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Mr Erkki Liikanen
Member of the European Commission, responsible for Enterprise and the Information Society
"Realising our vision of a global information society: from revolution to evolution"
3rd Annual Conference of the GBDe (Global Business Dialogue on e-commerce)
Tokyo, 14 September 2001
The GBDe has once again succeeded in gathering many of the leading "movers and shakers" of the Internet from all over the world. Despite the general slowdown in the hi-tech sector, we are all as busy as ever. Many are planning the next stage in the Internet's evolution!
Only a couple of years' ago, with exploding Internet usage and the emergence of the dotcoms almost overnight, people were talking of an "Internet revolution". Things have since come back down to reality somewhat and it can be said that the Internet has now arrived in the real economy where the basic rules apply.
What is needed now is - an "evolution" - where the Internet will find its way into everybody's daily life. This evolution will take much longer and require far more blood, sweat and tears than a revolution. We really must start rolling up our sleeves and get down to the serious and profound issues.
I therefore thought to go back to some of the basics of the European Union's vision of the Global Information Society and illustrate how important they are for this necessary evolution of the Internet.
I would like to start with the first part of that vision:
Ever since the discussion on the Internet started, we have emphasized that it is a global network without borders. It can potentially allow users located anywhere on the planet to access information from any source. Companies of all size can have access to a global marketplace at relatively low cost. It can also help developing countries to "plug-into" the world economy and bring much-needed information and resources to their people.
It was against this background, too, that we began to reflect on the most appropriate means to introduce and enforce rules, which are often nationally-based, in an environment without borders.
So where do we stand today with this global vision?
The Internet of today is more global in character and in outreach than it was when it was first created. It really does span the entire globe and is used by people throughout the world. We have seen rapid expansion of Internet use in Asia and in South America.
Though English is still the dominant language on the Internet, there is tremendous growth in national and local content. One can genuinely talk about a multi-lingual and multi-cultural Net emerging. The management of the domain name system has now been designed to reflect these changes, notably through the creation of ICANN. The internationalisation of the Internet is becoming a reality.
Yet there are still far too large variations in access to the Internet particularly between the rich and the poor: the so-called "digital divide".
The gross disparity in the spread of the Internet and thus the economic and social benefits derived from it is a matter of profound concern. The technology and skills gap between the North and the South is widening at an accelerating pace. Internet use still only reflects less than 5 per cent of the world's population. There are more hosts in New York than in continental Africa; more hosts in Finland than in Latin America and the Caribbean; and notwithstanding the remarkable progress in the application of ICT in India, many of its villages still lack a working telephone.
Whilst for some the Internet continues to tie individuals, firms and countries closer and closer together, there are many others who run the risk of being further and further marginalised. Developing countries have great potential to compete successfully in the new global market, but unless they embrace the ICT revolution, they will face new barriers and the risk of not just being marginalised, but completely bypassed.
The problem also exists within the developed nations, including the European Union. Currently, average Internet penetration in the EU runs at around 40 per cent, ranging from 65 per cent in Sweden in the North, and to 10 per cent in Greece in the South. We must aim at 100 per cent, everywhere!
It is only by connecting everybody that the Internet will become a normal aspect of everyday life for society as a whole.
Turning to the business environment, we are observing, not without some concern, that contrary to our expectations, only a fraction of small companies are actively using the Internet for electronic commerce. They are not getting the full benefits of e-business along the full chain from supply and procurement ("upstream") to sales and customer management ("downstream"). Yet, in the EU alone, there are an estimated 19 million SMEs, who thus play a significant role in our economy.
Whilst e-business is generally on the rise, the promise of access to a global electronic marketplace seems in reality to be fraught with added costs and (legal) risks, not to mention the conventional logistical problems of physical distribution and management of inventories. Mostly the large global brands have succeeded in reaching customers worldwide very often by setting up national or locally-based web sites.
However, in some EU Member States the figures are looking more reassuring. In the UK, for example, the Department of Trade and Industry found that the connectivity rate for UK micro businesses (0-9 employees) rose from 15% to an amazing 55% between 1999 and 2000.
In an effort to encourage SMEs to use the Internet commercially, the European Commission launched the "GoDigital" programme earlier this year. GoDigital is aimed at helping SMEs use the Internet more and better.
Our ambitious programme of EU Single Market legislation, which will effectively remove legal obstacles for cross-border electronic trade between EU Member States and create more legal security for SMEs, should also contribute to improving the situation. The eEurope initiative has succeeded in strengthening the Member States' resolve to adapt and harmonise their laws on a fast-track.
Further work, however, is still required at international level, also to improve consumer confidence. Consumers need the reassurance that, if anything goes seriously wrong with their Internet transaction or with the handling of their personal or financial data, that they will be properly protected, either by the law or by an effective and enforceable self-regulatory programme.
So what progress has been made on the regulatory front?
On the one hand, there has been a general rejection of the Internet as a free-for-all, where traditional laws would no longer apply. This was not a suprise.
On the other hand, we have also emphasised the drawbacks of fragmenting the Internet by applying too many distinctly national laws. Or laws that are out-of-date or ill-adapted to the Internet and the rapidly evolving technologies that drive it. Such a situation would risk destroying the Internet as we know it today.
I am confident that such a situation is unlikely. Yet, neither could one realistically envisage a single set of rules for the whole world.
What we see emerging is a patchwork of overlapping regulations, where most countries have followed similar approaches, like in the EU, for example. In some areas where there are particular local sensibilities (for example, free speech, data protection, pornography, gambling) local laws are being introduced.
