ELECTRONIC COMMERCE DEVELOPMENTS AND CHALLENGES
A Discussion Paper For the OECD Ministerial Conference on Electronic Commerce
Ottawa
7 - 9 October, 1998
By Roland Schneider Senior Policy Adviser TUAC
PART A. - THE ISSUES
1. The world is experiencing a period of impressive technological development.
Traditional means of information, communication and computing are merging.
Technologies of telephone, facsimile, television, audio-video discs and
computers have brought about vast changes in the methods of personal communication
as well as in the organisation of the development, production and marketing
of goods and services.
Internet - the basis for Electronic Commerce
2. Advances in telecommunication and computing have brought about a
communications revolution, based on the rapid growth of the Internet. During
past years, its impressive expansion caused much of the interest in the web. More
recently, a shift of interests occurred, interest is more and
more centred on its economic potential. This is due to the fact that the
"net of the networks" is still experiencing both a dynamic growth in its
application and a significant change in the objectives of its use. In addition
to being a source of information and a means of communication, the Internet
has become more and more a medium of education and entertainment. But the
Internet is also now becoming an important medium for electronic commerce.
An increasing number of businesses are using the Internet to organise the
process of designing, manufacturing and selling goods and services. Business
activities related to the purchase of components, logistics, inventories,
advertising, marketing and distribution rely more and more on the Internet.
Electronic Commerce - new visions of the business community
3. Some forecasters expect Internet commerce to start having significant
macroeconomic effects in the years ahead. According to Forrester Research,
a US consultancy group, retail spending on the Internet is forecast to
rise from $ 1,8 bn last year to almost $ 10 bn by 2001. But electronic
commerce encompasses a wider spectrum of activities than retailing, it
covers any form of business transaction that is conducted electronically,
i.e. through computers and telecommunication networks. Electronic commerce
includes ordering of goods and services as well as the online delivery
of some services. Of great importance is electronic commerce between businesses.
According to Forrester Research, Internet commerce conducted only among
U.S. businesses by the year 2002 will rise to $ 327 bn, equal to 2,3 %
of gross domestic product.
4. For some economists this digital revolution brings the world closer
to the ideals of perfect competition. They argue that it will contribute
to a further reduction of transaction costs, that it lowers barriers of
entry and that it will improve access to information for the consumer.
They consider that the explosive growth of the Internet will bring about
a revolution in the way business is conducted. Furthermore, they expect
that the digital revolution will lead to the replacement of entrepreneurs
by “netrepreneurs” and that the traditional marketplace will increasingly
give way to a new marketplace, which is timeless and seamless.
5. Electronic commerce provides business with new opportunities to exploit
the customisation of products and services whilst at the same time achieving
better use of production capacity. It allows business to conduct their
activities by the use of networks and to streamline these. It is expected
that the supply chain in manufacturing will undergo significant further
change. This will go beyond the current trend of subcontracting and outsourcing
noncore activities. These changes are leading to a debate about the appearance
of a new manufacturing paradigm in which manufacturing in the future is
based more and more on a partnership between product developers, contract
manufacturers, distributors and retailers.
Electronic commerce is considered to be an important means to reduce
costs. It is expected by many observers that falling transaction and delivery
costs will lead to a substantial decrease in the price of goods and services.
The argument applied here is to say that customers will place their orders
electronically, that some intermediaries will not be needed anymore and
that manufacturers as well as remaining retailers can more efficiently
organise the order and delivery of parts and supplies.
6. It is expected that electronic commerce based on the Internet will
not stop on national borders or geographical boundaries. Electronic commerce
is expected to enable business regardless of size, to reach customers anywhere
in the world. It offers customers and consumers the opportunity to purchase
and order goods and services independently of time and space. Consumers
will be able to consult online offers of product and services and make
a better-informed purchase decision. Some observers point out that due
to electronic commerce consumers will no longer need to visit the High
Street. Instead they can enjoy the convenience of locating and purchasing
information, goods and services from their home independently of the opening
hours of shops. Finally it is expected that electronic commerce will lead
to a stiffer competition based on the provision of a higher quality of
products and services as well as on the reduction of prices.
