Europe and the global information society
On the basis of this report, the Council will adopt an operational programme defining precise procedures for action and the necessary means.
Brussels, 26 May 1994
Contents
Chapter I: The information society - new ways of living and working together
Chapter II: A market-driven revolutionChapter III: Completing the agenda
Chapter IV: The building blocks of the information society
Chapter V: Financing the information society a task for the private sector
Chapter VI: Follow-up
An Action Plan - summary of recommendations
This Report urges the European Union to put its faith in market mechanisms as the motive power to carry us into the Information Age.
This means that actions must be taken at the European level and by Member States to strike down entrenched positions which put Europe at a competitive disadvantage:
Throughout the world, information and communications technologies are generating a new industrial revolution already as significant and far-reaching as those of the past.
It is a revolution based on information, itself the expression of human knowledge. Technological progress now enables us to process, store, retrieve and communicate information in whatever form it may take - oral, written or visual - unconstrained by distance, time and volume.
This revolution adds huge new capacities to human intelligence and constitutes a resource which changes the way we work together and the way we live together.
This revolution adds huge new capacities to human intelligence and.... changes the way we work together and the way we live together.
Europe is already participating in this revolution, but with an approach which is still too fragmentary and which could reduce expected benefits. An information society is a means to achieve so many of the Union's objectives. We have to get it right, and get it right now.
Europe's ability to participate, to adapt and to exploit the new technologies
and the opportunities they create, will require partnership between
individuals, employers, unions and governments dedicated to managing change. If
we manage the changes before us with determination and understanding of the
social implications, we shall all gain in the long run.
Our work has been sustained by the conviction expressed in the Commission's
White Paper, Growth, Competitiveness and Employment, that "...the enormous
potential for new services relating to production, consumption, culture and
leisure activities will create large numbers of new jobs...". Yet nothing
will happen automatically. We have to act to ensure that these jobs are created
here, and soon. And that means public and private sectors acting together.
All revolutions generate uncertainty, discontinuity - and opportunity. Today's
is no exception. How we respond, how we turn current opportunities into real
benefits, will depend on how quickly we can enter the European information
society.
In the face of quite remarkable technological developments and economic
opportunities, all the leading global industrial players are reassessing their
strategies and their options.
The first countries to enter the information society will reap the greatest
rewards. They will set the agenda for all who must follow. By contrast,
countries which temporise, or favour half-hearted solutions, could, in less
than a decade, face disastrous declines in investment and a squeeze on jobs.
Given its history, we can be sure that Europe will take the opportunity. It
will create the information society. The only question is whether this will be
a strategic creation for the whole Union, or a more fragmented and much less
effective amalgam of individual initiatives by Member States, with
repercussions on every policy area, from the single market to cohesion.
The only question is whether this will be a strategic creation for the whole
Union, or a more fragmented and much less effective amalgam of individual
initiatives by Member States.
The widespread availability of new information tools and services will present
fresh opportunities to build a more equal and balanced society and to foster
individual accomplishment. The information society has the potential to improve
the quality of life of Europe's citizens, the efficiency of our social and
economic organisation and to reinforce cohesion.
The information society has the potential to improve the quality of life of
Europe's citizens, the efficiency of our social and economic organisation and
to reinforce cohesion.
The information revolution prompts profound changes in the way we view our
societies and also in their organisation and structure. This presents us with
a major challenge: either we grasp the opportunities before us and master the
risks, or we bow to them, together with all the uncertainties this may
entail.
The main risk lies in the creation of a two-tier society of have and have-nots,
in which only a part of the population has access to the new technology, is
comfortable using it and can fully enjoy its benefits. There is a danger that
individuals will reject the new information culture and its instruments.
Such a risk is inherent in the process of structural change. We must confront
it by convincing people that the new technologies hold out the prospect of a
major step forward towards a European society less subject to such constraints
as rigidity, inertia and compartmentalisation. By pooling resources that have
traditionally been separate, and indeed distant, the information infrastructure
unleashes unlimited potential for acquiring knowledge, innovation and
creativity.
Mastering risks, maximising benefits
Thus, we have to find ways to master the risks and maximise the benefits. This
places responsibilities on public authorities to establish safeguards and to
ensure the cohesion of the new society. Fair access to the infrastructure will
have to be guaranteed to all, as will provision of universal service, the
definition of which must evolve in line with the technology.
A great deal of effort must be put into securing widespread public acceptance
and actual use of the new technology. Preparing Europeans for the advent of the
information society is a priority task. Education, training and promotion will
necessarily playa central role. The White Paper's goal of giving European
citizens the right to life-long education and training here finds its full
justification. In order best to raise awareness, regional and local initiatives
- whether public or private - should be encouraged.
