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European Telework Online Commentary on Europe's stated priorities for the Information Society - eEurope The free of charge provision of these resources is made possible by our sponsors: Commentary on Europe's priorities for the Information Society - eEurope This is a commentary from European Telework Online, sent to the European Commission on 1 February 2000 in response to the Commission's eEurope statement of December 1999. Summary of the European Commission statement Response by European Telework Online - see below Pole21 - a forum for policy input, organised by eurbit (see message in the Telework Forum archive) Your comments welcome in the Telework Forum Overall we can strongly support all of the goals and priorities of the statement. However there are some aspects that are either overlooked or understated, which, unless very strongly and directly addressed, will make it impossible to realise the vision as a whole and will also lead to a continuing and increasing USA hegemony as primary supplier of Internet-related technologies and influencer of content, such that Europe will suffer economically in both the short and the longer term. This is a summary of those critical factors. Further evidence supporting these comments can be provided if required. Europe's primary strength is diversity Where is eEurope to develop net positive trade with the rest of the world? The myth of European strength in "content" The structural barriers in education E-commerce: appropriate actions and markets for SMEs 1. Europe's primary strength is diversity One of Europe's main characteristics is the diversity of EU countries in terms general economic structures, cultures, approaches to work, enterprise and lifestyles and (in particular) patterns of ICT take up. In some respects this is a weakness. For example the EU as a whole is underinvested in ICTs compared with the USA and some other countries, and the gap between the EU and the USA is increasing not diminishing. One or two EU countries match the USA in some respects, and EU does have some leadership areas, notably as the statement says in mobile communications. But overall investment and usage levels are in serious imbalance. However this can be a strength rather than a weakness if it is clearly recognised and used. The EU's relative diversity can be regarded as a model for the world as a whole, and is a more realistic model for this than the USA's relative homogeneity. EU's lower per capita GDP etc also make the EU a more realistic model for the "global networked economy" than the USA, which is distinctly different from the rest of the world in all relevant aspects. Europe's strategies for an eEurope need to recognise, focus on and build on the difference between EU and USA and on the economic as well as cultural diversity within the Union. This becomes even more strongly the case when including the prospective new Member States. It is tempting to mask or downplay the difference in Information Society investment levels between EU and the USA but doing so leads to serious weaknesses in both analysis and strategy. Any statement at the level of "eEurope" should address the investment gap directly rather than as an aside. The eEurope Introduction says: Europe needs to build on its strengths. It has a leading role in mobile communications and digital TV. Yet the uptake of the Internet has been relatively slow. This avoids the fact that economic realities prevent Europe from closing the gap with the USA let alone catching up. This is a fact not a conjecture, supported by consistent evidence from the EITO reports over several years (http://www.eto.org.uk/eito). Concealing this is very damaging to Europe and to individual countries and regions since it encourages policy makers and decision takers to base their plans on a false premise - the oft repeated mantra that "Europe is a couple of years behind the USA". "Cheaper access to Internet" will not affect this, since the whole world will enjoy the fruits of technological price-performance improvements, which usually come first in the USA. Only if we confront these facts directly can we build effective strategies that will deliver real benefits. 2. Where is eEurope to develop net positive trade with the rest of the world? The aims and priorities outline in eEurope have to be paid for. Right now Europe has a negative balance of trade with the rest of the world in both ICTs and the new tradeables of the networked economy. Even continued or increased success in mobile and some other aspects of telecommunications will not lead to an overall positive balance in ICTs. But ICTs themselves are not the key factor in future trade. The evidence says that Europe already has a negative balance of trade in other goods and services across the Internet and that, like our relative investment levels in ICTs, this trade gap will continue to grow. Unless we identify and very actively pursue globally networked trade opportunities in which Europe has real strengths, our GDP levels relative to the USA will continue to decline and our ability to invest in all aspects of eEurope will decline alongside. The statement is silent on what are the significant, distinctive opportunities for Europe in globally networked trade, and on how we can differentiate Europe as a global provider (as opposed to consumer). Presumably, those who drafted the statement have not been able to identify these opportunities? 3. The myth of European strength in "content" The publishing industries in Europe (broadly defined) have a track record of resisting change and of failing to respond to the realities of emerging low cost pervasive multimedia communications. Optimistic statements on "content", from or supported by the Commission, have been unduly influenced by powerful voices of conservatism among the traditional media at the same time as USA innovators have led the "new content" sectors almost across the board. The evidence from the USA is that new "information age" enterprises can and do overtake traditional media companies, even where the traditional companies are large, profitable and endowed with massive intellectual property resources. Recent developments such as the merger of Time-Warner into AOL only serve to make incontrovertibly visible what has been happening for several years. Europe does indeed have potential strengths in "content", but the nature of these strengths and the paths towards their realisation as globally traded assets are not understood by the traditional media companies. Sectors that are currently dominated by public (government controlled) suppliers are among the main opportunities for future globally traded services ("content"), for example in health and education. In Europe these services tend to be introspective. They show little sign of recognising how changes in the technologies of provision are creating substantial new trade opportunities, nor of perceiving how their "customers" are already starting to be influenced by suppliers outside Europe. The eEurope statement on health care clearly reflects this introspection. 