This report critically examines two assumptions often made concerning the new economy. The first assumption is that the new economy is linked to globalization, in its inevitability and irreversibility, and that like globalization; it has reduced the role of the state in regulating markets. The second assumption is that the new economy, with its increase in information technology, will provide greater access to and participation in the market to groups formerly disadvantaged with regard to the old market. The report addresses these assumptions through an analysis of state policies. It concludes that the state does create and support policies that facilitate the market, and therefore the state does still play an active role in the new economy. It also concludes that the state has not designed policy to connect disadvantaged people with the new economy, and that they are still marginalized from the economy. The report reviews literature on the new economy, gives an overview of current state policies and concludes with a proposal for an alternative state approach to the new economy.