Why the e-conomy needs e-citizens and vice versa

Marianne Doczi
Ministry of Economic Development

Information and communication technologies (ICTs) are driving the world’s leading economy, the United States, along with other developed and developing economies, increasingly making them into e-conomies, electronic economies.

To be internationally competitive, to harness the technologies which will help us minimise what has traditionally been called the tyranny of distance, and the penalties of being a small population nation, New Zealand has to follow suite.

That is, if we want to take advantage of opportunities, minimise risks and increase personal and collective well being. And if we want to develop an innovative, inclusive economy, which is one of government’s key goals.

Now that might sound like a mouthful of govt speak, but from my 10 years in the NZ Employment Service, and from living in an isolated, almost job-free zone, the Hokianga, I believe an inclusive economy is very much a goal on most people’s minds, and from my experience in IT policy, I believe that being innovative is the only way we’re going to get one. It’s not possible to be competitive purely on price, or on volume. To stay ahead people have to generate ideas and identify niches in markets. And keep innovating.

Increasingly it is, and will be, those people and locations who can access, understand and value the Internet and other technologies who are better able to effectively contribute to economic growth and ensure their own well being and those of communities to which they belong. And it won’t be done by only having e-commerce and e-government: it can only happen if we’re e-citizens.

What’s an e-citizen?

So what do I mean by e-citizen. Simply, a person who understands how information and communication technologies are changing things. Now, this doesn’t mean having to understand the technologies themselves. I could no more tell you how sound, text and images got from my PC to someone else’s across the world than I could tell you how planes stay in the air. And to experience the value of both forms of technology and to use them to my advantage I don’t need to. All I need to understand is how to use them, be motivated to use them, and be able to access them. So an e-citizen is someone’s who’s got the nouce, skills, and funding to use ICTs and is.

Why do we need as many e-citizens as possible?

Let’s just put the technology aside for a moment. As we move to an economy that’s based not on capital, or on machinery, not on physical strength or labour, not on processes or systems, but on knowledge, ideas and relationships, we’re moving to an economy which is based on people. In our economy, whether you’re a small, medium or large player, profitability, jobs growth and success, is increasingly dependent on using knowledge and skills more innovatively and more co-operatively than before – and knowledge, imagination, creativity, relationship management, are all about people.

Win-win

Because the value of businesses are so dependent on people, and the Internet is all about networks of networks, or virtual communities, my sense is that in the Internet, e-commerce, e-business, e-govt age we’re entering, business and government and communities have a lot to gain from understanding each other more. And from ensuring that as many people as possible are able to participate in our economy and society by making use of information and communication technologies, particularly the Internet.

Growing in leaps and bounds – but not all over the place

While the Internet is leaping ahead in numbers of users, as you’d expect, it’s not even growth. Hence the creation of information haves and have nots, or the digital divide. The growth, or what’s known as the diffusion of technology, how it spreads, has never been even. Whether we’re talking about telephones, televisions, microwaves, irons, or even books, their spread was not even. But the issue with the Internet is that it is increasingly becoming a new form of literacy - essential for participating in society – for accessing information and knowledge, for getting the best deals on goods, for communicating with friends and family, with officials, with business.

• Growth (NUA 275 million 2/00)
• Top 20% of countries by income have nearly 95% of users (UN 1999)
• 43% of world’s Internet users in the USA
• 57% of Canadians and Americans have Internet access

50% of NZs – but only average, not true of all ethnicities, income levels, ages, locations (Porirua for example: 50% of European/other residents had access, only 17% of Maori and of Pac Is Peoples had access. While 76% of those earning more than $50,000 had access, this dropped to 27% for those earning between $25,000-$50,000 and 15% for those earning less than $25,000 (which would include students). One ward had 63% access, contrasting with 37% and 17% access for two other wards.

But I don’t want to talk extensively about the digital divide here, although I will be happy to discuss it more at the end. What I want to move onto is how the Internet is changing the nature of opportunities and putting the concept of "community" way up on the agenda.

The Internet changes everything

Larry Ellison, the CEO of Oracle computing has said, "the Internet is changing everything". What does he mean? I think he’s talking about the way the Internet cuts out a lot of middle people – the jargon here is disintermediation – and creating the need/opportunity for re-intermediation, new middle people. People or sites to help you find things of value in cyberspace.World Pay, digital wallets

The Internet is driving changes internationally in how goods and services are being researched, designed, developed, created, marketed and distributed – whether by companies or by governments. And where products and services are still physically based and being delivered over land, companies are increasingly making use of e-business to lower costs, create partnerships, increase profitability etc. To participate effectively as a worker, entrepreneur or consumer, increasingly you have to understand what the Internet is about. To know when it’s a threat and when it’s an opportunity. Like Garry said yesterday, Techno-tinorangatiratanga.

