At the European Telework Online website

"Telework 1998":
Annual Report from the European Commission

3.1.2 European telework in an Information Society context

Governments across Europe - at both national and local levels - have recognised the economic and societal importance of the emergence of an Information Society and a network economy. Enterprises and individuals in both the public and private sectors are connecting to the Internet. Website and email addresses appear in advertising for cars, cutlery and cosmetics. Leading newspapers, radio programmes and TV channels routinely provide email addresses for correspondence. Email addresses appear on the business cards of managers and professionals, along with mobile phone numbers and in some cases video connection numbers. The signs of an Information Society are everywhere - widely apparent, at least to those who are looking for them. However, this masks a quite different reality. In most of Europe only a small minority of individual citizens have full personal access to the Internet either at work or privately; and in Europe as a whole only a minority of those who do have such access are actively using the Internet and Information Society applications as an inherent part of their day to day work and other activities.

Despite heightened attention to the Information Society by Governments and rapidly increasing awareness of the Internet and it's applications, Western Europe's overall investment in ICTs continues to be considerably lower per head of population than in either USA or Japan.

Overall, only one European in 20 has Internet access. Perhaps one in a hundred has begun to integrate the use of Internet technologies into their daily activities as a matter of routine. These overall averages mask very wide variations between both countries and companies:

In Sweden and Finland around 15 in 100 citizens have Internet access; in Greece and Portugal less than 2 in 100. In some multinational enterprises email, Intranets and co-operation technologies such as Lotus Notes³³ are fully implemented and used as a primary tool by everyone from the chief executive to the receptionist. In other enterprises email has been badly implemented and become regarded as much as a nuisance as a benefit. In others (in numeric terms, the majority of enterprises) few people - or no people - have computers on their desks.

There is a clear relationship between understanding and regular use of Information Society technologies and understanding and appropriate application of telework, teletrade and telecooperation. This is especially visible in the case of multinational enterprises. In an enterprise that has fully embraced electronic communications it soon becomes obvious to everyone that work activities and relationships transcend physical locations and geography. Some people have as many (or more) work relationships with colleagues in other locations as with colleagues at the next desk or in the next office. When such a person is asked to move their family a hundred or a thousand miles on reassignment to a new role it is natural to question the need to move physically; their existing main work relationships are already with people in several different locations. People with long or difficult journeys to their "functional" location find it more convenient to use desk space at their nearest location. Even more so in today’s changing societal context in which many households have two, or even more, individuals with jobs. It is an obvious step from this to the idea of working some of the time at home and the rest of the time at whatever location is most convenient to the person and the task at hand. On the other hand in companies without email and other enhanced personal and group communications (or in organisations where email is badly implemented and managed), formal communication is either face to face, by written memo or by notice board. Informal communication is round the coffee machine or in the cafeteria. The suggestion that an employee might just as well work at home may well seem like a suggestion that they might just as well leave the company altogether! The relative penetration and use of Information Society technologies in different companies, together with their scale and geographic structure, are key factors determining the spread of teleworking in all its forms. Existing levels of use and understanding of the technologies need to be fully taken into account in planning Information Society applications for organisations of all sizes in both public and private sectors.

3.1.3 Vive les differences!

Similar considerations arise when considering the differences between countries within Europe and different regions within the same country. In this case the prevalence of ICTs is one of several important factors. For some of these factors, patterns emerge at the European level; an understanding of these patterns is useful in developing common policies and strategies and in sharing experiences and learning. Other factors need to be seen in the specific context of each country (for national planning) and each region or locality (for local planning).

Some key aspects of differentiation can be readily identified and reported, others are more subtle. Among the most clearly identifiable factors are:

Relative concentration or dispersal. For the organisation, is it a one-location enterprise serving primarily local needs, or a multi-location enterprise serving national, European or global markets? For the community (nation, city, region, village), is the population highly concentrated, with essential commercial and public services close to hand, or is widely dispersed, with long travel distances to reach (for example) specialist medical services or a wide choice of consumer products. As an example of different values, for the concentrated population teleworking may present opportunities to attract or create new office based work opportunities such as the concentrations of large and small scale tele-services centres clustered near cities like Leeds (UK) or in Belgium. For a dispersed population telework may mean increased ability to attract successful individuals to live and work in remote but attractive habitats, as well as opportunities for creating learning and work opportunities in local telecentres.

