The chief executive of a small firm in South Africa writes a short note explaining the opportunities for companies in Europe, North America and other high cost economies to tap the talents of skilled, home-based programmers in South Africa. Within minutes and at near-zero cost his message reaches some 400 people in 50 countries world wide. In Italy, a manager reads the message, translates the main idea into Italian and passes it on to another 200 people. Most of these are in Italy but some are elsewhere; one of them, based in Spain, relays the same information, this time in Spanish, to a further 300 people . . . within a day or two - and still at near-zero cost to the sender - a message promoting the skills of teleworkers in one country has reached thousands of potential customers world wide. The sender has never met any of the people who will read his message; quite possibly he never will. But they know about the service he can provide and no doubt some of them will use it. The Global Networked Economy is at work.
This true story illustrates how in 1997 and in the future telework is no longer just a matter of a particular employer organisation agreeing (or not) that its workers may work at home instead of commuting. Today telework is about where - globally - the new work opportunities of the Information Society will arise. For Europe's citizens, the key issues of telework are: what proportion of "old work"5 will continue to be done in Europe? and what proportion of attractive new work opportunities can be created in or attracted to Europe? These questions are central to addressing one of Europe's main political, social and economic issues - the number and nature of future jobs.
The future of work in Europe depends essentially on how Europe's citizens, enterprises, administrations and public services respond to three key application opportunities of the Global Networked Economy - telework, teletrade and telecooperation6. To the extent that we master the relevant skills and seize the opportunities, Europe will prosper and attractive work opportunities will be created. This section of Telework97 describes the opportunities and challenges from a global perspective.
Europe is pursuing a uniquely European vision of the Information Society, seeking a proper balance between, on one hand, economic requirements and opportunities, and, on the other hand, social needs and potential benefits. Whatever its nature, Europe's information society will be part of a global networked economy; an environment in which any company or individual, anywhere in the developed economies, can connect readily and at marginal cost to any other company or individual for work, for trade, for the exchange of ideas and know how, or simply for the fun and pleasure of each other's company. Of course, in 1997 we are still a long way from that vision. While the USA has some 48 million individuals connected (one in five of the active population), Europe has only 25 million (one in sixteen) and the world as a whole only around 95 million (one in a hundred)7. However, the total world population of Internet users approximately doubled over the two years 1995 and 1996 and is expected to double again over the next two to three years, providing a global market of Internet users with a total economic potential that by 1999-2000 will already be approaching that of the European Union.
The global nature of business activities in this new environment is well illustrated by experience during 1996-1997 in developing the European Telework Online services:
These results have been achieved using novel Internet-based outreach methods, with no advertising expenditure and only one full time person managing the site, supported by a number of part time helpers. To achieve similar results by conventional marketing methods would have required the resources of a multinational company and would have taken several years.
Other strong evidence of the trading reach that can be derived from astute use of the open Internet has emerged during the 1990s. First, the remarkable market phenomenon of the Internet itself. Taking the fairly reliable metric of connected host computers, the size of the Internet has increased by around 100% fairly consistently each year since its origins at the beginning of the 1970s. Until the 1990s, this growth was maintained without significant commercial investment. Second, the even more remarkable phenomenon of the World Wide Web and the Web browser. The Web browser was the first mass market product to emerge after an open, low cost global information network (the Internet) was already in place, allowing low cost online distribution and word-of-email marketing. When the first Mosaic browser for the PC was released in September 1993, the Internet had less than 2 million connected hosts. By October 1994, when the Netscape company released its first browser, there were still less than 4 million. Ten months later, the company was able to place a $140 million dollar share issue and saw its share price doubled within a day of flotation. Today (mid 1997) the Internet has some 20 million hosts and there are well over one million websites8. The growth continues - and with it, the business opportunities and challenges. The example of Netscape shows how innovative marketing, well tuned to the networked economy, presents novel business opportunities.
Telecooperation is the use of electronic networks to develop and sustain useful relationships. This can work at the local level (village, town or city), or at the national level, or regionally or globally. If a teleworker seeks to work only with or for local companies, he or she can use all the conventional means of finding work and presenting his or her skills to prospective employers or customers and can readily appear at the employer's offices for interview or at the customer's offices to establish the business relationship. But there is a clear geographical constraint to using such face-to-face methods for establishing relationships. Telecooperation removes this geographical constraint, but only if the parties concerned:
In the example from South Africa, the chief executive concerned had developed a successful strategy of where to place his message, and how to word it so that it would not only be read by the first set of people who saw it but also picked up and repeated by some of them to other audiences.