7. Against this background some commentators are predicting that efforts
to exploit the potentially enormous economic benefits of electronic commerce
will lead to the growth of new fields of innovative businesses and markets
and contribute to economic growth and job creation, especially in the fields
of software and the provision, organisation, management and presentation
of information. It is clear that the pervasive impact of electronic commerce
both on companies and on the society as a whole will lead to very significant
structural change. What is far less clear is whether this change will take
place as smoothly as suggested. Experience with past technological development
like the automated office, robotics and biotechnology, raises some doubts
concerning the optimistic vision being presented. Rather, past experience
suggests that far reaching technological development doesn't just have
benefits but also costs. The goal of policy must be to achieve a fair distribution
of the benefits of this process of change and to avoid or reduce the costs.
Warning signs for Electronic Commerce - myths and realities
Limited cost savings
8. The net is “open for business”. But will electronic commerce provide
a driving force for the 21st Century Global Economy? Will it enable, as
some predict, small and medium sized companies to communicate easily with
external suppliers, subcontractors and customers? Will it increase efficiency
and bring down transaction costs almost to zero? According to some reported
success stories the answer to these questions would seem to be a clear
"yes". A close look at the experience so far however presents a different
picture.
9. In contrast with expectations, business on the web seems to be rather
costly to transact with long pay-off periods. Amazon, a recently founded
“click-and-buy” bookseller and the most quoted example of success in electronic
commerce, was indeed successful in expanding its revenues from roughly
$ 16 million in 1996 to more than $ 147 million last year, but profits
are non-existent so far. It is reported that Amazon spent more than $ 50
million in setting up its cyberspace business.
10. In contrast to claims made by some forecasters and Web salesmen
that selling in the cyberspace can save costs, real efficiency gains from
buying on the web are rare once shipping costs are included. In a recently
conducted poll, business executives reported that their companies charge
for online business the same price as for traditional non-online transactions.
Some reported higher prices concerning their online offers. That indicates
that consumers may be charged for using the convenience of click and buy.
Therefore, the digital marketplace may not end up as great saver for consumers.
“Be aware” is the conclusion for consumers to be drawn from current shopping
experience on the web. Surveys indicate that virtual stores offer little
in the way of lower prices. Even if it is less expensive to sell on the
web, the number of price pioneers among new and young “Netrepreneurs” is
very small!
Increasing dependency of small and medium sized enterprises
11. Efforts to establish new ways of conducting business are raising
new problems. For instance, vertical integration is giving way towards
“virtual integration”. But while networks will be dominated by large multinational
companies, small and medium sized enterprises will be increasingly dependent.
At the same time, due to outsourcing and subcontracting, their role as
employers will increase. Furthermore, on one side virtual integration requires
broad networking alliances based on trust and mutual gains. On the other
side virtual integration contributes to an increasing dependency on the
supply chain and hence vulnerability. Network alliances pose the risk of
loosing control of knowledge, experience and intellectual property rights
to other companies. In addition, they contain the danger that secrets concerning
product development and business strategies are leaking to competitors.
Consumer concerns
12. Currently, only a limited number of consumers are buying over the
Internet. Their behaviour is determined mainly by two factors. First, to
buy the necessary IT-home equipment is still in many cases expensive. To
keep pace with fast developments of hardware and software is still simply
beyond the purchasing ability of many consumers. Second, a great number
of consumers are concerned about the security of payment systems, reliability
of business and lack of an opportunity for redressing when things go wrong.
13. Public concerns are related to the violation of privacy guidelines
and norms by a number of software applications, access providers and suppliers
of information, goods and services on the Internet. Several surveys provide
evidence for the fact that consumers have little privacy protection on
the Internet. A survey of over 1 400 web sites, conducted recently by the
US Federal Trade Commission, indicated that "industry's efforts to encourage
voluntary adoption of the most basic fair information practices have fallen
short of what is needed to protect consumers". According to this survey,
ninety-two percent of the 674 commercial web sites examined collect personal
information. But only 14 percent provide any notice with respect to their
information practices. Only two percent have a comprehensive privacy policy.