Of special significance is the way in which the Internet reduces the distance between knowledge producers or owners and consumers or receivers. Now, I know this also creates concern in some quarters, particularly Tangata Whenua. And I think it’s true to say that in changing everything, the Internet can be a negative force as well as a positive one. It amplifies opportunities for self management, for empowerment and wealth generation, and it also amplifies the risk of being controlled more, of being disempowered, of being cut out of the economic loop.

It’s changing how people access and distribute knowledge or information and what they use it for. And for those of us who believe that knowledge and the ability to create knowledge is power, then it’s definitely a two edged sword. And I’m guessing that’s why many people are here at this conference, because you want to be better equipped to understand the threats and maximise the opportunities.

E-conomy and e-citizen

But in looking at how the Internet changes everything I want to look at how it creates an interdependence between the many parties which make up our society and economy: our nation. Individuals, whanau, hapu, iwi, communities, business and government. How important that it is that as many of us as possible become e-literate: understanding the promises and threats of the Internet and how to use it to maximise the promises, and reduce the threats.

How, to be effective at looking after others and ourselves, manage our employability, become entrepreneurial and become aware consumers, we need to be e-citizens.

The Internet is about people not technology

Yesterday I was in a workshop where the issue of bandwidth came up – the technology infrastructure that controls how much and how easily we can send and receive information. If you’ve ever lived somewhere where you freeze under the shower because the pressure’s low and the water trickle’s out of the pipe, then you’ve had the water equivalent of low bandwidth. If you’re somewhere where you can sing away blissfully under the shower until others come knocking at the door to tell you to get out, then you’ve got the equivalent of broad bandwidth, the ability to receive or send a lot of information at one time.

While the technology makes it all possible, it’s important to remember that the Internet is a network of networks and that people are the critical ingredients. The technology is a means to an end – not an end in itself: gathering or exchanging information, accessing knowledge, communicating. It supports the creation of a range of communities, for whatever purposes, and enables them to interact with each other – it is people not the technology that matters most. But if people aren’t aware of the value of the technology, and comfortable using it, then the true value of the technology for all parties, be they communities or business cannot be realised.

It might be useful here to mention network economics, the value of networks in an interconnected world. You’re part of a network here at this conference. When you go away the value of what you’ve shared grows because of the number of people who you’ve met here that you’ve now got links with, and because you can, through them, link into more networks.

George Metcalf developed the theory of Network economics around the telephone. It goes something like this. The value of a network increases exponentially with every new person added, with the costs remaining the same or even sometimes reducing. Imagine if only a few hundred people in the country had telephones. They wouldn’t be much use. The value of the telephone lies in the fact that most people have them. It’s the same with the Internet. The value lies in having as many people as possible connected, which is why lots of deals go on about giving people free or cheap access – primarily where there’s a market however. Which is why Garry Watson again spoke yesterday of the importance of people in less populated areas getting together to understand the true size of their actual and potential market.

While networks are assisted by technologies, whether it’s the telephone, printing press or the Internet, the real driver of networks is people. And you’re skilled networkers so you’ve got a competitive advantage in the connected, Internet age.

People values

Just as the Internet is about people, increasingly business has to understand human values as well as balance sheets. With the growth in e-business, the traditional values of communities which are so important, such as trust, reciprocity, connection and co-operation, are vitally important for gaining and retaining customers: particularly trust. Send my money to an unknown business, pie in the sky, information superhighway, in cyberspace, I don’t think so … You get the picture

So in our digital world, as business practices are transformed, the healthy community has much of value to offer as a model for effective business to business and consumer to business relationships.

Management consultants have made small, and large, fortunes over the years with developing their models of how the business world works. TQM; Core business model: Competitive Advantage: Tom Peters; Michael Porter: William Denning, to name a few.

Well, I think it’s communities’ time to claim the management-speak high ground. As e-commerce and e-business increasingly become commerce and business – I think in a few years when we’ve got over the novelty of doing things over the Internet, we’ll drop the "e" everything –increasingly we are turning to communities for our models of interaction.

Why is community so important to e-commerce

Communities are places where people use their initiative to link with others, to make things happen, to be productive. Communities are places where people connect with strangers, develop a great deal of resourcefulness and make things happen out of a sense of purpose, of vision, or of curiosity. Where people share dreams, learning opportunities (ie, mistakes) and best practices. Where people both co-operate and compete. Where people are strongly individual yet are also part of the collective.

And as we struggle to come to terms with paradox, with things appearing to be contradictory, the way in which communities can encompass contradictions, provides useful learning to us. For the Internet is a paradox. It has increased the ability and desire to be global, while at the same time increasing the value of the local, of the unique. At the same time as the Internet is enabling us to whizz all over the world in our communication and consumption, it’s also putting on the pressure for localness, for uniqueness. Real people, real values.