Relative prosperity and purchasing power. It is no coincidence that, overall, high intensity of ICT use in Europe is encountered in areas that have high performance economies, while low intensity is associated with areas of relatively low per capita GDP. In particular, relative spending power affects the propensity for citizens to acquire PCs and Internet access for use at home. The decision to buy a 1,000 ECUs PC or to spend 20 ECUs a month on Internet access looks quite different in a country where per capita GDP is (say) 30,000 ECUs compared to one where per capita GDP is 10,000 ECUs.

Degrees of "economic freedom", including labour market flexibility. The Economist Intelligence Unit reports on the relative attractiveness of countries for business investment according to a number of different metrics, one of which is "economic freedom" - the extent to which the state and other social mechanisms does or does not intervene in or constrain transactions between individuals³⁴. In this as in the other factors, "more" does not necessarily mean better. Across Europe there are pressures for both more regulation and more freedom; we need "appropriate" regulation. Nevertheless, there is evidence that a higher degree of economic freedom encourages individualism and acts as a spur to enterprise and innovation and its results can be seen in the high levels of "informal" teleworking observed in countries like Netherlands and the UK. For companies and authorities, the main point is to be aware of this factor and its impact on the nature and pace of Information Society developments. A country with a high level of public intervention and public ownership or direction of industries and services may move faster in implementing large scale public applications of technology, but the private sector may wait for appropriate signals from government and a strong public consensus before innovative working methods can be widely adopted. In some EU countries it is noticeable that only externally owned and directed multinationals apply teleworking on an organised and fully integrated way - the "signal" comes internally from other branches of the enterprise.

Linked with economic freedom are other important variables: the degrees of formality or informality in labour relations, employee relations and management styles. Such factors are influenced by cultural attitudes as well as formal mechanisms; they cannot be "scaled" to make a comparative table, either among companies or countries. However their influence can clearly be seen in the extent to which in one country "informal" teleworking is widespread, unremarkable and uncontroversial while in another country the informal approach is seen as anomalous and is a source of controversy. The ETD estimates in the first table in this section 3 reflect the impact of this factor in the contrast between Germany and the UK. UK estimates suggest that alternative forms of teleworking - including a high level of informal telecommuting - engage more than six times as many people as formally supported telecommuting; the German estimate shows a higher number of people in organised schemes but a much lower proportion of people in alternative modes. The same factor can be seen at work even in organisations that might be expected to be highly bureaucratic. As long ago as the early 1990s guidelines for the civil service published by the UK Treasury Department recognised that some employees and their local managers might agree between themselves a degree of home based working instead of commuting. Common sense rather than rules were seen as the basis for such arrangements.

The structure of industry and the economy. The most widely known and discussed variable is between services, industry and primary (agricultural and extractive) sectors, but another important variable affecting Information Society developments is the nature and extent of international trade. Further analysis is needed before this can be presented in simple tabular form, but its impact can be seen in the contrasts between particular economies. As an example, tourism and agriculture account for some 18% of GDP in Greece compared with some 3% in Sweden. Information society applications are important in both tourism and agriculture, but the idea of working at home instead of commuting is of little relevance. The structure of the economy affects the motivation of Information Society investment as well as the nature of developments. As an example, Sweden and the UK have fairly similar levels of per capita GDP; both have similar levels of employment in services; and both have extensive overseas trading interests. But in Sweden, exports of "visibles" (industrial or forestry products) are more than twice the value of "invisibles", while for the UK invisibles and visibles each account for about the same proportion of value. A higher proportion of UK services employment is in commercial activities such as financial services, entertainment and tourism, generating revenue and taxes, while a higher proportion of Sweden's is in public services. Commercial applications of teleworking are to do with enhanced competitiveness, while public service applications are to do with attaining the social and policy objectives of the service concerned. For example, a commercial enterprise may use telework technologies to concentrate service operations that were previously dispersed and shift from face to face customer relations to telephone or online methods; for very similar activities some local authorities are moving tasks from a previously centralised basis to place them closer to the citizen.