An even more disturbing picture is presented by the privacy policy related
to web sites directed towards the attraction of children. Almost ninety
percent of the 212 surveyed children's web sites collect personal information
from children. But less than a quarter of those sides tell children to
seek parental permission before providing information to the site.
14. What is more disturbing is that the leading proponents of self-regulation
in the field of privacy have not been living up to their professed standards.
A review of 100 of the most frequently visited web sites concluded that
none of them met basic standards for privacy protection. Other surveys
indicate that efforts of business organisations, like the US Direct Marketing
Association (DMA), to promote sufficient privacy practices are having little
impact on its members. But to get its own house in order with regard to
the protection of privacy is not only a task concerning business. It is
a task of a number of government administrations, too. They failed in passing
tests of their own privacy recommendations.
Productivity effects
15. The potential impact of electronic commerce on costs and productivity
is considered as a strong driving force behind its fast growth. Many observers,
among them the authors of a recent OECD report on "The economic and social
impact of electronic commerce", are pointing out that e-commerce will contribute
to a great increase in the efficiency of the sales process as well as to
dramatic reductions of production costs. Moreover, they admit that e-commerce
will have a large impact on sectors that transmit and produce information,
like postal services, communications, entertainment, travel agents, finance,
stock brokers etc. But at the same time they declare that a widespread
elimination of intermediaries due to e-commerce is rather unlikely. This
view underestimates the challenges posed by current technological change.
It fails to recognise what was outlined by the OECD report on "Technology,
Productivity and Job Creation". According to this report positive employment
performance does not always follow innovation. Firm level evidence suggests
that major productivity and employment effects are only achieved if innovative
activities are complemented by organisational change.
16. Reports by management consultants and other studies give contradictory
views concerning the impact of e-commerce. They accept that e-commerce
lowers costs by reducing both labour and material inputs. Accordingly,
the disappearance of intermediaries from the value added chain is considered
as a possible scenario. E-commerce, together with some other new applications
of information technology for the first time opens up far reaching opportunities
to achieve important labour saving effects in both the private and public
service sector. This is due to the fact that the close link between production
and consumption of services will be weakened, either by the reproduction
of stored information almost free of charge or by IT-supported self-performed
services by customers or clients.
Job creation
17. Admitting that electronic commerce will have labour saving effects
is not to deny that e-commerce will lead to new job creation. There is
no doubt that the expansion of e-commerce will contribute to the creation
of new knowledge based jobs. But at the same time it will bring about a
displacement of a number of jobs. Therefore, there is a danger that the
shift towards a digital economy could have major employment shocks. As
in the past, innovative success will beside its benefits, have economic
and social costs. To admit this is an appeal to take seriously the employment
challenges brought about by the expansion of e-commerce and to take an
activist approach to promote new job opportunities, career paths and training
to the workforce. Moreover, it is essential to prevent the workforce becoming
polarized into a rather large segment of unskilled, insecure and peripheral
group on the one hand and a small but highly skilled core group with secure
employment on the other.
18. Beyond its impact on the level and the skill structure of employment,
conducting business on the Internet will also contribute to changes in
the nature of employment. The process of "creative destruction" may end
up in a "destructive erosion" of employment. Currently, innovation with
regard to selling and buying over the Internet is leading to new network
alliances, to outsourcing and subcontracting of manufacturing products
and delivering services. Moreover, it goes along with increases in the
versatility and flexibility of employment. At the same time the individualisation
of labour and self-employment are becoming more and more prevalent. This
erosion of traditional job security is mirrored in an increasing number
of teleworkers as well as in an increase in precarious employment. This
development contains the danger that human capital is wasted and social
cohesion is weakened. But an economy increasingly dependent on knowledge
and a skilled workforce as well as on high-quality products and services
cannot afford an increasing part of the workforce being placed in precarious
employment.
