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UNRISD News Number 19 Autumn/Winter 1998ESSENTIAL MATTER

Informational Capitalism and Social ExclusionManuel Castells

Excerpts from an opening address at the UNRISD conference on Information Technologies and Social Development A new form of socio-economic organization has emerged in the last quarter of the twentieth century. After the collapse of statism, in the Soviet Union and throughout the world, it is certainly a capitalist system. Indeed, for the first time in history the entire planet is capitalist, since even the few remaining command economies are surviving or developing through their linkages to global, capitalist markets. Yet this is a brand of capitalism that is at the same time very old and fundamentally new. It is old because it appeals to relentless competition in the pursuit of profit, and because individual satisfaction (deferred or immediate) is its driving engine. But it is fundamentally new because it is tooled by new information and communication technologies that are at the root of new productivity sources, new organizational forms, and the construction of a global economy. Let us briefly examine the profile of this new world, which in fact is shared by all countries despite the diversity of their cultures and institutions.

The global economy In the 1990s the core activities of the global economy function as a unit in real time, on a planetary scale. Thus capital markets are interconnected worldwide, so that savings and investment in all countries, whether globally invested or not, depend for their performance on the evolution and behaviour of global financial markets. At the same time, multinational corporations, in manufacturing, services, and finance, with their ancillary networks of small and medium businesses, constitute the core of the world economy. These corporations directly employ "only" about 70 million workers, but these workers produced one-third of the world's total private output; and the global value of their sales in 1992 was US$ 5,500 billion, which is 25 per cent more than the total value of world trade in that year. Furthermore, the highest tier of science and technology, the one that shapes and commands overall technological development, is concentrated in a few dozen research centres and milieus of innovation around the globe — overwhelmingly in the United States, Western Europe and Japan. When they reach a certain level of scientific development, Russian, Indian and Chinese engineers, usually of very high quality, can only pursue their research by linking up with these centres. Thus highly skilled labour is also increasingly globalized, with talent being hired around the globe when firms and governments really need the skills, and are ready to pay for it.

At the same time, the overwhelming proportion of jobs, and thus of people, are not global. In fact, they are local and regional. But people's fate, their jobs, their living standards ultimately depend on the globalized sector of the national economy, or on the direct connection of their economic units to global networks of capital, production and trade. This global economy is historically new, for the simple reason that only in the last two decades have we produced the technological infrastructure required for it to function: telecommunications, information systems, micro-electronic-based manufacturing and processing, information-based air transportation, container cargo transport, high speed trains, and international business services located around the world. However, if the new global economy reaches out to encompass the entire planet — if all people and all territories are affected by its workings — not every place, or every person, is directly included in it. In fact, most people and most lands are excluded, switched off, either as producers, or consumers, or both. The flexibility of this global economy allows the overall system to link up everything that is valuable according to dominant values and interests, while disconnecting everything that is not valuable, or becomes devalued. It is this simultaneous capacity to include and exclude people, territories and activities, that characterizes the new global economy as constituted in the information age. And the organizational basis for this capacity is networking.

Networking No major historical transformation has taken place in technology, or in the economy, without an interrelated organizational transformation. The large factory, dedicated to mass production, was as critical to the constitution of the industrial age as the development and diffusion of new sources of energy. In the information age, the critical organizational form is networking. A network is simply a set of interconnected nodes. It may have a hierarchy, but it has no centre. Relationships between nodes are asymmetrical, but they are all necessary for the functioning of the network — for the circulation of money, information, technology, images, goods, services, or people throughout the network. The most critical distinction in this organizational logic is to be or not to be — in the network. Be in the network, and you can share and, over time, increase your chances. Be out of the network, or become switched off, and your chances vanish, since everything that counts is organized around a worldwide web of interacting networks.

