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While discussions were going on about the worthwhile scheme of economic development (capitalist versus socialist one) to be chosen by Ukraine (the discussions actually did not produce a clear answer for the question of where we are heading), time flow has cancelled this issue from all the countries' agenda altogether.

Emergence of information technologies has become the way out. Today, they dictate to ever increasing number of economies, corporations, individual businesses and consumers and determine what should be the way of economic interoperability on every level, what should be the main resource and value, what should be the way of formation of product's added value: So, due to the expansion of global informatization, active formation of so-called 'network economy' is underway now; and the main characteristic feature of the 'network economy' is public networking form of governance.

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Such economic scheme was once at work; however, it was pushed out by capitalistic relations, which are characterized by different, market and hierarchic forms of governance. Following the logic, the latter likely emerged as a response to inability of public (network) form of governance to provide efficient service of labor division system, when such a system began to reach out of individual community. The reasons for this were limited possibilities of then existing means of communication and systems of information exchange, necessary for normal work of public economy [12].

To generalize, it would be appropriate to mention the words of Nobel Laureate in economics Friedrich von Heiek that formation of capitalist market in the process of social revolution connected with transition from an organized small group of people being in the immediate contact with one another, to expanded economic order [13].

At the beginning of the 21^st century, social revolution, most likely, concludes yet another spin; and the modern economic system may soon find itself at a point where this 'expanded economic order' will be actually based upon the community of 'people being in the immediate contact with one another'.

These characteristics suggest, that the term 'network economy' may be replaced by the term 'public economy', or, in more contemporary terms, by the expression 'economy of direct relations, equal in rights'. The author of the term 'economy of direct equitable relations' is Philosophy Doctor Sergey Parinov, the Head of the Department in the Institute Of Economic Relations and Industrial Production Organization of the Saint Petersburg Branch of the Russian Academy of Sciences [12]. Generally, in the report, prepared by the European Commission, a global networked economy is defined as 'an environment, in which any company or individual anywhere in the developed economies can connect readily and at the marginal cost to any other company or individual for work, for trade, for the exchange of ideas and know how, or simply for the fun and pleasure' [14].

Getting back to Ukrainian reality, let us ask: perhaps, we may defer with self-definition as to network economy the same way we did with the issue of capitalist and socialist economies? Why not let things go with the flow, with the hope, that the time itself will solve everything? And we again will point out to rich and successful Europe, which has proved to look up for easier ways, too. The European Council, however, did find the reasons to support to the active position and to force the events.

'Why may we not delay? Because competitive providers of networks and services beyond Europe become more and more active in our markets. For those companies, which lag behind, the price for a slower pace of liberalization will be ruthless fight with more dynamic foreign competitors and smaller domestic market.

The time is about to be over. If we do not speed up actions, we will enjoy advantages of new economy either too late or never' [15]. The fields for competition in information age are continental economic regions and world markets. Aggression, manifested by more dynamic companies that changed in compliance with new market conditions, is increasing. In 1998, the share of external trade made up three-fold portion of world income in comparison with 1950 [16].

It is not the reason for despair, though. Countries, possessing the status of 'developed countries' today, actually are developed, however mostly in terms of the Second wave. Large-scale industrial economy has rooted into their order too deeply. And today, positions of all highly developed countries shook because of collision of the Third Wave with out-dated economic institutions of the Second Wave. Tension between the Third Wave civilization and the two earlier civilizations will grow further. The new civilization will struggle for global hegemony the same way modernizers of the Second Wave did [6]. Will Ukraine be the one from the ranks of modernizers? Or because of inactivity and insecurity of its own choice and requirements it will again become a colony, an object of influence of more successful powers?

It is the conscious choice, which will call forth appropriate state policy in the field of education and science, first of all, is the guarantee of Ukraine's inclusion into avant-garde of the Third Wave. These are by no means enormous expenses for new technologies or forced marches to increase the budget.

Because it is neither computerization, nor financial manipulation, it is rather the giant jump in intellectual field of society (which we made together with all the humankind, and we do not have to come up with anybody, we just should keep, not lose, what was accomplished) which explains the development of the networked economy.

The newest computer developments allow creating endlessly diverse and non-expensive products. The cost of this diversity is, in fact, annulled by information technologies.

The planet intelligence, united into a network, speeds up the technology development of the future in all the science intensive fields, which progressed slowly in the past because of 'sluggishness' of huge data arrays to be processed to acquire new results.

The only cause today which forces us to transport enormous quantities of rude materials like bauxite, copper or nickel through all the planet is the absence of technologies allowing to process natural resources available in a given area into necessary substitutes. As soon as we acquire such possibility, the necessity of this transportation will be gone. And, again, economy will be the result. Generally, in the Third Wave economy knowledge will substitute for both resources and transportation. The same could be said about energy, too. Recent inventions in the semiconductor's field became the best proof for ability of knowledge to substitute for any resources. These inventions will at least decrease the amount of energy, necessary to produce every unit.

