Staying connected

At a time of economic uncertainty it becomes even more important for Wales to understand and make the most of the internet, says Rhys David

Rhys David is a trustee of the IWA. He writes on economic and business affairs.

Delegates will gather in Nairobi in September for one of the year’s least heralded but perhaps more important conferences. The Internet Governance Forum exists under the overall umbrella of the United Nations to enable a dialogue to take place among stakeholders – including the public – on the many issues arising from the growth of the internet, one of the most profound developments affecting society in the last two decades.

A spur to economic growth and creativity, an open window to new forms of commerce, an entry point into new spheres of entertainment, the internet remains all of these and more, and has become such an integral part of people’s lives it is hard to imagine a pre-internet age or certainly the return to one. Yet, as discussed at a Welsh meeting held to take soundings on the issues due to be raised in Nairobi, the economic turmoil affecting the world is making it ever more important that the benefits of the internet should be carefully nurtured and spread so that all sections of society – including those who are suffering most from financial and other pressures – benefit from its continued development and not just those at or near the top.

As far as Wales is concerned, the internet balance sheet has been overwhelmingly positive. Even 10 years ago broadband was not universal, yet it is now seen as almost as much a right for remote rural communities as running water. Similarly, it was difficult to think of buying a book other than through a bookshop but now only the wildest optimist or specialist would consider opening a bookshop. It is only a few years ago that US bookshops, such as Borders, were still expanding in Britain but they have left without trace. Music too has been transformed through downloads and there are even successful online clothing brands, such as Asos, products it might have been thought would always require viewing, touching and trying on in the shop.

In the workplace, individuals with products and services that do not need more than occasional face-to-face contact between supplier and purchaser can work anywhere and firms can receive orders 24 hours a day and seven days a week, exposing other businesses to almost limitless competition. The technologies have changed, too. Companies used to store data on massive computers that hummed away on whole floors of buildings. The 1990s revolution was “distributed computing” putting massive power at workers’ disposal on desktop PCs. Now the wheel has turned again and companies are storing and handling their data in “clouds” – huge off-site computers hosted by third parties that can be located anywhere on the planet.

Wales has experienced the swings and roundabouts of the internet revolution like any other part of the world. Back-office jobs, one of the salvations of the economy in the 1980s and 1990s when civil service, bank and other mainly clerical jobs were transferred to Wales have been cut, as computers – or foreign operations – take over more of the work. Some of the slack has been taken up by software and services companies and indeed by the opening of massive data warehouses. Other jobs heavily dependent on information technology in the creative industries have also been generated.

Information technology has also, helped to create much more flexible working conditions, enabling people to work at home as well as in more traditional workplaces – a particular benefit for women needing to juggle care and work responsibilities. It has also helped, however, to hasten the demise of some traditional manufacturing industries, inasmuch as products can be thought out in one place, the designs shipped to another low-cost location, and returned in manufactured form, tracked all the way by satellite.

Internet retailing, too, has brought a vast range of products from electrical goods to clothes and food within a mouse click for people living away from mainstream shops who are able to enjoy many of the advantages of a big city location. As a result it has become possible for people to live in and work from a wider choice of places. The converse, however, has been the pressure exerted on conventional retailing. Jobs gained, for example, in Amazon’s Swansea warehouse have been lost elsewhere in book and other retailing. Amazon, moreover, is one of very few internet operators based in Wales so a greater proportion of Welsh retail spending is now being made outside Wales.

One possibility considered at the Cardiff meeting was a real reversal in economic fortunes for the UK and Wales in particular – not entirely unimaginable if the latest attempt to fix the debt crisis of the smaller European countries such as Greece fails. A massive shift in the balance of economic power towards Asia could well see Europe becoming progressively and relatively less prosperous.  Such reversals have occurred in the past. Argentina, for example, was one of the richest countries in the world 100 years ago but has struggled unsuccessfully ever since to recover that status.

Wales, as we are constantly reminded is already one of the poorest parts of the UK, and there are towns and villages, particularly in some of the remoter south Wales valleys where the internet’s benefits are much less widely felt than in the prosperous parts of south east England. These are places where people do not have the resources or lifestyle that goes with booking airline flights or even train tickets online, downloading the latest films, or working on office documents from home on Friday.

One of the challenges for Wales over the next few years, therefore, could be to ensure more people join the internet-enabled society and to prevent sections of society that are currently part of this cadre from reverting to a pre-internet age or one where it becomes less accessible.  The danger is that in any downturn the rich who have the resources and skills will stay connected, stay mobile, and stay employed while the poorer lose these advantages and see the gap in their incomes and living standards falling even further behind.

Amid all the discussions going on about recalibrating economic strategy under the new Labour administration in Cardiff Bay, considerations such as these need to be given high priority. They also need to inform the talks that take place in Nairobi in two months’ time.

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