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05-04-00
The potential inability of large intergovernmental bodies like the World Trade Organization to regulate e-commerce and other major global economic issues were on the agenda on day two of this week's global think-tank, Boosting the Net Economy 2000. Andrew Sleigh of the UK Ministry of Defence said: "Inter-governmental bodies look like a necessary idea, but can they actually work given the inherently non-centralised and fast moving nature of the web, quite apart from the problem of legitimacy? "Might there be an equivalent of the World Trade Organization, the G8 or the OECD for e-regulation? Well, it might happen, but it is very difficult to see how any such body could be sufficiently agile, and act with adequate force to contain the huge dynamic pressures which characterise the new economy. "Instead we need to rely on the distributed effect of non-governmental regulatory bodies that pervade almost every area of commercial activity. Almost every walk of life has its regulatory institutions, many of which have international ties, and the combined effect of these non-government bodies being a very powerful regulatory constraint on business behaviour. They derive legitimacy not from law but from common consent amongst the market sector or profession. I believe this is a much more important effect than many people comprehend, and the digital economy, by further tightening globalisation, will shift the balance further in favour of these international regulatory bodies and away from government." Alain Madelin, President of Democratie Libérale in France, said a 'dual economy' is now emerging composed of a "real economy" encompassing mature industries with low income and price elasticities; and a "virtual economy" made of new fast-growing activities linked to information and characterised by very high price and income elasticities. "Those high elasticities mean that these industries benefit from a potential of very large scale economies that feed strong competitive pressures, huge productivity gains, and translate into ever lower prices. Thus, one of the first consequences of the rise of net industries is to break the traditional relationship that linked inflation and economic growth. We have entered an era of enduring low inflation." The economic cycle was also different in the virtual economy, he said: "Growth impetus [comes] primarily from new inventions and the development of new territories. In such a new environment, booms and busts depend much more on financial market dynamics than on government controls. Traditional macroeconomic tools loose most of their usual power. We are literally in a new economic world." Sam Lanfranco of the international Internet Societal Task Force suggested "within 10-20 years the world will no longer consist of 140 national currencies, but instead will consist of a handful (5, 10, 20?) of common currency areas. Some such as Europe will be based on new currencies and some will be based on existing currencies (such as Ecuador's recent 'dollarisation'). Andrew Mancey of the Sustainable Development Networking Programme in Guyana went further: "as national economies merge into a global economy it would seem to me that the emergence of a single currency is only a matter of time. "When combining systems into one single system in order to achieve efficiency and stability maximum compatibility is needed. This applies to electronic systems, organic systems and surely to economic systems too. It will happen as the perceived advantages overcome the resistance of vested interests." The concept of flexible, virtual labour unions to correspond with the emerging flexible labour markets was floated by Tim Cole, former editor of the leading German business magazine NET-Investor. "Just as consumers will use the Internet to create instant online purchasing communities, unorganised labour might in the future use the Net to form spontaneous, short-lived 'online unions'. These could very well replace organised unions in many fields, especially given the trend towards self-employment. "Online unions could serve most of the functions of a 'real' union, such as providing information and collective bargaining power to their members. Of course, overhead would be negligible. In fact, these organisations could themselves be set up as private enterprises, acting as agents for a commission fee or for a cut in any deals reached with employers. After power shopping, why not power negotiating on behalf of self-employed workers around the world?" Kevin Carey of HumanITy said the issue of 'digital exclusion' nationally and globally depended not so much on the cost of technology but on education. "The only secure source of jobs in the next twent years will be in information, particularly in countries that do not have natural resources - but that can only happen if development assistance concentrates on creating a middle class in poor countries; that's what's happened in India and it needs to happen in Africa."
03/04/00
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