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Building the European Information Society

for us all

Final policy report of the high-level expert group
April 1997



European Commission

Directorate-General for employment, industrial relations

and social affairs

Unit V/B/4

Manuscript completed in April 1997

The members of the high-level expert group (HLEG) are:
Hans Blankert, President, Confederation of Netherlands Industry and Employers (VNO-NCW), The Hague, Netherlands.
Gerhard Bosch, Professor, Head of Labour Market Department, Institut Arbeit und Technik, Gelsenkirchen, Germany.
Manuel Castells, Research Professor, Consejo Superior de Investigaciones Científicas, Barcelona, Spain.
Liam Connellan, former Director General of the Confederation of Irish Industry, Dublin, Ireland.
Birgitta Carlson, Senior Advisor, Telia AB, Farsa, Sweden. *
Ursula Engelen-Kefer, Deputy President, Deutscher Gewerkschaftsbund (DGB), Düsseldorf, Germany.
Chris Freeman, Emeritus Professor, Science Policy Research Unit, University of Sussex, United Kingdom.
Lisbeth Knudsen, Chief Editor, Det Fri Aktuelt, Copenhagen, Denmark.
Yves Lasfargue, Director, Centre d'Etude et de Formation pour l'Accompagnement des Changements (CREFAC), Paris, France.
Isabelle Pailliart, Professor, Institut de la Communication et des Médias, Université Stendhal, Grenoble, France.
Armando Rocha Trindade, President, Universidade Aberta, Lisbon, Portugal.
Jorma Rantanen, Director, Finnish Institute of Occupational Health, Helsinki, Finland.
Luc Soete (chairman), Professor, Director, Maastricht Economic Research Unit on Innovation and Technology (MERIT), University of Maastricht, Netherlands.
Pier Verderio, Director, International Relations and Training, Federazione Informazione e Spettacolo - Confederazione Italiana Sindacati Lavoratori (FIS-CISL), Italy.

*Ms Carlson passed away on 17 February 1997, two days after the final meeting of the Group.

Acknowledgements

While this report is produced under the sole responsibility of the HLEG and based on complete consensus between its members, we would like to acknowledge the support of Commission staff, in particular DG V.B (Werner Herrmann, Ken Ducatel and Juliet Webster), in advising and commenting on previous drafts. We also acknowledge the administrative support of Jeannette Cloostermans (DG V), and are particularly grateful to Karin Kamp (MERIT) for her unfailing assistance with the production of this report.


We have also been aided by the many responses received to the interim report published in 1996 and the supporting analytical reports commissioned, discussed and presented at a number of workshops over the past year. These will be published separately later in 1997.
In addition to these individual comments and responses, we would like also to acknowledge the formal written comments received from the following organisations. Their comments have been particularly helpful in our discussions and deliberations.


Governmental organisations
Ministry of Labour, Denmark

Permanent Representation to the European Union, United Kingdom

Participants at a meeting of representatives of Member States held in Brussels in May 1996
Trade union organisations
Eurocadres, Council of European Professional and Managerial Staff, Belgium

Eurofiet, European Regional Organisation of the International Federation of Commercial, Clerical, Professional and Technical Employees, Belgium

Manufacturing Science Finance, United Kingdom

Participants at a meeting of representatives of trade unions held in Brussels in June 1996


Companies and business organisations
Digital Equipment Corporation, European Software Centre, & Co. Ltd, United Kingdom Ireland

Global Highways Business Group, United Kingdom

Greenhalgh & Co. Ltd. United Kingdom

Academic institutions
Annenberg School for Communication, University of Southern California, United States

Faculty of Divinity, University of Cambridge, United Kingdom

Centre for IT Development, University of East Anglia, United Kingdom

Department of Geography, University College Galway, Ireland

Department of Future Studies, Center for Environmental Research, Germany

Robert Gordon University, United Kingdom

Maurice Kennedy Research Centre, University College Dublin, Ireland
Religious organisations
CARE (Christian Action Research and Education) for Europe, Belgium

European Evangelical Alliance, Belgium


European Commission departments
DG III - Director-General's Adviser on Technological Futures and the Impact of Technologies on Employment

DG V.C.2 - European Social Fund France and Greece

DG V.E.1 - Analysis and Research on the Social Situation

DG X.D.3 - Audiovisual Policy

DG X.B.4 - Libraries

DG XXII - New Technologies for Education and Training


Others
Participants at a meeting on "The Information Society and Gender" convened by the Equal Opportunities Unit (DG V.A.3) of the European Commission

