A.The information society

5.1. Introduction

This decade is witnessing the forging of a link of unprecedented magnitude and significance between the technological innovation process and economic and social organization. Countless innovations are combining to bring about a major upheaval in the organization of activities and relationships within society. A new "information society" is emerging in which the services provided by information and communications technologies (ICTs) underpin human activities. It constitutes an upheaval but can also offer new job prospects.

With easier access to information, it is becoming increasingly easy to identify, evaluate and compete with economic activities in all sectors. The pressure of the marketplace is spreading and growing, obliging businesses to exploit every opportunity available to increase productivity and efficiency. Structural adaptability is becoming a major prerequisite for economic success. The growing interconnection of the economy is leading to major productivity improvements in the production of goods but also in relation to services, and the borderline between goods and services is becoming increasingly blurred. Throughout the world there is a trend towards specialization and professionalization in economic activities which is gradually extending to subcontractors and service providers. To be able to compete worldwide, European industry must exploit all possible ways of improving its competitiveness by making growing and effective use of ICTs. It must favour innovative and attacking strategies aimed at acquiring market shares rather than simply adjusting by reducing its production costs.

Businesses are very much aware of the importance of applying ICTs in order to stay competitive. The job situation has generally remained more favourable in companies which have introduced microelectronics than in those companies that have not used this technology. The main effects have been job substitutions on the basis of different qualifications. The spread of ICTs within the Community has generated increases in productivity and in GDP, and a lower rate of inflation. The overall impact on employment depends to a large extent on how competitive the European ICT industry is: the better it performs, the greater the benefit in terms of the impact on employment. However, the worrying current employment situation within the Community cannot be blamed on the penetration of the ICTs into the industrial and social fabric.

The economic impact of technological progress on growth and employment depends on the innovation process, which has become interactive. The linear model of innovation, with the innovative act being isolated, has in today's world been replaced by complex mechanisms: innovation requires constant and organized interdependence between the upstream phases linked to technology, and the downstream phases linked to the market.

The means available to create, process, access and transfer information are remodelling relationships in our societies. One of the most important aspects of current developments is the breathtaking expansion in the means available to us to communicate and process information (sound, text, images) in digital form.

Companies' operations have become unthinkable without the use of ICTs. These technologies are enabling them to seek total integration of their own functions in space and time and in terms of their environment. The introduction of ICTs, globalization and international competition are forcing companies to rethink the way in which they organize their production. Where the general public is concerned, the penetration of ICT-dependent products and services into everyday activities is also striking. This generates new forms of economic and social organization the structure of which is no longer subject to geographical constraints but depends on telecommunications networks or teleports: teleworking is emerging as a major social phenomenon. Authorities concerned with the management of public funds and wishing to provide their constituents with better quality services also call upon ICTs. Relationships between the general public and the authorities are changing, and more fundamentally the present boundaries between the role of the State and the market are altering.

Despite the undeniable progress that has been made, the penetration of ICTs is not an unmitigated success story. The changeover towards an information society has placed severe demands on the adaptability of those concerned. The risk of exclusion, e.g. as a result of inadequate skills or qualifications and, more generally, the emergence of a two-tier society should not be underestimated. Europe must prepare itself for this changeover in order to capitalize upon the economic and social advantages while analysing and mitigating any adverse consequences: an increase in the isolation of individuals, intrusions into private life, and moral and ethical problems. It is important to identify to a greater extent the employment possibilities for those who encounter difficulties in integrating into a working world which is becoming increasingly complex and demanding. Social responsibility is a matter for employers, employees and the State. The information society is producing a significant acceleration of economic and social changes, and new and more flexible forms of employment are emerging which often require new forms of social protection.

5.2. A common information area

The move towards an "information society" is irreversible, and affects all aspects of society and interrelations between economic partners. Creation of a common information area within the Community will enable the Community fully to seize these opportunities.

(a) What is a common information area?

