Events & presentations

19/11/2002

e-Summit

"Lessons from the e-Economy: The Internet, Community, and Social Change"

Information and communications technology has been a key force behind prosperity in business - powering innovation, developing services, connecting partners, speeding cycle times, and reducing costs. We can't imagine doing business without it.

ICT has also been profoundly transformative for the individual - facilitating learning, encouraging personal growth and social mobility, overcoming the limits of geography, and creating unlimited opportunities.

But unfortunately, life without it is a reality for many people. It's appalling and unconscionable that the Internet is used by only 5 percent of the world's population. Even in the developed world, the Knowledge Economy has left far too many behind.

So I applaud the work of the e-Envoy to spread the benefits of the Digital Economy throughout Britain. And I am delighted to see all of you today, exchanging views on this timely issue.

I am here wearing two hats. The first is as head of Business in the Community, an organisation that promotes corporate responsibility in Britain. BiTC was founded on the premise that commercial enterprises are inescapably linked to their broader communities, not just to their employees and shareholders. We are involved on many levels in encouraging and assisting companies to promote ICT skills within their communities.

My other role is chairman of mm02, a mobile phone company in Britain and Europe. Today happens to be a milestone for mmO2 - it is our first birthday.

Exactly one year ago, on 19 November 2001, we demerged from British Telecom and became an independent company. It has been a challenging year for us, and for our colleagues in the telecoms sector. But we're extremely proud to be in the forefront of the digital revolution.

So this is a good occasion to reflect on some of the lessons we've learned about the risks and rewards of technology.

But first, a story. When I was a kid growing up in South London, we weren't rich, but we were fortunate enough to have a telephone in the house. It was a party line, and we shared it with the family across the street. Many of our neighbours didn't have their own phones, so they were constantly stopping by the house to use ours. We were very popular. I can still see that black Bakelite phone sitting in the hall.

That recollection brings me to my first lesson for today. Remember the past.

This is not as easy as it sounds. Most of us are so focused on the future, and in such a hurry to get there, that we forget where we've been.

In 1968, when I joined Shell UK as a young executive, I was based in London, and I often needed to communicate with people in East Africa. The telex was the only way, but it was expensive and awkward. I had to write out the message, and it had to be recorded on a one-time code pad. If I wrote it in the afternoon, it wouldn't go out until the next day, unless it was urgent.

Once the message was received at the other end, the other party wouldn't necessarily send a reply straight away for the same reasons. It could take a week to go back and forth - once. Incredible as it seems, this is the way we conducted business.

Today, like many of us in the e-Economy, I keep my email in my pocket (pull out your mobile phone, hold it up to the audience). People around the world whiz data to me, solicit my point of view, and I whiz back a response. Decisions take seconds.

In the Knowledge Economy, information is always available and always on, and I still find it breathtaking.

But there are parts of the world, indeed many parts of London, where information is not whizzing back and forth. Where using the Internet is not an ordinary, everyday activity. Where people are still, in a sense, living in the past.

Basic Internet skills have become a prerequisite in the contemporary workplace. Public access, low-cost hardware, dialup access, training and technical assistance - these are among the most basic components of economic participation today. Sadly, too many people in our so-called developed world don't have them.

Anyone who is not at least literate in digital information techniques - or who does not have access to the Internet either at home or work - cannot not engage in the economy of the 21st century.

It's as if they were back in the era of the black Bakelite phone.

Which brings me to lesson number two. Expect the unexpected.

In our headlong rush to the future, we sometimes fail to notice what's directly in front of us. Or rather, we fail to grasp its importance. The history of technology is filled with examples of serendipitous discoveries.

We all know about the unplanned emergence of the Internet. The Cold War was at its height, and the US military agency ARPA was looking for a way to send and receive secure messages in case of a nuclear attack. It was a small project, remote from the mainstream economy. It eventually took over the mainstream economy.

For a long time, I have been fascinated by what's known as "deviance" in the workplace - by deviant employees and deviant discoveries. Deviance can either be positive or negative. Positive deviance can be a powerful force for transformation.