Members of the European Commission's Information Society Forum


Contents


Letter submitted by the Chairman of the HLEG 9
List of recommendations 11
Introduction 13

1. The High-level expert group's vision: from an emerging 16

information economy towards a knowledge society

A. From information to knowledge 17


B. From technological determinism to social embeddedness 19
2. Building a European information society for us all: the main 22

policy challenges
A. Acquiring knowledge and skills 22
B. The changing role of the public sector 26
1. Regulating the emerging information society markets

2. Public information services: the new engine of growth

in the IS

3. The case of health services


C. Exploiting the virtual value chain 31
1. Measuring intangible production

2. Removing obstacles to electronic consumption

3. Managing abstraction
D. The changing nature of organisations and work 35
1. Towards flexible organisations

2. Coping with outsourcing

3. Flexibility and security

4. The IS and forms of telework

5. Negotiated change


E. From time to work to time to live 43


1. Time to work

2. Time to consume

3. Time to live
F. Globalisation 48
1. Jobs in Europe and the emerging global information society

2. National welfare and taxation systems and the emerging global IS


G. Including everyone: the cohesion challenges 54
1. Social inclusion

2. Enhancing employability


H. The death of distance 58
I. European diversity - taking advantage

of the many emerging information societies 61

J. Transparency and democracy 63
1. Media concentration

2. Including everyone: a broad democracy project


3. Conclusions 67

Annex I - List of supporting research papers 68
Annex II - List of European Commission documents relating to

the Information Society 69
Letter submitted by Professor Luc Soete,

Chairman of the high-level expert group
Maastricht, 15 April 1997

Dear Commissioner Flynn,

On behalf of my colleagues, I am pleased to present you with this final report of the High-level expert group, setting out the collective thoughts, opinions and beliefs of the members of the group as agreed upon in the course of our deliberations over the last two years.
Since the publication of our interim report one year ago, the debate on the social aspects of the emerging information society (IS) has, we would argue, developed rapidly. We believe that our "first reflections" of last year, in their own limited way, have contributed to this ongoing, dynamic debate, and hope that this final report will provide welcome additional input. It will be for others to judge how meaningful a contribution it makes. At all events its publication brings our work to an end.
We continue to recognise the variety of opportunities that the emerging IS could afford. As in our previous report, the importance of "social embeddedness" remains central to our vision of a socially inclusive IS. In this final submission we have sought to take the debate a step further by proposing a policy framework that considers the broad range of opportunities and challenges the IS presents. In so doing we have endeavoured to sharpen our overall policy message and put forward some of the core policy recommendations which we believe are required to build an IS that improves quality of life for all Europe's citizens.
We thank you for the continued trust and confidence you have placed in our group and for the opportunity to contribute to the European Commission's debate on the social aspects of the IS. You have said in the past that you were looking for independent advice on the trends and challenges that the new information and communication technologies could offer: fresh eyes for new challenges. We hope our work lives up to your expectations.
Finally, we would like to gratefully acknowledge the commitment of our dear friend and colleague Ms Birgitta Carlson, who passed away shortly after the group's final meeting. Birgitta's professional and personal contribution to our work was of tremendous importance. Her expertise on a number of critical issues was essential to the production of this report, and her optimism helped support the group through challenges along the way. We regret that she could not witness the project's conclusion.
For the high-level expert group,

Professor Luc L. G. Soete,

Chairman

List of recommendations

1. Actively stimulating the acquisition of knowledge and skills
a. Establishing an education network

b. New financial incentives for training

c. Improving and disseminating knowledge on learning methods

d. Producing high-quality, low-cost learning materials
2. Coordinating regulation at EU level
3. Public services as an engine of growth in the emerging IS
a. Shifting public services from infrastructure to content

b. Making public services more effective: improved productivity for a better service

c. Public services as models of service provision

d. Improving health services
4. Exploiting the virtual value chain
a. Measuring intangible performance

b. Creating confidence in electronic commerce

c. Mastering the impact of virtuality
5. Developing flexible working arrangements
a. Collecting successful case studies of organisational innovation

