Living and Working in the Information Society: People First

European Union

1. People first in the Information Society - executive summary

2. Why a Green Paper? - invitation to a political, social and civil dialogue

3. Working in the Information Society

1. The concerns: skill revolution and job insecurity
2. The facts: a new world of work
3. The first challenge: to build knowledge and raise awareness of new forms of work organisation
4. The second challenge: to ensure that SMEs take full advantage of the IS
5. The third challenge: to modernise the institutions of working life
6. A new concept for security
7. A new culture of anticipation
8. Questions for further reflection

4. Employment in the Information Society

1. The concerns: jobless growth and the end of work?
2. The facts: steady employment growth since 1960
3. The first challenge: prevent beggar-thy-neighbour policies
4. The second challenge : more effective management of the job transformation process
5. The third challenge: to overcome the skill gap
6. Overhauling education and training to match the ICT-revolution
7. The platform: the new priorities in the convergence programmes
8. Questions for further reflection

5. Cohesion: Living in the Information Society

1. The concerns: concentration or cohesion?
2. The facts: public policies make the difference
3. The first challenge: to make the best of the new regulatory framework
4. The second challenge: the human resource base
5. The third challenge: empowerment and integration
6. Consolidating progress
7. Questions for further reflection

6. The Information Society - the European way

1. People first in the Information Society - executive summary

1. We are living through a historic period of technological change, brought about by the development and the widening application of information and communication technologies (ICTs). This process is both different from, and faster than, anything we have seen before. It has a huge potential for wealth creation, higher standards of living and better services.

2. ICTs are already an integral part of our daily life, providing us with useful tools and services in our homes, at our workplaces, everywhere. The Information Society is not a society far away in the future, but a reality in daily life. It is adding a new dimension to society as we know it, a dimension of growing importance.The production of goods as well as services is becoming more and more knowledge based.

3. However, the speed of introduction of ICTs varies between countries, regions, sectors, industries and enterprises. The benefits, in the form of prosperity, and the costs, in the form of burden of change, are unevenly distributed between different parts of the Union and between citizens. Understandably, people are worried and demand answers to questions about the impact of ICTs. Their concerns can be summarised in two main questions:

• the first has to do with employment. Will these technologies not destroy more jobs than they create? Will people be able to adapt to the changes in the way we work?
  
• the second question has to do with democracy and equality. Will the complexity and the cost of the new technologies not widen the gaps between industrialised and less developed areas, between the young and the old, between those in the know and those who are not?

4. To meet these concerns we need public policies which can help us reap the benefits of technological progress, and which can ensure equitable access to the Information Society and a fair distribution of the potential for prosperity. This Green Paper aims to stimulate the debate on the development of the European Information Society, and focuses on the key issues of the organisation of work, employment and social cohesion.

1.1. Working in the Information Society (Chapter 3)

5. ICTs have led to an enormous reduction in the cost of storing and processing of information over the last 50 years. We are now witnessing a similar reduction in the cost of transmitting information. This is the beginning of the information distribution revolution. In this way ICTs are reshaping working life, the organisation of enterprises and the whole of society. Enterprises are being transformed away from hierarchical and complex organisations with simple jobs to more decentralised and network-oriented organisations with more complex jobs. The most successful enterprises are combining ICTs with education and training and with organisational transformation in an integrated approach. Fostering this approach presents a number of challenges.

• a first challenge is to build knowledge and raise awareness of the potential of the new paradigm of work organisation to deliver both productivity growth and job satisfaction.
  
• a second challenge is to help SMEs, the job generators in the EU, maximise the potential of this change to become more competitive.
  
• a third challenge is to modernise the contractual framework for working life to find ways and means to reconcile flexibility and security.

1.2. Employment in the Information Society (Chapter 4)

6. Europe has had steady but low employment growth for several decades. The introduction of ICTs does not seem to have changed the rate of job creation. If anything, growth has become slightly more, not less, job-intensive. The introduction of ICTs has huge effects on skill requirements and employment policy must become more focused on human resource investment. This is underlined by the already existing mismatch between skill supply and the demand for new skills - the two-speed labour market.

