Information technology has revolutionized the economic system of the United States, and it is believed the U.S. economy is now in a long-term, high-growth phase in which growth is being led by rising productivity.

Of course, there is plenty of skepticism about the “New Economy” theory.

Some economists point to the lack of a clear statistical relationship between the advance of IT and changes in industrial productivity, while others warn that the IT boom in the U.S. is merely a bubble phenomenon as illustrated by the recent slump in Internet-related stocks. Nevertheless, it is undeniable that the longest- enduring growth in the postwar U.S. economy has been supported by the IT revolution.

Then how, specifically, is IT changing economic systems?

On a corporate level, the IT revolution is believed to have greatly affected companies’ organizational structures and decision-making processes. For example, a number of U.S. firms have introduced the Enterprise Resource Planning system, in which information on direct operating functions — like procurement, manufacturing and inventory control — and support functions — such as finance and management — are processed in an integrated manner.

These kinds of systems allow each corporate division to mutually share information, and employers must realize that changing to a flat corporate structure with a minimal decision-making hierarchy will be more efficient.

A research project conducted by a team at the Massachusetts Institute of Technology suggests that productivity rises in proportion to IT investment only among companies that have carried out such organizational reforms.

The IT revolution has also tremendously impacted business-to-business transactions.

The Big Three automakers have introduced an Internet-based parts procurement system called ANX, through which component suppliers are shared. Such a system — dubbed Supply Chain Management — is not unique to the automotive industry. In distribution, Net grocers like Peapod have allied with supermarket chains to take online orders for home delivery.

In short, the IT revolution is a movement to deconstruct the traditional value chain of commodity distribution — consumers, retailers, wholesalers — and build a new one.

Microlevel structural changes of that kind are believed to be developing the foundation of the New Economy in the U.S. A key factor is flexibility. ERP and SCM systems are efficient tools for utilizing management resources like employees and funds. To make full use of these systems, an environment must be secured for a smooth allocation of resources within a company or between companies.

As part of supply-side structural reforms aimed at revitalizing Japanese industries, the government has moved to deregulate procedures that govern corporate spinoffs and transferals of business licenses. But a more drastic reform of the corporate legal system is needed to prepare the nation for the IT revolution. Furthermore, reforms to labor systems, such as activating the labor market and ensuring the portability of pensions, will be essential to enhance job mobility, an issue that will bubble to the surface as businesses attempt to reallocate their human resources.