Information technologies made it possible to locate production facilities far from the cities. Nevertheless, expenditures for transport and energy will be significantly reduced. [6].

All above-mentioned means, that even the country, which is not the rich one, can find itself on the high level provided there is a networked economy. So that, Ukraine really has satisfactory perspectives as to reaching out to avant-garde of the world economy. We just should involve as many as possible economic agents and consumers to the new way of economic relations actualization.

The Council of Europe has a good recipe for this as well. According to its recommendations, the most efficient tools to overcome the slow increase of information intensive sector of economy are initiatives in the application field. They accomplish the function of manifestation of the information technology possibilities, which, in turn, helps to expand their usage [15].

One more feature, brought about by information technology into economy, is mass individual production. If industrial economy created mass production, then, a new digital economy is creating, so to say, mass individualization, that is mass production of individual (tuned, custom-oriented) products and services, including data.

This new scheme requires larger, much larger amount of knowledge, even basic ones or related to everyday life. What to say, if even 'McDonald's' created the University of Hamburgers [4, p. 242, 363].

Knowledge reduces the requirements for rude materials, labor, time, space, capital and other resources. Knowledge becomes the indispensable tool, the main resource of the modern economy, the value of which continuously increases.

If one may say so, 'cognitive revolution' is taking place: it completely changes economy, whether national economy or the world economy. The economy of the Third Wave is made revolutionary by the following fact: while land, labour, rude materials and, perhaps, even capital can be viewed as limited resources, knowledge is actually unlimited.

As opposed to blast furnace or factory line, knowledge can be used simultaneously by unlimited number of market participants. And the latter can employ knowledge in order to create even more knowledge. [6].

Knowledge - is the only object, which actually possesses value in cyberspace economy. Brainworker is the main acquirement of any organization. Labor is no longer a commodity. This is, to an increasing extent, a job for automated lines. What matters most is knowledge and creativity. A main means of production is the intellect of a worker.

The only essential advantage for companies in a new race is provided by lifelong learning. People want to get information when they need it, without leaving their workplace. 'Education without leaving job' acquired a new content. Now this is education, which is an integral part of production. 'Workplace' and 'student's place' today determine the same notion.

This is vital for production survival, because innovation nature of information economy dictates the principle: 'You are the one to make your product to become outdated '. Today it is one of Microsoft slogans. The product will become outdated anyhow; just the main role in this process will be played by competitors [4, p. 73]. This is true and this formula works also for the most powerful economic giants. With the technology progress, which everyday discovers new ways to serve yesterday's markets, monopolies 'once and for a long time' are replaced by competitive battlefields. Even if monopolies are created, the pace of technological transformation is threatening to make them short-lived. Dynamic competition - the essence of what Austrian economist of the first half of the 20^th century Joseph Schumpeter called 'creative destruction'- is the nature of the cyberspace economy [18].

This creates the necessity for continuously increasing amount of knowledge, which also stimulates economic development and emergence of new companies and new products in the field. But traditional educational institutions no longer satisfy economy's information requirements. So, continuously increasing great possibilities of new goods and services in the educational field are emerging. Because the number of 'white collars', highly skilled professionals, has already exceed 60 % of the overall number of labor force (there were 20% of them by 1900). These are them who are mostly interested in keeping up and improving their professional skills, so that, they are interested in knowledge. And everyone feels serious responsibility to learn to the last days of their lives [4, p.83]. The biggest requirements in this respect are in relation to managers, to those, who govern processes in any economic organization. As Ken Alvarez, vice-president and responsible for personnel of the 'Sun' firm, puts it: 'In the process of accepting new technologies managers need new expertise in order to develop new systems of work organizations. These have to be socio-technical systems, which optimize both social and technological components of new work. The ultimate goal is to significantly increase productivity of a producer, on one hand, and to increase the level of his motivation, on the other hand, and a satisfaction from the quality of professional life' [4, p.356].

Today these are really serious indicators of any production. Increasing specialization and fast replacement of skill requirements reduce interchangeability of labor. Horizontal mobility within margins of one profession, say 'an engineer' or 'a doctor' became very problematic, since it requires almost radical re-education and change of professional habits, strictly specialized for every economic niche.

In such a way, unemployment moved from quantitative category to qualitative one: to find a job, one has to learn a huge amount of knowledge. And this is true for more and more occupations. But this by no means implies that representatives of 'working class' occupations are pushed out from labor market. They just all the time improve their own skills. So that, proletariat becomes 'cognitariat'.