• what Europe needs is a substantial overhaul of education and training that can match the ICT revolution and keep pace with continuing technological development during the years to come.
  
• the education system must be transformed from teaching to learning. Enterprises must offer more learning by doing. The unemployed must be offered retraining instead of long term unemployment and de-skilling.

1.3. Cohesion: Living in the Information Society (Chapter 5)

7. Strengthening economic and social cohesion remains a key objective of the Union. Progress towards convergence in income per head between Member States has been positive but slow, but disparities between regions within the same Member States have tended to widen over time. ICTs can play an important role in supporting regional and local development and promoting integration and empowerment, and the key issue is how to maximise the opportunities and minimise the risks of new ICTs for cohesion.

• a first challenge is to ensure that the liberalisation of telecommunications proceeds fully and rapidly across the Union and that the new regulatory framework supports cohesion objectives.
  
• a second challenge is to integrate more closely the Structural Funds and Information Society policies, so as to stimulate the access and use of modern ICTs. The process of stronger local involvement through local and regional employment pacts could be an important vehicle for a new, more employment intensive and human resource oriented cohesion policy.
  
• a third challenge is to ensure that the Information Society becomes a tool to create an inclusive society. The Information Society should be about people and it should be used for people and by people to unlock the power of information, not to create inequalities between the information rich and the information poor.

1.4. Guiding principles for the Information Society (Chapter 6)

8. The way we develop the Information Society, the most fundamental change of our time, must reflect the ideas and values upon which the European Union is shaped. These ideas and values should be transparent in order to gain and deserve the broad support of European citizens. To this end the Commission invites all interested parties to reflect on the possibilities of formulating a set of common Community principles for the development of the European Information Society.

2.Why a Green Paper? - invitation to a political, social and civil dialogue

9. The importance of the Information Society (IS) as a positive force for change was highlighted in the Commission's 1993 White Paper on Growth, Competitiveness and Employment. This White Paper, together with the subsequent report "Europe and the Global Information Society", launched - with the full backing of the European Council - an important series of initiatives to help shape and promote the IS in Europe.

10. The Commission's 1994 Action Plan "Europe's way to the Information Society" presented an overview of the Commission's work programme on the Information Society and placed an important emphasis on social and societal questions. These issues were also highlighted in the Commission's European Confidence Pact for Employment. This Green Paper is part of a package of initiatives being developed by the Commission to update and take forward the 1994 Action Plan.

11. To meet the task of providing new insights into the social challenges of the Information Society, the Commission has sought advice from some of the most prominent experts in Europe on how to promote job creation, social solidarity, equality of opportunity and access and the preservation of Europe's cultural diversity in the Information Society.

12. Two main groups were set up by the Commission. A High Level Group of Experts began its work in May 1995, and presented its preliminary report "Building the Information Society for us all" in February 1996. In parallel, the Commission created an Information Society Forum, which is broadly based and consists of 128 members. The Forum's first annual report was adopted in June 1996. The IS was also one of the four main topics of the First European Forum on Social Policy held in Brussels in March 1996.

13. The reports of the High Level Group and of the Forum were designed to stimulate the debate about issues beyond those business and academic communities already familiar with them. They are available as complements to this Green Paper, and details of how to obtain full copies are at the end of this text.

14. The Commission has decided to present a Green Paper in order to promote wide discussion and awareness of the social and societal issues involved. Only through active participation of a wide range of actors can our societies come to terms with the new challenges and choices with which we are confronted.

15. The objective, therefore, is to invite comments on and discussion of the Green Paper, and of the two associated reports of the High Level Group and the Forum, during the remainder of 1996. This process will be launched in September, in collaboration with the Irish Presidency, at a European Colloquium in Dublin. In the light of the reactions received, the Commission will present action proposals in 1997.

