IP: One race, many roads -- FT

[Dave Farber <farber () central cis upenn edu>]

[Note the full report is out later this month fromm HMSO]




One race, many roads


Friday August 16 1996


Vanessa Houlder on a study that assesses countries' progress on the=
 information
superhighway.


Has Europe been left behind on the information superhighway? A report*
published this month attempts to shed some light on countries' relative
strengths and weaknesses in information and communications technologies.


The report, commissioned by the Department of Trade and Industry and written
by Spectrum Strategy Consultants, compared nine technologically advanced
countries: the UK, US, Canada, Japan, France, Germany, Australia, Sweden and
Singapore.


One conclusion came out strongly. "The gap between the US and the rest of=
 the
world is unlikely to diminish," it says. "The US is rightly perceived to be
one of the fastest-moving and most receptive markets for the information
society."


Beyond that, the conclusions are less confident. Since countries are=
 emphasising
different approaches to the delivery of services - including PCs,=
 interactive
televisions and mobile telephones - the consultants argue that it is hard to
assess the significance of differing rates of progress.


"Some paths may prove to be technological cul-de-sacs, much as analogue
high-definition television proved in the 1980s," they say. "Others, possibly=
 the
online-Internet path, may have genuinely radical and long-term effects."


The premise on which the study was based was that a country's economic=
 success
is partially determined by its willingness to embrace new information and
communications technology. IT products and services increase business
productivity and efficiency; a willing uptake of IT will stimulate the=
 growth of
indigenous industries.


The researchers argued that the main factors
influencing progress towards the
"information society" are people's income, the price
of services and access to
appropriate content and culture. The government's
role in promoting, using and
regulating information technology is important.


Furthermore, much depends on the strength of the
domestic IT and
communications industry, its ability to raise capital
and the level of skills in the
country.


The report concluded that:


* The dominance of the US reflects extensive local
content, high PC penetration,
competitive pricing of high-speed networks, and the
broad base of its
communications and IT culture.


* Japan's performance is mixed. Japan's supply
industries are strong, with six of
the top 10 IT companies in the world. But on the
demand side, there is low
penetration of PC, modems, cellular technology and
Internet hosts. The uptake
of PCs has been slowed by a lack of Japanese software.


* Germany has "performed poorly on several benchmarks
relative to other
countries". For instance, it has the lowest number of
faxes per employee and
limited use of the Internet. But it leads all the
countries surveyed in terms of
ISDN subscriptions and has the highest multichannel
penetration in Europe.


* France has "performed poorly on many measures",
notably PC density, the use
of mobile communications, multichannel penetration
and Internet usage. The
reasons include high telecommunications prices and
the reliance on Minitel
telephone-based information services that may have
removed the perceived
need for PCs and alternative online services.
Cultural factors have resulted in
restricted use of English language content, limiting
the choice for consumers.


* The UK's performance is "more or less" in line with
other economies of
comparable size. It performs relatively well on
measures such as the use of PCs
and cellular technology and telephone charges.


* Canada performs relatively well on the benchmarks
chosen by the consultants,
with the third highest PC penetration of the
countries surveyed. But it has the
lowest penetration of high-speed ISDN links and a
relatively low take-up of
mobile services.


* Australia is a close follower of the US in terms of
PC and modem density and
ranks third in Internet penetration. Its immense size
and remoteness from
Europe and the US have been the key drivers in the
development of a strong
communications culture.


* Sweden leads Europe in the uptake of PCs and
cellular phones and has cheap
international telephone charges. It has benefited
from a widespread ability to use
English language products and services and the
remoteness of some
communities which encouraged the use of communication
technologies.


* Singapore has high levels of PC, modem, cellular
and paging technology. It has
successfully implemented electronic data interchange
and has a sophisticated
telecommunications infrastructure.


The consultants warn that the report's comments are
an attempt to summarise
"a very complex and rapidly shifting picture". An
early lead in a technology may
not lead to a long-term advantage.


Because technology is evolving so fast, it is
difficult to determine the form in
which it will eventually become established, it says.
"One consequence of this is
that there is potential for less sophisticated users
[and whole societies] to leapfrog
their competitors."


*Development of the Information Society: an
international analysis.
A free executive briefing will be published later
this month on the ISI Web site
It is also available from the ISI Info Line: 0345 152000.
The main report, costing about =A320, will be published
by HMSO. Tel 0171 873
9090.




                   =A9 Copyright the Financial Times
Limited 1996
           "FT" and "Financial Times" are trademarks
of The Financial Times Limited.