Preparing Europeans for the advent of the information society is a priority
task. Education, training and promotion will necessarily play a central role.
The arrival of the information society comes in tandem with changes in labour
legislation and the rise of new professions and skills. Continuous dialogue
between the social partners will be extremely important if we are to anticipate
and to manage the imminent transformation of the work place. This concerted
effort should reflect new relationships at the work place induced by the
changing environment.
More detailed consideration of these issues exceeds the scope of this Report.
The Group wishes to stress that Europe is bound to change, and that it is in
our interest to seize this opportunity. The information infrastructure can
prove an extraordinary instrument for serving the people of Europe and
improving our society by fully reflecting the original and often unique values
which underpin and give meaning to our lives.
At the end of the day, the added value brought by the new tools, and the
overall success of the information society, will depend on the input made by
our people, both individually and in working together. We are convinced that
Europeans will meet this challenge.
Why the urgency? Because competitive suppliers of networks and services from
outside Europe are increasingly active in our markets. They are convinced, as
we must be, that if Europe arrives late our suppliers of technologies and
services will lack the commercial muscle to win a share of the enormous global
opportunities which lie ahead. Our companies will migrate to more attractive
locations to do business. Our export markets will evaporate. We have to prove
them wrong.
Tide waits for no man, and this is a revolutionary tide, sweeping through
economic and social life. We must press on. At least we do not have the usual
European worry about catching up. In some areas we are well placed, in others
we do need to do more - but this is also true for the rest of the world's
trading nations.
The importance of the sector was evident by its prominence during the Uruguay
Round of GATT negotiations. This importance is destined to increase.
We should not be sceptical of our possibilities for success. We have major
technological, entrepreneurial and creative capabilities. However, the
diffusion of information is still too restricted andtoo expensive. This can be
tackled quickly through regulatory reforms.
Public awareness of the technologies has hitherto been too limited. This must
change. Political attention is too intermittent. The private sector expects a
new signal.
This Report outlines our vision of the information society and the benefits it
will deliver to our citizens and to economic operators. It points to areas in
which action is needed now so we can start out on the market-led passage to the
new age, as well as to the agents which can drive us there.
As requested in the Council's mandate, we advocate an Action Plan based on
specific initiatives involving partnerships linking public and private sectors.
Their objective is to stimulate markets so that they can rapidly attain
critical mass.
In this sector, private investment will be the driving force. Monopolistic,
anticompetitive environments are the real roadblocks to such involvement. The
situation here is completely different from that of other infrastructural
investments where public funds are still crucial, such as transport.
This sector is in rapid evolution. The market will drive, it will decide
winners and losers. Given the power and pervasiveness of the technology, this
market is global.
The prime task of government is to safeguard competitive forces and ensure a
strong and lasting political welcome for the information society, so that
demand-pull can finance growth, here as elsewhere.
By sharing our vision, and appreciating its urgency, Europe's decision-makers
can make the prospects for our renewed economic and social development
infinitely brighter.
Information has a multiplier effect which will energise every economic sector.
With market driven tariffs, there will be a vast array of novel information
services and applications:
Large and small companies and professional users are already leading the way in
exploiting the new technologies to raise the efficiency of their management and
production systems. And more radical changes to business organisation and
methods are on the way.
Business awareness of these trends and opportunities is still lower in Europe
compared to the US. Companies are not yet fully exploiting the potential for
internal reorganisation and for adapting relationships with suppliers,
contractors and customers. We have a lot of pent up demand to fill.
In the business markets, teleconferencing is one good example of a business
application worth promoting, while much effort is also being dedicated
worldwide to the perfection of telecommerce and electronic document interchange
(EDI).
Both offer such cost and time advantages over traditional methods that, once
applied, electronic procedures rapidly become the preferred way of doing
business. According to some estimates, handling an electronic requisition is
one tenth the cost of handling its paper equivalent, while an electronic mail
(e-mail) message is faster, more reliable and can save 95% of the cost of a
fax.
Electronic payments systems are already ushering in the cashless society in
some parts of Europe. We have a sizeable lead over the rest of the world in
smart card technology and applications. This is an area of global market
potential.
Markets for small and medium sized enterprises
Though Europe's 12 million SMEs are rightly regarded as the backbone of the
European economy, they do need to manage both information and managerial
resources better.
They need to be linked to easy access, cost-effective networks providing
information on production and market openings. The competitiveness of the whole
industrial fabric would be sharpened if their relationships with large
companies were based on the new technologies.