Changing work patterns
19. Changes in the nature of work, especially major changes in the traditional
conception of the workplace and working time, will have an important impact
on the growth of information services and e-commerce. Traditional patterns
of the time-use are being called into question. Flexibilisation of working
time is in many cases increasing rather than reducing pressure on individuals
and families. Constraints caused by flexible working time patterns are
limiting the time available for the use and consumption of new information
technology based goods and services.
20. The interrelation between the time available to consume and to live
was outlined by the follow-up related to the OECD Job Study. The already
mentioned report on "Technology, Productivity and Job Creation", which
stated that "one of the most notable characteristics of the new information
and entertainment services is that their use is time-intensive and market
growth is restricted by the time residential consumers have available for
using the new services and entertainment services in particular. It is
quite often those social groups in which disposable income is concentrated
that have the least amount of disposable time, while it is the increasing
number of part-time workers with lower relative levels of income who dispose
of the most. Significant growth in services thus cannot occur if reductions
in or the restructuring of working time are accompanied by reductions in
purchasing power. This factors raise important issues with respect to telework,
the social and legal underpinnings of work and questions of flexible work
regimes and the duration of work".
Electronic Commerce - leaving it to the markets?
21. Governments, business groups, international bodies and organisations,
among them the group of the seven leading industrialised countries (G7),
the OECD, the European Commission and the WTO, have become aware of the
economic potential of electronic commerce. They take the dynamic growth
of the Internet as a proof for a successful transformation of business,
which leads to a decrease of costs, to an increase in productivity and
competitiveness. Therefore, the current “conventional wisdom” is that in
order to facilitate electronic commerce it is desirable to have a non-regulatory,
market-oriented approach to policy. A priority is being given to industry
self-regulation and giving the private sector the lead in setting standards.
22. The main efforts to build a Global Information Infrastructure and
to realise the full potential of electronic commerce are following the
tracks of deregulation, liberalisation and privatisation. Many governments
and international organisations are following a minimalistic approach of
intervention and involvement accompanied by further deregulation and liberalisation.
They are trying to overcome new challenges of electronic commerce regarding
financial and legal issues as well as to improve market access and introducing
a "zero tariff" approach to internet trade (WTO). This holds also true
for the ongoing OECD work on electronic commerce. Up to now, this work
has neglected the social limits of free markets. At current it is, as is
indicated by the ongoing crisis of financial markets, challenged by economic
limits of free markets as well.
Computerised technological change and electronic commerce - the debate
is lacking a social dimension
23. The ever-growing application of computers as well as of information
and communication technology is often referred to as an "information revolution".
Computerised technological change leading into the twenty-first century
must give rise to a debate about the nature of the "Information Society".
It must be asked whether the information revolution is bringing about a
new society without precedent, or rather intensifying ongoing processes
in today's society?
24. There are two alternative responses to this question. A simplistic
view, shared by many media, politicians and business representatives, stresses
that economic and social changes in the wake of the IT-revolution are inevitably
to the benefit of both the economy and society as a whole. Another view,
as for example provided by both the outcome of the OECD's Technology/Economy
Programme and by the report of the High Level Expert Group of the European
Commission, is more cautious in considering the concept of an information
society. The latter view rejects the notion of technology as an exogenous
variable to which individuals, regardless of social status and work or
employment, must adapt just as society as a whole. Instead it considers
the development and use of technology as a social process. According to
this view society is shaped by technical change, and technical change is
shaped by society.
25. Ongoing debates about the information society and the digital economy
are characterised by a lack of a social dimension. Most contributions made
so far are based on technological determinism. Calling for further liberalisation
and deregulation they clearly overlook the limits of markets. Furthermore,
they ignore to some extend the fact that civil society needs realms of
political rights protected from the market. An information society simply
cannot be based on the superiority of free markets and on technological
determinism. What is needed is an information society, which goes along
with a fair distribution of costs and benefits, which promotes inclusion
instead of exclusion and which provides for a social embediment of new
technologies.