Deviance is typically located on the edge, away from the mainstream, unfettered by conventional thinking. And the fringe is rich with ideas.

The story of how some of the best ideas have moved from the fringe to the mainstream has been told in a fascinating new book by two American futurists, Ryan Mathews and Watts Wacker. The book is called The Deviant's Advantage.

Let me give you an example of how this works in my field, mobile telephony. SMS stands for short messaging system, what we know as text messaging. SMS is why young people in Japan have become "the thumb generation" - because they're all so busy thumbing text messages to one another.

Short messaging was conceived as a technical data channel for telephone engineers. When the first SMS message was sent in the UK in 1992, no one imagined that SMS would be a mass communications tool. But now, every month, there are 1.4 billion text messages sent in the UK, and 24 billion around the world. And it keeps growing. SMS is the new first-class post, but cheaper than a stamp - and faster.

SMS perfectly demonstrates the concept of viral spreading, since every person who receives a short message immediately wants to send one back.

SMS has a multitude of commercial uses. Businesses use it to streamline processes, gain efficiency, communicate remotely. It is used to monitor machines and complex systems. In some hospitals, sensors continuously check lab instruments and send out an SMS message to staff if something is wrong. Similar systems are used to monitor the temperature in farmers' greenhouses or the level of rivers for flood alerts. And so on.

SMS voting for municipal elections with mobile phones was used this year for the first time in Liverpool, Manchester and Sheffield. In three wards, voting participation went up significantly.

SMS voting appears to work best in poorer areas, where there is a high percentage of pay-as-you-go mobile phone users. It also seems to work best among young people. A recent MORI poll found that 73 percent of 18-to-24 year olds say they would vote if they could do it via their mobile phones. Voting participation is currently around 50 percent.

SMS texting is also very inclusive - allowing those who are hard of hearing to use mobile telephony for the first time. In a fascinating reversal of that technology, BT has just announced a system that translates SMS text messages into voice, so that the blind or visually impaired will be soon be able to read their text messages.

No one could anticipate that SMS would become a grassroots craze, or that it would one day deliver so many benefits to society. As I consider its unexpected growth and promise, the question I continually ask myself is, what else are we missing?

My third lesson for today is: Don't go it alone.

For various reasons, this happens to be a difficult lesson for some commercial enterprises. Whether for proprietary reasons, or reasons of pride, they just don't understand the power of partnerships.

At Business in the Community, partnerships between business, government, the voluntary sector, trade unions and local authorities have been crucial to our many achievements over the years.

Working closely with local authorities, we support a number of schemes that encourage businesses to contribute resources to their communities. Last month, MAD 4 It week (Mad For IT) coordinated volunteers from 92 different businesses that provided training in IT skills. Just one example - Cadbury Schweppes in Birmingham sent volunteers to teach homeless people how to use the Internet.

BiTC also supports IT 4 Communities (IT For Communities), another project that encourages IT professionals to share knowledge and know-how with local communities. Companies of all sizes and capabilities have joined the effort.

At one end is a small IT company in Lancashire that is committed to investing in the local community. Omega Alpha recently helped set up a website for a cerebral palsy charity called the Hornsey Trust. When I recently took a look at the website of Omega Alpha, I was delighted to see the company's philosophy stated on their home page:

Because only dead fish go with the flow.

That's one way to describe positive deviance.

On a larger scale, IBM has developed the KidSmart Early Learning programme as a way to introduce computers to pre-school children. There are now 125 KidSmart installations in 16 local education authorities across the country. The project has also been very successful in America. It's a good example of how a member of BiTC, in partnership with education authorities and the voluntary sector, uses its core business skills to address a critical social need.

At mmO2, we have also learned the lessons of partnership. This year, we joined the government in a public finance initiative to create a national emergency services network. The system is called Airwave, and it allows the 120,000 police officers across Britain to communicate with one another over radio waves, using encrypted voice and data. We hope to follow through with fire communications as well.

With a system like this in place, the police at Hillsborough Stadium would never have opened those stadium gates back in 1988. As many of you will remember, 92 people were crushed to death that day in Sheffield.