Networked relationships with universities, research institutes and laboratories
would boost their prospects even more by helping to remedy chronic R&D
deficiencies. Networking will also diminish the isolation of SMEs in Europe's
less advantaged regions, helping them to upgrade their products and find wider
markets.
Markets for consumers
These are expected to be richly populated with services, from home banking and
teleshopping to a near-limitless choice of entertainment on demand.
In Europe, like the United States, mass consumer markets may emerge as one of
the principal driving forces for the information society. American experience
already shows that the development markets encounters a number of obstacles and
uncertainties.
Given the initial high cost of new pay-per-view entertainment services, and of
the related equipment, as well as the high cost of bringing fibre optics to the
home, a large mass consumer market will develop more easily if entertainment
services are part of a broader package. This could also include information
data, cultural programming, sporting events, as well as telemarketing and
teleshopping. Pay-per-view for on-line services, as well as advertising, will
both be necessary as a source of revenue. To some extent, existing satellite
and telephone infrastructure can help to serve the consumer market in the
initial phase.
At the moment, this market is still only embryonic in Europe and is likely to
take longer to grow than in the United States. There, more than 60% of
households are tapped by cable TV systems which could also carry text and data
services. In Europe, only 25% are similarly equipped, and this figure masks
great differences between countries, e.g. Belgium (92%) and Greece (1-2%).
Another statistic: in the United States there are 34 PCs per hundred citizens.
The European figure overall is 10 per hundred, though the UK, for instance, at
22 per hundred, is closer to the US level of computer penetration.
Lack of available information services and poor computer awareness could
therefore prove handicaps in Europe. Telecommunication networks are, however,
comparable in size and cover, but lag behind in terms of utilisation. These
networks, therefore, can act as the basic port of access for the initial
services, but stimulation of user applications is still going to be
necessary.
Such structural weaknesses need not halt progress. Europe's technological
success with CD-ROM and CD-I could be the basis for a raft of non-networked
applications and services during the early formative years of the information
society. These services on disk have considerable export potential if Europe's
audio-visual industry succeeds in countering current US dominance in titles.
In terms of the market, France's Minitel network already offers an
encouraging example that European consumers are prepared to buy information and
transaction services on screen, if the access price is right. It reaches nearly
30 million private and business subscribers through six million small terminals
and carries about 15,000 different services. Minitel has created many new jobs,
directly and indirectly, through boosting business efficiency and
competitiveness.
In the UK, the success of the Community-sponsored Homestead programme,
using CD-I, is indicative, as is the highly successful launch of (an American)
dedicated cable teleshopping channel.
Meanwhile in the US, where the consumer market is more advanced,
video-on-demand and home shopping could emerge as the most popular services.
Audio-visual markets
Our biggest structural problem is the financial and organisational weakness of
the European programme industry. Despite the enormous richness of the European
heritage, and the potential of our creators, most of the programmes and most of
the stocks of acquired rights are not in European hands. A fast growing
European home market can provide European industry with an opportunity to
develop a home base and to exploit increased possibilities for exports.
Linguistic fragmentation of the market has long been seen as a disadvantage for
Europe's entertainment and audio-visual industry, especially with English
having an overwhelming dominance in the global market - a reflection of the US
lead in production and, importantly, in distribution. This lead, which starts
with cinema and continues with television, is likely to be extended to the new
audio-visual areas. However, once products can be easily accessible to
consumers, there will be more opportunities for expression of the multiplicity
of cultures and languages in which Europe abounds.
Europe's audio-visual industry is also burdened with regulations. Some of these
will soon be rendered obsolete by the development of new technologies,
hampering the development of a dynamic European market.
As a first step to stimulating debate on the new challenges, the Commission has
produced a Green Paper on the audio-visual industry.
The Group is convinced that technological progress and the evolution of the
market mean that Europe must make a break from policies based on principles
which belong to a time before the advent of the information revolution.
The key issue for the emergence of new markets is the need for a new regulatory
environment allowing full competition. This will be a prerequisite for
mobilising the private capital necessary for innovation, growth and
development.
In order to function properly, the new market requires that all actors are
equipped to participate successfully, or at least that they do not start with
significant handicaps. All should be able to operate according to clear rules,
within a single, fair and competitive framework.
The Group recommends Member States to accelerate the ongoing process of
liberalisation of the telecom sector by:
This is as true for the telecommunications operators (TOs) as for others. It is
now generally recognised as both necessary and desirable that the political
burdens on them should be removed, their tariffs adjusted and a proper
regulatory framework created. Even the operations of those TOs whose status
has already evolved over recent years are not fully in line.