The common information area consists of a number of indivisible levels:

1. the information itself, converted and collated in electronic, i.e. digital, form (databases, document bases, image bases, CDI etc.);

2. the hardware, components and software available to the user to process this information;

3. the physical infrastructure (terrestrial cable infrastructure, radio communications networks and satellites);

4. the basic telecommunications services, particularly electronic mail, file transfer, interactive access to databases and interactive digital image transmission;

5. the applications, for which the abovementioned levels perform the storage, processing and transmission functions, providing users with the specific services they need. Generally, users "see" only the application to which they are connected; the transport side needs to be "transparent" for them. Consequently, applications are the area where the greatest efforts must be made to improve the structuring of the information and user-friendliness. With the aid of the applications, their performance and the conditions in which they can be used, the common information area will have an economic and social impact and can help to improve the employment situation;

6. users who are not only trained in operation of the applications but are also aware of the potential of ICTs and of the conditions required for optimum use thereof.

(b) What opportunities?

The common information area is a factor for economic and social improvement. In the current competitive context, access to and mobilization of information are becoming the central aspects of productivity and competitiveness, especially for SMEs. The capital and non-capital investment required to set up information technology infrastructures directly supports growth and contributes to structural improvements in the conditions of supply. The common information area is also a factor for economic and social cohesion: it will allow reconsideration of siting and make it possible to promote new decentralized methods of organizing work, e.g. teleworking. It contributes to the performance of other major infrastructures, in particular transport infrastructures, and constitutes an aid for the protection of the environment and risk management. Last but not least, infrastructures are a powerful lever for the development of new services, and in this way can make a significant contribution to improving the job situation. In particular, certain services for which the State has been responsible hitherto, and which are subject to increasingly tight budget restrictions, could be transferred permanently to the market. There are many examples of such new services related to communication and social relations: education and training, culture, security, etc. They cannot be developed free of charge and be funded implicitly by the taxpayer. They call for the introduction of new methods of payment, such as the pay-per-use system.

Modern technologies are fundamentally changing the relationship between the State and the general public. The ordinary citizen can have access to "public services" on an individual basis, and these will be invoiced on the basis of the use made of them. Transferring such services to the marketplace will lead to new private-sector offers of services and numerous job-creation opportunities. However, this will have to be accompanied by a reduction in user costs; otherwise, no-one will be willing to make use of such opportunities. It will also be essential to ensure that this transfer does not entail social disbenefits.

(c) The policies pursued with the Triad (Community, USA and Japan)

The move towards an information society, and the opportunities which it provides, will in the long run be as important as the first industrial revolution. It is difficult to predict the pace at which this change will take place. The economies which are the first to succeed in completing this change satisfactorily will have major competitive advantages. The United States and Japan are therefore attempting to speed up the process.

In the United States, the public authorities have a strong desire to maintain American technological pre-eminence, in particular on national economic security grounds, and are making technology the driving force behind a revival in American economic growth and competitiveness. The policy to establish information technology infrastructure spanning the entire United States is considered vital for growth in the USA. The project to speed up the introduction of new high-speed networks, computer systems and communication technologies is not limited to investment in physical infrastructures. It also includes the development and installation of new technologies and applications.

In Japan, political awareness of the strategic importance of ICTs for Japan's economic development dates back to the 1960s, and a social consensus on the priorities and the means and programmes required was already achieved at that time. The recognized importance of "information infrastructures" to maintain Japan's development has given rise to a programme under the new Japanese economic recovery plan.

The Community and the Member States have taken numerous steps to create information infrastructures: revision of the regulatory framework for telecommunications, and in particular the liberalization of value-added services and a programme designed to culminate in 1998 in the liberalization of voice telephony, RTD support programme, stimulation of the development of data-communication systems of general interest, establishment of a standardization policy, and a policy of innovation and support for regional policy.

