For investors in dotcoms, the past year has been a nightmare. More than $5 trillion of global paper gains have evaporated since the peak in the markets last spring. But speculative bubbles have swollen around other new technologies in the past. When they burst, they left behind impoverished investors but real assets that enriched the economy. Will the dotcom bubble be the same?

The coming of the railway in the 1840s fed the earliest big technology speculative spree. It too saw the the early equivalent of the flood of IPOs. By the time the bubble popped in 1845, some 1,200 new railway shares were pouring onto the market. Many had no revenues and no clear idea of what a railway’s business model would turn out to be. Many of the people who bought their shares had never before invested in the stockmarket.

When these flimsy enterprises collapsed, family fortunes were wiped out. Share prices fell to a fraction of the giddy heights they had reached, and took more than a generation to recover. And yet, the tracks were laid and the trains built. Over the remainder of the century, the railways transformed the economy of the Victorian world, in both Europe and the United States. Early railway magnates thought of their new technology mainly as a way to carry passengers. In that respect, the railway turned out to be an extraordinary source of social change. But the big economic effects sprang from its “B2B” uses – as a way for companies to ship goods. This disastrous investment turned out to raise economic growth on both sides of the Atlantic.

In some ways, the dotcom bubble has been quite different from the Victorian railway boom. Much of the money that day-traders invested or venture capitalists put up has gone, not into building durable physical assets, but into far more evanescent spending on airline tickets and product launches, billboards and television commercials. The fact that investment capital appeared to dotcom companies to be virtually “free” undoubtedly led to an enormous number of extremely bad decisions. You might think that it is impossible to have too much investment in new technology – just as it is impossible to be too rich or too thin. However, the enormous emphasis on brand-building and the idea of a “land-grab” persuaded companies to pour money into advertising. Never before has so much stock-market capital gone straight into buying slots on prime-time television. No wonder that newspapers and television stations – the old media that new media was supposed to wipe out - have done so well in the past couple of years.

But some of the assets that the boom created will have a lasting value. Cable has been laid, routers bought, LANs installed. All these will remain, even if the companies that installed them go bust or are sold. Indeed, because they were built with “free” money, they will be available far more cheaply to future users than would otherwise have been the case. The costs of sending data through cable, for example, will continue to drop because of the vast amount of overbuilding of the past two years.

Add to this the way the boom speeded the pace of technical change. New innovations in hardware and software have poured onto the market at a rate that would surely not have occurred without the incentive of unlimited financial backing and vast rewards. Some of the intellectual property created by the boom will, of course, turn out to be worthless – think of PriceLine’s famous reinvention of the Dutch auction. But others, such as Instant Messaging or XML or Voice Over Internet Protocol, will become part of the transformation of established firms.

In addition, there is human capital. Lots of bright people have had a crash course (as it were) in running a business. All that cheap capital paid for a massive training programme for young business-school graduates with good (and not so good) ideas.  Some have seen a company through the entire cycle, from start-up to shut-down. The lessons they learned will, in time, be useful in more stable businesses.

For the real revolution starts now. The important changes of the next few years will be in things that established companies are already doing, but will do differently. There will, for instance, be a gradual but fundamental change in the way purchasing departments are run, supply chains connected, teams collaborate and share information, and knowledge is made accessible to workers on the job.

The dotcom bubble helped to speed these changes. Without the fright they got from e-upstarts, big companies would surely have taken far longer to notice the potential of the Internet, and to deploy their best people to understand how it would affect their operations. The changes ahead may be less spectacular than those of the past two years, but they will be more durable. They will increase productivity and wealth, just as the railways did. The mistake that people always make with a new technology is to over-estimate the short-term effects and under-estimate the long-term. It is in the long-term that the true promise lies.

Frances Cairncross is Management Editor of The Economist magazine, and author of “The Death of Distance 2.0”, published by Texere.

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