It is possible to end monopoly. In future, all licensed public operators should
assume their share of public service responsibilities (e.g. universal service
obligation and the provision of equal access to networks and services).
A competitive environment requires the following:
The Group recommends the establishment at the European level of an authority
whose terms of reference will require a prompt attention.
In order for the market to operate successfully, the Group has identified the
following objectives and recommendations:
Evolution in the regulatory domain
Identify and establish the minimum of regulation needed, at the European level,
to ensure the rapid emergence of efficient European information infrastructures
and services. The terms of reference of the authority which will be
responsible for the enforcement of this regulation is a question that will
require a prompt attention.
The urgency of the matter is in direct relation to the prevailing market
conditions. A clear requirement exists for the new "rules of the game" to be
outlined as soon as possible. The market place will then be in a position to
anticipate the forthcoming framework, and the opportunity will exist for those
wishing to move rapidly to benefit from these efforts.
The authority will need to address:
Two features are essential to the deployment of the information infrastructure
needed by the information society: one is a seamless interconnection of networks
and the other that the services and applications which build on them should be
able to work together (interoperability).
In the past the political will to interconnect national telephone networks
resulted in hundreds of millions of subscriber connections world-wide. Similar
political determination and corresponding effort are required to set up the
considerably more complex information infrastructures.
Interconnection of networks and interoperability of services and applications
are recommended as primary
Union objectives.
The challenge is to provide interconnections for a variety of networking
conditions (e.g. fixed and new type of networks, such as mobile and satellite)
and basic services (e.g. Integrated Service Digital Network - ISDN). Currently,
the positions of monopoly operators are being eroded in these fast-developing
areas.
Joint commercial decisions must be taken by the TOs without delay to ensure
rapid extension of European basic services beyond telephony. This would
improve their competitive position vis-à-vis non-European players in
their own markets.
The European information society is emerging from many different angles.
European infrastructure is evolving into an ever tighter web of networks,
generic services, applications and equipment, the development, distribution and
maintenance of which occupy a multitude of sources worldwide.
In an efficient and expanding information infrastructure, such components
should work together.
Assembling the various pieces of this complex system to meet the challenge of
interoperability would be impossible without clear conventions. Standards are
such conventions.
Open systems standards will play an essential role in building a
European information infrastructure.
Standards institutes have an honourable record in producing European standards,
but the standardisation process as it stands today raises a number of concerns
about fitness for purpose, lack of interoperability, and priority setting that
is not sufficiently market driven.
Action is required at three different levels:
following the successful example of GSM digital mobile telephony, market
players (industry, TOs, users) could establish Memoranda of
Understanding (MoU) to set the specifications requirements for specific
application objectives. These requirements would then provide input to the
competent standardisation body. This type of mechanism would adequately
respond to market needs.
Operators, public procurement and investors should adopt unified open
standard-based solutions for the provision and the procurement of information
services in order to achieve global interoperability.
These should be encouraged to establish priorities based on market requirements
and to identify publicly available specifications, originated by the market,
which are suitable for rapid transformation into standards (e.g. through fast
track procedures).
European standardisation policy should be reviewed in the light of the above.
When the market is not providing acceptable technical solutions to achieve one
of the European Union's obPartnership for jobs
If we seize the opportunity
A common creation or a still fragmented Europe?
What we can expect for...
A more caring European society with a significantly higher quality of life and
a wider choice of services and entertainment.
New ways to exercise their creativity as the information society calls into
being new products and services.
New opportunities to express their cultural traditions and identities and, for
those standing on the geographical periphery of the Union, a minimising of
distance and remoteness.
More efficient, transparent and responsive public services, closer to the
citizen and at lower cost.
More effective management and organisation, access to training and other
services, data links with customers and suppliers generating greater
competitiveness.
The capacity to supply an ever wider range of new high value-added services.
New and strongly-growing markets for their products at home and abroad.The social challenge
Time to press on
Political attention is too intermittent. The private sector expects a new
signal.
An Action Plan
The market will drive ... the prime task of government is to safeguard
competitive forces....
New markets in Europe's information society
Markets for business
Business awareness of these trends and opportunities is still lower in Europe
compared to the US.
...once products can be easily accessible to consumers, there will be more
opportunities for expression of the multiplicity of cultures and languages in
which Europe abounds.
Chapter 2
A market-driven revolutionA break with the past
Ending monopoly
Enabling the market
Interconnection and interoperability