information are the main resources.

What are the benefits of the new economy?

• Low capital: a business can start and operate with little money, for example selling through social media.
• Time efficiency: orders, payments and messages are completed in minutes.
• Job creation: new jobs appear, such as web designer, app developer and online marketer.
• Globalisation: a seller in Nigeria can reach buyers in other countries.
• Wider knowledge: people learn quickly from online sources.

What are examples of the new economy in Nigeria?

• Online shopping: buying goods through websites and apps, such as Jumia.
• Mobile and internet banking: transferring money with a phone at any hour.
• POS payments: paying by card instead of cash.
• E-mail and messaging: sending documents instantly.
• Online learning: taking lessons through video and websites.

What are the challenges of the new economy?

• Cybercrime: fraud and hacking can steal money and information.
• Power and network: it needs steady electricity and internet access.
• Skills gap: people without digital skills may be left out.
• Job loss: some manual jobs are replaced by machines and software.

What is the difference between the old and new economy?

• Old economy: a labour-based, mechanical system that depends on physical contact.
• New economy: a digital, knowledge-based system that works through technology.

Evaluation

1. What is the old economy?
2. State four features of the old economy.
3. Explain how distance and time limited business in the old economy.
4. State four benefits of the new economy.
5. Give three differences between the old economy and the new economy.

Assignment

Define the new economy, list four of its features, and explain the limitation of space in the old economy.