Networks provide the appropriate medium for an interconnected, global economy based upon relentless adaptation and extreme flexibility. The concentration of capital can go hand in hand with the decentralization of organization. In fact, large multinational corporations function internally as decentralized networks, whose elements are given considerable autonomy. Each element of these networks is usually a part of other networks, some of them formed by ancillary small and medium businesses. Some ties involve collaboration with other large corporations, around specific projects and tasks, with specific time and spatial frames. In the end, however, the goal is to assure a profit. And most earnings do not remain in the firm, but find their way into the global casino of interrelated financial markets. Because of this level of unpredictability and complexity, the networks in which all firms, large or small, are anchored, move along, form and re-form, in an endless variation. Firms and organizations that do not follow the networking logic (whether in business, in the media, or

in politics) are wiped out by competition, since they are not equipped to handle the new model of management.

So, ultimately, networks — all networks — come out ahead by restructuring, whether they change their composition, their membership, or even their tasks. The problem is that people, and territories, whose livelihood and fate depend on their positioning in these networks, cannot adapt so easily. Capital disinvests, software engineers migrate, tourists find another fashionable spot, and global media close down in a downgraded region. Networks adapt, bypass the area (or some people), and re-form elsewhere, or with someone else. But the human matter on which the network was living cannot so easily mutate. It becomes trapped, or downgraded, or wasted. And this leads to social underdevelopment, precisely at the threshold of the potentially most promising era of human fulfilment.

We confront a growing social crisis. Polarization is on the rise everywhere. At a global level, the ratio of the income of the top 20 per cent of the population to the income of the bottom 20 per cent jumped from 30 to 1 in 1960 to 78 to 1 in 1994. Furthermore, extreme poverty, or misery — usually defined as the proportion of people who are below 50 per cent of the poverty line — is the lot of the fastest growing segment of the poor population in almost every country. And as a significant number of people are being excluded from access to regular jobs, they are moving onto the shop floor of crime. One could say that some have little choice. People who are not needed in the information age do not vanish: they are there. It is urgently necessary to reverse the downward spiral of exclusion and to use information and communication technologies to empower humankind. The reintegration of social development and economic growth in the information age will require massive technological upgrading of countries, firms and households around the world — a strategy of the highest interest for everyone, including business. It will take a dramatic investment in overhauling the educational system everywhere. It will require the establishment of a worldwide network of science and technology, in which the most advanced universities will be willing to share knowledge and expertise for the common good. It must aim at reversing, slowly but surely, the marginalization of entire countries, or cities or neighbourhoods, so that the human potential that is being wasted can be reinvested. Solidarity in a globalized world means global solidarity. And it also means intergenerational solidarity. These are basic, elementary principles of economics and policy making "as if people matter". And they are in full coherence with the productive, creative logic embedded in information technologies. If this sounds like wishful thinking, it is only a measure of how bewildered we have become at this critical moment of historical transition.

Biographical Note Manuel Castells has been Professor of Sociology, and of City and Regional Planning, at the University of California, Berkeley, since 1979. Prior to that, he was at the University of Paris, the Institute for Sociology of New Technologies (Universidad Autonoma de Madrid) and the Higher Council for Scientific Research (Barcelona). He has been visiting professor at 15 universities in Latin America, Asia, Europe, and North America. He has received the Guggenheim Fellowship and the C. Wright Mills Award and has published 20 books in

different languages. His most important, and recent, work is the trilogy The Information Age: Economy, Society and Culture (Blackwell, Oxford, 1996, 1997, 1998).

New Information and Communication Technologies, Social Development and Cultural Change Digital Technologies: Choices for Social Development

Given the growing demand for digital technologies, policy makers will have to take decisions that adjust technological potential to the requirements of social development. Yet the "digital landscape" is kaleidoscopic. On the one hand, there are strong expectations that digital technologies will create a bright future. On the other hand, there are very pessimistic projections that point to serious social and economic problems. And empirical reality completely supports neither the utopians nor the dystopians. The question in this confusing situation is thus how one can arrive at defensible policy choices.

The techno-centric perspectiveIn much utopian writing, ICTs represent a revolutionary force that can fundamentally transform societies and individual lives. In this perspective, the imperatives of technological development determine social arrangements: technological potential drives history (see, among others, Hiltz and Turoff, 1978; Toffler, 1980; Beniger, 1986; Zuboff, 1988). Furthermore, the techno-centric perspective holds that the "digital revolution" definitively marks the passage of world history into a post-industrial stage. The emerging global information society is characterized by positive features: there will be more effective health care, better education, more information and diversity of culture. New digital technologies create more choice for people in education, shopping, entertainment, news media and travel. From this perspective, there is no reason to put technology itself on the public agenda, since the technological process is accepted as inevitable. For the protagonists of the "digital revolution" it is not conceivable that people would decide not to adopt these innovations.