The development of an "information society" will be a global phenomenon, led first of all by the Triad, but gradually extended to cover the entire planet. In pursuing its strategy, Europe should aim at achieving three objectives:

1. from the outset, placing its approach in a world perspective, and therefore encouraging the international alliance strategies of its companies and operators; promoting where possible the development of open systems and international standards; working resolutely towards the opening up of third country markets, in order to seek genuine reciprocity, and opposing any form of discrimination;

2. ensuring, at the same time, that the systems developed take due account of European characteristics: multilingualism, cultural diversity, economic divergence, and more generally the preservation of its social model;

3. creating the conditions whereby, in an open and competitive international system, Europe still has an adequate take-up of basic technologies and an efficient and competitive industry.

Fuller use of the potential offered by information and communication technologies can:

• create new service markets;

• facilitate provision of services by the private rather than the public sector, including a new partnership between the private and public sector, e.g. for training;

• speed up administrative decision-making procedures.

5.3. The objective: to create new service markets

Europe has the know-how and experience to establish a common information area. However, to harness them, there needs to be a collective effort and a political framework so that the measures to be taken can be implemented as quickly as possible. This process will primarily be led by the private sector and underpinned by the emergence of new needs and new markets. It is therefore necessary to define the role of the public authorities unambiguously.

In the first instance, it will be their responsibility to address the "societal" implications as a whole, avoiding exclusion phenomena, maximizing the impact on employment, adapting education and training systems, and taking due account of the cultural and ethical implications for the general public, including aspects relating to the protection of privacy.

The second task of the public authorities will be to remove the remaining regulatory obstacles to the development of new markets. However, investors' "wait-and-see" attitude can also be explained by the fact that, for want of a communication infrastructure, demand cannot be expressed sufficiently clearly. To resolve this dilemma there is a need for the public authorities to provide encouragement, guidance and opportunities for concertation.

The third task of the public authorities is to create the conditions whereby European companies develop their strategies in an open internal and international competitive environment, and can continue to ensure that crucial technologies are mastered and developed in Europe.

The changeover towards an information society is a very complex process requiring new forms of partnership and cooperation between the public and private sectors. In the measures proposed below, the principle of subsidiarity must be applied fully between the private sector and the public authorities and also between the Community authorities and the national administrations.

A strategy for establishing a common information area must satisfy four specific requirements:

1. diffusion of best practice and development of European ICT applications, which is the fundamental objective in view of the contribution which it can make to restoring growth and strengthening competitiveness;

2. liberalization of the telecommunications sector, which alone can release the market forces of the information society; users must be offered a broad range of options at attractive tariffs;

3. faster standardization, which alone can create a European information area from the fragmented communications areas;

4. trans-European telecommunications infrastructure, which is essential as the basic foundation of the information society.

The policy for creating a common information area should set the following priorities:

(a) Diffusion of best practice and development of European ICT applications. This is the fundamental objective in view of the contribution which it can make to restoring growth, strengthening competitiveness and improving the employment situation.

(b) Creation and enforcement of a legal, regulatory and political environment encouraging private initiative by opening up the market to competition, taking due account of the interests of the Community (the existence of universal services and the emergence of European operators) and of individual citizens (protection of data and privacy, security, etc.).

(c) Development of basic trans-European telecommunications services, which are a sine qua non for the free movement of information.

(d) Provision of specific training targeted on extensive use of information and on the needs of the ICT industries for qualified human resources.

(e) Technology take-up and improvement of the performance of the European ICT industries, a precondition for adapting the applications to the specific situation in Europe, for making full use of technological progress and for maximizing the impact of the measures proposed on employment.

These five complementary priorities form an indivisible whole. The first sets the objective and the others are the means to attain that end. In the current climate of rapid technological and industrial change, action must be started as soon as possible to establish a European information infrastructure and give a positive lead to the strategic intentions and choices made by businesses. The instruments or bodies necessary to ensure the compatibility and interoperability of products and services must also be set up without delay.

(a) Diffusion of best practice and development of European ICT applications

Strict implementation conditions are needed to exploit all the potential offered by ICTs. In particular, the introduction of computer systems must go hand-in-hand with the identification of companies' strategic objectives, the functions and support to be provided by the system, and appropriate work organization. This is an area where the awareness of the user companies must be raised.