At the same time, in other areas, like the protection of intellectual property rights (I am referring to the WIPO Treaties), international rules and standards are being added to the regulatory landscape.
Where there are differences a "safe harbour" type approach or some form of mutual recognition could be a good solution.
Where self- or co-regulation can play an effective role, and it often can, it is up to initiatives like the Global Business Dialogue to ensure that self-regulatory rules are consistent also at global level.
We must also continue in our efforts to attach major importance to international trade rules. They should be made to apply to cross-border electronic transactions as well. Respect for the free trade and market access rules of the WTO, for example in the telecommunications field, will contribute enormously to the take-up of global electronic commerce.
Let me now turn to the second aspect of the Global Information Society vision:
The Internet, above all, is an information network. It is estimated that there are around 2 billion web pages of information on the Net today, with some 2 million pages being added each day.
Industrial-based societies are being transformed into information societies. Information breeds knowledge and knowledge is of major value in the e-economy.
At the Lisbon Summit in March 2000, the EU Member States set the ambitious goal of transforming the EU into a competitive and dynamic knowledge-based economy.
This can only serve to underline the importance of preventing at all costs the development of a society of "information rich and information poor".
Citizens of all ages and backgrounds should be given the possibility to have convenient access to the Internet and its wealth of information: so-called digital literacy. This has important implications for education and training.
In the EU, we are fortunate to have a well-educated and relatively high-skilled workforce. Yet, although around 80 per cent of EU schools are connected to the Internet, currently we have an average of only 1 online computer for 22 school pupils. This is clearly unsatisfactory if our aim is to create a digitally literate society.
An IT skilled workforce is essential for a healthy economy today. A recent estimate for Germany identified a shortage of 13.000 university graduates in the fields of electronic and ICT engineering alone. Experts are warning that this "skills-gap" could seriously hamper economic growth.
Despite the downturn, the whole problem was not discussed. Information is a vital resource for the economy. Vast data bases of useful information are in the hands of the public sector, such as statistics, governmental reports, economic and demographic data, geographical information, etc. This information has often been difficult to access by the public, but the Internet is changing that. Public sector information is gradually being made available online where it can be accessed by members of the public and businesses at the click of a mouse.
Information is also a very vulnerable resource. Like many things, it is open to abuse. Law enforcement authorities around the world need to be equipped with the legal and material resources to fight the online criminal activity. Work is progressing at international level under the auspices of the Council of Europe.
In Europe people are convinced that they have a right to protect their personal data and this right must enshrine in law.
These issues are vital if citizens are to gain confidence in electronic commerce.
We also need to develop a global framework based on laws and effective technological means, which encourages information and content to be created and made available for all tastes and cultures however diverse. Such a framework has been set up by the WIPO Treaties, which when fully implemented by their signatories, will ensure that the creators of content can exercise their rights without hampering the use of content to the extreme or intruding on users' privacy.
I am pleased to say that after four years of arduous negotiations, we have managed this year to adopt EU legislation on the protection of copyright and related rights in the Information Society. This legislation will enable the EU Member States to implement the provisions of the WIPO Treaties.
Finally, I would like to say a few words about the last aspect of the Global Information Society vision:
The Internet is a community a GLOBAL community made up of thousands of local communities. Indeed the Internet can support and enrich the fabric of our society, notably the schools, libraries, hospitals and health services, research centres, and universities. This is a central part of "the Internet evolution" that we should aim for: the societal dimension.
It is here that the decentralising characteristic of the Internet is so important. It means that each local community becomes a centre in its own right. This fact is something that is clearly recognised by the Global Cities Dialogue, whom I know are represented at this conference. In eGovernment, it is time to move from pilot projects to real applications. By using the Internet, public sector is in win-win-situation. It can increase productivity and citizens can have better services. But it requires leadership; and not only eGovernment solutions but also reorganisation of the work and training of the staff. We will organise a major international conference to be held in Brussels on 29th-30th November on eGovernment.
Of equal importance for the emerging Information Society are all small communities, like clubs, interest organisations, cultural groups, and forums that have sprung up all over the Net. They are genuine networks and create social capital. The list is endless as wide and diverse as society itself! The Internet brings people and peoples together.
In conclusion, it seems that almost 10 years on, the vision of a Global Information Society is still alive and well. There has been much notable progress and numerous significant achievements. Yet, we are still some way off realising this vision:
Naturally, governments, business, international organisations, and NGOs all have a stake in this vision and must all play a role in realising it.
For the Global Business Dialogue, if you will allow me, I have one simple message:
Over the achievements of the past three years, you have grown in both membership and standing. The GBDe is more and more widely recognised as being an authoritative private sector voice on global e-commerce policy matters.
This has meant, for example, that the ambitious consumer confidence guidelines agreed in Miami last year have raised expectations as to the consumer policies of e-commerce companies and in particular GBDe members. It is not yet clear if these expectations have been met.
There are similar expectations when it comes to other important areas such as cybersecurity, intellectual property rights and the digital divide, where the GBDe is also particularly active. I would encourage you to keep up the momentum!
The European Commission has been supportive of the GBDe from its inception. The GBDe as a concept is unique and the high level political dialogue it generates with governments, international organisations, and now with consumers is extremely valuable. It is therefore my hope that this important conference will shed light on genuine, practical progress to be made by the GBDe and its members as it embarks on its fourth year.
The GBDe, together with the governments and organisations it co-operates with has the potential to play an important role in driving the Internet evolution. But it won't happen overnight this time!
Thank you for your attention.