The gravest problem with the techno-centric perspective is that it ignores the social origins of information and communication technologies. It suggests that they originate in a socio-economic vacuum, and fails to see the specific interests that generate them. Guided by this perspective, policy makers find it very difficult to accept that technological innovations do not, in and of themselves, create the institutional arrangements within which they function; and thus they fail to see that whether the potential of technologies will be realized in positive rather than negative ways depends much more on their institutional organization than on the features of their technical performance.

If the technological environment is accepted as given, then options of decision makers are limited to reactive policies and programmes, "designed to cope with, or adapt to, the consequences of technical change, rather than anticipating (and so influencing) these

consequences" (Edge, 1995:26). Unless we understand what problems the major stakeholders want to see resolved and what technical systems they select, policy makers cannot anticipate the consequences of these systems and thus make a concerted attempt to influence their design in socially beneficial ways.

The perspective of discontinuityThe techno-centric perspective is characterized by a strong emphasis upon the discontinuity of historical processes. Its analytical approach is based upon the notion that a technological discontinuity (the "digital revolution") causes a social discontinuity (a "Third Wave civilization", in the words of Toffler, 1980). In its fascination with "revolutions", the perspective overlooks the fact that technological processes are only rarely revolutionary and most often proceed in gradual ways over longer periods of time.

Technological developments can hardly ever be described as radical breakthroughs. Studies on technological inventions usually demonstrate that innovations have (often long) pre-histories of conceptual and technical development. Thus today's ICTs evolve quite logically from earlier technological generations. Size diminishes, speed increases and capacity expands — but this is hardly revolutionary. Almost all developments today are just further refinements of what was there already.

This observation does not imply that there are no significant technological breakthroughs in the application of digital technologies or that these could not create new concepts and methods of information handling which might interact with social processes in ways radically different from past experiences. The point is that it is often too early and too facile to label current processes as revolutions, since it may take quite some time before new concepts and methods translate into new patterns of social behaviour, new lifestyles, political and economic structures, and viable virtual communities.

A serious problem with the concept of technological revolution is that, when such a term is used, it becomes harder for policy makers to see that technological innovations come in different layers of "newness". Developments such as the Internet are not monolithic. They have various dimensions, ranging from techniques that are only slightly different from previous ICTs (such as e-mail in comparison to "snail" mail) to techniques that show less and less resemblance to earlier modes of information handling (such as newsgroups, Internet Relay Chats, and three-dimensional graphical presentations in virtual reality).

In general, the process of social transformation resulting from the interaction between socio-economic variables and technological innovation is most adequately analysed in terms of gradual change. Two hundred years ago, in some parts of the world, mechanical techniques began increasingly to be used in the production and distribution of industrial goods. This mechanization process, largely motivated by considerations of cost efficiency, logically evolved through several stages of upgrading, such as rationalization (Taylorism) and conveyor belt automation (Fordism). Technical developments, such as those in the field of energy utilization, contributed to this process of refinement. Mechanical techniques, however, require capital-intensive energy in the form of manual labour or fossil fuel. The logic of cost efficiency supported their replacement by semi-independent systems

that have minimal energy requirements and yield better cost-benefit ratios. Thus electronic systems, utilizing information rather than energy input, came to substitute for machines.

Electro-mechanical techniques have been increasingly replaced by ICTs in the production and distribution of industrial goods. On the surface, this suggests that there has been a transition to a totally new type of economy: the service economy in which industry will rapidly disappear. It is certainly true that today, in many developed countries (as well as in some of the developing countries), the service sector makes a considerable contribution to the national economy. However, many services are integrally related to industrial production and distribution and could not survive in a de-industrialized economy.