16. All Member States are engaged in one way or another in reviewing the social challenges of the emerging Information Society. The Green Paper raises issues which affect the responsibilities of governments and regional and local authorities, the social partners and civil society. Recognising fully the principle of subsidiarity, the Commission will examine the extent to which there would be added value from pooling of experience through demonstration projects or other initiatives, joint sponsorship of research, and systematic exchange of information, as a complementary and catalytic contribution to the policies and measures pursued within Member States. The Structural Funds have a key role to play in this process, in particular Objective 4 and the ADAPT-BIS Community Initiative.

17. The Green Paper also complements a range of activities already underway in other areas of Commission work, notably the White Paper on Teaching and Learning, which focuses on the skills and knowledge which will be necessary for people's full participation in the Information Society, as well as the forthcoming initiative "Learning in the Information Society".

18. Within the framework of existing cooperation this Green Paper is intended to:  

• deepen the political dialogue with the European Institutions and the Member States, notably on employment policies in the framework of the Essen process (the Single Report to the European Council in December 1996 and the development of the multiannual programmes 1997),
  
• focus the social dialogue between employers and unions on these issues and stimulate joint initiatives at a European level,
  
• stimulate civil dialogue notably with the NGOs, on the basis of the Conclusions of the European Social Policy Forum in March 1996.

All concerned are invited to comment on the issues raised in this Green Paper.

3. Working in the Information Society

3.1. The concerns: skill revolution and job insecurity

19. During the last 20 years, we have witnessed an ICT revolution, more far-reaching than most of us could have anticipated. One of the main effects of new ICTs has been a dramatic reduction in the cost and time of storing, processing and transmitting information. Such dramatic changes in price relations have a fundamental effect on the way we organise the production and distribution of goods and services and, thereby, on work itself. These developments are reshaping work, skill structures and the organisation of enterprises. Through this, they are bringing fundamental change to the labour market, and to society as a whole.

20. The resultant shifts in the structure of skills, work patterns, companies, and goods and services is bewildering, and makes very different and new demands on workers and employers. Static function-based skills, and traditional management models and techniques, are rendered inadequate and inflexible in a workplace which demands the opposite of workers and managers - the development of a new industrial and enterprise culture characterised by flexibility, trust, commitment and ability to anticipate and harness change.

21. The rate of job destruction in the late 20th century is not so different from that resulting from the structural changes of the past. More problematic is the new nature of job destruction. The new pace of change, and the new modes of production it engenders, require broader based skills and new production processes to respond to constantly changing market demands. This raises great concerns in terms of job security, job content, skills obsolescence, and the relationship between working and living patterns. It also creates challenges for the Union objective of equality of opportunity and access. However, this does not mean that, in the future, only highly educated IT-literate workers will find a job. Traditional or manual jobs will remain, but their relative importance will decline.

3.2. The facts: a new world of work

22. Our economies are being transformed away from standardised manual production towards a more diversified, knowledge based, production of goods and services. This is why ICTs provide tremendous opportunities for improved productivity and real wages, and thereby for strong economic growth and new jobs.  

23. The technological revolution was, for a long time, not transformed into faster growth of productivity. At the same time, the slow growth of productivity led to a limited increase in real wages and low consumer expectations, which have an effect on the willingness of consumers to buy and of enterprises to invest and to create new jobs. The main reasons why ICTs have not led to increased productivity are now well documented: in the past, the introduction of new technologies has been hindered by a lack of adequate organisational transformation.

24. Despite these problems, and despite occasional claims to the contrary, the EU economy and labour market systems are remarkably fluid. A Commission review of empirical research indicates an overall rate of enterprise creation and destruction in Europe of at least 10% a year and considerably higher in some sectors, with the average 'life' of a job of 4-5 years - comparable to the U.S.

25. Overall, this evidence suggests that, whatever problems there may be in ensuring the successful integration of ICTs, they are not related to a lack of flexibility in employment at the level of firms. During recent years we have seen a growing number of examples where the introduction of ICTs has met the highest expectations. The main message from these examples is the need for an integrated approach, linking the introduction of ICTs with education and training and with organisational transformation.  

