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Rt. Hon. Stephen Byers - Former Secretary of State for Trade and Industry (Dec 1998 - Jun 2001)New Statesman/LSE Conference - "Britain On Line" |
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Our performance in the new digital technologies - the extent to which we create a truly on-line Britain - will be the key to the success of the British economy over the coming decade and beyond. Building Britain?s on-line capability and our strength in the digital technologies has to be an important part of preparing Britain for the knowledge driven economy of the future. We are already at the forefront of these developments in Europe. More than 10 million people in the UK use the Internet, either at home or at work - a higher proportion of the population than any other major European country. More businesses have websites and a higher proportion of sales are made on line in the UK than any other major European economy. 90% of secondary schools are now connected, and 68% of primary schools - more than in any other G7 country. And we are well on the way to connecting all our libraries as well. If we continue to be at the forefront of these changes, the potential benefits will be enormous. British business will benefit, both because it will create new sources of wealth and jobs, but also from their ability to export their experience and know-how to the rest of the world. British consumers will enjoy lower costs, greater choice and a whole range of new products and services. And, if we play it right, British society as a whole will be strengthened, not only because it will be a more prosperous society, but also if we seize the opportunities that the new technologies present to create a more inclusive society. However, if we get it wrong, it could be divisive for society. In the pursuit of these ambitions I am determined that we should not become slaves to the new technologies, but their controller. Of course, I don?t underestimate the challenges we must face if we are to ride this wave of change. Some industries could be entirely revolutionised by the Internet. Just look at the challenge which readily available CD quality music over the internet poses for the music industry. And for all business, the Internet is changing working practices. Opening up new markets. Bringing new competition. Creating new products and services. Revolutionising distribution and relationships between businesses and their supply chain. Huge gains are possible. Our estimates suggest that if UK companies adopted best practice in the narrow field of stock control alone, this would cut the cost base of UK business by some fifteen billion pounds per year. And while business to business e-commerce accounts for around 80% of e-commerce activity, it is not just business, but individuals as well who should be seeing the benefits from these on-line developments. For example: Buying new books. The new Thomas Harris book, Hannibal had a List Price of £16.99. A leading high-street retailer?s discount price was - £12.99. While over the internet, the book was available at £10.78 delivered to your door. According to one recent study, CDs cost on average 14% less on line than in the high street. But the internet is about more than shopping. It also gives us new access to a whole wealth of information. A third of people using the web in the US do so to search for medical information. The most popular site in Europe is the BBC?s. And the internet offers us all new opportunities to communicate with people who share our interests, both within our communities and across the world. And all of this change is happening at a staggering pace. Just think, this time last year Dixon?s Freeserve didn?t even exist. Yet today it?s worth billions of pounds. And there are many other examples of new and dynamic markets for business. Of course, such rapid change can be unsettling. People are concerned about their jobs. They worry about the complexity of the machines. Many don?t understanding how to use them. They don?t know what it all means, and they worry about being left behind. That?s why there is a responsibility on Government and others who lead in society to take people with them. To ensure that people are partners in change, not victims of change. Government in particular needs to show real vision in its approach to these new technologies. And to demonstrate real leadership. That?s why in last December?s White Paper on the knowledge driven economy, we set out the ambitious goal of developing the UK as the best place in the world for e-commerce by the end of this Parliament. Since that White Paper, we?ve moved to make a reality of this pledge. First, we have taken action to lay the foundations of a world class broad band infrastructure. We?re in the vanguard internationally in licensing spectrum for a competitive, innovative market in 3rd generation mobile phones and services. OFTEL has announced plans to open up BT?s local network to competition. We have also consulted on whether, in the light of converging telecommunication, IT and media markets, we should move to a single regulator. In that consultation, industry argued strongly for an evolutionary approach. And that?s what we?re doing. But I am personally very conscious of the speed with which these markets can change. We may need to move more quickly if we are to maintain UK?s leading-edge position, and therefore I intend to keep this whole area under very close review. Second, we have been putting in place the light touch regime of regulation needed to build trust in the digital market place. There is a clear role for Government here. A laissez faire approach would not build the trust in the new networks that both consumers and businesses need. But on the other hand, traditional regulation is too slow and clumsy in the internet age. That?s why we are leading the way globally in developing a totally new approach to the Internet: where Government defines the public policy objectives, but tasks the private sector to design and implement flexible solutions. We pioneered this approach with the Internet Watch foundation, a system of self-regulation in relation to illegal content on the Internet which has become a model of global best-practice. The Consumer White Paper we published in July also announced the creation of an industry-led body, TrustUK, to create an e-hallmark for websites which will guarantee high standards of consumer protection. And in July I published our electronic communications bill which will give legal recognition to electronic signatures and will be introduced in the autumn. This rejects the last Government?s plans for mandatory key-escrow, which would have imposed significant burdens on business while failing to meet our crime prevention objectives. Instead, the Bill will encourage an industry-led system of self-regulation to resolve the central issues needed for e-commerce to flourish. Third, as part of our battle against social exclusion we have pledged more than £1 billion to boost community access to the Internet, including through 800 community based