In fact, there is little indication that industrial production is fundamentally withering away (Webster, 1995:41). "In most countries the proportion of industrial workers has hovered around one-third during the twentieth century. And growth in the `service' sector dates right from the beginnings of industrialism" (Lyon, 1988:47). American data show that industry accounted for 32 per cent of GDP in 1947 and 22.8 per cent in 1990. Services went up from 55 to 73.3 per cent, but most services were related to manufacturing. The significant change came in the sector of agriculture (see American Economic Review, May 1996) In the process, the manufacturing output of industrial societies did not fundamentally change, it shifted to the manufacture of service products.5 As Webster concludes: "Undeniably, information and knowledge — and all the technological systems that accompany the `information explosion' — have quantitatively expanded. It can also be readily admitted that these have become central to the day-to-day conduct of life in contemporary societies. Nonetheless, what cannot be seen is any convincing evidence or argument for the view that all this signals a new type of society, `post-industrialism', which distinguishes the present sharply from the past" (Webster, 1995:50).

The post-industrial thesis (such as that proposed by Bell, 1976) suggests that the number of so-called "information workers" has dramatically increased. Apart from the problem of measuring this increase, it can be questioned whether, even if there are more information workers, this implies a social revolution. One could ask, for example, what kind of transformation the employment of more "information workers" has implied for women or for the ethnic minority work force? As Webster concludes from the empirical evidence: ". . . more service sector employment, more white collar work, and even more professional occupations . . . do not announce a `post-industrial' epoch" (Webster, 1995:46). However, even if one is sceptical concerning the supposed discontinuity between industrial and information ages, one cannot ignore the fact that the proliferation of ICTs, as well as the increased social and economic importance of information handling, have an impact on existing social structures. There are undeniably important social processes at play in relation to the application of ICTs. But it is not certain that these processes usher in a totally new society. It is not yet obvious that societies around the world are moving beyond corporate capitalism, for example, or replacing male-dominated social institutions.

Meanwhile, overemphasis on historical discontinuity makes it difficult, if not impossible, to deal in any realistic way with the empirical finding that in most societies actually-

existing processes of social change lag far behind visionary predictions. Thus the discontinuity perspective is not very helpful in dealing with what has been called the "computer paradox". Computers are applied by some 50 per cent of the work force in the industrial nations, and their processing capacity doubles every two years. Of the world's total investment in capital goods, 50 per cent goes to computers and peripherals. Yet expected growth in productivity has not materialized. White collar productivity remained stagnant during the 1970s and 1980s at some 0.9 per cent per year and improved in the early 1990s to 1.3 per cent — a low figure despite the announcement by Fortune magazine that "the productivity payoff arrives" (Fortune, 27 June 1994:35-9).

To many observers it is unclear what causes this "computer paradox" (see Makridakis, 1995:800; UNESCO, 1996:276; and American Economic Review, May 1996). It could be, however, that one cause is the phenomenon of "social inertia" (Postmes, 1996:142). "Thus while technology has invaded aspects of everyday life to a degree believed impossible by technological experts until the 1980s . . . the dramatic changes in social relations that were prophesied have not materialized" (ibid.).

Aside from questioning the historical correctness of labelling technological and social developments as "revolutionary", there is yet another problem with this perspective. Since it binds technological and social discontinuities so strongly together, it ignores the option of a technologically discontinuous process without a social revolution. This position — taken by Armand Mattelart (1985), among others — accepts the reality of a technological revolution and argues that there is no empirical evidence of a social revolution. Finally, one could argue that there is no way of telling which way any deep process of social change may go: the adoption of digital technologies might, for example, reinforce the pyramidal shape of social power relations; or the pyramid might flatten out, or turn upside down. No one can predict this. The essential questions thus become how we want social relations to be shaped in the future, and how digital technologies should themselves be shaped to realize this goal.

Utopian versus dystopian perspectivesMost current discussions on digital technologies are couched in terms of optimistic versus pessimistic perspectives. On one side of the debate are utopians such as John Naisbitt, Bill Gates, Nicholas Negroponte, Pamela McCorduck, Yoneji Masuda, Alvin Toffler, Kevin Kelley, Howard Rheingold and George Gilder. Utopian scenarios are put forward in the myriad business folders that announce the billion-, if not trillion-, dollar investment opportunities in the new global electronic markets.

