OECD Workshop on the Economics of the Information Society a Synthesis of Policy Implications

Abstract

The information society can be found at the interseclion of the once distinct industries of telecornmunications, broadcasting, and computing, based around a paradigm of digital information. One dri ving force has lo do with persistent increases in the processing power of computers on the market, accompanied by falling prices. Another element is the ability to link computers into networks, allowing them lo share data, applications, and somclimes proccssing power itself, over distances as small as an office and as large as the planet. This core model of distributed processing power and fast networks is al the heart of the information society. The potentials and realities of convergence are most evident in the global network of networks that is the Internet. Over the 1990s, the Internet has emerged from being an obscure tool for the research and education community to a household term. Because of its decentralised and inherently global nature, allowing many- to-many communication, the Internet is already considered the most dynamic and interactive medium in history, with wide-ranging scope of applications. The Internet is effectively a world-wide experimental lab, where new technologies, applications, products and services are being tested. Barriers to entry are low, enabling a huge variety of small-scale enterprise and innovation in marketing and advertising, sales and distribution. This experimentation plays on the many-to-many features of the medium.Business has beco quick to adopt ICT and the Internet as strategic elements of competitiveness. Internally, ICT is used to enhance communications within and among functional arcas such as sales,marketing, R&D and production. Companies have used ICT to better interact with their suppliers and partners, and have been able to drastically reduce inventories through "just-in-time" production methods.Similarly, the way in which companies interact with consumers is changing. The banking sector, for example, has extensively used ICT to change the way it does business with the customer. Growth areas point in two main directions. First is economic activity around building the information infrastructure, including hardware in the form of computers, routers and fibre optic cable. Second, applications, content and scrvices -- the new "knowledge industries" -- are the key areas of long run growth .Indeed, knowledge is now recognised as being at least as important as physical capital, labour and natural resources, as a force driving growth , embedded in the structure of a produclion process, in the value-added capabilities of a product, in organisational struclure, and in strategy. Innovation as a stated objective of a company's operation is a key characteristic of the GIS.