b. Handling outsourcing

c. Towards security in flexible working arrangements

d. Dealing with new occupational health risks

e. From promoting telework to integrating it within society

f. Social dialogue in the IS
6. Managing time
a. Structuring flexible working time

b. In search of time

c. Healthy living in the IS
7. Reprioritising "full" employment
a. Enhancing employment growth in the IS

b. Towards a social global level playing field


8. Maintaining national government revenue in an increasingly global environment
9. Including everyone
a. Increasing social participation

b. Avoiding exclusion/targeting specific needs

c. Providing technological tools for the social partners

d. Towards a European Social Fund focused on employability
10. The death of distance
a. Towards universal community service

b. Rethinking regional cohesion policy
11. European diversity - taking advantage of the many emerging information societies
a. Developing a high-quality multimedia industry

b. Nurturing a multicultural Europe

c. Celebrating the local
12. Transparency and democracy
a. Maintaining pluralism

b. A democracy project


Introduction
In May 1995, the high-level expert group (HLEG) was formed to analyse the social aspects of the information society (IS). Until that time, the debate on the emerging IS had been dominated by issues relating to the technological and infrastructure challenges involved and the regulatory economic environment most conducive to enhancing the dissemination and use of information and communication technologies (ICTs). As noted in our interim report "First Reflections", published in January 19961, the relative neglect of the social issues was to some extent understandable.
The debate on the technological challenges posed by the digital convergence of ICTs follows a long tradition of concern that Europe is lagging behind in major fields of leading-edge technology such as semiconductors, microelectronics and other ICTs considered crucial for its overall competitiveness. Despite a succession of long-term research support policies (the framework programmes2) during the 1980s, European competitiveness in these ICT-related areas deteriorated often in those areas most strongly supported by European research and development (R&D) policies3. In the 1990s, with the further harmonisation of the internal European market, the policy focus gradually shifted to the economic environment and in particular to national regulatory frameworks in the telecommunications sector, which were becoming increasingly outdated as new information and communications services emerged.
Today, as policy discussions of the necessary deregulation and liberalisation of the telecoms sector come to an end, the debate is entering a third phase, focusing on the many neglected and sometimes unexpected social aspects of the IS. In taking this approach we are not attempting to claim that no

research or policy debate has taken place on these broader issues over the years. Nor are we asserting that the Commission has not addressed many of these points4. Rather, we are suggesting that these issues have not been at the centre of the policy debate.


In our interim report we set out a vision which recognised the tremendous opportunities new ICTs could offer, such as the potential for substantial productivity increases and for the emergence of many new and improved products and services. At the same time, we warned that converting this potential into actual gains in productivity, living standards and quality of life would require a lengthy process of learning and institutional change. The technology in itself is neither good nor bad, we argued: it is the way in which any technology is used which determines both the nature and the extent of its benefits. Moreover, these benefits do not accrue automatically to all sections of society5.
Since the publication of our interim report, the Information Society Forum (ISF), a broad-based user expert group also set up by the European Commission, has produced its first annual report6, arguing along similar and complementary lines. Their continued work will undoubtedly lead to more detailed proposals and recommendations in forthcoming contributions. Other European and national expert and advisory groups have also been established and some are in the process of formulating policy conclusions7. At the end of 1996, the Commission adopted its own action programme "Europe at the Forefront of the Global Information Society", pointing to the many social challenges brought about by the emerging IS8. In other words, the field has expanded rapidly, with the social aspects of the emerging IS moving to the top of the policy agenda. We very much welcome this shift of priorities, and hope the HLEG's interim report and the ensuing debate may have made a modest contribution to bringing it about. Perhaps somewhat presumptuously, we conclude that one of the first tasks we set ourselves has thus been achieved.
While the above groups, and the others that are likely to emerge in the future, will develop new proposals, our work comes to an end with the publication of this final report. In our interim report we made a large number of detailed proposals, some of which have become a focus of debate in academic and policy circles. Rather than repeat them here, we have opted to sketch out what is in our view the essential broad policy framework within which the debate on the emerging IS should take place, and to present an action programme comprising a limited number of core policy recommendations9. In so doing we hope to have somewhat sharpened our overall message and contributed to the ongoing European debate on the social aspects of the IS. This message, we should emphasise, is based on complete consensus among group members.

1. The high-level expert group's vision: from an emerging information economy towards a knowledge society

How do we define the information society? The information society is the society currently being put into place, where low-cost information and data storage and transmission technologies are in general use. This generalisation of information and data use is being accompanied by organisational, commercial, social and legal innovations that will profoundly change life both in the world of work and in society generally.


