I believe that the convergence of information and communication, facilitated by digital technology has the potential to reverse the trend of growing polarisation of the haves and have-nots: the rich and poor. To do so will require brave political decisions, a willingness to invest in a sustainable future and above all, an articulate vision for humanity. The global nature of this challenge does not excuse national governments for treading softly. Leadership is the key.
Such an onerous agenda starts with getting the priorities right. It is about people, hope and future existence.
You will be forgiven for thinking that the title of my presentation makes an assumption that people, and the social impact of technological change, are an afterthought in establishing a comprehensive information industry development strategy.
I put to you that far from an after-thought, it is the instinctive need for social progression contained within the collective human psyche that drives technological development. Therefore, to ignore the social implications of such change is the ultimate abrogation of political responsibility. To extract people from the technology equation is to cook without food.
I hope to present you with the range of social issues that require urgent political attention. It is important to contextualise the development of the information technology and telecommunications industry appropriately within a broader framework of social policy.
I shall begin with a quote from a speech my Mr Jay Naidoo, Minister for Post, Telecommunications and Broadcasting for South Africa at the OECD Minister's Conference on Electronic Commerce, held in Ottawa on October 9, 1998:
"So as we discuss this momentous advance of our civilization and the emergence of a digital world economy, let us consider that this connectivity is, in fact, the greatest equalizer in the world."
To apply a social perspective to these matters I will canvas a number of areas.
The description 'information haves and have-nots' is widely used as a generalisation of the inequities that exist between those who are on-line and those who aren't. I will be looking at the most recent statistics and trends.
Apart from the committed net-heads, consumer demand plays a role with respect to improving access to the Internet: people need a reason to go there. I will look at the digital convergence of a range of media and why content will be a critical determinant of the social relevance of the Internet.
I recall an article in one of the national papers profoundly declaring that the Internet had failed because no-one had found a way to make money off it. E-commerce gives us a global market place and introduces a whole new set of vexing social policy questions, not to mention economic ones.
The information industry is uniquely critical to our future. Not only do the goods and services produced by the sector enable the community, government and business sectors to participate in the knowledge society, but the current and worsening trade deficit with respect to information technology and telecommunications goods and services demands urgent support for industry development.
Before you can get on-line you have to be able to afford the hardware, software and connection costs. These costs are significant. Currently the richer you are, the more likely you are to have internet access. Add to this the time-critical nature of our day to day lives and the barriers for on-line participation seem to get harder to overcome.
This graph shows the four most prevalent selected technologies in the home. Despite having being available for many years now, the newer technologies are far from the fixed phone. The mandatory provision of a telephone, provided for by the Universal Service Obligation and a public utility has ensured an identifiable minimum level of telephony service for every Australian citizen.
It raises the question as to what social and political priority should be given to achieving mandated access to this new information and communication tool, the Internet. Is the technological progression so profound that it can be compared to telegraphy, to telephony? If the answer is yes, then equity of access to the Internet is a right that all Australians have as citizens.
The concept of connectivity is already way beyond just getting a decent Internet connection to your home, it is a way of live, but measuring internet connectivity to the home is not a bad place to start taking measurements.
Whilst there has been growth in internet usage usage, particularly here in Canberra, the figures are still startlingly low. Connectivity has three interdependent elements, infrastructure, content and demand, each requiring policy attention. With only 13.5 % on-line, or just under one million people, we are far from achieving an equity in connectivity.
The demand, or those who require the use of communication and information services must not be narrowly defined to 'consumers' rather the broader definition of 'citizen' is a more fitting description as it necessitates public interest be a factor in the connectivity equation. In a political environment of employment insecurity accompanied by rapid technological change, the needs of citizens must have equal priority in the connectivity agenda.
Connectivity holds within its grasp massive opportunities for empowering society. Seizing these opportunities requires a multi-dimensional set of policies that must in the first instance address the barriers that exist for many people. The following issues were identified in the recent Australian Bureau of Statistics Publication titled 'Household Use of Information Technology.
Inadequate analysis and the underlying reasons for 'lack of interest' pose interesting questions about fear of change. Just talking to people it becomes clear that the whole concept of the internet and connectivity evokes fear and genuine concern about the direction of technological change. Anticipation of these concerns and plans to pro-actively address them are necessary if citizens are to be confident with the concept of connectivity in an era of extraordinarily rapid change.
