Select Committee on European Union Written Evidence

Memorandum by the Committee for the Future (Council of State report on the Commission communication to the Grand Committee)

The Committee's Positions


1.  EU preparation of the matter exceptional

The Committee for the Future draws attention first to the exceptional nature of the EU's preparation of this matter. This may in part explain why the content of the Commission's communication is of only minor novelty in relation, on the one hand, to Information Society trends and strategies in the most advanced EU member countries in the field and, on the other, to trends in the competing country, the United States.

  Normally matters of this sort are prepared in the Commission and the relevant administrative preparatory bodies in the member countries. In this case the responsibility for the preparation has belonged primarily to the presiding country—in such a way, however, that the Commission has prepared a so-called progress report for the Lisbon summit meeting hurriedly, on the basis of the eEurope communication. The problem is that the communication itself was not considered by the European Council, while national organs responsible for the issues did not have an opportunity to take positions on the eEurope initiative's objectives, either. In other words, positions are being taken now on the eEurope communication's progress reports and action proposals with the summit meeting in mind, and only then will positions be taken on the communication, which enunciates the objectives. For this reason, problems have appeared in preparation and the formulation of positions at the national level. The inadequacy of the few months' time allotted for drafting the progress reports in the wake of the issuance of the eEurope communication represents a problem of its own.

  Presumably, however, the Member States will submit the requested comments simultaneously on both of the two types of progress reports (the presiding country's and the Commission's)—as well as the e-Europe communication, without its having been considered by the Council. In the background is the Helsinki summit meeting's decision giving the Commission and the Council the task of preparing a progress report for the Lisbon summit.

  The member countries can commit themselves to the objectives of the eEurope communication and its progress reports only if the member countries have had the opportunity to consider those objectives properly. Because of the complexity and exceptional nature of the preparatory phase, Finland's position has remained vague. The Committee for the Future nevertheless considers the subject of the utmost importance and will raise several issues in its statement.

2.  Examples of US government objectives to which the EU communication must be proportioned in the global economy

  In the fields of the economy, employment and especially IT, the disparity between the United States and Europe has been allowed to become too large in the 1990s. The communication's point of departure should clearly be those objectives and measures by which this gap will be eliminated very quickly.

  The communication is good in that it focuses on subjects important to the citizen. Proceeding from this basis, it is natural that the communication gives abundant attention to activity by public authorities that serves the citizen—that activity including the on-line transaction of business, for example. In terms of longer-term prerequisites for the well-being of Europe, however, this chosen approach may also have become the communication's weakness. The communication is not adequately able to challenge the United States in what might be termed the toughest areas of IT—the digital economy, e-commerce and online business-to-business dealings. Discussion of both research in the field and the commercial exploitation of innovations has not been adequate, either. Nor has adequate attention been given to accelerating the establishment of new companies in the field, and, as an element of the intensifying global competition, increasing the size of the small businesses now operating in the field. Generally, the communication has pushed the consideration of the business economy—the private sector—into the background. However, the information society can offer the good services which the communication clearly outlines for the citizenry only if the EU and its member countries succeed in the new economy and manage to create jobs and thus make the citizens wealthier. If the structural change in the economy is not controlled, and IT, as a factor which pervades all the production and service sectors, is not utilised fully, we are likely to face a situation in which Europe, in spite of its high level of expertise and good capabilities in IT, will not be able to realise the objectives of the public good which the communication enunciates.

  On 9 March 2000, following this week-long visit to the United States, Enterprise and Information Society Commissioner Liikanen, who bears responsibility for this question, noted that "with the aid of e-commerce, businesses in the United States have achieved a cost savings of as much as 10 per cent, even in traditional sectors. This is changing the businesses' operating dynamics and the structure of the whole economy." It is precisely here, on the question of structural change in the economy, production, and working life, that the Communication should have treated its subject more incisively.

  The clear differences in approach and emphasis in the public discussion of the field in Europe and the United States come in focus when we compare the words and initiatives of a number of the central players. The US Department of Commerce, for example, has devoted a tremendous amount of resources to studying the digital economy's impacts at the level of the national economy, the company's finances, and general social implications. It is revealing that, while Europeans have much to say about social exclusion, the United States is talking about the so-called digital divide, in reference to which the survival possibilities of various parties and strata are evaluated on the basis of the economy. The challenges of the new economy, technology and innovation are placed before the national economy, businesses, training, research, the federal government and, always, the individual. For policy in the first years of the 21st century, the Department of Commerce has established rigorous training objectives or identified such important trends as the following ("The Digital Economy,"

    —  By 2006 half of the private-sector labour force will be in IT production (hardware and services) or in industry, which is a large-scale user of IT.

    —  The salary gap between information workers and other workers is now great, but it will increase at an extreme speed in the first part of the 21st century. In 1997, an average IT worker in the private sector earned USD 53,000 yearly, but other workers in the sector earned only about USD 30,000 on average. The highest salaries are commanded by software workers, whose earnings average USD 59,000.