26. The rejection of technological determinism and the recognition of
the social aspects of information technology have important consequences.
They make it obvious, that policies to promote the widespread use of information
technology "cannot and should not be limited to the economic integration
of technological change", as the European Commission High Level Expert
Group has stated in its final policy report. To provide the prerequisites
for a successful endogenous process of technological and social change,
negotiated and mediated both within companies and at the level of society
at large, all aspects of a broader social integration of technological
change must be included.
27. The theory of “the social embeddedness” of information technology
is supported both by practical experience and by scientific evidence. Quite
a number of studies and reports (including OECD work) show that IT investment
made by large numbers of companies has been less rewarding than could be
expected. Projects to introduce and apply IT ran over budget and time schedules.
Moreover, many projects failed to meet the performance goals, some failed
completely and some were abandoned. The problems companies encounter are
in general not caused by the technology itself. They are rather caused
by the continuing lack of attention given to the crucial role played by
employees and organisational aspects in shaping the outcomes of IT investments.
Case studies indicate that successful outcomes have been achieved when
employees were actively involved in technical and organisational change,
i.e. in the introduction of new forms of work as well as in the setting
up of new organisational structures and if training was provided.
PART B - THE POLICY AGENDA
Challenges on the way to an information economy - the trade union
agenda
28. From a trade union perspective, the non-regulatory and market-oriented
approach to accelerate the move towards a new digital economy has some
links and raises many questions. Is a minimalist approach in state intervention
adequate to ensure the necessary legal framework for privacy protection
and reliable financial transactions on the Internet? Can further steps
to build the Internet, to strengthen the growth of electronic commerce
among businesses, to increase new forms of digital ordering and delivering
of (electronically) goods and services only take place under the leadership
of business? Can the setting-up of new ways of retail sales of tangible
goods and new forms of transactions between business and administration
as well as between consumers and administration satisfactorily be founded
on industry self-regulation? Will the removal of alleged global or national
barriers boost electronic commerce? Will it offer at the same time new
opportunities for small and medium-sized companies, or will it bring additional
advantages to big business? And what about employment, skill requirements
and structural as well as organisational change? Are market forces sufficient
to promote the necessary retraining and development of human resources?
Will they promote the redeployment of workers into areas with new jobs?
What are the competition policy implications for growing concentration
of Internet access providers?
Building trust and making electronic commerce work - the necessary
steps
29. Further questions are related to the access to the Internet as well
as to the content of information and services. If the Internet becomes
an indispensable tool in everyday life, how can an affordable access for
consumers and citizens be assured? Up to now the "universal service" has
in general guaranteed every community local telephone service at reasonable
rates. It is therefore essential to avoid inequality of access and to ensure
new possibilities of access for all. There can be no doubt that this requires
regulatory measures to enlarge the notion of universal service. Up to now,
the application of information technologies and the access to the Internet
have been the preserve of a well-educated and privileged part of societies.
To avoid social exclusion and a further increase in the gap between information
haves and have-nots, the future development of networks and operating systems
therefore must enhance access and choice.
Access for all
30. It is necessary to ensure and enhance affordable access for consumers
and citizens. All citizens, regardless of geography, social and economic
status must have access to public information networks and have the opportunity
to use them effectively by the provision of support services. Otherwise
the growing use of networks will increase the risks of social exclusion
and divide the societies into information "haves" and "have-nots".
Improvement of education and training
31. Investment in education and training must be increased so as to
facilitate access and to strengthen the use of networks in favour of information,
communication and commercial transactions. This must be especially directed
towards the young, the low skilled and women, aimed to increase their participation
in the use of information technology. They stress the need to achieve a
better balance between investment in information technology and human capital.
32. With respect to the ongoing formation of an information society,
governments and businesses are urged to support actively the promotion
of computer literacy; they must devote more resources to education and
training. Education besides its instrumental roles in developing skills
and facilitating electronic commerce also supports social cohesion and
cultural diversity.