Among the critics of these technophiles, most of whom belong to the academic community, one finds authors like Herbert I. Schiller, Ian Reinecke, Frank Webster, Kevin Robins, Joseph Weizenbaum, Neil Postman, Theodore Roszak and Mark Dery. It is important to understand the suppositions underlying these two schools of thought.

The "utopian" perspectiveThis scenario couches its support for the deployment of ICTs in such terms as "new civilization", "information revolution" or "knowledge society", and thus subscribes to the

theory of historical discontinuity discussed above. An array of positive developments are associated with the emerging information age. New social values will evolve, new social relations will develop, and widespread access to the crucial resource known as information will bring the "zero sum society" to a definitive end.

The scenario forecasts radical changes in economics, politics and culture. In the economy, ICTs will expand productivity and improve employment opportunities, and will also upgrade the quality of work in many occupations. Moreover, they will offer a great many opportunities for small-scale, independent and decentralized forms of production. In politics, decentralized and increased access to unprecedented volumes of information will improve the democratic process, and all people will ultimately be empowered to participate in public decision-making. Finally, in the realm of culture, new and creative lifestyles will emerge, as well as vastly increased opportunities for different cultures to meet and understand each other. New virtual communities will be created that easily transcend all the traditional borderlines and barriers of age, gender, race and religion.

The "dystopian" perspectiveCritical analysts reject the idea of discontinuity and stress the likelihood that ICT deployment will simply reinforce historical trends toward socio-economic disparities, inequality in political power and gaps between knowledge élites and the knowledge-disenfranchised. On the economic level this scenario forecasts a perpetuation of the capitalist mode of production, with a further refinement of managerial control over production processes. In most countries, it foresees massive job displacement and de-skilling.

In politics the expectation is that a pseudo-democracy will emerge, allowing people to participate in marginal decisions only. ICTs will enable governments to exercise surveillance over their citizens more effectively than before. The proliferation of ICTs in the home will individualize information consumption to a degree that makes the formation of a democratic, public opinion no more than an illusion.

And finally, cultural developments will be characterized by the play of antagonistic tendencies: one toward a forceful cultural "globalization" (homogenizing all ways of life in the mould of global McDonaldization), and another toward an aggressive cultural "tribalization" (fragmenting cultural communities into fundamentalist cells with little or no understanding of different "tribes").

The debate between utopians and dystopians is not very helpful in designing policies and programmes that are intended to realize the development potential of digital technologies. The most important flaw in both perspectives is their failure to recognize the fundamental impossibility of foreseeing the future social and economic implications of technological innovations. Since there are no valid scientific instruments to predict future social impact, it is necessary to make social choices about the future under conditions of uncertainty. The validity of our projections into the future is obviously dependent upon the robustness of the tools of inference on which we rely. Prospective technology assessment (PTA) is one of these, which is clearly seriously flawed. It is based on the supposition that harmful

effects of the introduction of particular technologies can be forecast in extensive studies and consequently avoided.

Prospective evaluation can be criticized for several reasons, including the fact that it tends to show a technological bias, i.e., it takes technology as a given and tends to focus on the control of negative impact. Prospective evaluation is also inductivist: it is guided by the assumption that one makes statements about the future on the basis of a limited number of observations in the past. Against inductivism, David Hume (1739) proposed as early as the eighteenth century that there is no logical argument for supposing that phenomena about which we have no knowledge would resemble those we know. Inductivism has to assume an inherent continuity of the historical process. It requires accepting the existence of unalterable laws of historical destiny.

Such laws may be formulated by the physical sciences for regularities in the physical environment, but there is no empirical indication that similar regularities are valid in the social environment. There are certainly trends to be observed in human social history, but these are distinct from natural laws that determine the movement of a society and thus provide a valid prediction about society's future. Trends depend upon the specific configuration of historical conditions which themselves are not unequivocally determined. It is possible to establish correlations between trends and historical conditions, but these cannot in any way guarantee that a prediction based upon them is valid. This is related to another flaw in technology forecasting: the poverty of social scientific theory. It is possible to provide a theoretical explanation for the relationship between certain trends and certain historical conditions. However, if one refuses to accept the notion of unyielding laws in the historical process, any explanation can be contested. In fact, it is characteristic of social scientific theories that they are "underdetermined": there are always several theoretical perspectives that concur with a single empirical observation of social reality. This implies that empirical observation does not provide a way definitively to prove or disprove divergent social theories.