    —  Fields that utilise IT pay 13 per cent higher salaries than other industrial fields.

    —  The need for highly trained workers will grow fundamentally by 2006—a 60 per cent increase from 1996 to 2006 is forecast. During the same period, the need for less educated workers (programmers and the like) will decrease.

    —  The shortage of labour is an impediment to growth. Although, for example, the number of students in university-level four-year computer science programmes has doubled in three years, the national labour supply is not adequate. More experts than before will have to be imported (100,000 high-tech experts annually on special visas). During the 1990s there were about a million immigrants and a great number of illegal immigrants.

    —  In order to keep up with developments, US states and regions have to implement quick structural solutions independently. The State of Maryland, for example, has decided to double its educational places for highly trained information workers.

3.  Finland must adopt a level of objectives much more demanding than the EU's

  If Finland intends to be able to keep pace with trends in IT, it must pursue objectives more demanding than those that the communication presents. Examined from the standpoint of current standards in Finland and the Nordic countries generally, the first point alone, on bringing European youth into the digital age, reveals the modesty of objectives. The EU is establishing the goals of equipping all teachers with technical possibilities for the Internet by the end of 2002, and of making fast Internet connections available to all pupils in their classrooms by the same date.

  The point of departure is the old-fashioned idea of collective use (ie Internet use by a school or class) based on a fixed network—a computer and a fixed telephone or cable. Finnish thinking has for years emphasised the importance of personal Internet and other data communications links that travel with the individual. The whole thinking is different. Internet links and the services they provide are constructed with an emphasis on mobile links. Computer-based connections are needed, but, alongside them, the latest technical possibilities must also be given realistic consideration throughout Europe, especially when the objective is to expand the coverage of Internet connections in Europe rapidly.

  The communication establishes objectives for citizens and official authorities respecting the transaction of business online. Here the gap between the EU and Finland is substantial. Finland is the first country in the world to have developed a smart card for the citizen through legislation, and the health-care system will be getting its own smart card this autumn as a result of the Satakunta macro pilot project. At the same time, it has been decided to oblige official authorities to produce their services electronically. Couldn't the communication, for example by referring to so-called best practices, have presented other European countries with ways in which governments or parliaments can further the progress of IT, as in Finland, by establishing clear, binding norms? Within a few years, authorities in Finland will be obliged to make all their possible services available to citizens in electronic form, too. In legal terms, an objective which binds the authorities is often substantially more effective than other means of guidance. That presumably also holds true in the electronic automation of Europe, at least so far as the public sector is concerned.

  Perhaps the most important thing is to establish ambitious objectives from the standpoint of Europe's future competitiveness, on the basis of the global economy's points of departure. The communication should have concentrated clearly on those areas of IT in which Europe, largely through the Nordic member states, holds an edge over the United States. Those areas include at least the following:

    —  Internet and other communications based on cell phones;

    —  services in wireless communications and IT;

    —  digitalisation and especially its use with television;

    —  smart card technology and its applications;

    —  construction of future "smart" houses and flats equipped with modern data technology;

    —  technology and expertise connected with health-care, ageing and, generally, so-called welfare services (eg gerontechnology and so-called welfare clusters).

  Of these areas, one of the newest and most promising from Finland's perspective is the application of data technology to the construction of houses in an entire residential area. The application represents the forefront of developments in the field world-wide. The Arabianranta project in Helsinki provides an example. IBM, Nokia, Sonera, Digia and Symbia have announced that they have joined together to plan the Helsinki Wireless Virtual Village, a residential and office neighbourhood that will serve the communications needs of the future and act as a proving ground for the field's latest solutions. Plans call for making use of the experiment elsewhere in the world.

  The information economy will not function without experts. The shortage of skilled workers in the field is already severe. Germany, for example, has decided to bring 20,000 information experts into the country through special measures. The need is estimated at 100,000. Germany meanwhile has millions of unemployed workers. It is estimated that Europe has a half million open positions in the information industry, and it is believed that the number will triple by 2002. The communication did not give adequate consideration to the simultaneous occurrence of a structural labour shortage and the joblessness of 10 million Europeans.

4.  Actions are more important than general objectives

  In summary, the committee concludes that the Commission's communication "eEurope—an information society for all" is to be supported, even although it does not really introduce anything new that would fundamentally enhance Europe's competitiveness in the markets of the electronic, virtual world. But because actions alone are decisive, a good model for progress in the matter might have several levels, as follows:

    1.  In accordance with the initiative, broad-based measures that concern everyone will be implemented. These measures will promote general capabilities for success in the Information Society.

    2.  At the same time, however, a few well-prepared top-priority projects equipped with adequate resources will be implemented. These projects will be directed at the development of data network content and methods, for which the best European resources will be assembled and through which the general objectives of point (1) will assume concrete form.