Ensuring appropriate and inoffensive content
33. There are strong doubts as to whether the regulation of content,
of advertising and the prevention of fraud can be left to industry self-regulation.
A free flow of information across regions and national borders must respect
both universal principles of human rights and cultural diversity. In considering
the problems of enforcing regulation to prevent xenophobia, violence, sedition,
racism, pornography and other kinds of inappropriate or offensive content,
neither industry self-regulation nor easy-to-use filtering technologies
alone offer adequate solutions. There are strong arguments in favour of
developing a code of conduct concerning the provision of appropriate and
inoffensive content, but the development of such a code as well as the
monitoring of its application is anything but a sole task of industry and
business. Only in addition of such a code, filtering technologies may support
efforts of users and consumers, to shield themselves and their children
from offensive content.
Guaranteeing Privacy
34. In order to ensure broad public acceptance of digital market places
it is particularly important that existing concerns in areas as privacy
within everyday life as well as during working life and consumer protection
are resolved effectively. The evidence of the inability of industry and
business to make self-regulation work to protect privacy is a strong indication
of the need for legislation. What is needed is the existence of enforceable
safeguards that provide assurance of privacy for consumers and employers.
A mix of adequate data protection regimes and appropriate technology is
the right approach to address the concerns related to privacy, consumer
protection and offensive and harmful content. Trade unions agree that the
application of encryption technologies must be in accordance with the requirements
of national constitutions and best practice by business. They do not support
the introduction of Key-recovery procedures. Furthermore they support the
introduction of digital signatures and authentification to provide a basis
for trust and reliability.
35. Efforts to develop a legally binding framework which defines the
conditions under which personal data can be collected and processed can
be guided by the principles of the Data Protection Directive of the European
Union. This directive defines the conditions under which personal data
can be collected, processed and transmitted. What is of great importance
too, is the fact that it calls for the protection of fundamental rights
and freedoms of natural persons, and in particular their right to privacy
with respect to the processing of personal data. Moreover, the directive
makes the necessary provisions for setting up self-regulating codes of
conducts guided by its principles. With regard to codes of conduct it must
be emphasised that the development of such a code is anything but a sole
task of industry and business. Governments must contribute to the development
of appropriate codes not only in close co-operation with business but also
with social interest groups including trade unions and consumer organisations,
too. It is also necessary to support efforts to minimise the collection
of personal data and to maximise their protection.
Social Impacts, Costs and Benefits
36. Efforts to provide the framework for successful technological change
must take account of the interrelationship between society and technology.
Effective promotion of technological change cannot be essentially about
the adjustment of society and individuals, regardless whether at work or
in the home, to change. Policies addressing only the economic integration
of technological change will fail to achieve the aim of maximising both
the economic and social benefits of electronic commerce and lead to an
uneven distribution of costs and benefits. Governments, business and trade
unions must act in favour of a socially acceptable transformation towards
a digital economy.
Weaving electronic commerce into organizational structures
37. Many high-tech investments made in recent years have failed to fulfil
accompanying expectations concerning both an increase of productivity and
of revenues. The lesson to be learned from this experience is that to transform
information technology into a powerful tool for productivity and competitiveness
requires far-reaching organisational changes at the company level.
38. This process is going to affect intermediaries in retail trade and
employees carrying out noncore functions as well as the management and
the employees of subcontracting firms. Changes in the structure of industry
and business are leading to a destruction of jobs as well as to the creation
of new jobs. Moreover, the impact of organisational change through electronic
commerce on the systems of industrial relations goes along with new challenges
for trade unions, management and employers associations. Against this background
OECD countries cannot afford to miss out in the global stakes nor can they
afford to weaken social cohesion in a rush for a rapid move into the digital
economy for some, but not for all.