For Europeans, global telecooperation presents both opportunities and challenges. Because of Europe's combination of strengths and interests - embracing an immense spectrum of history, culture and trade - people world wide have a high level of interest in connecting with Europe and with Europeans. European citizens, companies and institutions that take the trouble - and develop the skills - to make themselves visible on the global networks are often pleasantly surprised at the extent of the response. But alongside such opportunities there are significant challenges:
If European teleworkers and service businesses are to secure attractive work opportunities from the growth of global networks we have to become highly knowledgeable and skilled in all these aspects - as well as ensuring that the world has fast Internet access to all areas of Europe and that all Europe's citizens and enterprises have fast, reliable access to each other.
The term "teletrade" embraces every aspect of doing business across networks - finding customers, establishing their needs, marketing products to satisfy those needs, answering the customer's questions, securing an order or a contract for work, and managing the delivery process as well as collecting payments. In 1997 there are two main types of markets in which teletrade methods can be successfully deployed:
Today, the relatively low level of Internet take up in most European countries means that the opportunity for online methods to compete with conventional methods is relatively small in our local markets and we must look to the USA for evidence of how online penetration of conventional markets is likely to develop. In the USA some existing companies already report that up to 15% of new business-to-business sales of physical goods are being achieved through web-based marketing10. This is a remarkably high proportion considering that active use of the World Wide Web for such purposes only started within the past two years. If present Internet growth trends continue this kind of pattern could well be repeated in Europe within two or three years.
However, it is in the new kinds of markets that the most exciting opportunities exist, together with the most serious competitive challenges to existing enterprises that fail to respond. The new kinds of markets embrace physical goods as well as informational goods and services; for example a small UK bookshop quadrupled its sales by changing its market - from the small local community able to visit its High Street store to the millions of world wide Internet users able to visit its website. These new kinds of markets are already accessible to European teleworkers and companies, so long as we think through and implement effective strategies for reaching them. This is of course one field where Europe's cultural diversity is a strength. For products sold through English language sites and services the USA has the advantage of a large, homogeneous and well advanced home market where considerable effort and skill is needed to compete for attention and share of voice. But there is relatively little competition in global terms for online marketing in French, German or other non-English languages to those who prefer to do business in those languages - and there is a world wide diaspora of European-language speakers who will be delighted to use their home language online for many purposes, if we reach out effectively to connect with them.
For Europe's teleworkers, teletrade skills are as important as telecooperation skills. This applies to both company employees (if the company sells successfully online it will need more staff) and to individual, self-employed teleworkers (who have to sell their skills and services direct to prospective customers).
There are two main aspects of global telework that are of immediate concern to Europe in the late 1990s:
As with so many aspects of the Information society and the global networked economy, local workers and economic policy makers can see the greater geographic flexibility it offers to employers as either a threat or an opportunity. Its net impact will depend on Europe's overall response and on the responses of local communities across Europe.
Certainly, it is well known that a significant proportion of new software development for the world's leading software producers is already being undertaken in India instead of in the USA, the UK or Germany - traditionally the main centres of software production for global markets. It is instructive to consider the reasons for this, partly lower costs, but also the excellent reputation that certain areas in India have gained for the quality, reliability and consistency of their software programming skills. Its also instructive to consider that for world-leading software products such as Microsoft Windows or Netscape Navigator the initial programming cost is not a dominant factor in either market price or market success - when such a product is sold in millions of copies, factors such as marketing investment, support costs, distribution channel management and - above all - user satisfaction are much more important than initial creation cost.
Labour cost in terms of wages and overheads only becomes the key factor for products that have a relatively high labour content and a relatively low skill content - like many "old style" jobs of the industrial age. A highly skilled and consistently productive programmer can produce at least twice as much net usable output as one who is error prone or who needs constant monitoring - programmers are recruited and employed based on the results they achieve. Many of the new work opportunities of the Information Society will go to the workforce with the best combination of skills, motivation and learning capacity, not to the lowest bidder.
