Telework Central to the New European Economy

This is the text of a statement by Horace Mitchell, Programme Director, European Telework Development, at a press conference held at the International Press Centre, Brussels, 10th June 1996, to launch European Telework Week 1996

"Telework is central to the new European economy"

Telework is one of three main building blocks of the future European economy. The others are teletrade - also known as "electronic commerce" and telecooperation, known under many labels, such as "open electronic networking", "personal networking", "organisational networking" or "networking across distances".

The public are being misled

The public and decision makers are being given a misleading impression of telework. The popular image portrayed by the media is that someone does the same job as before but does it at home instead of traveling daily to an employer's office. This is one possible interpretation of telework but its a very false picture.

All jobs are changing

The first error is the assumption that someone is "doing the same job". All jobs are changing, in all sectors of the economy, from Prime Ministers and chief executives to junior staffs in Banks and High Street shops. Most jobs are changing radically. The nature of relationships between employers and employees is changing. For Prime Ministers this is noticeable in the way politicians have to make greater and greater efforts to retain public confidence in an environment where neither Governments nor large companies can control market forces. For chief executives its visible in the way that shareholders and their representatives demand a greater say in some key aspects of corporate governance, employees expect greater openness from managements about decisions and planning, and customers demand better services and responsiveness. For junior staffs its noticeable in more frequent changes of role within companies, more frequent changes of tasks within the same job, more frequent movement from one company to another or from employment into unemployment or self employment and back again.

If we assume that telework means "doing the same job, but at home" we make a grave error.

A profound change in the economy

This upheaval in jobs and work reflects an equivalent upheaval in the economy and the nature of trade, part of the development of an "Information Society" or what I prefer to call "the networked economy". Whenever such a radical change occurs it entails a radical change in work:

It took 40 years between 1790-1820 to change 20% of the entire UK workforce from agricultural jobs to factory jobs;
It took 15 years from 1955-1970 to move 15% of the same workforce from factory jobs into service jobs;
The first of these changes took more than a working lifetime - the second took less than one third of a working lifetime.

The current change is happening dynamically; it is at least as significant, but some aspects of it are more subtle and more difficult to measure and report. Its main features are:

The shift from "lifetime careers" with a single employer to a mixed pattern;
The shift from "lifetime careers" in a single sector or trade to a mixed pattern;
The change in employment relationships from one where the employer made the decisions to one of greater dependence on more self-reliant, self-determining workers;
The decline in the role of large enterprises -the biggest are striving to get smaller in headcount terms and the smaller ones try to grow with as few people as possible;

The resultant is a greatly increased dependence on entrepreneurs and innovators.

The globalisation of trade and work

The emergence of a "global networked economy" means that these changes cannot be managed or controlled at the national or the European level. This is strongly underlined by the changing geography of work and trade:

If I buy a piece of software I now buy it "online" directly from the (USA based) manufacturer. I get the advantages of immediate use, USA prices (typically down to two thirds of European prices) and the latest version of the product. I pay no European taxes. No value is added in Europe through distributors, dealers, retailers or support staff, transport, warehousing etc. No-one is employed in Europe in the value chain.
If I need to get some work done, I look for talented people "online". I get the work done by the person who seems most suited to it. That person may be in Portugal rather in the UK or in China rather than in Europe. One recent example is the use of a talented individual in mainland China to help with the sale of Scottish "heritage" products to buyers in the USA. The work relationship is a contract between the people concerned but not a conventional employment contract - that would be fiendishly complicated for both parties. The work isn't done in Europe and the person pays no income tax in Europe.

On the Internet I can do business just as easily with someone in Manilla as with someone in Manchester or Milano. Indeed if the person in Manilla is "online" and the person in Manchester is offline, its much cheaper and easier to do business with the person in Manilla.

There is no practical way for Europe to erect barriers to prevent this kind of global relationship and it would damage our interests if we tried to do so - Europe is the worlds greatest trading area and we need more trade rather than less.

A Chance and a Challenge for Europe

This is the excellent title for a Telework Congress convened in Luxembourg 26-28 June 1996 and supported by the European Commission under the personal patronage of Commission President Jacques Santer.

The chance for Europe is to become a leader in the new networked economy and we have every chance of achieving this. But we do need to act fast and purposively.

The challenge is that we are currently lagging behind in our development and our learning curve:

In 1995, companies and individuals in the USA invested 681 ECUs per head of population on information technologies. Japan invested 563 ECUs, Europe invested just 335 ECUs.
Within Europe, the Netherlands invested 477 ECUs for each member of its population, Portugal 82, Greece only 47.
Europe has on average 72 personal computers for every 100 white collar workers. The USA has 104. Portugal has 43, Greece 42 - and this is per head of white collar workers - it reflects a lack of understanding and use of the technology not an agrarian economy.
In the USA over 30% of all managers and professionals can already be reached by email. In Europe the figure is no more than 5%.

Some people feel we are rushing too quickly into an Information Society - that we should allow more time for evaluation - we should pause and reflect. But an Information Society is not something we can plan for in theory or in isolation. People - including politicians and other decision makers and opinion formers - can’t begin to understand what it means to have an information society until they are gaining daily experience in using the new technologies and methods. The figures suggest that Europe is well behind on our learning curve.

Many European decision makers are dangerously ill informed

At a recent conference 200 European experts in labour law, health and safety at work, and social security met to discuss telework and to debate Europe’s policies for telework and the networked economy. Less than one third of these experts were day to day users of electronic mail across their organisational boundaries - the most basic tool of today’s networked economy - and only two individuals - both of them speakers from outside this expert community - were familiar with the use of electronic conferencing, the second most important tool.

In an equivalent USA meeting one would expect well over half of those present to be using computer conferencing methods and nearly all of them to be using email. Which group of experts can we expect to make better informed decisions about an Information Society - those who understand and use its tools or those whose knowledge is second hand?

Europe is moving and learning too slowly, not too quickly.

We need action now - on telework, teletrade and telecooperation

The new European Telework Development initative prosposes to campaign for wider understanding and use of the key technologies of the networked economy, especially among decision makers in every sector of the economy and society.

As we learn to use these tools we will be able to understand what is happening and start to respond effectively. Our responses need to embrace the three main building blocks of the networked economy:

Teletrade - we need to awaken Europe's companies and entrepreneurs to the immense possibilities presented by the emergent surge in global trade enabled and driven by the networked economy - we need to get Europe's industry "doing business online".
Telecooperation - both within organisations (through the use of Intranets) and between organisations and individuals, effective electronic networking is one of the most powerful tools ever made avaliable. We need every European citizen to understand this tool and know how to use it effectively, both for commercial and for social purposes.
Telework - insecurity in employment is the most vital issue facing politicians and the European society. Telework can enable people to reach out and tap work opportunities regardless of where they arise. It also enables other workforces that may be more "market effective" than ours (and who have learned telecooperation) to reach out and seize work opportunities that might have originated here in Europe. We need every firm, every worker, every institution connected with employment and work to focus on the underlying realities, opportunities and threats of telework, not just on the niceties of whether someone commutes to the office this week or stays at home.

The European Telework Development Team will shortly launch its proposals for helping to make these visions a reality

To make sure you are informed about the initiative and about telework developments generally, join either the European Telework Online discussion list or the related "announcements only" list.

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