The explanatory poverty of social scientific theory invalidates technology forecasting, since this is based upon the assumption that a valid explanation of the modes of interaction between technology and society is possible. There is no theoretical perspective on technology and society that could provide the basis for a solid prediction about their future interaction. Given the essential contestability of theory in the social sciences, neither is there a prospect that such a prediction will emerge shortly. This fact may be disguised by the sophisticated nature of some forecasting techniques, but in the last analysis their very basic flaws make them no better than ancient astrology.

Since the available tools of inference show serious shortcomings in their capacity to predict the future outcomes and consequences of ICTs, we must always live with imperfect information. Perhaps even the notion of imperfect information is too generous; it seems more appropriate to accept a state of ignorance.

Given this situation, the choice for a utopian or dystopian scenario cannot be made on the basis of unequivocal information. With regard to the development of integrated digital

networks, for example, it is equally possible to project positive effects as negative ones. The optimistic forecast sees more productivity, more employment, consumer convenience, more access and participation, and protection of vital information. The pessimistic forecast sees greater social disparity, more unemployment, more central control, more invasion of privacy and more social immobility. But neither utopian nor dystopian perspectives — both based upon a flawed assumption about predicting future impact — can guide the search for defensible social choices as these are related to the design and deployment of digital technologies.

The conclusion, then, is that it is imperative to move away from analytical perspectives that are techno-centric and determinist, that focus on historical discontinuity, and that make unwarranted claims about future impacts.

To correct these deficiencies, an approach focusing on the "social shaping of technology" has been developed (MacKenzie and Wajcman, 1985). This approach does not ignore the possibility of social impact, but stresses the dynamic interaction between social forces that shape technological development and technological innovations that affect social relations. In contrast to technological determinists, those who concentrate on the "social shaping of technology" are particularly concerned with "the social forces which give rise to particular technologies" (Mackay, 1995:41). Among the factors shaping ICTs are socio-economic, political, cultural, and gender variables, geography and market forces.

It is imperative for those who want to influence the course of change in information and communications technology, in directions that might support social development, to understand what forces shape the evolution of ICTs, and how these forces interact (for a good illustration of this approach, see Flichy, 1995). This makes pro-active policies and programmes possible and allows for conscious social choice.

The question immediately arises as to how policy makers can make such choices if it is impossible to predict future impact. The answer is that pro-active policy-making rests upon the design of visions for a preferred future. The inability to foresee future social impact should not stop policy makers from designing alternative future courses and deciding about their desirability. Then technological solutions must be shaped to match these future visions. In this way, policy-making can move beyond the unproductive battle between optimists and pessimists. These bands would argue, for example, about whether investments in digital technologies will or will not lead to greater economic productivity. A third position would propose that a scenario for a desirable, environmentally sustainable, economic future should include a definition of the social and institutional changes that seem to be required before digital technologies can contribute to achieving this vision.

Relying upon utopian or dystopian perspectives, the debate will get stuck between the empirical evidence that automation eliminates jobs (Howell, 1985:297-310) and the evidence that automation creates new jobs (Peitchinis, 1983). What remains — inevitably — unclear is what the eventual balance will be.

One could, however, move beyond the debate on more or less unemployment, and make a social choice for the creation of full employment. This choice could be inspired by the observation that "Large scale unemployment is the main source of growing social inequality in OECD countries" (Freeman, 1995:21).

Mass unemployment is an unmitigated social disaster. . . . Just as unemployment alone cannot be blamed for the rise in crime and drug-taking, so too it cannot be regarded as the sole cause of ethnic conflicts and the rise of fascist-type movements. But one would have to be blind indeed not to observe the connections between unemployment and these phenomena, whether in the 1930s or the 1980s and 1990s (ibid.).

If policy makers share this vision, they should design those social and institutional instruments that seem required to adjust the potential of digital technologies to a full-employment future.

