(March 20) – “As the U.S. economy struggles with the bursting of the high-tech bubble, here’s an improbable question: Could there also have been a bright side?” asks Greg Ip in today’s Wall Street Journal.

“Billions of dollars went down the drain in the past few years, to support high-tech companies that never made a profit. Years of entrepreneurial effort by the nation’s best and brightest were flushed away on failed business plans. Massive wealth was created, and then destroyed, leaving shattered confidence in its wake.”

“Yet the bubble also may have done society a huge favor. The technology-stock boom fertilized new technologies and business innovations, and it galvanized old-economy companies into accelerating their own adoption of these innovations.”

” ‘The introduction of the Internet and wiring of the economy with new forms of communication happened much more quickly than it would have in the absence of the stock-market boom,’ says David Hale, global chief economist for Zurich Group. ‘There’s no doubt we threw too much money at the sectors that were popular. But the fact is there was a far-reaching change in technology that will affect how we do business for many years to come.’

“Assessing the impact of the bubble is of crucial importance as Federal Reserve Board Chairman Alan Greenspan and his colleagues meet Tuesday amid mounting signs of economic distress. Financial markets are expecting the central bank to cut its target for the key ‘federal funds’ interest rate by either half or three-quarters of a percentage point.”