However, knowledge is not a limit. Workers are encouraged not only with respect to their rational skills, but also for employing their emotions, intuition, imagination in the process of their work. This is why the Marcusean critics view it as even more destructive 'exploitation' of workers [6].

So, efficient functioning of economic organization requires a full value provision of the main resource of the new economy - knowledge, and appropriate 'quality' of a worker, which appears not only as ability to work and productivity, but also as intellect and creativity.

But for institutes of at least one economy's sector, one additional condition for survival in the market exist. So thinks Ron Sommer, the Head of the 'Deutsche Telecom' Board of Directors. He is talking about emerging of a new super-sector, named TIMES. This acronym stands for Telecommunications, Information Technology, Multimedia, Entertainment and Security services.

Sommer, in particular, mentions: 'US experience is an evidence, that in a big market investments may be made faster and more economically. We in Europe need a big market in order to fully enjoy the opportunities created by new technologies, in particular the next jump of technology - mobile commerce. A very big amount of investment is required. Their return directly related to the volume of the market, which will benefit from implementing innovation. Enterprises with essential financial basis are required to invest billions in innovation technologies.

Ability to keep up with the initial speed is as much important as infrastructural investments, since such level of development can recoup itself only on the long-term basis. This is one of the reasons for a company's size being a key factor of survival in a quickly developing market' [1].

But Sommer does not insist for this principle to be universally applied. He narrows a sphere of its action to the TIMES-segment of the market: 'The position 'it is not the big company, which sweeps away a small one, but a fast company goes ahead of a slow one' is no longer true; at least, not in our industry,' - he says. Today, in order to survive, a company has to be both big and fast.

The beginning for the process of companies merging was made by the first union created in compliance with the laws of Internet Age. Time Warner, the world's largest and most famous media conglomerate, was in fact taken up by acquisition by AOL (America On Line), Internet service provider, which is only a few years old. This is a testimony of how dramatically corporate power balance has shifted under the influence of informatization. When talking about production generally, not only about TIMES, one should point out a few more peculiarities brought about by the Network Age of economy.

As early as in 1980s, western researches of economic efficiency of information technology implementation identified the 'productivity paradox' [19], which means, that as a result of this implementation, the productivity at the object increases insignificantly [20].

New studies conducted in 1996-1997 provided the explanation for this paradox. The effect of implementation manifests largely in other quality; for example, as increasing consumer value for a product being produced, in speeding up economic growth, etc. [12].

Specific parameters of a hyperspace economy are more clearly described by an economist and futurologist Kevin Kelly, one of the editors of Wired Magazine. Kelly summarized these new features into 12 new peculiarities (or rules) of modern economic environment. Let us mention the most significant.

• First, emergence of a few additional new components in the network may essentially increase positive effect for all users. But this feature of a network economy directly contradicts two of the most fundamental axioms of industrial economy: 1) value is related to scarcity, and 2) plentitude of things reduces their value.
• Second, organizations have to change all the time, in order not to find themselves in the position of 'the world's best expert on quickly dying technology'.
• Third, the old is quickly ruined and the new emerges, over and over again. Genesis soars over Chaos (poetic formulation of Schumpeter's creative destruction).

As for the productivity paradox, Kelly does not overload himself and the reader with an extra trouble. 'One should not be obsessed with productivity; robots have take care of this. In the age, when machines will secure production process and make a 'black' work, a question 'how to do this job right and well' for a person will be replaced with the question 'what work to be done is right and good'.

It is impossible to assess productivity of innovation and creativity with traditional measures. The network economy plays according to human desires: replicating, copying, automation are being devalued, while originality, imagination, creativity are increasing in value' [[21].

New opportunities and a new value also emerge in relations of a company and a person. The main kind of relations between a producer and a consumer in the Age of Network Intelligence is education [4 p.371]. An act of purchase in more and more cases means emergence of long-term relationship between a seller and a buyer [22].

And a consumer is no longer the same: he expects firms to provide him with high quality, environmentally clean goods, which are delivered without a delay at low cost, with the best service, realizing full responsibility before the society [4 p. 13].

Moreover, with the transition to the Hyperspace, a trade no longer needs intermediaries; and it practically does not need physical trade infrastructure. Remaining brick and cement constructions must become very attractive for anyone to come by [4 p. 31].

However not only those who did not jump on the bandwagon of Hyperspace, but also modernized virtual market participants will face difficulties. There is not yet legal framework established as for taxation of transactons within Internet. And though network organizations may struggle against the idea of taxation in the Internet, this is probably inevitable. Indeed, if an essential portion of economy moves to Internet, governments will have to insist on access to the businesses in order to fill up the budget. [16].

