Information economy is an economy with an increased emphasis on informational activities and information industry, where information is valued as a capital good.^[1] The term was coined by Marc Porat, a graduate student at Stanford University, who would later co-found General Magic.^[2]

Manuel Castells states that information economy is not mutually exclusive with manufacturing economy.^[3] He finds that some countries such as Germany and Japan exhibit the informatization of manufacturing processes. In a typical conceptualization, however, information economy is considered a "stage" or "phase" of an economy, coming after stages of hunting, agriculture, and manufacturing. This conceptualization can be widely observed regarding information society, a closely related but wider concept.

There are numerous characterizations of the transformations some economies have undergone. Service economy, high-tech economy, late-capitalism, post-Fordism, and global economy are among the most frequently used terms, having some overlaps and contradictions among themselves. Closer terms to information economy would include knowledge economy.

Knowledge workers

In The Effective Executive by Peter Drucker, Drucker describes the manual worker (page 2) who works with his hands and produces "stuff". The knowledge worker (page 3) works with his head and produces ideas, knowledge, and information.^[4]