Policies for an Information Society
We are undergoing profound technological change and countries are all over the world are responding by developing policies that are intended to shape the development of information societies. The goals of these policies are remarkably similar, although it is possible to identify differences in the motivating factors.
When considering the mechanisms that have been chosen to achieve the policy goals, it is possible to identify two broadly divergent models. One is based on neo-liberal economic philosophies and emphasises the importance of market-led solutions, exploiting private capital. This approach has been adopted by the G7 nations, the European Union and Western-oriented economies such as Australia.
The alternative model can be described as dirigiste. It is based on a much greater degree of intervention and, consequently, places more emphasis on the role of the state as a participant rather than as a facilitator. This approach is characteristic of the economies in East Asia.
While it is early yet to identify the effects of the policies, it is possible to discern differences in the rates of social change and economic growth; the degree of stability and social cohesion and in what is becoming known as the cultural ecology of the information society.
The broad lesson seems to be that, when dealing with a pervasive social, political, economic and cultural phenomenon, neo-liberal policy mechanisms with their emphasis on narrow economic solutions are inadequate. The holistic approach that is characterised by the dirigiste model seems more appropriate.
Introduction
We are living at a time of profound change. The introduction of new information and communication technologies is having far-reaching effects on individuals, on organisations and on nation states. It is changing the ways in which we work learn and play; changing the relationships between individuals and the state; changing the nature of business and commerce and, in the long-run, it will change fundamentally the characteristics of cultures that have evolved over centuries.
It is not surprising, therefore, that governments are trying to find the most appropriate responses to deal with this situation. What is unusual is the fact that this has produced a flurry of policy formulation, the like of which we have never seen before.
Just five years ago, for example, Singapore was alone in having a clearly formulated set of national policies that were concerned with information and its use in society. Today, just about every country of significance has produced some form of information policy or is making an attempt to position itself as an information society.
Across the world, the goals of these information policies are surprisingly consistent. What differs are the mechanisms that have been selected to achieve the goals. Two dominant models have emerged in the last few years - each has different origins and characteristics. And each is likely to produce different effects. It is now becoming possible to assess which is likely to produce the most successful and enduring model of an information society.
The goals of information policy
The goals of information policy are remarkably similar. The hopes and aspirations of Bill Clinton and Al Gore in the USA are, when it comes to the development of an information society, uncannily like those of Jiang Zemin and Li Peng in China. They are a set of aims that are shared by the G7 nations, by developing countries like Thailand, by newly industrialised countries like South Africa and by small but mature economies like Belgium or Finland.
Broadly, what all these states are trying to achieve is first, cheap and efficient telecommunications infrastructures that will enable individuals and organisations to communicate with one another. Initially the need is to extend the reach of these networks so that there is universal service. Increasingly the pressure is on to expand the capacity to accommodate the larger and larger flows of digital information. An efficient telecommunications networks is the single most important element in a successful information society.
The second goal is to improve industrial and commercial competitiveness and productivity by making organisations use information as a resource. The productivity gain can come in many ways - through better use of research to speed innovation; through automation of administrative processes; or through the application of information-intensive management techniques. The secondary expectation is that, once individual companies and the overall economy become more competitive, it will be possible to make a fundamental shift in the nature of the economy by moving into more information-intensive operations that increase the value-added by each worker and, in so doing, bring about real increases in per capita incomes.
A prerequisite for this is a skilled workforce or, more properly, an educated workforce. The third policy goal is, therefore, to improve education and training. All citizens must have basic information and technology skills. Many need to develop these to a high level so that they can meet the needs of the information-intensive organisations. What is more, the education and training system must accommodate the need for lifelong learning and a constant process of extending and enriching skills.
An information society is seen as a means of promoting social harmony and cohesion. In developed countries, this goal stems from a concern about the level of fragmentation that has developed in the last thirty years. Rising levels of crime, unemployment and social deviancy worry politicians and they see the creation of an information society as a means of halting the slide into chaos - although it is never made very clear how this will come about. In less developed countries, the same goal of social cohesion is identifiable but here the motivation comes not from rising levels of fragmentation, but from a concern to ensure that everyone benefits from economic growth. Thus the intention is to reduce the disparity between rural and urban areas, to lessen the gulf between the poor and the prosperous and, in countries like Malaysia, to ensure that there is racial and religious harmony.
