One of the biggest questions of our time is how accelerating technological developments are affecting the way our economies work. The internet, the 'third industrial revolution', is considered the latest example of a technology that has fundamentally changed modern economies and it is on the internet that this project focuses. The first part of the project concerns the impact on labour markets and the fact that information technology has been seen as particularly beneficial to highly educated workers. In most countries, the income gap between the low and high educated is widening, but it is difficult to know how much of this is due to technological development rather than, for example, increased globalization. And, to be more precise, what kind of education, experience and other characteristics are in demand when technology is renewed? We also examine the extent to which firm productivity is affected by technological change and how changes at the firm level affect the development of aggregate productivity in society. The second part concerns the extent to which globalization is increasing due to the spread of the latest of the most important technological changes in modern times, namely information technology. Will the role of geography in trade decline with the development of the Internet, leading to the so-called "death of distance"? The final part examines what determines how the internet spreads and when and why different firms or regions adopt new technologies at different rates.