39. Governments must develop employment and labour market policies to
avoid the danger of a two tier society permanently divided between a high
skilled part of the workforce enjoying the benefits of computerised technological
change and those on the low end on the skill hierarchy struggling to make
the ends meet. A prerequisite for that is a sufficient combination of adaptability
and security.
Combining adaptability and security
40. The digital economy poses a policy challenge to the traditional
organisation and institutions of the labour market and industrial relations,
namely the need to develop new collective bargaining and work arrangements.
There is a need to ensure giving more attention to achieving a meaningful
job content and an acceptable work environment, to an increase in autonomy
and responsibility related to job tasks as well as to a further development
of skills. New work arrangements should also contribute to enlarged options
of adaptability and flexibility in the interests of both the employees
and companies. New forms of adaptability for firms must not bring with
it insecurity of employment, working conditions and income for the employees.
Moreover, to cope with new forms of adaptability it is necessary to establish
new pay systems, reflecting enlarged job content, higher responsibility
and flexibility.
41. As shown by recent experience with the ongoing expansion of flexible
working time, change leads to new burdens and organisational challenges
for employees to reconcile work and family life. This leads to an increase
in the part of time-use, which is related to work. Information technologies
and digital networks certainly will facilitate to cope with increased challenges
of flexitime employment to organise everyday life within partnerships and
families. But at the same time the amount of time available for the gathering
information from networks, for communication and for the consumption of
digitally offered services will be reduced. This might hinder the development
of multimedia and electronic commerce.
42. In reconciling obligations of family and working life, special attention
must be given to telework. Trade unions call for an update of regulatory
systems of both social security and industrial relations so that they encompass
teleworkers and the broad variety of telework. Therefore, collective agreements
must be extended to telework and teleworkers must be given the right to
join a trade union and to be included in the protection given by unions.
With regard to the ongoing separation between the location of companies
and the site of work, trade unions must be given the right to make also
use of company based digital networks (intranets) for the purpose of communicating
with members and to ensure solidarity at work.
Preparing a social global level playing field
43. With regard to the process of globalisation, trade unions are concerned
that most international policy attention related to electronic commerce
has focused on liberalisation of markets for information technology based
products and services as well as on ensuring competition. Little attention
was given to establishing, and enforcing a set of common social standards.
This must be overcome.
44. Boundless digital networks bring about new opportunities to de-localise
manufacturing and service activities, to avoid tax and social cost. But
avoiding taxes and contributions to social security systems has nothing
to do with comparative advantage. Instead, it strengthens the risk of a
downward adjustment in social welfare, working conditions and standards
of living. To reduce the risk of “a race to the bottom” it is necessary
to ensure the adherence to minimum social rules like the ILO's seven core
conventions to the emerging global information society. It is also essential
to extend competition to avoid harmful tax competition.
Conclusion
45. Further efforts to extend the Global Information Infrastructure
must go hand in hand with an effective public policy response on a wide
range of issues. This must include efforts to:-
- create the necessary regulatory framework (provision of affordable
access for consumers, protection of privacy, provision of pluralism, ensure
appropriate and inoffensive contents, protection of copyright and intellectual
property rights, security of transactions, a sure and stable contractual
basis, regulation of electronic payments, interconnectivity and operability);
- promote the socially acceptable transformation towards a more information
based economy (information and sensibilization, support of SME's, promotion
of organisational changes, education and training, documentation of best
practice examples);
- avoid electronic commerce undermining the tax base as well as efforts
to promote electronic access to public administration (including the stimulation
of electronic procurement).
46. There is an urgent need for public debate on these issues and broaden
the current policy dialogue. Despite ongoing work and a broad range of
programmes and projects, there is a lack of awareness concerning the role
of actors, especially of unions and consumer organisations. So far the
debate has solely been driven by short-term business concerns. Rarely addressed
are the challenges concerning employment, work and training coming from
an emerging global information economy. The same holds true for the changing
nature of organisations and work and their impact on the development of
human resources.
These issues must be addressed more in detail in the follow up of the
OECD Ottawa Ministerial conference on electronic commerce.