Availability of the Internet through appliances other than computers will present different options for people and families for whom the expense previously ruled out going on-line. As phone, fax, data, video and even TV signals each move towards (or upgrade existing) digital transmission, the opportunities for accessing the internet and therefore participating in the information society are greatly improved. This almost universal move towards digital content has had a big impact in the way it is delivered, not to mention by whom. Being on-line and enabled will come in many different shapes, sizes and experiences.
The way in which this digital signal is delivered to the home or business, be it copper wire, cable, optic fibre, radio spectrum or satellite also takes on a whole new flexibility, with each 'pipe' able to carry the digital signal competing for quality, reliability and coverage.
The content, be it TV shows, news and sports coverage, entertainment, information or services will evolve as convergence allows content to morph into a new experience with layers of interactivity to suit individuals. This new medium has a dimension that is only now being explored from a marketing perspective. What is desperately needed is an exploration of the social perspective. Putting the Government on-line is part of creating demand for using the net for improving social amenity, but as yet there is no genuine recognition by the government as to the community use of the net.
The word convergence is a word used to describe the trend towards the production and distribution of digital content. It is also a word that carries with it many vital social, economic and political considerations.
A range of very important policy issues confronting government are touched by this issue of convergence, including public ownership of Telstra, because Telstra owns the existing telecommunications infrastructure and therefore controls the greatest proportion of digital content distribution.
Production of public digital content via the ABC and SBS all form part of the balance in providing quality, diverse sources of information for Australians, and indded the world.
Controversial policy areas like cross-media ownership come into play as. Tussling over their 'market share' of both distribution and production of digital content, existing media proprietors and the many corporations who have partnerships with them have effectively excluded new entrants to the market.
The production and distribution of digital content are the key to ensuring everyone has the chance to use the Internet and participate in the information society. This includes the right balance between the production of public and private content.
The priority of Government must be to pursue equity of access to quality digital content in all its forms. It is not good enough for government to play arbitrator between corporate interests - such an approach is devoid of vision and squanders rare opportunities to harness social progression from technological change.
The privacy of citizens information is critical as well. It is a right that personal information kept about us by anybody else, private or public is protected by law.
As growth of Internet usage continues and new, non-pc based environments through which goods and services become available, consumers will be able to purchase from a global smorgasbord. The Internet and television will collide in an amazing kaleidoscope of interactive entertainment services in lounge rooms around Australia. This new media will be, as conventional media is, driven by advertising revenues.
When the market is a global one, and seeing an add from a US-based travel agent and booking on-line may provide a better product for a cheaper price for consumers the threat to local businesses is real.. The price to be paid will be in jobs and a burgeoning trade deficit. Tax implications present a mine field, particularly with respect to a GST. It will be virtually impossible to apply a GST in the cyber market place. Will the inequities already identified with respect to the proposed application of the GST be exacerbated as those who can access the GS-free market place simply avoid paying it?
There are also social considerations that have not even been touched on in the frantic search for a secure electronic commerce platform. Whilst confidence is touted as a critical consumer (read social) issue, corporate interest in e-commerce is about creating new markets.
For example, the emerging technology for electronic commerce is credit based. Both VISA and Mastercard are leading the way with the active support of the ANZ, National Australia Bank and Westpac in the development of SET (Secure Electronic Transaction) technology. If you don't qualify or choose not to use credit, does this mean exclusion from the world of secure electronic transacting?
The Credit card companies are not the only ones angling for transaction related revenue though. Telstra has its own ideas and are well placed, with their strategic partnerships with on-line content tzars nineMSN, to capture a market with their own brand of e-commerce technology in the critical business to private consumer category.
At the Virtual Opportunities conference last Friday week, the new minister for Information Technology, Senator Alston spoke about Telstra's plans to levy a charge on every electronic commerce transaction with no regard to implications of what could be interpreted as a net tax
In his address, the Minister said:
'Blount also talks about Telstra charging a transaction fee, so that a percentage of the total cost of the online purchase - a small percentage, but significant nonetheless - goes to the telephone company.
In other words, Telstra is preparing to "own" the process and to earn value from it. The aim is to develop a process where the consumer talks not about buying a book from Amazon.com but with their Telstra smartcard.'
The implications of charging for net-based transactions for the purposes of making a profit make a mockery of the Government's assertion that it supports the principle of no discriminatory treatment of electronic compared to conventional commerce. There is serious questions with respect the inconsistent treatment of such charges, which, in the hands of the public sector would be seen as a levy or tax, but in the hands of a private corporation are seen as getting a fair cut of the action.