But we insist, that talks about any benefits for the government may begin only after virtual economy will be established. Now the only right approach is protectionism, which will be effective while the new economy is forming. In this respect, a position of the World Trade Organization, which at the beginning of 1998 approved a decision to abolish a tax on data and software products purchased and delivered via the Internet, may serve as a model [23].

In our opinion, experience of Ireland with respect to national economic decisions and their results for a country and individual businesses would be very useful for Ukrainian economy. Let us not waste the time and space for systematic economic analysis - this would be done better by professional economists. We just want to present a kind of kaleidoscope of events, mosaic of facts, which are the most demonstrative and interesting for Ukrainian audience. The main theme of all the illustrations is creation of a favorable investment climate. Perhaps, Irish government is indeed slightly half-witted and does not care about state security and national interest protection, but Ireland benefits significantly from being such an airhead. Let us start with the fact, that the permission of the state agencies is not required for business creation. A foreign investor may possess the same rights as the Irish company does. The only compulsory requirement is to obey orders regarding construction. The Central bank of Ireland oversees and approves all foreign investments. Transferring dividends and profit abroad as well as repatriation of capital may also be made only after getting the permission of the Central bank, which is, however, just a formal procedure. Permissions are granted in routine mode and function rather as monitoring instrument; but they are by no means an instrument to control capital movement.

Companies' profits, generated from production and relevant services in the field of implementing new information products and proposals of solutions which employ Internet technologies are taxable at the rate of 10% until 31 December 2002 while the income tax is 28%. This is practical implementation of policy for strategic industries development. And it probably does not ruin budget, since from 1 January 2003 a single corporate tax rate of 12,5% will become effective. This rate will apply to a trade profit in all sectors including production and international services.

Such policy allowed small Ireland, which never was a model of distinct scientific achievements, to become the world's second (after the USA) software exporter. It is Ireland, where 10 largest international software-producing companies carry out a significant portion of their activity.

Please take in account: it is not about transferring hazardous or dirty production to the third countries. This is very 'clean' science intensive industry with extraordinary high percentage of generated added value, which, in addition, contributes to increasing intellectual level of nation.

Furthermore, this sector creates career perspectives for next generations. For more than 10 years, the government, education system and businesses cooperate in their efforts to provide an adequate supply of IT professionals. This means, that the number of college entrants and graduates, whose education is computer-related, is increasing; this, in turn, promotes further development in this field.

The situation is unlikely to become less attractive with the time. In small Ireland, over 300 companies have already been involved in the development and production of a wide range of software products in 1998. One third of all the country's export was due to these companies. More than 35 000 people worked for these companies.

And the progress goes on because it has a base to keep on. Since 1980 40% of all the American investments (not loans) were directed to Ireland. And, now, quickly go look at the map - what portion of Europe is taken up by Ireland? Much less than 40%, even less than 10%, isn't it? (To be precise, it takes up 0,7 % assuming a general area of Europe is 10 million square kilometers. Following the same calculations, Ukraine takes up 6% (70,000 square kilometers and 603,000 square kilometers respectively).

So, what percentage of the world's investments can get Ukraine provided there is efficient investment policy and informatization? It is policy efficiency, properly chosen strategy (rather than filling up the budget), perfection of the entire legal base, priority of relevant industries or even the level of citizens' literacy is the guarantee for a country's economic progress.

It works indeed. And the government of India, with over a billion population - largely hungry and illiterate population - took serious steps to create TIMES-sector as an export non-capital intensive industry, which could develop without large-scale import, create jobs and increase the country's level of education.

Having an objective to develop offshore software production, the government took steps to essentially liberalize external trade (in particular, regarding export and import control), to create technoparks as well as other significant steps. And when they are talking about 'virtual workers' in America today, they most likely mean Indian programmers.

Ukraine with its human resources and scientific potential must not lose its chance to start 'international career'. Increasing world's demand opens opportunities for countries with basic prerequisites to create or to develop information technology for own needs or for export at the expense of investment.

Because, according to experts' assessments, today's developed industrial countries will not be physically able to provide education of the required number of specialists of a relevant profile within a required term. So, one should expect further expansion of practice of offshore software development in the third countries.

The Government, and especially those who care about the national security too much, have to take in account that lagging behind in information technology field - the field, which works simultaneously for the domestic needs of a nation as well as for export - will mean gradual increase of import of such technologies. So, unless we invite investors into information technology, we will face importers invasion with the time.

Besides that, increasing employment of educated people (middle class), and especially, provision of national industry with the national software products are strategic state interests [24].

Taking in account all the above mentioned, the conclusion will be as follows: 'Virtualization and Informatization' has to become a slogan for Ukrainian economy for the nearest decades.