Memorandum by Lord Puttnam of Queensgate
1. What needs to be done to create confidence
and to stimulate e-commerce?
e-Commerce is being driven by large American corporates—eBay,
Amazon.com and Yahoo to name just three. And, after a slow start,
the Hollywood film studios are beginning to explore online opportunities
in an extremely aggressive manner.
As a result, it seems possible that the United
States is set to reap the principal benefits of the new digital
economy.
If any of us outside the US are to have the
remotest chance of competing on the world stage we need to create
media powerhouses which have the financial muscle and the distribution
capacity to take on the American giants who are already dominating
the "virtual" world.
For example, it is reported in the Financial
Times of 29 July that e-bay.co.uk, a subsidiary of the American
online auction house eBay, is grossing £90,000 a day as opposed
to QXL (the UK based auction company) which is grossing just £16,735
across the whole of Europe each day. The competitive advantage
currently held by the Americans cannot be underestimated.
This is not just about a business opportunity
but also about exploiting our home-grown creativity. Outside the
United States there exists an extraordinarily rich pool of creative
talent—writers, directors, producers, technicians. But unless
we have the means to exploit this talent pool and distribute their
ideas, then both the talent and the ideas will be hoovered up
by the US, with all the benefits accruing to their economy.
The broader point should be clear; without companies
the size of a merged Carlton-United, an enlarged Granada or some
similar giant, we in Europe will not be able to compete for talent
and ideas in the globalised, online marketplace. The size of the
talent pool is relatively inelastic, so the cost of deploying
it will surely rise as demand for it increases. And without companies
of sufficient size we won't be able to get the finished product
to market in a cost-effective manner. But at the same time, those
companies must have the flexibility to respond quickly to opportunities
to "turn on a sixpence" if the market place starts heading
off in a new and unexpected direction—which it surely will
from time to time.
2. Does the European Commission's draft Action
Plan "e-Europe: An Information Society for All" offer
a realistic means of promoting e-commerce in the EU?
My main interest in the e-Europe Action Plan
naturally relates to the targets set out for education on page
7. The objectives and timetable set out are designed to ensure
that teachers, pupils and schools alike all have access to the
Internet and multi media resources. It seems to me to be of absolutely
fundamental importance that these all have the ability and confidence
to use these tools.
3. Unless we ensure that Europe's educational
systems have the means to exploit the potential of ICT to transform
the processes of teaching and learning then we cannot hope to
compete in the globalised economy of the 21st century.
For example, we must not see the impact of the
computer on education as merely akin to the impact of the calculator
on arithmetic; speeding up and simplifying the process, without
offering any significant change to the process itself. If these
technologies are sensitively and intelligently used, they have
the potential to influence the development of the whole educational
process—and with it, our collective futures.
4. Will codes of conduct and co-regulation
provide sufficient protection? Is there a case for intervention
by national governments and the EU?
I am not sufficiently qualified to answer on
this. I believe that the work undertaken by KPMG for the 1996-97
European commission on regulation convergence provides a very
useful summary of all the issues.
5. Do the institutions of national governments,
on the one hand, and the European Commission, the Council of Ministers
and the European Parliament, on the other, function with sufficient
flexibility and coherence to promote the EU's objectives in the
field of e-commerce?
The difficulty that confronts us is that many
of the issues raised by e-commerce no longer conform to what has
traditionally been the responsibility of quite separate government
departments and EU institutions.
We desperately need to find a way of making
sure that solutions, once identified can be taken up and carried
forward by all the relevant bodies. Only in this way will we be
able to take advantage of their individual disciplines and skills
so as to arrive at a solution that is correct, rather than one
that is merely convenient. Businesses can accommodate this type
of flexible structure but sadly government departments have, at
least, in the past seemed unable to emulate them.
We need to truly "modernise" the way
we govern ourselves to adjust to the challenges and opportunities
raised by the development of e-commerce. The recent Modernising
Government White Paper offers some useful proposals in this respect,
but we should not under-estimate the scale of the challenge that
confronts us.
6. Should existing EU institutions' internal
structures be changed, or new ones created, to improve policy
development and co-ordination?
I am not qualified to answer.
7. How can structural change be brought about
fast enough to accommodate to the growth of e-commerce?
See answer to question 1.
3 March 2000
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