This is closely related to a set of political goals. Al Gore sees the information superhighway as a means of promoting more informed democracy and a higher level of participation. It would be stretching the point to say that such aspirations are shared by Li Peng in Beijing, but even here there is a recognition that centralised planning is a brake on economic and social development and that it is necessary for the central organs of the state to become more transparent so that sensible and better informed decisions can be made in a devolved structure.
Throughout there is a concern about culture. There are those that perceive Hollywood and the American information complex as a means of exerting a new form of hegemony. Some of these reside in the USA and regard this as a good thing. Many more reside elsewhere and have a different view. What they have in common is a desire to ensure that the development of an information society enhances and strengthens the home culture and, wherever possible, promulgates it elsewhere.
Finally, most of the information policies seek to provide some form of support for the information services sector. This is seen as a key strategic asset for the future and most states are trying to do something to nurture it.
Motivation
When we consider the underlying motivation for these policy aspirations the differences begin to emerge. Very broadly it is possible to identify two distinct clusters of motivation.
The first is dominant in the developed world and, in particular, in North America and Europe. It is motivation through fear. The dominant economies in the global economic system are seeing their positions eroded. New economies are emerging and changing the balance of power. This is producing a widespread concern about the loss of dominant economic positions and the consequent loss of influence on the world stage.
At home there is a corresponding concern about social disruption brought about by high levels of unemployment and by other structural changes in society. All this produces pressure to exploit an economic opportunity in the hope that, by maintaining or, if possible, increasing levels of national income it will be possible to stave off social dislocation and, critically, bring more of the workforce into employment.
The way out is seen to be a return to economic prosperity which will secure the country's standing in the world pecking order while tackling deep-seated social problems at home. Such a rationale is admirably set out in the recently published manifesto of Tony Blair's New Labour Party.
The alternative is a cluster of motivational factors associated with a similar desire for long-term economic growth and expansion. But here the starting point is different. In the less developed and newly-industrialised countries an information society is seen not as a means of hanging on to an existing position but as a path towards future prosperity through accelerated economic growth.
This accelerated growth is, however, also seen as the key to solving long-term socio-economic problems. The problems of rural stagnation, urban blight, disparities in income, poor education and inefficient public services. All can be addressed, so it is thought, by better use of information. In this way it becomes possible to achieve a desired degree of social cohesion and, what is more, to bring about conditions where economic growth reinforces cohesion instead of weakening it.
There is also, in some countries, a desire to move towards a new socio-political order. In many of the countries concerned, democratic systems are relatively new and are settling down after a period of disruption. Clearly information systems and the creation of an information society have a distinct bearing on the way in which the political system operates. Getting it right in a country like South Africa can be important.
The policy mechanisms
The wide variations in motivation contribute to the diversity of approaches in the mechanisms that are chosen to achieve the policy goals. Here it is possible to identify two distinct models which we might designate as neo-liberal and dirigiste.
Neo-Liberal
The neo-liberal model is, unsurprisingly, market-led. Private capital, operating through efficient markets, is seen as the driving force for the achievement of the policy goals. This carries the clear implication that the scope of the information policies is determined by what the private sector deems to be important, or profitable.
In this model the state acts as a facilitator. Its essential role is to create the conditions that will enable markets to flourish. It should intervene only in cases of market failure and even then its intervention should seek to create the conditions where market mechanisms can operate. This approach is clearly enunciated in the G7 information policy documents and it is a strand that runs through the National Information Infrastructure policies of the Clinton administration and through the Bangemann approach to the creation of a European information society. It is an approach that finds its purest expression in the approach of the present Conservative government in Britain where the current Information Society Initiative is primarily concerned with using relatively small amounts of government money to stimulate investment and the take-up of information technology by the private sector.