3.1.4 Value from difference

It should be emphasised that an understanding of these variations is important for commercial purposes as well as for public strategies and initiatives. A company adopting telework or teletrade methods needs good data about take up and use among the local customers it serves today, as well as intelligence about existing and potential competitors who are emerging in both local and wider markets. A local authority needs to understand its own local strengths and weaknesses in the context of European and world wide patterns as well as the perceived and actual needs of its own citizens and enterprises. Managers in public and private sectors need both reliable data and the background information to interpret in their own context. In marketing, considerable attention is paid to differentiation - product differentiation to make the company's product stand out from others that may be functionally similar; and differentiation in methods of approaching and serving customers.

For Europe, there is considerable potential for applying telework to capitalise on regional differences. For example, as companies learn more about teleworking they start to apply it to address problems of costs and skills. The example of companies in Silicon Valley employing or contracting software developers in India is most often quoted; a company in an area of high costs and skill shortages provides valued work opportunities for people in an area of lower costs and available skills. As ICTs become the primary tool for more and more work in every sector of the economy the economy, this approach becomes more widely applicable. Within Europe we have the opportunity to enhance the competitiveness of companies in high performance, high earnings regions, using the skills of people in lower performance, lower earnings regions to the benefit of both the company and the two regions concerned. Left to the vagaries of the market there is an equal chance that such work will be contracted outside of Europe rather than inside. But if European managers (and regional economic planners) can be provided with better and more reliable data about costs, skills and infrastructure in the other regions of Europe we increase the likelihood that they will seek and find the resources they need within the Union³⁵.

This aspect of differences, and the importance of reliable measurement and reporting of differences, becomes even more significant when we consider the enlargement of Europe to include new member states that - in the main - have lower costs and lower levels of economic performance than the average of the present members. Added to this is the increasing linkage of Europe with neighbouring regions around the Mediterranean and Central and Eastern Europe. If Europe and its neighbours find good ways to capitalise on differences to our mutual benefit we will strengthen overall economic performance and enhance social cohesion. Appropriate measurement and reporting, focused on identification of "useful differentiation", will play an important role.

3.1.5 Benefits, barriers and issues

The 1997 status report identified awareness (or rather, lack of awareness) as the most significant barrier to the spread of teleworking. A subtle but important shift seems to have occurred during 1997-1998, possibly due - at least in part - to the rapidly increased general focus on ICTs resulting from high media attention to the Internet. Current reports from those countries that have an appropriate economy and infrastructure for home based teleworking suggest that there is now very wide recognition of the term and a reasonable general understanding of what it is about (working at home instead of commuting). What is lacking now is not general awareness but more detailed knowledge and understanding. Most people have a rather simplistic view that telework means working at home; they don't know about or understand alternatives such as neighbourhood telecentres. Many see teleworking in plain "either-or" terms. They don't understand and appreciate that most home-based telecommuting is mixed and combined with travel to work - either some days at home and some at work or even just shifting the commute time to off peak by doing some of the day's work before leaving home. Many (perhaps most) people don't like the idea of working entirely at home. They may have homes that are unsuitable as workplaces, they may prefer the idea of being with colleagues "at work" rather than being on their own at home. The simplistic view of telework as only being about working at home instead of at the office has been the main focus of media coverage and considerable effort is needed by both telework consultants and the telework champions in companies to get across the message that telework provides a wide variety of options.

Here again the analysis of differences is important. While the need in countries with high levels of ICT penetration and use move from general awareness to more subtle and detailed understanding, other countries have different problems that require different solutions. Where Internet use is low, the early pioneers struggle to run websites and online discussion in the absence of a critical mass of users and supporters, or to promote Information Society techniques in new ways that fit the local environment but may - quite appropriately - be different from the examples coming from the USA or the European mainstream.

Where telework is already on the agenda, the barriers that are most frequently reported have changed little during the past year, although our understanding of the details of barriers has improved. They still include:

• restrictive taxation and regulation, or uncertainty about how tax and regulatory rules apply in particular modes of teleworking
• resistance from management who sometimes fear losing control, and especially from middle management who fear losing their rôles as organisational hierarchies are squeezed and team working is introduced
• to this can be added concerns among managers about their own ability to "manage at a distance", and sometimes a lack of confidence that employees will work effectively in the absence of hands-on supervision; this links with the degree of formality or informality in management styles in different organisations
• trades union and employee resistance when telework is seen as part of a de-stabilisation and casualisation of the labour market, for example in the context of the often close association between telework and part-time work, short-term contracts and the out-sourcing of tasks previously undertaken by permanent staff within the company
• the personal perspective on this is sometimes linked with the increase of self-employment - it is feared that moving "off site" will be the first step towards moving to self-employed status; because of both cultural and tax/regulatory differences, attitudes to self-employment vary widely in countries
• relatively under-developed ICT infrastructures and penetration in some, especially southern, European countries
• the perceived high on-cost of the necessary equipment and services, especially in companies that have not fully implemented ICTs and networking across the enterprise, and in countries with low ICT penetration and low per-capita GDP

