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Stephen Timms MPRole of the Government in Promoting Electronic Commerce |
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[Introduced by Phillip Creek, Managing Director of Globix] I am delighted to be here this evening at this seminar, and I am looking forward to a lively debate following my introduction. E-commerce is everywhere! Enabling businesses and citizens to reach out to new customer markets, and harness new channels of communication. Geographical boundaries are melting into insignificance. We are looking at change on a global scale. Two incidents have underlined that for me recently. I visited Aberfan in South Wales last month, and was told about a local one-person medical supplies company, which had established a web site and was now taking on four or five new staff to cope with the export orders that had resulted. They hadn't had any export orders previously. And in a place like Aberfan, that only needs to happen a few times before the boost to the local economy is tangible. I presented the prizes at this year's e-commerce awards, which the DTI supports, and the overall winner for a really compelling and effective web-based business model was a Glasgow-based recycled metal broking company called Global Recycling. As I presented the prize to the managing director I asked him if any of his colleagues had joined him at the ceremony. His reply was: "No, the other person had to stay behind to run the business". For that start-up company, the web had opened up opportunities, which would have been simply inconceivable without that technology. Innovation is key to success. The Chancellor has announced today a wide-ranging review of business innovation and its contribution to UK productivity growth. Our economy is changing. Traditional business models are giving way to new ones enabled by technology. We need to make sure that everyone can participate in the benefits. If we fail on that, then we will fail on our ambitions for e-commerce. People need access to the Internet, and they need to be able to acquire the right skills to take advantage of it, and to participate with those skills in the market place. Last week was an important milestone in the development of UK e-commerce policy. We have been benchmarking our progress against progress in all the other G7 countries, plus in Australia and Sweden, and last week we published the results at the E-summit in London, attended by the e-envoy equivalents and other leaders from each of the eight other countries. The Prime Minister made a major speech at the summit, announcing that the study had concluded that we have the second best environment for e-commerce of all the benchmarked countries, after the US. So that is good, but not good enough, and our ambition is to be the best. The benchmarking study is a very substantial piece of work with a very open and transparent methodology and I do commend it to you – it is well worth a read. There is a lot of Government activity in promoting e-commerce in the UK, from advice for consumers on safe Internet shopping to loans for new businesses. I am going to focus on just three main topics this evening: the roll out of broadband, skills and the cross-government initiative, UKOnline. The Roll Out of Broadband The Progressive Policy Unit in Washington, which is close to the Democrats, published a report in September called "Unleashing the Potential of the High Speed Internet – Strategies to Boost Broadband Demand". It refers to "the promise of the Internet: greater productivity and economic efficiency, empowered consumers, and a better educated and more open society. In particular," it goes one, "the economic impact of broadband deployment – in improved productivity, new jobs and so on – will be hundreds of billions of dollars annually." And I believe that focus on the economic importance of broadband is quite right. We made a slow start in the UK on broadband, but our target is to have the most extensive and competitive broadband market in the G7 by 2005, and we are now making rapid progress. Broadband services in the UK have moved from being the most expensive to among the least expensive in the G7. The gap between flat rate narrowband and broadband has reduced in some cases to below £10 per month. We have a very competitive broadband market, with sharp competition in many areas between broadband services delivered via the telephony network and delivered over the cable TV network. We passed the one million broadband connections milestones at the beginning of last month, and new ones are being sold at the rate of nearly 30,000 a week. The big challenge now is to extend the reach of the services, because about a third of households are still beyond the reach of affordable broadband services, although BT announced at the E-summit last week that its ADSL broadband service should be available to at least 80% of households by 2005. The big opportunity we have to influence this is through the growing demand of public services to use broadband. The Prime Minister in his E-summit speech announced that of around £6 billion to be invested in E-Government services over the next three financial years, around £1 billion will be on broadband networks and services. That is not because the Government thinks it is a good idea to promote broadband, but because my colleagues with responsibilities for schools, hospitals, the criminal justice system, and local government too – they all need broadband to achieve the improvements in the services for which they are responsible.