If the state is a facilitator, then the private sector is the doer. It is the private sector that mobilises the capital, makes the investment decisions, carries the risk and, if all works out well, makes the profit. In many developed countries this makes real sense. In Britain, for example, the privatised British Telecom generates very substantial flows of income and can channel these into infrastructure investment in ways that benefit both the nation and the company. Similarly, if foreign companies can be persuaded to invest their funds in a national infrastructure, then the nation is a net beneficiary. A similar rationale applies to the development of multimedia products.
To create these investment conditions, however, it is necessary to place due emphasis on competition. Markets must be opened up, state-owned companies must be privatised and competition must be encouraged. The key to this, so the orthodoxy goes, is to de-regulate. But, as the British government is discovering, introducing competition into an industry previously dominated by a state-owned monopoly is not an easy business and calls, paradoxically, for a high degree of regulation. So it is possible to observe an increasingly vigorous role being adopted by the Office for Telecommunications Regulation (OFTEL).
The emphasis on markets tends also to create a perception of people as consumers. Companies need to direct their products at these consumers and, if they are sufficiently powerful, to shape individuals' consumer preferences. There should be little need to educate the consumers in order that they can use the information products, rather the emphasis is on ease of use - what Peter Cochrane of British Telecom calls the 'three clicks maximum' approach.
Education and training is not neglected altogether. The private sector needs to be able to draw on a skilled workforce and ensuring that there is an adequate supply is one of the state's most important roles as facilitator. The educational reforms are, therefore, determined primarily by the requirements of the employment market.
Clearly, this approach to information policy draws on neo-liberal, post-Keynesian economics. It is, therefore most evident in those countries that advocate such economic philosophies. In the USA the approach underpins the information policies, although it is tempered and alleviated in a characteristically pragmatic way. In Britain the market-led approach pre-dominates, with the government conceding only reluctantly that is even has a role as facilitator. Working from this extreme, it is possible to identify a range of countries which have basically the same approach but which is moderated to a greater or lesser degree - Australia, Canada, all of the European Union member states and South Africa have moderated a basically neo-liberal approach to their information policies.
Dirigiste
At the other extreme is the dirigiste or interventionist model. Far from being led by market forces, policy implementation is driven by the state acting in accordance with a pre-determined set of objectives.
Clearly, in such circumstances the state is a, possibly the, key player. As such, it has many different roles. It can be the provider of investment funds; it can be a producer of information products and services; it can own major assets such as the telecommunications network; it can use its functions as facilitator, contributor, consumer, regulator, arbitrator and leader to advance progress towards the achievement of the policy goals. Above all else, the state is seen as the leader, setting the goals and writing the policy agenda.
But the private sector also has an important role to play. Many of the states that have adopted a dirigiste approach to their information policy are fiercely capitalist and private sector companies play a major part in the present and future information societies. The critical difference lies in the perception that there is a partnership between the state and the private sector. The trick is to determine which functions are best left to the state and which are best delegated to the private sector.
Many of the countries following a dirigiste approach are developing or newly industrialised. In some cases it makes sense for the public sector to lead investment in the infrastructure. In others it is inevitable. The large amounts of capital investment required are not sufficiently attractive for private capital: the returns may be too uncertain; the pay-back period may be too long; the investment may be required in areas that are never likely to show a profit or the existing companies may be too short of capital resources to take on the high level of investment needed. So, in countries like China, Thailand and Vietnam the state has taken on the task of financing the building of the infrastructure, introducing competition into the construction and operation of an asset that remains in state hands. It is worth noting that this was the strategy that was used by nearly all developed countries to create their transport infrastructures.
Where the private sector is deemed to be the appropriate player, the aim of policy is to create conditions where competition can be managed rather than left solely to market forces. This approach stems from two beliefs. First there is the need to protect local industries until they are in a position to compete on equal terms with global players. This is the rationale behind the Korean industrial policy that produced world-class companies like Hyundai, LG and Samsung. The second belief is that markets are not always the best allocators of scarce national resources like capital and skilled labour. The requirements of capital, particularly international capital, frequently call for short-term returns when a long-term approach is needed. In Japan, for example, multimedia producers found it difficult to attract adequate levels of investment - the risks and uncertainties associated with multimedia deterred venture capitalists. So the Ministry of International Trade and Industry established a capital guarantee fund to underwrite investments in multimedia companies.