There's another, somewhat more unusual project we're currently testing that I want to mention. MmO2 has teamed up with a small start-up company in Oxford to use mobile telephony to help asthma patients keep track of their breathing.

Here's how it works. The mobile phone is hooked up to a piece of equipment called a flow-meter. Twice a day, the patient blows into the flow-meter, which automatically records lung capacity.

The results are sent to a site on the Internet and put on a graph. At the other end, a nurse reads the results. The nurse can instantly tell whether the patient is getting better or worse, and adjust the treatment. The records are far more accurate than when individuals keep track themselves, or try to. That's particularly true for children, who are not known for their accurate record keeping. With the results from the flow-meter immediately accessible, potentially dangerous conditions can be spotted earlier, and treated. And if a patient neglects to take the test, a reminder is sent by email or SMS texting.

I'm especially proud of this project, which combines the best of medical and mobile technology to address a critical health need.

Could we have predicted this a few years ago? Of course not. We didn't know which direction the market would take us. Which brings me to my next lesson.

Don't regulate the future.

Those of us in the mobile telephony sector are intensely aware of the dangers of over-regulation, but I know we are not alone.

As chairman of a mobile telephony company, I am constantly asked - what's the killer app for 3G? The honest answer is - we don't know yet. The technology is simply too new. The mobile sector is still in its infancy, and anything is possible.

But not if we find ourselves constrained by regulation.

Until now, the mobile sector has been an economic and social success thanks to a high degree of innovation and competition. Our continued growth depends on that freedom.

So in part, I am appealing to the regulators in our audience to please, tread lightly. But I'm also arguing for a measure of tolerance on the part of the public. As the technology matures, we will inevitably face dilemmas.

One that particularly concerns me is the likelihood that as mobile telephony integrates the Internet, it will become a popular vehicle for adult entertainment - pornography. For better or worse, we to accept this as the inevitable outcome of wireless devices that offer individuals even more privacy and discretion than was possible with laptops and desktops. And of a society that allows adults to communicate with one another however they like, within the law.

As we move into camera phones and streaming images with the new generation of phones, the possibilities will multiply.

We cannot regulate pornography out of mobile phones. Self-regulation is the only way to go. We've seen this approach at Yahoo and AOL, which allow users to install their own filters. Eventually, we will probably be doing the same with our mobile phones - activate the tools that let each us control who gets in, and who doesn't.

But my broader point is that regulation should not be allowed to hinder innovation. Unnecessary interference in areas like content, e-commerce, crime, environmental protection, and planning will only serve to stifle innovation and investment, and add to the burden.

Which brings me to my final lesson. Climb the Ladder, one rung at a time.

We've heard a lot about the Digital Divide. It's often described as a chasm, with the "haves" on one side and the "have-nots" on the other. And the Internet is widening the gap.

I agree that Digital Divide has a nice ring to it, but I don't think it's a particularly useful image. It creates a false impression.

Instead of a Divide, a better metaphor would be a Digital Ladder. This isn't my metaphor, by the way. Others have proposed it before me. But I think it works.

At the bottom rung of the Ladder are those who have no access to the Internet. One step up are those who derive some benefit from it, but whose cyber horizons are limited. Significantly higher up the ladder are most of us in this room, who have a great deal more opportunity to benefit from technology.

In general, I think the ladder is a better metaphor because it describes how things work in real life. First-time Internet users typically start out at the bottom rung of the ladder, hang out there a while, and then gradually move up. It takes a certain amount of online confidence to practice e-commerce and e-banking. That doesn't happen until users have been online for about 18 months to two years. This is according to research by the BT/Future Foundation.

Instead of trying to help the disadvantaged cross a great forbidding Divide - which sounds terribly complicated - we instead have to help them up the ladder. One rung at a time.

And we must recognise that we are all on the ladder, moving in the same direction. And that the ladder stretches upward, infinitely.

We are still at the earliest stages in the integration of the Internet into society. Many of its broader economic and social impacts are still unknown to us. What's clear is that the Internet offers extraordinary new opportunities to improve individual life chances. We must do everything we can to extend them to all people.

Thank you.

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