Internet Governance Forum
Baroness Shriti Vadera, Minister for Economic Competitiveness and Small Business (jointly with Cabinet Office)
London, 11 July 2008
When this government came to power Al Gore had only recently ‘invented’ the internet. Mobile phones were a rich businessman’s toy. Only 10% of the population had used the net and broadband as we know it did not exist. Public services were devoid of technology after decades of underinvestment.
Today some 70% of the population have used the internet. More than half of homes have broadband and there are more mobile phones than people. Public services are being transformed by technology thanks to investment of £6bn since 2002. Today you can go online and post a public review of your hospital treatment on a government website. And of course since then Al Gore has invented ‘saving the planet’.
In the global context, the exponential growth of subscribers and hosts has actually been faster in EUrope than in north america and asia, with the UK amongst the top four countries in the world in the growth of internet access. So we can have leadership and take decisions that can change the world.
Adam Smith in the wealth of nations demonstrated an acute understanding of the importance of communication and the size of markets on competitiveness. In fact he devotes a whole chapter to more efficient communication yielding more competitive outcomes.
I quote: ‘as it is the power of exchanging that gives occasion to the division of labour, so the extent of this division must always be limited by the extent of that power, or, in other words, by the extent of the market.’
Of course he was talking about the massive leap from affordable sea and river communication which led to specialisation and creative, if huge, disruptions to ways of life in response to competitive pressures.
If Adam Smith was a fly on the wall today he would have a sense of déjà vu. Radical changes in communication leading to massive disruption in commerce. Smith even covered the impact of trade with India.
The internet he would have said underpins and is underpinned by openness and flexibility, not protectionism and rigidity – it is the only way new technology can work its magic. And I am proud that britain is arguably the most open economy in the world.
It is the combination of competition and investment in technology that yields stong productivity gains. We can see this in our analysis of why in the EU over 40% of productivity growth is now due to ict. But in the us – where there is a large and truly open and competitive single market - it has been above 50%.
But more profoundly than economic efficiency and productivity, you have all driven one of the most significant changes in society since the industrial revolution – the empowerment of everyone who is connected to the internet to communicate with the world easily and for free.
The internet is unlike all other advances in communication in the last 100 years because it is free, easy to use and two way, giving the user not just control over content but the ability to create it. The phone was expensive, dependent on a phone book and thus created an information asymmetry that limited its usefulness. TV and radio were one way. We forget sometimes just how profound it is that I can just as easily be sitting at home in Harlow or Hong Kong doing my grocery shopping or buying a machine part or a whole production run.
Behind the credit crunch and what is happening to oil and food prices around the world, people sense we are in the biggest restructuring of the global economy we have seen in our history. Besides the shift of economic power from west to east, the internet and new technology is enabling a shift of power away from corporations who control media gateways, away from government and political parties to people. With only one or two caveats, this is a good thing.
It isn’t the fact that people can communicate that is interesting – it is what they are choosing to do with this power.
Sally Russell a mum from Hertfordshire created netmums.com. Within 5 years a 400,000 member movement to provide mutual support and advice. Twice the size of a political party.
If tens of thousands of parents came together in a park or football stadium, people would expect the government to be there to offer advice from the NHS or Surestart. The importance of these huge mutual support groups online is now recognised by government. The power of information work that Tom Watson is taking forward from cabinet office is redefining how government should work with these groups to provide better public service outcomes.
As people become used to the internet allowing them to tailor content and services to meet their individual tastes and needs, they are increasingly coming to expect the provision of public services to be similarly personalised and responsive.
Simple things that can transform. Like greater access to information for self-medication or to study at home or to map areas where crime is happening in their neighbourhoods. Not rocket science but an important direction change – government going to where people are online – not trying to bring people to them.
And at local level it can be the citizen telling the council where the potholes are, or where street lights have failed – fixmystreet.com or finding out how their mps are voting at theyworkforyou.com.
The internet is also about communications between people on a scale never seen before. Its contribution to innovation, creativity and economic productivity is driven by its empowerment of people. And, as the Prime Minister said at the Google Zeitgeist Conference:
People are able to communicate, organise, and find common cause with each other. And so build not simply a successful global economy but start to create the first truly global society.