Unlikely as it may seem, a useful exemplar for the global mobility of skills in the networked economy can be found in the very traditional and relatively low-tech world of commercial theatre. The top writers, actors, singers, conductors, directors, producers, designers are in world-wide demand, they work on a world wide basis and can command very high earnings. To a large extent the work - and working conditions - are arranged to suit the worker. At the other end of the scale, there can be fierce competition for the more routine work - in the chorus line, in the orchestra pit, scene painting and scene shifting. At the organisational level there is wide variation between (for example) orchestras that are in highest demand, whose recordings sell in large numbers, with whom the best conductors and singers wish to appear, and those that are regarded as run-of-the mill, who have more difficulty in staging performances and attracting audiences. In these spheres, Europe is more than capable of competing with the best in the world, as illustrated by the world wide success of productions such as the Franco-British Les Miserables and the world reputation of houses such as La Scala, Salzburg and Glyndebourne.
The globalisation of work and of labour markets means that similar effects can be expected in many Information Society sectors and enterprises. Work will be attracted to and by the most 'market-effective workforce', whose companies and workers will enjoy high earnings and a high level of discretion over when and where and in what circumstances work is to be performed. Against this, work will be attracted away from workforces that lack key skills, or are in other ways 'market ineffective'.
Alongside these macro effects of increased geographical mobility of, there is a micro effect in which a higher proportion of work is focused round the individual worker rather than the worker being seen as someone who fits into a particular job within a particular company. Aspects of this can be seen across a whole range of changes in the world of work:
In this context, the use of telework, teletrade and telecooperation methods by individuals to seek work opportunities across a wider geographical area dovetails neatly with companies' needs for greater flexibility in employment. In the traditional, single employer, single career path kind of work, its often the case that an individual can only achieve either career advancement or a change of role by moving from one company location to another. When (as is often the case) the demand for labour and skills is greater in an area distant from one's home the choice is between disruption of family and social life in exchange for better job prospects, or a stable family and social life but with restricted work opportunities and reduced earning power. Widespread adoption of telework, teletrade and telecooperation methods by both employers and individuals can mean wider access to work opportunities combined with greater social stability.
When we link these trends in the context of a global networked economy, it becomes clear that the response of both enterprises and individual workers will be conditioned by their degree of confidence. Those who feel that they understand what is happening and that they are well equipped to respond have a high level of confidence and perceive the global marketplace - for business and for work - as offering exciting new opportunities. But its natural that those who already feel insecure in their present work or employment and who are uninformed about what is happening should see any change in terms of threats to their already fragile position. In Europe as a whole, relatively high levels of unemployment in terms of local work opportunities have persisted for some years and its natural that those most affected by this will see globalisation of work as potentially another source of insecurity, unless they can very clearly see the opportunities. The challenge for Europe is to make the opportunities both real and visible so that enterprises and individuals are encouraged to get involved and to develop the necessary skills.
How well will Europe perceive and respond to the opportunities presented by the global networked economy? Four things are critical: first, it is essential to understand and develop the relevant skills of telecooperation, teletrade and telework; second Europe's enterprises - especially our micro-enterprises and innovative individuals - must understand the new opportunities and reach out to connect with them; third, these enterprises and individuals must have access to high performance Information Society infrastructure at world-competitive costs; and fourth - underpinning all of these - we must develop the experience and know how that will build confidence in the opportunities instead of fear of the unknown.
These issues are important to the European agenda. They are already being addressed today in many programmes and projects, as described in this document. As section 4 demonstrates, Green Papers on social and societal issues have been launched by the Commission in order to involve the social partners and the citizens of Europe in the debate. Awareness activities to involve as many Europeans as possible are underway. Section 5 describes the preparation for the Fifth Framework Programme, where the focus of one specific key action will be on new ways of working and electronic commerce.
These initiatives are contributing to Europe's progress, not only at the international level, but crucially at local, regional and national levels as well, as section 3 clearly demonstrates. Much is being achieved, but much remains to be done using new approaches as well as existing mechanisms.
In particular, the global dimension is being addressed though the development of a strong network of European Telework Online websites, working both in English and in other national languages, and linked with telework websites world wide. This means that enterprises and individuals in Europe who seek information about telework are made immediately and vividly aware of the global nature of the networked economy and have direct opportunities to connect with work opportunities outside as well as within Europe. However, this resource is - by definition - available only to those who have already made the decision to 'get connected' to the networks - currently only about one or two per cent of Europe's potential teleworkers.
A key priority for Europe is now to encourage and assist everyone in the workforce to get connected so that they can learn and understand for themselves and develop the confidence and skills needed for future success.
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