26. The organisation of such successful "flexible enterprises" is becoming more and more based on processes, less and less on specialised functions. Workers perform a range of tasks, rather than pass the job on from one to another. Enterprises are being transformed from hierarchical and complex organisations with simple jobs, to less hierarchical, more decentralised and network-oriented organisations, with more complex jobs. The new flexible enterprise has been described as a fleet of small boats, moving on the same course, as opposed to an oil tanker steered from a central point. It is important to understand this change not as "A New Model" for work organisation, but as a process towards ever improving practices in work organisation.

27. Europe has recognised this sea-change in organisation. We are not short on innovative ideas and we already have a relatively well trained workforce. Our weakness, as identified by the Commission's Green Paper on Innovation, has been in combining technological and organisational innovation. High-quality, high-performance strategies require enterprise-level training, careful job design and rapid implementation of innovations. The Competitiveness Advisory Group chaired by Mr Ciampi has made a case study of new forms of work organisation. The findings of the Group confirm that these innovations in the organisation of enterprises lead to improved business performance, better job protection and job enrichment.  

3.3. The first challenge: to build knowledge and raise awareness of new forms of work organisation.

28. The most important obstacle to this development is the lack of awareness of the newforms of work organisation and the potential of flexible organisation. Managers may also be rightly cautious about innovations which alter systems and procedures currently delivering an acceptable level of performance, compared to entering an unknown realm in which there is uncertainty about how to complete the process of change and how long it will take. There are no "turn-key" solutions. The very flexibility of the technologies means that they must be embedded in the social organisation of the workplace in order to achieve a competitive combination of productivity, performance and quality. The key question therefore is how to increase awareness of the potential of new approaches to organisation of work.

29. It is essential to find the right balance between what has to be done at enterprise level and what could be done at national and European level. The key to success is enabling and supporting local initiatives, and the role of governments and European institutions is a catalytic one, one that encourages new initiatives. But the role of public authorities requires strong commitment and action at a number of levels. This involves an understanding of new forms of work organisation and their implications for public policy and for enterprise, and responding effectively across many fields, from economic development to trade policies, from research policies to skills development, and imbuing these responses with the values of equality of opportunity and access.

3.4 The second challenge: to ensure that SMEs take full advantage of the IS

30. The new concept of an integrated approach of ICTs, education and training and organisational transformation offers enormous potential for firms to become more competitive and to create better working conditions. It has particular advantages for SMEs, the key engines of employment growth - and especially "microfirms" - since the whole concept is built on the small unit, market-driven, decentralised and based on teamworking.

31. The extent to which SMEs' job creation benefits from ICTs varies. For the more globally oriented SMEs, the IS offers important advantages. In some cases, the emergence of microbusinesses is directly linked to ICTs. In other cases, microbusinesses are just an extension of existing traditional consultancy and profession services. However, the constraints which SMEs face and their specific problems in accessing anticipation and training mechanisms justify priority attention. In this context, the prime concern should be to enable SMEs to act under their own responsibility as regards adaptation to the Information Society, and the tools and technologies of the Information Society will help them do this. The new Integrated Programme for SMEs recently presented by the Commission proposes to launch a pilot action to ascertain the priorities of SMEs and the obstacles hampering the use by SMEs of information technologies.

3.5. The third challenge: to modernise the institutions of working life

32. Alongside the question of raising awareness of the potential of new forms of  organisation of work, we have to address the question of the modernisation of the institutions and the institutional framework of working life. The world of work needs to be organised in ways that support and facilitate positive developments, rather than making them more difficult. This also means improving the quality of skills and therefore of education and training, (see Chapter 4).

33. It also means providing the right legal and contractual framework (labour law, collective agreements, industrial relations etc.) to allow firms and individuals more flexibility, while providing adequate security to workers. Member States' labour laws based upon the standard model of full time, workplace-based employment of indefinite duration, can no longer respond entirely to the needs of a more knowledge-based production of goods and services.

