This chapter analyses the evolution of finance and technology. In the modern era, we mark this in four major periods. The first focused on electrification and lasted for a century until the mid-to-late 1960s. It was dominated by analogue processes and traditional banks. The second period of digitisation was marked by digitisation, including across securities markets (NASDAQ), payments (ATMs, SWIFT), mass computerisation (financial calculators, PCs), communications (Internet, mobile), and lasted 40 years. From around 2007–2008 onwards, a new trend emerged as a result of the application of a range of new technologies to finance, combined with the impact of the 2008 GFC on finance and regulation. These three driving forces– the 2008 Crisis, the application of a range of new and transformative technologies to finance, and a massive increase in regulation globally in response to 2008 and a range of financial scandals– underpinned the emergence of FinTech, short for ‘financial technology’. This third period lasted just over 10 years and saw the rise of data, and its algorithmic analysis in a process called datafication which has transformed finance. The most recent era, driven by the COVID pandemic, commenced in 2020 and is characterised by the emergence of scale, in the form of large digital platforms.

This chapter explains the extent of fuzzy logic law surrounding the legal structure of technology companies in China. The chapter provides a profound illustration of the environment in which Chinese entrepreneurs must operate and remains an ongoing story. From the outset, Chinese technology entrepreneurs must decide how to legally structure their companies in order to account for vague conceptions of legality.

Chapter 9 examines the bubble in internet and other technology stocks that occurred at the end of the 1990s. This bubble witnessed the coming to market of many young firms which had never generated a profit. The excitement resulted in the NASDAQ index trebling in value in the 18 months prior to its peak in March 2000. By the end of 2000, however, it had lost more than half of its value. This bubble in tech stocks was not confined to the United States – it was a global phenomenon. The chapter then uses the bubble triangle can explain the causes of the dot-com bubble. The spark was provided by the new internet technology. Marketability increased as a result of new technology and many more companies floating on stock exchanges. Monetary conditions were loose in the runup of the bubble and there was a sharp rise in margin lending. Speculation was rampant in the runup, thanks to the rise of the day trader. The chapter concludes by arguing that the modest levels of economic damage associated with the bursting of the dot-com bubble suggest it could have been useful. However, its minor economic impact might also have made the authorities and investors complacent about the housing bubble which followed on its heels.