It is recommended that the following action be taken:

1. diffusion of best practice in the use of ICTs. Attention should be focused on the conditions under which ICTs are used: a programme for the diffusion of best ICT practice aimed at businesses, in particular SMEs, would significantly improve the impact of ICTs on their competitiveness and ability to create jobs;

2. launch of European applications projects. The crux of the matter is not technology, but organization. In order to avoid a proliferation of uncoordinated and incompatible applications in Europe, several major applications projects should be launched to catalyse the market and promote greater homogeneity in terms of standards in particular. Clear priorities must be defined. They offer the prospect of creating a market large enough to make investment in telecommunications infrastructure profitable and guarantee satisfactory amortization. They could concern:
   • administrations, through an extended version of the IDA programme;

   • major public services. On the basis of work already carried out, efforts should be concentrated on effective implementation of a limited number of major projects leading to a political commitment: an integrated air traffic control system, a European road traffic management network, a European medical information system, a network of research centres, a European distance learning service, a "computers in schools" programme or a European civil protection system;

   • teleworking and telepartnerships. Teleworking and telepartnerships have an important part to play in the relocation of work and of businesses to the disadvantaged areas of Europe (rural areas, peripheral areas or old industrial areas, etc.). A European project could be launched to promote the development of teleworking and telepartnerships;

   • greater involvement of ICT users in the creation and implementation of Community programmes;

   • strengthening the coordination of programmes.

Creation of a common information area will depend primarily on private sector investment. It is therefore essential to create a legal environment which will stimulate the development of such investments and guarantee that they are used in the public interest. Several types of action can be taken to achieve these objectives, most of which have already been initiated, and should be intensified where appropriate.

1. opening up to competition, to provide the broadest possible range of services at the best price to suit the market;

2. universal service. Since the traditional operators are becoming increasingly independent of the State and are exposed to growing competition, it is necessary to define precisely the universal service obligations, their price and how they should be financed;

3. standardization. Given the standardization policy conducted hitherto at Community level, enhancing the efficiency of the present system means speeding up standardization processes, ensuring transparency in standardization (declaration ab initio of patents by standards proposers) and guaranteeing all companies equitable rights to exploit the patents underlying the standards;

4. protection of data and privacy, in particular ensuring complete reliability of data transfer systems;

5. security of information and communication systems. Both industry and Member States are calling for coordinated action to solve the problems of security of information and communication systems.

(c) Providing the Community with basic trans-European telecommunications services

European telecommunications face considerable difficulties, notably the incompatibility and non-interoperability of the national telecommunications services' networks. The principal problem is not technological, it is the result of the structure and organization of the market: the absence of telecommunications operators of a European stature and the non-existence of basic services at European level (electronic mail and file transfer, remote access to databases and interactive image transmission services).*1

The following action can be recommended:

1. development of support networks: Euro-ISDN and integrated broadband communication (IBC) system. Mobile radio communications (GSM, PCN) are another area in which efforts should be made to speed up development;

2. acceleration of the standardization process and integration of standards into services, in particular those which are vital to service interoperability;

3. strengthening of coordination, in particular between telecommunications policy and the Structural Funds.

The competitive pressures on European industry require from all staff an increasingly high level of skills and an ability to use new technologies effectively. Managers need specific training to make them aware of the potential of ICTs and their organizational and socio-professional implications. Technicians and other workers need to have specific ICT-related aspects better integrated into the training for their basic trade. Schoolchildren and students should learn to use ICTs, in particular in order to resolve general education and training problems. Educating potential ICT users to enable them to make effective use of ICTs entails training as many people as possible in the basic skills and providing specialist training for some of them.

Europe has made a big effort to develop basic training in computer science, but it does not have sufficient qualified staff, and insufficient attention has been paid so far to the application of new technologies in training and education systems. In particular, the possibilities opened up by distance training should be better exploited.