While there’s lots of technical things that e-commerce relies on, such as well run physical networks and distribution channels, I’d like to look at the softer side, the elements of trust, branding, connectivity, that e-commerce needs. And look why it’s in the interests of business and government to have communities fully understanding the Internet and finding it a place of value for them, on their terms.

I’m going to talk about:

• Trust
• Communities of customers
• Reciprocity
• Connection
• And the transferability of skills

Trust – communities of customers

A major reason that people give for not shopping on line, or going to a site but backing out without doing business, is that they don’t trust the interaction that will take place over the wire. Many people who shop over the Internet pay by cheque or on delivery rather than use a credit card. Another reason is that people don’t perceive the Internet as offering them anything of value. Most of us have to make trade-offs in how we spend our money and for these people getting online figures lower down their particular priority list.

However, if business were to support communities to make effective use of ICTs - for their own needs, the communities’ needs - then communities in turn, as consumers, producers, entrepreneurs might be more likely to feel ok using the technology. As Claire Shearman gave many examples of yesterday, and research backs up, you can take a horse to water but you can’t make it drink. No matter how much effort commercial portals or businesses put into attracting users online, unless there is relevance and meaning, lots of people (that is lots of potential customers, suppliers and workers) are not going to jump online.

So it’s in businesses own interests to encourage community connectivity, to encourage people to create their own meaning on the Web, out of which will grow more trust in the medium – that it’s not just there for purely commercial purposes.

Reciprocity

Many e-commerce sites want to attract consumers and want information from consumers or visitors to build information profiles, which they can use for improved product development and marketing.

The best sites/businesses are starting to see customer relationship management as critical to their online success – to making sales. They want to build communities of interest amongst their customers. In fact, in doing this businesses are modelling a key ingredient of communities – the sharing of knowledge, information and services around affinity, around common interests and shared values/features. So businesses, in attempting to set up Net based, virtual communities have much to learn much from real life communities. Because learning how to create a successful virtual, commercial community is unlikely to be picked up from a marketing manual, or Information Systems 101 at university.

So in management speak, you in the community sector have a competitive advantage in this New economy, this digital economy. You understand intuitively and practice on a daily basis, the key elements of the online world. While you may have gained from business in learning how to run some aspects of community organisations, be assured business has much to learn from you in coming to grips with managing communities of customers and suppliers, and partnerships.

Connection

As several speakers have said, the Internet is a highly democratic piece of technology, which is really just a network of networks. As Gerry McGuire, founder of NUA, an Irish Internet development company, and author, in 1994 of a report for the Irish government entitled, Ireland: The Digital Age, the Internet, says, the network is all about people: people are the network. What’s he saying is that it’s not about technology, about the tools and the wire, about the computer, it’s about people. Everything you do in a network you should do with people in mind, whether they are your staff, customers, public, media or investors

Therefore people involved in community development, which is about people, have first hand knowledge about connectivity, which you can turn to good use both in terms of profiling yourselves as experts in the New Economy, and understanding what the information society/economy is about, and how to utilise it to best effect in your own organisations, amongst your own communities.

Transferable skills – entrepreneurs/managers/workers

The sorts of skills that people develop from their own community online activities, whether it be being part of a chat group, setting up a site to promote a favourite hobby or interest, or being part of a group which now operates via the Web, are skills that carry over into the business or commercial world. They make a person a more effective consumer, producer or entrepreneur. So, as businesses attempt to create communities of interest amongst their customers, they not only need staff who have skills and understanding about the technical issues, they need staff who have experience and skills in understanding community dynamics. They need people who’ve learned about the Internet from community online activities. And why work for someone else, why not put what you’ve learned to work for yourself, and become an entrepreneur, transferring your skills and values from the community to the business world.

Digital divide

It’s important not only to business but also to government that as many people as possible are able to harness the benefits of technology. If we head towards a situation of information haves and have-nots, what in America has been termed a digital divide, we are likely to compound existing disadvantages and create new ones. Making it that much harder for people to create and make use of opportunities for self and community management that the Internet makes possible.

Summary

But I didn’t want to focus too much on the digital divide today because rather than focusing on the down side, I wanted to highlight the way in which the Internet and e-commerce relies on the very essence of community, the trust, reciprocity, interdependence, sharing of values and information, to be successful. So that I could, in some small way, contribute to a feeling of optimism and excitement about becoming an e-citizen. I imagine that many of you have come here this week because you are in some way excited and open to the possibilities of what the Net offers: either because you’ve used it to good effect yourselves, or you have an intuitive understanding of what it can offer.

While there’s a long way to go - before everyone understands its potential, values it, creates meaningful and relevant content, and are able to use it to best effect, it’s a great start to see the number of people at this conference who have "got it" and will be a powerful resource for spreading the Net wider.

Thank you