IT learning centres; computers for 200,000 of our least well-off families. But also through tax incentives for individuals to invest in IT training. And through tax incentives for companies to provide PCs for employees to take home. Fourth, we have committed serious resource to raising awareness of e-commerce amongst the small business community. This has included a partnership with some of the key players in the sector to raise the e-commerce skills of the UK?s thousands of professional small business advisers. And in June we held the first ever E-commerce Awards ceremony to celebrate e-commerce success in the UK?s small business sector. Finally, we have been driving forward the e-commerce agenda with our partners in the European Union and in the wider international arena. We cannot hope to achieve our objectives in this area in isolation. E-commerce is above all a global development, with many of the public policy issues it throws up requiring global solutions. If we are to maximise the benefits for British businesses and British consumers, we need to lead the way in creating a genuinely open and flexible global framework for e-commerce. So, much has been achieved. But there?s no room for complacency. In parallel with all of this activity, we have been developing our forward strategy through the Performance and Innovation Unit. Their report on e-commerce will be published next week by the Prime Minister. This report will be a landmark in the Government?s approach to the digital economy, mapping out precisely what becoming the world?s best place for e-commerce entails and what we need to do to achieve the goal. Competition As the PIU report will show, we are already seeing the benefits of competition. New services are coming on line almost every week. The UK is already one of the cheapest places in the world to surf the net and the cost is coming down. Last week?s announcement by BT that it was to cut its call charges was a welcome move. But I hope this is the beginning not the end of price reductions from BT. My strong personal view is that all the key players in this market will need to move much further and much faster if they are not to see their position eroded by their international competitors. The Government?s job is to ensure that this process of competition intensifies. Hence for example, OFTEL?S recent announcement to press ahead with the unbundling of the local loop. And we must also ensure that no new threats to competition emerge. The PIU report, therefore, will task OFT and OFTEL to review all possible barriers to competition in the emerging e-commerce markets, by March 2000. This review will assess all the potential bottlenecks in the new markets - from ownership of set top boxes to the potential impact of advertising on internet portals. Business Awareness Second, the PIU report will also show that not all regions in the UK have yet recognised the benefits of these digital technologies. At the moment, London is way out in front. Given the size, strength and global reach of London?s economy, I would be worried if it were anything but. While the reasons for London`s leadership at the moment are understandable, we need other regions to identify their own particular strengths in the digital world and build strategies around them. Our latest figures show that 65% of businesses in London have dedicated websites, and 83% use external e-mail. In the South West, only 42% have websites and 61% use e-mail. For the North East those figures are 40% and 63% respectively. The numbers for Wales and Northern Ireland are lower still. We must keep this in perspective. Overall, the UK is a sophisticated market. Even our worst performing regions compare favourably with take-up in some of our major European competitors. But the take up of these technologies will be central to the competitive performance of our regions. Earlier in the summer I set national targets for UK business take-up. To underpin these, I will be writing to the chairmen of the Regional Development Agencies to ask them to develop targets for their own regions. I want these to form a key part of their strategies for raising the competitive performance of their regions. DTI?s own web-presence Finally, Government must practise what it preaches and show real leadership in its adoption of the new technologies. For my Department specifically, I welcome the recent plaudits for our Website from the FT, but know that the service we provide needs to evolve quickly if we are to match developments elsewhere. For example, we?ve already set up a website for consumers - the Consumer Gateway - which has had over 180,000 hits since it was set up in late July. In the wake of the PIU report we will be setting up a site specifically for parents. A major barrier to internet usage is parental concern that children will be exposed to obscene or harmful content. This new site will provide parents with advice on how to filter unsuitable content, and offer links to content filtering software. More generally, I intend to challenge my Department to think radically about our internet presence. I want to see both more of DTI?s services available over the net, but also to look at how we can use the internet to contribute to every area of our work. Conclusion In conclusion, I believe that the UK is extremely well placed to succeed and prosper in the digital world of the twenty first century. Many of the key ingredients are in place. We have a world class IT and communications infrastructure. We have an obvious advantage in the English language which has long been the language of global business and is the language of e-commerce. We have a strong presence of the key market players of the future: telecoms companies, internet companies, media and information companies. And we have growing pool of skilled and creative workers, entirely at home with the new technologies, who can turn a vision into reality. I believe there is also a genuine enthusiasm for the new technologies from the population as a whole. I am looking forward to working on this whole agenda with Patricia Hewitt, whom the Prime Minister has given a formal cross-Government remit to drive forward the Information Age. The Government is serious in its determination to create in Britain the best place to trade electronically, this combination of factors should ensure that the UK leads into the Information Age. We should ensure that this knowledge revolution generates new opportunities in all areas of life, creating both new wealth and new jobs, while at the same time contributing to a stronger, fairer more inclusive society. In the words of the late John Smith, ?economic efficiency and social justice are two sides of the same coin?. I?m confident that by working together all our people can benefit to the advantage of our communities, our economy and our country. |
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Other speeches by Rt. Hon. Stephen Byers - Former Secretary of State for Trade and Industry (Dec 1998 - Jun 2001)
(the following are available from the archive) |
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