To counter the inadequacies of the market, a system of managed competition has arisen. And it is being applied in the information policy arena, particularly in the telecommunications and broadcasting markets. Entry to certain markets is restricted. Local companies are offered licences as monopolies, duopolies or oligopolies so that they can build up a strong home base without having to worry too much about obliteration by powerful multinationals. Even in mature markets like the USA competition is managed so that entry by foreign-owned companies is restricted and controlled. The recent merger of British Telecom and MCI is a case in point - it is far from certain that the US regulators will accept such an incursion into their telecommunications industry.
In such circumstances, regulation is seen, not as an evil to be eradicated, but as a policy instrument that can be used to achieve certain policy goals. The most obvious example is the need to achieve universal service. Open, unfettered competition will never ensure that telecommunications are provided universally, other than, perhaps in a compact city-state like Singapore. It is, however, possible to achieve the universal service goal through regulation and by placing conditions on the companies licensed to provide telecommunications service.
The other striking difference in the dirigiste approach is that it views people as participants in the information society of the future rather than simply regarding them as consumers or as potential workers in information-intensive organisations. There is, therefore, a much greater emphasis on education at all levels. The information policy of the Thai government, for example, places the highest priority on education and training, the aim being to create a whole population with the skills and abilities needed to function in an information society.
This dirigiste approach to information policy reflects, as we have noted, the general political economy of the countries concerned. As such, it draws on wide range of influences: including Confucius, Marx, and Keynes The theories put forward by these and other individuals have been reinforced by the practical example provided by countries like Singapore, Korea and Japan which have rapidly grown strong through the use of dirigiste economic policies. There is little reason to suggest that they will not continue to do so.
The effects
It is still very early to say with confidence what the effects of the different policy approaches will be. We are, however, getting to the stage where it is possible to venture some observations.
First, there is the speed of change. The technology is developing rapidly and, riding on this, dramatic changes are taking place in national economies as well as in individual organisations. The challenge is to re-structure national economies so that they can take better advantage of the opportunities presented by an information-intensive world. The structural change that has taken place in the economies of countries like Korea, Taiwan, Singapore and, more currently, China is, frankly, breathtaking. Within a very short space of time they have made a transition which is every bit as fundamental as that which took place in Britain in the 200 years since 1780. Contrast that with the very slow pace of structural change that is taking place in Britain and in our European partners.
Within individual companies there is an even greater degree of change. In a short space of time, for example, IBM changed from being one of the world's most prosperous and stable companies, to a lame duck and then back again into prosperity. New industries have emerged and with them have come powerful new multi-national corporations. Which policy approach seems better able to accommodate such rapid changes? The neo-liberals would say that competition creates the conditions that are most amenable to rapid change. And, given the relatively inflexible and inefficient political systems of the West, they may be right. But the dirigisme of East Asia seems to have produced companies that are much better equipped to cope with major structural change. There is, it seems to me, greater stability, allied with rapid expansion, in companies like LG, Samsung, Fujitsu and Mitsubishi, than there is in comparable Western companies like Compaq, Intel, Apple or even Microsoft. It is this combination of stability linked to rapid expansion that is, I believe, the key to successful organisational development.
Markets may provide one means of responding to changing conditions. An interventionist industrial policy, backed by a clear government vision certainly seems to offer an effective alternative.
Closely related is the question of relative rates of economic growth. Here the neo-liberal approach seems to be out-performed by the dirigiste economies of East Asia and, increasingly those of Latin America. During the last 25 years, in the neo-liberal economies of the West we have achieved modest rates of growth - around 3 per cent a year. In Britain the long-term growth rate is much lower - closer to 1.5 per cent. Over the same period the dirigiste economies of East Asia have achieved average growth rates that are closer to 10 per cent. As they pass Western levels of GDP per capita, they show few signs of slowing down. Within those rapidly expanding economies, information-related organisations will flourish. The demands for information will grow; the ability to pay will increase; and there will be sufficient capital to invest in new products and services. There will also be a sufficient national surplus income to finance the needed investment in education, in social and cultural information services and in the overall development of an information-intensive society.