In the future there could be different models of information society, just as today we have different models of industrialised society. They are likely to differ in the degree to which they avoid social exclusion and create new opportunities for the disadvan­taged. In referring to a European IS, we wish to emphasise, in line with the white paper "Growth, Competitiveness, Employment", the importance of the social dimension which characterises the European model10. It will also need to be imbued with a strong ethos of solidarity - not an easy goal to achieve, since the traditional structures of the welfare State will have to undergo substantial changes. Furthermore, that concept of solidarity will need to be active, not passive, to adapt to these changes.
But before addressing these and other policy challenges we shall briefly develop two more conceptual features - the distinction between data, information and knowledge, and the requirement of "social embeddedness" - which in our view are essential for any discussion of the IS and are at the core of our policy analysis.

A. From information to knowledge
First and foremost it is essential to make a clear distinction between data, information and knowledge. From our perspective, the generation of unstructured data does not automatically lead to the creation of information, nor can all information be equated with knowledge. All information can be classified, analysed and reflected upon and otherwise processed to generate knowledge. Both data and information, in this sense, are comparable to the raw materials industry processes into commodities11.
One of the main effects of the new ICTs has been to speed up and cut the cost of storing and transmitting information a billion-fold, thereby "energising", in the words of the Bangemann report, "every economic sector" ("Europe and the Global Information Society", Brussels, 1994). However, these new technologies have had no such effect on the generation or acquisition of knowledge, still less on wisdom12. One would hope, of course, that society would be shifting more and more towards a "wise society", where scientifically supported data, information and knowledge would increasingly be used to make informed decisions to improve the quality of all aspects of life. Such wisdom would help to form a society that is environmentally sustainable, that takes the well-being of all its members into consideration and that values the social and cultural aspects of life as much as the material and economic. Our hope is that the emerging information society will develop in such a way as to advance this vision of wisdom.
One of the main challenges for the IS will be to develop the skills and tacit knowledge required to make effective use of information. From this perspective, ICTs should be viewed as essentially

complementary to investment in human resources and skills. In that sense they differ from previous

major technological transformations. Most previous major new technology clusters complemented physical capital accumulation. The development of the railways, for example, prompted an investment boom in the necessary material and capital equipment inputs, and hence a strong upsurge in overall economic growth. Similarly, the mass consumption of motor cars, which "induced" demand for better roads, easily accessible motorways and readily available petrol and car maintenance services, led to an upsurge of growth based both on the increase in end consumption and on demand for the many intermediate materials and forms of capital equipment.
Unlike previous technology clusters, new information and communication technologies are typically not so strongly linked to intermediate demand for physical, material goods and capital equipment. Indeed, it is precisely this that makes data very different from conventional raw materials. Consuming information does not involve "usage" in the traditional sense. Not only is information reusable by successive users, but two or more individuals can use the same information at the same time. Whereas market economies have traditionally been geared towards solving the problem of scarcity, information will practically by definition lead to problems of abundance and questions about how tools should be developed to manage that abundance.
In hardware terms, it seems unlikely that the increased demand for computers, mobile phones, optical fibres and Internet connections will yield a strong impulse for growth by "inducing" demand for plastics to build computers and optical fibres or iron oxide to build semiconductors. Despite the major capital investment required for some of these products (e.g. semiconductors), material, physical capital accumulation is no longer the essential "complementary asset" of these sets of new technologies. Rather, since the knowledge on how to use information typically depends on

individual skills and what we have chosen to call "tacit" knowledge, the new complementary asset to the growth and use of new ICTs is investment in intangible, human capital13.


For this reason we stress that it is essential to view the information society as a learning society. The learning process is no longer limited to the traditional period of schooling, but is - as was emphasised in the Commission's white paper on education, "Towards a Learning Society" (1995), and the OECD report on "Life Long Learning" (1996) - a lifelong process, starting before formal school-going age and taking place at work and in the home. Our point has, we believe, been widely accepted14. However, we are concerned that in Europe the incentives to invest in such lifelong learning activities are insufficient15. Not surprisingly, therefore, we start our list of policy recommendations with those which address this particular challenge, going well beyond the traditional calls for multimedia software applications and infrastructure support for education and training.
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