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422 Pekka Himanenthe informational economy is not about the Internet but about the basic structuresof companies and labor markets, and production – developments thathave been happening for a couple of decades now. For the present analysis,there are three especially important features in the development of the informationaleconomy.First, enterprises are developing into informational enterprises (for empiricalbackground to the “network enterprise” in both the West as well as Asia,see Imai, 1990; Castells 1996, 2000a, 2001). That is, companies are organizingthemselves as networks that increasingly create products based on information(symbol) processing. All of this is done with the help of informationtechnology. Internally, the companies are decentralized into relativelyautonomous units that network together for projects. Externally, the companiescoordinate a changing network of suppliers. They also network with theircompetitors on an ad hoc basis for certain large projects. In general, projectsthat consist of a varying network of actors become an important organizingunit for companies. The growing importance of information (symbol) processingproducts means that research and development, as well as other forms ofsymbol creation (such as marketing), become increasingly important functionsin companies.Second, labor markets are becoming informational. This means thatnetwork enterprises organize their labor as ever-changing networks of workersin which the role of information (symbol) processing work grows. Basic ITskills are required in almost all jobs. The emergence of “flexible workmarkets” has been documented both in the West and in Asia (Castells, 1996,2000a, 2002; Carnoy, 2000). In a sense, work becomes more and more projectbased,whether it is information creation work defined by deadlines or routinework available for temporary periods. This is reflected in the rise of “nontraditional”jobs: more and more workers belong to the categories of the selfemployed,temporary, and part-time workers.Third, growth is based on innovation. This is a critical difference betweenthe concept of the informational economy and ideas about the “dot-com economy”or the “new economy.” The informational economy is about growthbased on innovation. It is not just about the Internet. And it is not just aboutgrowth in market value but, more importantly, about productivity growthbased on innovation. This growth derives from innovation in technology,process (the network form of organization), and products, as Castells andothers have shown (Castells, 1996, 2000a, 2002; for empirical data, seeBrynjolfsson and Hitt, 2000). The role of organizational change should beemphasized here because empirical studies show that the mere introduction ofinformation technology does not increase productivity if it is not combinedwith re-organization (ibid.).The central role of innovation as the foundation of economic growth is also