We have noted that in both neo-liberal and dirigiste philosophies, one of the aims is to achieve stability and cohesion. How have the two systems performed? Market forces seem to be doing little to increase social cohesion. If anything, levels of alienation and isolation are increasing. The dirigiste systems are also under stress. The promised reductions in rural isolation, for example, have yet to materialise in countries like China, Vietnam and Thailand, although in Malaysia the differences between rural and urban areas are being reduced. What is, perhaps, the most notable achievement of the last 25 years is the high level of stability that has existed in the dirigiste systems. Rapid change, dramatic growth, racial and ethnic imbalances, all exist within the dirigiste economies, yet there has been remarkable stability. A major challenge lies ahead in testing whether the political systems that have evolved are sufficiently robust to survive the increased transparency that will come as the societies become more information-intensive.
Finally, we should consider what is becoming known as the cultural ecology of the information society. That is, the impact on cultures of the information and communication technologies. Broadly, will the shift towards a global information society mean that national cultures become subsumed within a world culture shaped in Hollywood and controlled by Rupert Murdoch? Or will we be able to use the technologies to enrich the diversity of global cultures. A neo-liberal approach, leaving such questions to the market would almost certainly result in an American cultural hegemony. The alternative is to resist such incursions so as to protect and nurture local cultures. The French government led an attempt in the European Union to limit the amount of non-European material shown on television in Europe, but their efforts were largely defeated by the neo-liberals, led by the British government. Whereas countries like China, India, Indonesia, Malaysia, Singapore and Vietnam are implementing policies that will constrain the impact of undesired cultural influences. I feel sure that the pressure to protect indigenous cultures will grow in the years to come.
The lessons
What lessons can we learn from this analysis? The first thing that strikes me is that we are dealing with a pervasive phenomenon, one that will have a significant impact on the social, economic, political and cultural life of a country. Information is a key element in the whole fabric of a society and the changes that are taking place in the technologies used to manipulate information will have a profound effect.
For this reason, if for no other, I believe that policies that are derived from narrow economic philosophies are inadequate. The neo-liberal approach which attempts to subject all issues to resolution by market forces may be an acceptable way of dealing with industrial and commercial policies but moving us towards an effectively functioning information society requires more than changes in the economic system. Information policies need to address a wide range of social, political and cultural issues in way that both accommodate and facilitate economic change.
The dirigiste approach, in marked contrast, emphasises an holistic approach and, it seems to me, it is almost certainly a more appropriate means of developing an information society. It is, therefore, encouraging to note that it is possible to identify a more interventionist approach emerging in Europe as concern moves away from information industries towards information societies. The interim report from the Commission's high level group of experts sets out a policy agenda that goes way beyond a reliance on market forces and private capital. Although, it has to be acknowledged that the overall thrust of European Union policy is still essentially neo-liberal.
I am not at all sure how long Britain and Europe will be able to hold the line. We do not have a market that is as big or as homogeneous as the United States. We also do not have the dynamism and impetus of growth that exists in the Asia-Pacific Region. We therefore face severe competition from both the East and the West. And, as a consequence, we have an information services sector that is steadily losing out to American competition and that is failing to capitalise on the rapidly expanding East Asian market.
We have yet to crack the difficult task of introducing effective competition into the monopolistic telecommunications industry with the consequence that our telecommunications infrastructure is expensive and inadequate. Yet we continue to follow the dogma of de-regulation. We are very slow to introduce information-intensive working practices into our organisations whether in the public or private sectors, and so we are slipping down the world competitiveness league tables. We are failing to make the quantitative and qualitative changes in the education system that will produce people with the skills and abilities needed by information-intensive organisations. We are not even able to produce an acceptable basic level of information literacy in our school graduates. And we are proving to be very slow at reforming our social and political systems to accommodate a new information-intensive social order.
The neo-liberal approach does not seem to have served us well. Success is not obligatory and the price of failure will be high. The time has come to, I believe, develop a different approach, one that does not rely wholly on market forces but that recognises the need for a clear vision and for a radically different approach to the achievement of the goals.