Increasingly, the world is a global interconnected space of communication or collections of such communicative spaces. This fundamental fact with its multiple facets and consequences has redefined economic development both for countries of the North and South, both for developing or transitional economies and those of advanced liberal capitalist states. It will influence the direction of the global economy in the future. At the center of this development have been a set of cultural forces and intellectual movements that have been in train since the early twentieth century: the movement of European formalism; logicism and the rise of logical empiricism; the linguistic turn; the development of semiotics and structural linguistics; the mathematical theory of communication (Shannon); the development of cybernetics (Weiner); the formalisation and mathematisation of economics and its application to information economics; and, the development of the modern digital computer, hypertext and the World Wide Web. Communication is at the heart of learning, knowledge creation, transmission and production. It is also at the heart of culture and language. Advances in information and communications technologies have created new tools and changed the consumer from a passive agent into an active user, a change captured in Apple's slogan "Rip, Burn, Mix".Digitalization, speed and compression are the forces at work that have transformed the global economy and now have begun to affect every aspect of knowledge production-- its organization, storage, retrieval, and transmission. The knowledge economy has certainly arrived, although this does not mean the end of the business cycle, as many early pundits singing the praises of the new economy maintained. But it does signal structural shifts to and new sources of growth in some Western economies (e.g., US, Finland) that delivered both low unemployment and low inflation due to increased productivity.This paper first traces the cultural and technological forces that has centered on communication-its digitalization, speed and compression--as the ethos and infrastructure for the new economy. It employs an approach called "cultural knowledge economy" to discuss the "culturalisation" of the economy and to demonstrate how central education has been to these innovations. Second, the paper scrutinises the 'new economy' in the work of J. Bradford de Long, Kevin Smith, OECD and others and outlines (following Danny Quah) the characteristics of digital goods as nonrival, infinitely expansible, discrete, aspatial, and recombinant. Third, the paper focuses on modernization theory and informatization in relation to questions of the 'new' education and its role in development.