4. The structural barriers in education eEurope rightly focuses on ICTs in education as crucial to economic and social progress. Most countries have (albeit in most case belatedly) accepted this and developed programmes for Internet access in schools, teacher training and support etc. However, the eEurope statement misses the two main barriers which inhibit progress and have done so for many years, even in countries that have had IT in Schools programmes for at least a decade: Funding and budgetary structures, value appraisal Education budgets and funding (with the exception of some hi-tech University departments) are dominated by "people costs". Compared with equivalent information-intensive industries, where overhead costs (including ICTs) often equal or sometimes double basic labour costs, such overheads are a relatively small proportion of labour costs in education budgets. In most countries education is regarded as inadequate and already underfunded. The role of ICTs in education is little understood and there are no accepted ways to appraise the value of investment in ICTs. Therefore the pressure is to further increase budget allocation for teachers, who are (rightly) regarded as the critical resource. ICTs funding is widely regarded as an "extra" and often provided as if it were a capital investment rather than a recurring budget element. Unless and until a high level of ICT provision becomes regarded as a normal element in education budgets, with acceptance that labour costs (as in industry) should be a reducing proportion of the total, we will not see the wholesale and wholehearted adoption of ICTs as an intrinsic element of teaching and learning. Children are not "digitally literate" because they have been taught about IT and Internet. They are digitally literate when the use of the technologies in the course of all their information activities (ie most learning activities) has become natural to them. There is good evidence that such use of "ICTs across the curriculum" does deliver positive results in terms of motivation and educational attainment. But such evidence is treated with scepticism by most people in the educational establishment, because (Catch 22!) so few have direct experience of plentiful ICTs and their use across the curriculum. The budgetary problem is compounded by apparent ignorance on the part of education Departments and school managers of the fact that ICTs need to be replaced on about a 3-5 year cycle and also need substantial ongoing maintenance and upgrading as well as management. A 600 student school with 600 computers is a large ICT installation which in industry would have probably five or six support staff. Teacher familiarity, competence and attitudes The eEurope statement asks that "All teachers should be individually equipped and skilled in the use of Internet and multimedia resources" by the end of 2002. There may be some hope of achieving this in some countries, where there are already programmes to (for example) provide all teachers with a portable or desk PC for private use in their homes, and where there is growing acceptance of ICTs across the curriculum. However, this aim is fighting for attention against many other educational priorities - for example a shortage of qualified science and math teachers in several countries; pressure for better measurement of teaching and learning and their outcomes (in some places, any such measurement!) etc. It is also unattainable unless teachers believe that their own learning will be accompanied by proper provision of technologies and support in the classroom. Unless eEurope spells out how to reach this desirable goal (and is clear about the budgetary and staffing, as well as the motivational implications), it is a target designed to be missed by miles. 5. E-commerce: appropriate actions and markets for SMEs There are two issues for SMEs that need to be identified and spelled out, but which are either missed or inappropriately focused in the eEurope statement: SMEs should be selective in their priorities and targeting for e-commerce. The eEurope statement that "Member States and the Commission should launch a campaign to help SMEs "go digital" should be conditioned by the fact that e-commerce should be a very high priority for some small firms and a low priority for others. There are some success stories from small firms' adoption of e-commerce methods but also a lot of serious disappointments. Most websites run by (or representing) conventional small firms in Europe receive very little traffic and are of little value to the company or its customers. Small firms need more explicit advice about whether, and if so when and how to enter e-commerce, not a general exhortation to "go digital". This has been explored with existing centres of competence, and was generally agreed to be the case. However centres of competence themselves often have web sites that are a bad rather than a good example, suggesting inadequate competence to advise! An emphasis on "advising the advisers" and on appropriate roadmaps for small firms is needed at the level of the eEurope statement. (http://www.eto.org.uk/etd/etd-pres.htm - "Going Online: towards a roadmap for entering electronic commerce"). The eEurope statement suggestion that SMEs should "consider the whole European market as their market". This confuses the mission of a small firm (to stay in business, make profits and possibly grow) with the EU mission to enhance the single market. For many small firms their best opportunities outside their immediate geographic area are outside Europe, not within Europe. The Portugal government has recognised this with its networked economy focus on Portuguese-speaking people world wide. A small firm in France may well have better e-commerce opportunities in Quebec and other Francophone countries than in neighbouring Spain. An online employment agency in New York calls itself "Italian Telework". A firm in Ireland may well find it easier to do business online in California than in Bavaria. Again even those small firms that have excellent online opportunities need more analytically targeted advice rather than exhortations to "get into e-commerce". And of course Europe need exports as much as it needs better internal trade - if not more so. 6. Europe's second great strength - the diaspora This links back to the question of balance of trade and to Europe's strength through diversity. In the global networked economy Europe has new opportunities to connect with her sons and daughters (and grandchildren of several generations!) in every country in the world, many now in positions of great influence. The eEurope statement looks too much inwards and neglects the potentially immense strength of this diaspora. Our far flung family may think of themselves as being of "European" descent but they are much more likely to consider themselves to be Greek or Scottish or German or Polish or Hungarian - and this is one aspect in which the prospective Member States and wider Europe can make a strongly positive contribution to the whole. eEurope needs to include a high priority on "linking out" and making sure we encourage and facilitate "linking in". This is one of the keys to competing with the USA's current hegemony of online content and should be a key priority. Further input on the above can be provided by European Telework Online, contact: Horace Mitchell Director, European Telework Online http://www.eto.org.uk eto-info@eto.org.uk.