The new economy

5. THE NEW ECONOMY -

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THE FINANCIAL ECONOMY In the new economy, sales of financial products have increased (insurance, mutual funds, socks‌).

Financial capital is essential in the real economy because many companies rely on investment to carry out their economic activity.

Financial activities generate more profits than the production, distribution and consumption of goods and services.

Amongst the most iportant finantial markets are New York, London, Tokyo, Paris‌

5. THE NEW ECONOMY RENEWABLE ENERGIES - They are the alternative to oil because they will never run out.

- Types: 1. Hydroelectric energy: - It is generates by the energy produced by water faling from dams and rivers, and by tides.

2. Biomass: - The production of certain fuels (ethanol, methane gas‌) by fermenting organic matter.

3. Geothermal energy: - This uses the heat inside the Earth to produce electricity.

4. Solar energy: - Solar radiation generates electricity using photovoltaic solar panels.

- Storage systems have been invented to make t available for use night or day.

5. Wind or aeolic energy: This uses the wind to move large wind turbines producing electricity Some wind farms (parques eĂłlicos) are at sea.

5. THE NEW ECONOMY -

THE SERVICE INDUSTRY Employment in service industry continuos to grow around the world and industrial employment represents a smaller proportion of jobs.

With the fragmentaion of production processes, large factories have given way to smaller centres of production.

Many tasks associated with manufacturing a product are subcontracted to smaller companies which bring down (bajar) costs by competing amongst themselves.

As a consecuence the number of small services companies is increasing a local level, while industrial activity is concentrated in large companies.

5. THE NEW ECONOMY INNOVATION AND CREATIVITY - To be more competitive, companies in the most developed countries focus on creating innovative products whose features set them apart (se diferencian) in the market and attract customers.

- This strategy relies upon (depende de) the creativity and talent of millions of professionals.

- Charactristics of creative industries: - They give products added value (valor aĂąadido) - They help create higher-quality jobs - They tend to be geographically concentrated in certain spaces.