Australia's industrial base and the source of future employment must also be considered in a social context. A clear indicator of the urgency is the burgeoning trade deficit in information technology and telecommunications sector. Currently our information technology and telecommunications trade deficit is $6 billion. It is estimated that if current trends continue, then this will blow out to over $46 billion in ten years time.
We have no choice but to utilise every strength we have to improve our capacity to produce information technology and telecommunications products and services. One of these strengths is our IT 'maturity'. In 1996 an analysis of IT maturity is contained in a Gartner Group Strategic Analysis Report. It ranks Australia first out of 14 countries in the Asia-Pacific region. IT maturity is described as a measure of how advanced and sophisticated those countries were in their use of IT within their governments and commercial enterprises, in other words, it was an analysis of consumption.
Leveraging government procurement is a sensible and practical policy tool available to Governments pursuing an industry development agenda. Australia has disproportionately high percentage of IT&T expenditure by Governments - nearly 40%. To squander the opportunity to grow indigenous business is ridiculous and cannot be excused. The US has shown the world how effective procurement be for growing industries.
Proximity to markets has always been a disadvantage for Australia in terms of attracting foreign investment in manufacturing and distribution of our exports, be they natural resources or value-added commodities. This weakness will be exacerbated in a global economy. This is not a problem that will be solved by Luddite attacks on the labour movement or distribution infrastructure, rather it requires a sophisticated analysis of where value, and hence the source of capital, will be found in the future.
If 'taking on the global challenge' is a euphemism for pitting our collective intellectual prowess against the rest of the world, then we need to take stock of what raw materials we have for the task. Administrative and corporate innovation are key ingredients. They highlight the need for both a strong, independent public sector and an industry development strategy designed to foster growth of Australian companies in intellectual property-rich sectors. However, it will be our ability to create value out of intellectual property that will determine if Australia can hang on to an autonomous presence in the global ether.
Surely our attention is better placed with investing in our human resource through education and fostering Australian industry development. The importance of education for the purposes of both satisfying the industry demand for skills and the general enhancement of the nation's prospects cannot be stressed enough. The brain drain is a phenomena that Australia has unfortunately, got to know too well.
Relationships between tertiary institutions and research facilities are essential if our industry is to have depth. Currently, despite the hype, this is Victoria's greatest flaw, following massive cuts to the education system at both state and federal level. University funding and political commitment to education at all levels is an essential element of an effective IT policy.
So far I have focussed my comments on Australia. However, as with all matters regarding 'what comes next', it is impossible and unwise to approach in a purely parochial manner. In leading up to my conclusion, I would like to have take on a more global perspective.
In the recently released Human Development Report 1998, published for the United Nations Development Program, global consumption trends, including information technology usage are cross referenced with human development indicators for each nation. In the 'Action Agenda' for creating sustainable futures, pragmatic recommendations to address the entrenched inequities on a global scale are proffered:
"Privately produced public goods, such as technological innovations, need support from the state plus dynamism in the private sector to ensure that "poor people's technology" and environmentally friendly technology are produced and marketed."
It is the intelligent application of technology that can facilitate the de-linking of economic growth with finite natural resources.
I will conclude by completing the quote from Mr Naidoo at the OECD Ministerial Forum:
"So as we discuss this momentous advance of our civilisation and the emergence of a digital world economy, let us consider that this connectivity is, in fact, the greatest equaliser in the world.
But in this very world that we live in, half of humanity has never used a telephone. Yet, that access could catapult, could leapfrog the remotest rural community of this world into the leading edge of this new economy."
It is the potential for equity and a sustainable future that exists within technological progression that must be harnessed by political leaders. This is the challenge for the new millennium.
Thankyou
REFERENCES
Human Development Report, United Nations Development Programme (UNDP). Oxford University Press 1998
Australian Bureau of Statistics - Household Use of Information Technology 1998
Electronic Commerce: Taxation Framework Conditions
Electronic Commerce: A Discussion paper on Taxation Issues
Directorate for Financial, Fiscal and Enterprise Affairs: Committee on Fiscal Affairs 10/10/1998 OECD
This is an updated version of the extended abstract published in the November 1998 edition of the conference proceedings. The original version is available on-line at: http://www.acs.org.au/president/1998/past/io98/lundy.htm
The slides are at: http://www.acs.org.au/president/1998/past/io98/social.ppt
Tom Worthington, 9 November 1998. Editor of "Electronic Commerce: Net Benefit for Australia?", Proceedings of the 1998 Information Industry Outlook Conference, : http://www.acs.org.au/president/1998/past/io98/io98prgs.htm