We introduce the concept of efficiency of a network as a measure of how efficiently it exchanges information. By using this simple measure, small-world networks are seen as systems that are both globally and locally efficient. This gives a clear physical meaning to the concept of "small world," and also a precise quantitative analysis of both weighted and unweighted networks. We study neural networks and man-made communication and transportation systems and we show that the underlying general principle of their construction is in fact a small-world principle of high efficiency.