The following recommendations are put forward:

1. there needs to be an in-depth analysis of the importance of the greatest possible number of people being given the basic knowledge for making the best possible use of data processing systems, and the conditions and resources necessary to achieve this;

2. on user-oriented training: generalize the use of new technologies in teaching and training, notably by developing appropriate software and training teachers and instructors;

3. on producer-oriented training: it is essential to train the engineers and researchers which the European ICT industry needs and to coordinate the ICT-related training provided under the various specific Community RTD programmes.

(e) Harnessing technologies and improving the performance of Europe's ICT industry

Unlike its competitors, Europe's ICT industry does not have a firm hold on its home market. Europe must be given the applications necessary to meet its needs and the ability to devise the requisite applications software. A solid software industry base is inconceivable without close cooperation with equipment suppliers and early knowledge of how their equipment performs. Because of the speed of new developments, it is essential to know the specifications of equipment and components before they are available on the market, otherwise it is possible only to follow developments, which leaves very little scope for initiative. Having a strong European ICT industry would also help considerably in maintaining a scientific and technological community in Europe, and particularly in harnessing generic manufacturing technology.

It is recommended that action be taken in the following areas:

1. promotion of strategy watch at European level. There should be action to raise awareness on strategy watch, to reinforce the measures already taken and to coordinate and rationalize existing resources in order to remedy the lack of strategy watch structures and organizations in Europe;

2. support for the R&D effort. The rapidity of technological progress requires that the R&D effort be maintained and even reinforced. In the priorities of the Fourth Framework Programme concerning the generic technologies necessary for the emergence of an information and communication infrastructure special emphasis will be placed on taking into account users' and market needs and the general aim of making the economy as a whole more competitive. The impact of the programmes will be strengthened by involving users, and through training, coordination with national initiatives and Eureka and international cooperation. Careful consideration needs to be given to taking better account of the importance of incremental research, industrial realities and the interactive nature of the innovation process;

3. exploitation of RTD projects through industrial policy. Specific action could be launched consisting in developing pilot demonstrations in those areas where market forces are slow to commercialize the results of RTD (multimedia, in particular);

4. adapting industrial and commercial policies to the new international situation. Globalization of the economy and the existence of unfair competitive practices in the various markets of the Triad create competitive advantages which could seriously handicap European companies. In accordance with the Council Resolution of November 1991,*2 higher priority should be given to specific measures aimed at levelling competitive practices and launching international cooperation programmes.

5.4. Conclusion: combining our efforts

A Community policy aimed at establishing a common information area will help to increase competition and improve European competitiveness. It will help to create jobs. It should be backed up by specific measures aimed at facilitating economic and social changes, and ensuring that all workers have jobs which reflect their qualifications. To this end, steps should be taken to promote the creation of new jobs, e.g. in new social services.

Devising a policy to promote a common information area requires in particular the setting-up of an efficient system for cooperation between the parties concerned. Because of the Community's political structure, this is much more difficult than in the USA or Japan.

Establishing an information infrastructure will require urgent and structured measures. If these measures are to be credible and successful, it is important to define them clearly, to specify a timetable and to put in place resources or structures which will ensure that this timetable is respected. We must therefore combine our efforts in Europe and make greater use of synergy in order to achieve as soon as possible objectives aimed at building an efficient European information infrastructure and taking the necessary measures for creating new services.

It is proposed that a Task Force on European Information Infrastructures be established with a direct mandate from the European Council. This very high level Task Force would follow guidelines set by the European Council and would have the task of establishing priorities, deciding on procedures and setting schedules. It would be required to report to the European Council within three months after first consulting all the parties concerned.

It would consist of one member of the Commission, several members of the Governments of the Member States, representatives of the European Parliament and high-level representatives of industry, operators, users and financial institutions.

The Task Force should be set up before the end of 1993.

At the same time, the European Council should instruct the Council to speed up the work already being done aimed at setting up information infrastructures.