Old economy is actually the traditional company/industry that running businesses physically before the dot.com era. These old economy industry did not involve much in the investment which means that they seldom offer new investment potential for a company’s cash. The digital economy nowadays is using the latest technology to work together in their company/industry.
On the other hand, old-economy stocks tend to be valued, based on are more stable business models and less robust growth expectations, resulting in less variance of analyst expectations and more accurate earnings estimates.
Digital Economy refers to an economy that is based on digital technologies. The digital economy is also sometimes called the Internet Economy, the New Economy, or Web Economy. Increasingly, the “digital economy” is intertwined with the traditional economy making a clear delineation harder.
It is widely accepted that the growth of the digital economy has widespread impact on the whole economy. Various attempts at categorising the size of the impact on traditional sectors have been made. The Boston Consulting Group discussed “four waves of change sweeping over consumer goods and retail”, for instance. Deloitte ranked six industry sectors as having a “short fuse” and to experience a “big bang” as a result of the digital economy. Telstra, a leading Australian telecommunications provider, describes how competition will become more global and more intense as a result of the digital economy.
Given its expected broad impact, traditional firms are actively assessing how to respond to the changes brought about by the digital economy. For corporations, timing of their response is of the essence. Banks are trying to innovate and use digital tools to improve their traditional business. Governments are investing in infrastructure. The Australian National Broadband Network, for instance, aims to provide a 1 GB/sec download speed fibre based broadband to 93% of the population over ten years.