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03rd January Daily Important Editorial Discussion
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03rd January Daily Important Editorial Discussion (Disruption, Concentration, and the New Economy)

Prabhakar Jha
GS And GA faculty @ Mahendra's Coaching Institute. Teaching Polity, and international relations for 7 years

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  1. unacademy o3rd January 2019 Important Editorial Discussion(Disruption, Concentration, and the New Economy) Presented By: Prabhakar Jha

  2. What is the New Economy? The new economy is a buzzword describing new, high-growth industries that are on the cutting edge of technology and are the driving force of economic growth. Changing Structure of Markets The growing dominance of leading technology firms has occasioned an intense debate about the trade-offs between efficiency and market power (i.e more efficient tech companies gather more market power thereby giving rise to monopolistic trends), while raising questions about what the changing structure of markets will mean for innovation and the distribution of wealth in the future. At the same time, exit rates within many industries have remained relatively flat despite an increase in productivity dispersion. In other words, weaker producers aren't being knocked out of the market, implying a lack of dynamism in many sectors of the economy

  3. What is Market Disruption Firms are gaining market share by becoming more efficient, and not simply by snatching up other firms while antitrust authorities stand aside. . Another development is the growing importance of "intangibles" such as software and intellectual property which researchers suggest could be driving an increase in market concentration. Innovation is driven largely by competition Market disruption (involving big-tech) is slowing down investment, research and development, or the diffusion of innovation from superstar firms . In addition to stifling competition, this practice (of concentrating market power and the capacity to innovate, in the hands of a few big tech companies) is also discouraging financing by venture capitalists