    3.  Particular weight will be given to the sectors in which Europe is already ahead of its competitors, and to projects in those sectors.

  From Finland's standpoint, important subjects which are close to the citizen, in which Finnish expertise is very advanced by European standards, but in which substantial further measures are at the same time imperative, include the following among others:

    4.  A computer driver's licence which supports the learning of basic IT capabilities and is intended for all citizens. The licence idea's next developmental phase should be an "advanced driver's licence" that supports the development and introduction of collaborative web-based methods.

    5.  Development of modes of supplementary training to support a uniform learning strategy for the individual and his or her work community. Supplementary training programmes developed and introduced by universities—so-called professional development programmes—constitute a good function for the development work.

    6.  Utilisation of the potential offered by digital television as an aid in both work-place-specific and independent individual learning, the idea being that the development work takes place in close conjunction with virtual university and virtual school projects that are under way.

  The role of the EU and nation-states in the creation of the Information Society must be considered closely. Is there reason for the State to be active and if so, in what fields and by what means? In the Nordic countries, too, various directions in such things as the construction of data network links can be seen today. In Finland it is thought that, for the State, opening the market to the data networks' end use is enough of a task. In Sweden, by contrast, the Ministry of Trade and Industry is planning to build a broad-band network that will cover the whole country.

  Last year, according to the so-called Information Society index developed by the International Data Corporation, Finland's Information Society environment was the world's second most-advanced after the United States'. The index, which depicts 55 countries, incorporates information from more than 20 qualitatively monitored component areas. According to the comparative study made at the beginning of 2000, Sweden had risen to first place, the United States was second and Finland had dropped to third. What has Sweden, as a country comparable to our own, been doing better than us? How have the different players contributed to the situation? From the policy-making perspective it is interesting, for example, that Sweden, through tax relief aimed at workers and employers, has achieved the world's highest density of computers in home use.

  Since the EU's different programmes encompass thousands of active projects relevant to the initiative's substance, the initiative's implementation programme should emphasise the dissemination of the results of projects already under way. Appropriations should be directed much more so than before to the documentation and dissemination of so-called practices, in a form that can easily be utilised in various parts of Europe.

  When the EU prepares its various directives and objective programmes, we should be assured of a functional, uniform set of norms for the advancement of e-commerce and IT in general. Special attention must be given to the fact that the need which prevails in the EU for top-down regulation does not hinder the development of these fields.

5.  Values and attitudes should be taken into account, too

  Through policy we can influence the values and attitudes of a society. In Finland the mood and attitude concerning IT has been favourable. The situation is however quite different elsewhere in Europe. AT IST99, the EU's largest information society event, held in Finland in the autumn of 1999, consideration was given to EU barometer results respecting popular opinions about IT. Quite generally, more than 60 per cent of different groups opposed all new technology regardless of the fact that the respondents were furnished with examples of how the Internet, cell phones and other technologies benefit them in their work, at home, and in different life situations.

  Differences appeared among the Nordic countries, too. In Denmark the national consumer agency carried out a major survey directed at consumers. Surprisingly, the study revealed that, on a great number of points, as many as 80 per cent of all Danes took a negative or extremely cautious view of new technology, including e-commerce.

  If we want Europe to advance more quickly in the area of IT—particularly in the exploitation of IT throughout society—we must begin with values and valuations.


  As its statement, the Committee for the Future respectfully concludes:

    —  that this matter is so important to the economy and well-being of Finland and Europe that it is essential to attend effectively to the matter's future preparation in spite of the exceptional nature of the preparation of the communication to date;

    —  that, once the Member States have considered the e-europe communication and committed themselves to its objectives, the Commission and the Council, during Portugal's presidency, will prepare an action programme on the information society and its economic basis, taking into account the very varied stages of development in the member countries;

    —  that the objective level, starting from that in Europe's best countries, must be raised considerably higher, because only in this fashion can we think of the communication's goal of catching up with the United States as an objective;

    —  that, in additional to the public sector, the examination should encompass and give due weight to the private sector's problems, for which the public sector can contribute solutions and thus improve the IT field's developmental prerequisites; and

    —  that, at the community level, the EU must accelerate measures which will provide infrastructure and a good operating environment for e-commerce and other online activity.

15 March 2000

  Chairman  Martti Tiuri /kok

  Vice Chairman  Kalevi Olin /sd

  Members:  Jouni Backman /sd, Leena-Kaisa Harkimo /kok, Susanna Huovinen /sd, Reijo Kallio /sd, Kyösti Karjula /kesk, Jyrki Katainen /kok, Markku Markkula /kok, Rauha-Maria Mertja­rvi /vihr, Petri Neittaanma­ki /kesk, (osittain), Juha Rehula /kesk, (osittain), Esko-Juhani Tennila /vas.

  The secretary of the Committee Paula Tihonen, Committee counsellor.

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