34. New work organisation practices tends to blur the central element of the classic employment relationship: the notion of employer is becoming more complex (groups of undertakings, joint ventures, networks, subcontractors); the location of work has diversified; working time practices have been individualised to respond to particular needs and requirements; time-based remunerations may in some cases be replaced by task-specific remunerations and the scope of workers' autonomy enlarged. In other words, wage employment and self-employment are tending to converge, rendering the scope of labour law unclear and reducing its effectiveness in certain fields (non-standard contracts, telework and where work is outsourced or externalised).

3.6. A new concept for security

35. It is important to have a well-informed debate on these basic conditions for the development of working life. However, the public debate on the institutions of working life is often confined to simplistic arguments on regulation or deregulation. The emerging Information Society requires a more sophisticated and fundamental debate on the institutional framework which can shape this new world of work.

36. ICT integrated with education and training and with organisational transformation offers great potential to improve productivity and create good jobs with good wages and salaries. Public policies must be based on this understanding. However, it is necessary to shift the focus of the debate away from regulation-deregulation and towards the more fruitful perspective of a new balance between flexibility and security and the mutual benefits for enterprises and workers of a balance between the two elements. This is the new perspective that the Commission introduced in the consultation of the social partners on working time.

37. This new balance between flexibility and security includes, on the one hand, the use of part-time work, temporary work, fixed term contracts, teleworking and new forms of employment relationship, where this is appropriate. On the other hand, it includes not only security against arbitrary dismissals and discrimination, but also the security which comes from increased involvement within the company and the possibility to develop skills and employability to the benefit of both company and employee. In this context, the question arises of how to provide the most efficient arrangements for workers' involvement in these matters.

38. These are examples of necessary renewal. More fundamentally there is a need for aradical rethink of all the relevant systems - employment protection, working time, social protection and health and safety - to adapt them to a world of work which will be organised differently, in particular one where the boundaries between work and leisure, work and learning, employee and self-employed are, or may become, less well-defined. The concept of security for workers has to be developed and broadened, focusing more on security based on employability and the labour market rather than on the security of the individual workplace. It should be focused on security in change, not security against change. Within this it is important to have particular regard to issues of equality, and how to ensure that change enhances efforts toward both desegregation of the labour market and improved reconciliation of working and family life, for both women and men.

39. In the light of these developments, the Commission is preparing a Green Paper on work organisation and working time which will examine from an economic point of view the policy implications for the European Union and the Member States, of changes in work organisation and working time, with a view to launching a debate, in particular with and between the Social Partners.

40. The Commission will also present in the second half of 1996 a Communication on the impact of telework from the point of view of labour law, health and safety and social protection. The aim of the Communication will be to encourage Member States and the Social Partners to develop good practices and implement measures to improve the working conditions of teleworkers.

41. ICTs also offer new opportunities in the field of health and safety at work. In particular, the application of new technologies can bring considerable added value to risk assessment activities, the collection, screening and dissemination of information, education and training in occupational safety and health, and for end users, particularly SMEs. The Fourth Health and Safety Action Programme (1996-2000) actively addresses questions regarding the impact of the IS on working and living conditions, and a conference on these issues will be held in Brussels on 13-15 November 1996.

3.7. A new culture of anticipation

42. The European Social Fund interventions under Objective 4, together with the related Community Initiative ADAPT, are aimed mainly at improving the management of human resources by anticipating the changes which the Information Society will bring, in particular by strengthening investment in human capital. Structural changes bring permanent changes in employment in terms of volume, structure, and qualifications. In particular, it is vital to develop a capacity for anticipation in enterprises which identifies and minimises the negative impact of these changes. This will also help tap new job opportunities through training which addresses new skill needs.

43. The resulting adaptation needs are felt at both macroeconomic and company level. For this reason, one of the main objectives of the anticipation approach should be to enable companies to identify more readily their quantitative and qualitative needs, as regards human resources in the context of a better understanding of overall change, thus enhancing the internal and external capacity for adaptation.

3.8. Questions for further reflection

44. Developments in the relationship between the new forms of organisation of work and the legal framework for work raise some fundamental questions to be discussed in the framework of the Social Dialogue and in the Essen employment process.

Chapter 4