Mass collaboration through online petitions or canvassing in the us primaries is just a start. As James Surowiecki says “the many are smarter than the few”.
And you cannot now have behind the scene deals and back room fixes. You cannot ignore problems that exist in countries when information is available globally as people report it across frontiers in a way that can change the behaviour of governments.
With their begging bowl and their blogs, the monks in Burma showed knowledge of what is happening cannot easily be suppressed. Ten years ago we might never have heard their plight.
Also think of the Philippines where President Estrada was brought down after a million people texted to come together in a demonstration - the first ‘coup de text’ in history.
And we can hope that if the genocide in Rwanda were happening today, then the world would not be silent as it was, because ordinary people could have known what was happening, and leaders could have been forced to act.
While the internet has broken down barriers, opening up opportunities to many, the challenge still remains to give the power of the internet true global reach.
There are approximately 1.1 billion internet users worldwide but mainly in the developed world. In Africa only 5% have access to the internet. Even for India, defined in popular perception as riding the wave of technology, some estimates show that access will reach only 7% by 2011.
The world needs to address this fundamental divide in access to internet technologies and services. A major theme at the IGF in Hyderabad will be how to bring the internet to the next billion. This is a key target for the internet community, along with tackling issues of security, trust and confidence.
And in doing so, we can help create in the next decades a truly global society that is a force for good.
This revolution is not just global, it is personal and individual. We do not need media empires, corporations, or even governments to project our voice. But we see from netmums and other online groups that the first thing individuals do online is form new networks. This enables a radically different approach to regulating the internet than was used for its forebears. But this does not mean a naïve return to laissez faire but a role for government and parliaments that is light touch, listening to experts, helping to broker consensus.
This government came to power in an analogue age. It set bold broadly free market approaches to this sector which is now amongst the most important in the economy. From a market for spectrum, to embracing a digital age in television, and making the UK the investment and cultural destination of choice for the creative and tech businesses, where IP is respected but the regulatory environment promoted innovation. None of this happened by accident.
But we are now in a new era where we recognise that this sector is going to be the engine of our economic growth and I want to hear your views about the role of government and how we get the right regulatory and policy framework for businesses to respond and to invest in competitive infrastructure and services
If the internet is to unleash its true potential and if people are to have confidence in its power to create new communities – and I know many of you here today are working towards safety for children, dealing with piracy and of course issues of privacy – then the challenge for government is to get the right balance between protection for the consumer and for business. And at the same time not hold back the innovation to business and society that the internet brings.
The government has accepted the recommendations of the Byron Review in full which has a focus on self-regulation. And I am delighted the UK council for child internet safety is being launched in September.
As the Creative Economy paper launched by Andy Burnham in February recognised, we want our world leading creative industries to thrive. They are a key part of Britain’s comparative advantage. We all need to ensure that people understand music does not write itself and for them to value the content that they enjoy. That also means that rights holders need to provide products in ways that modern consumers wish to consume them.
The second role of government is to ensure that we have the right environment for investment in infrastrure for the longer term. History shows us that competition in telecoms markets delivers high levels of investment. I believe the market can deliver next generation broadband if we create the right conditions. But we will not be complacent if the UK is becoming disadvantaged. That is why I commissioned the report from Francesco Caio on the barriers to investment in next generation broadband access which will be published in the autumn. I am pleased that it has already brought the subject to the top of the agenda in the internet community.
And if the internet is to enable real global change – with all the benefits in the developing world I was talking about - then we must resist the siren voices of protectionism and state control in Hyderabad: and the key to success here will itself be the open exchange of ideas and best practice. Expert participation of industry and civil society alongside parliamentarians and policy makers is key.
This was the approach we successfully helped forge at the world summit in tunis three years ago: a process free of the pressures and constraints of negotiation and decision-making.
I look forward to hearing the results of your talks today – in particular on how you believe we can transfer the lessons from the UK to the global economy.
A new society, another industrial revolution in the private and public sectors, democratisation and development around the world: your role in all this is vital. You are the voice of the internet here in the UK. As the experts, the business leaders and consumer champions, it is you who will shape the next stage of internet development.
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