All these barriers remain real and need to be faced and resolved in order to promote telework that is both economically and socially beneficial. In many cases the barriers connected with fears and concerns are linked with the simplistic model of working at home full time instead of commuting. The employee who teleworks part of the time but is in the usual office several days a week is more visibly part of the mainstream than one who works almost full time at home. The same barriers are also be linked with the lack of knowledge and understanding of alternative modes such as neighbourhood telecentres or company-owned work centres. When a teleworking employee still works on company premises or in premises where the employer meets the whole costs this again confirms that the employee remains part of the mainstream. There is also more confidence among managers that such employees are "at work".

Two important perspectives on these barriers are to do with confidence. There are wide variations in the confidence of managers and employees in the strength and future of their own organisation and in the strength and future of the overall economy and (especially) of the local labour market. People in a profitable company, in a growth sector, located in a prosperous and buoyant region are much more likely to see telework in purely practical terms ("will it work for me?") and much less likely to feel threatened by risks and issues. There are also wide variations in personal levels of confidence that individuals feel about their own ability to prosper and survive in an Information Society context. The person with considerable know-how and experience in Information Society technologies and techniques is confident that he or she can find enjoyable and rewarding work, whether in employment or self-employment. The person who lacks relevant experience and know-how is puzzled and confused by "all this stuff" and (quite naturally) clings to what is known and understood - in other words, the old ways. This can be observed in quite senior management as well as on the shop floor. Knowledge and competence breed confidence; ignorance and lack of experience breed fear.

An additional challenge, hardly yet appreciated, is the opportunity telework presents to re-integrate socially excluded groups, such as the unemployed and the disabled, into the labour market. A promising development in 1997-1998 has been the emergence of ISdAC, the Information Society disAbilities Challenge, which won a 1997 European Telework Award for innovation and has the explicit goal to campaign for awareness and action on wider social, educational and work inclusion of people with disabilities through the appropriate deployment and use of ICTs.

As described elsewhere in this report, considerable activity is in hand at European level and in some Member States to address these barriers and issues. More effort is still needed to improve knowledge and understanding and there is scope for applying Information Society techniques to achieve this. Active and busy websites and online discussions and information services now exist in around half of the EU member states. These have proved to be a powerful vehicle for connecting telework champions in companies to expert practitioners. They help resolve the doubts of potential teleworkers and their managers by answering their questions and bringing them into contact with people who already telework and can speak from personal experience of the benefits and how to gain them as well as the pitfalls and how to avoid them. It has also been observed that although only a relative few Europeans are actively using the Internet, each of today's active users is known to many friends and colleagues who are not yet connected; effective messages that reach the connected pioneers can be relayed by them to their colleagues. Especially in those countries with relatively low ICT penetration, the early pioneers play a key rôle in changing attitudes and stimulating action; people see them as experts and ask their advice.

This does not mean, however, that we can ignore or abandon other communications methods; even in the most intensively connected countries and communities people still get much of their information through newspapers, magazines, TV and radio and gain much of their knowledge and understanding through personal contacts at meetings, seminars and conferences. This is demonstrated by the large scale advertising campaigns on telework, electronic commerce and, a new term: e-business, bringing the two terms together. Most telecom operators recognise the importance of a more rapid development of their markets, and set up units specifically focusing on the development of telework, as do many suppliers in the ICT sector. It is therefore not a surprise that the European Commission found partners in developing telework in Europe in companies from these sectors for its media- focused European Telework Week initiative: core partners at the time of print of this document for 1998 are France Telecom, Telecom Italia, CISCO, as well as the core partners from 1997, Toshiba and Siemens. Uptake and media attention is crucial: information and educational effort remains important across the spectrum of communications methods, backed by improved measurement, reporting and analysis.

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