And all of these developments give us the opportunity to extend the reach of services to people outside the public service too. In June I announced we would create a new UK Broadband Task Force, with a broadband expert in each of the English Regions and the devolved administrations. I launched the task force last week, and the aims of the experts are to stimulate economic development and enhance the delivery of public services through extending broadband services. The Task Force will be looking to co-ordinate broadband activity between central Government Departments. It will aim to bring about increased roll out and increased take up of broadband, drawing on activity already underway. In addition to the Task Force, my department has established a £30 million broadband fund for Regional Development Agencies. The key aim is the development of broadband in the regions and in particular addressing the rural-urban divide. For example the first cattle auction took place on the net recently, farmers didn't even need to leave their homes to buy new stock. In Cornwall where rural exchanges are being equipped for broadband, we can see companies directly benefiting and expanding as a result. I think we are going to see some very interesting results from all these activities, providing models that the Task Force can then encourage to be taken up elsewhere. We want everyone to have access to effective e-commerce. Whilst the Government is committed to developing the broadband market, the challenge lies with industry to make the right investment, make available the right products and market its services effectively in order to fulfil the potential that is increasingly evident. Skills In order for these new technologies to be successfully exploited in the UK for e-Commerce, we need to focus on getting the skills out to people – tackling skills gaps in the ICT workforce, ensuring the skills of the workforce support improvements in the productivity and competitiveness of the business. During the late 1990s, business demand was characterised by the need for increasing numbers of people to fill ICT job roles. Since the downturn in high tech sectors, the focus of employers' concern has switched more to tackling skills gaps within their existing workforce. So the DTI along with the Department for Education and Skills is engaged with partners in business and education to help make the UK the number one country for the supply of advanced ICT and related skills. The Skills Framework for the Information Age (SFIA) is one example of how ICT skills can be transferred. Developed by e-Skills UK, the new Sector Skills Council and launched last year, it is one of the most flexible and sophisticated skills classification frameworks for ICT in the world.
The framework is now being adopted by a number of major employers of ICT professionals in the UK as a benchmarking tool and is of increasing interest to skills bodies and employers internationally. In a series of initiatives we have sought to:
We have also been addressing ICT skills in schools, and among adults who are not necessarily in work at the moment. The Prime Minister announced last week that we had succeeded in our aim of opening 6000 UK online centres around the country before the end of the year, and they are providing inexpensive Internet access and initial training in taking advantage of it. UK Online The third strand I wanted to emphasise this evening is the drive to encourage businesses to take advantage of the opportunities which e-commerce is opening up – to follow the example of those like Global Recycling who are reaping the commercial rewards. The Prime Minister launched UKOnline for business two years ago and it works to assist companies to make deeper, more effective use of ICTs. It offers packages of support, with particular emphasis on small and medium sized organisations for whom the barriers are the most significant. In particular now we want 'to help businesses move beyond having a website or simply trading online to transforming themselves through the effective use of ICTs'. Developing the sophistication of the exploitation of e-commerce is the programme's new priority. We want SMEs to understand the potential for business transformation which the technologies offer - greater market penetration, increased customer response, more flexibility, lower costs, closer relationships with suppliers – and how to avail themselves of them. The programme has publications, a successful and well regarded website which has just had its one-millionth visitor, and a network of some 400 specialist advisors around the country. We see it as a key element in our programme to achieve the potential of e-commerce. The stability and strength of the UK economy, by comparison with all our major competitors and with our own past record, gives us the chance at last to start to close the productivity gap between us and others, which has bedevilled us for so long. We need to exploit our superb science base and promote innovation to create world-class ideas, breakthrough technologies and high value businesses. Firms need to master the art of innovation. Where product lead times are becoming shorter, companies need constantly to develop and adopt the best products and practices available. Universities must become much better integrated in the economy, developing stronger links with business and commercial applications for their research. Gordon Brown has announced today an independent review into how, over the coming decade, businesses can better draw on universities to the mutual advantage of both sectors. It is the task of government to work with others to support people through this whole process of change. And successful exploitation of e-commerce is one of the keys to success. We have today the second best e-comerce environment in the G7. Our goal is to be the best. And the three topics I have highlighted this evening are aimed at that ambition:
There is a great deal at stake in all this, but we are convinced we can make a success of it, and all of us need to be working together to make sure that we do. |
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Other speeches by Stephen Timms MP
(the following are available from the archive) |
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