5 As Gershuny demonstrated (as early as 1978) with massive documentation: "Instead of buying services, households seem increasingly to be buying - in effect investing in - durable goods which allow consumers to produce services for themselves" (Gershuny, 1978:8).

United Nations Research Institute for Social DevelopmentGeneva, Switzerlande-mail : info@unrisd.org <mailto:info@unrisd.org> Postal address:UNRISDPalais des NationsCH - 1211 Geneva 10Switzerland

Social Exclusion : Commission Takes First Step Towards a Poverty Strategy

The Commission took an important step forward in the fight against poverty and social exclusion today when, for the first time ever, it adopted a report analysing governments' social inclusion policies. The report shows that the Commission, in pursuing the Lisbon summit goals, is committed to a socially cohesive Europe, both in its own right but also as a factor of economic competitiveness. The report must now be agreed between Commission and Council, and will go to the Laeken summit in December this year. It describes the present situation and main challenges for poverty and social exclusion policies in the EU, using a common base of social indicators and documenting a wide range of action being taken by Member States. It provides a launchpad for strengthening policies and programmes across the EU through co-operation between Member States, in particular through the exchange of good practice. This co-operation will now be stimulated by the new five-year, €75 million social exclusion programme agreed on 18 September between European Council, the Parliament and the Commission.

Anna Diamantopoulou, European Commissioner for employment and social affairs said in presenting the report : "Social exclusion is a human question. How can it not be when there are 60 million people in the EU today who are poor or at risk of poverty? But it is also an

economic question and one about governance. An economic question because only a cohesive Europe can tap rich resources of human capital and skills which are presently underutilised. A 'governance' question because the EU is still widely seen as being focused the interests of big business rather than the man or woman in the street. This report is an important step because it shows that the EU has the collective political will to act not only in the economic field but also against poverty and social exclusion."

The report is based on an analysis of 'national action plans' against poverty and social exclusion drawn up by all Member States for the first time this year and to be submitted every two years. The report confirms that tackling poverty and social exclusion continues to be an important challenge facing the Europe Union. 18%, or over 60 million of the EU's population, are at risk of poverty and about half of these are living in longterm poverty. Children and young people, the elderly, the unemployed and lone parent families have a particularly high risk of poverty. The relative poverty rate - those living below a threshold of 60% of median national income - varies considerably across Member States, from 8% in Denmark to 23% in Portugal.

Risk factors The report identifies a series of severe risk factors that increase the danger of poverty. These include long-term unemployment; living long-term on low-income, low quality employment; poor ualifications and leaving school early; growing up in a family vulnerable to social exclusion; disability; poor health; drug abuse and alcoholism; living in an area of multiple disadvantage; homelessness and precarious housing; immigration, ethnic background and risk of racial discrimination.

New risks The report warns that some of the major structural changes that are taking place in society, while positive for most people, could lead to new risks of poverty and social exclusion for particularly vulnerable groups unless appropriate policy responses are developed. These changes include changes in the labour market due to globalisation and the very rapid growth of the knowledge-based society and information and communication technologies, demographic changes with more people living longer and falling birth rates, a growing trend towards ethnic, cultural and religious diversity as a result of increased international migration and mobility within the Union, changes in household structures with growing rates of family break-up and the de-institutionalisation of family life and the changing role of men and women.

Eight core challenges The report identifies eight core challenges which are being addressed to a greater or lesser extent by most Member States. These are:

developing an inclusive labour market and promoting employment as a right and opportunity for all;

guaranteeing adequate income and resources for a decent standard of living; tackling educational disadvantage; preserving family solidarity and protecting the rights of children;

ensuring reasonable accommodation for all; guaranteeing equal access to and investing in high-quality public services (health,

transport, social, care, cultural, recreational and legal); improving the delivery of services; regenerating areas of multiple deprivation.

The report indicates that all Member States have presented the main features of their policies in accordance with the four common objectives agreed by the European Council of Nice : to facilitate access to resources, rights, goods and services; to prevent the risks of exclusion; to help the most vulnerable; to mobilise all relevant bodies. However, the effort to develop a strategic and integrated approach to fighting poverty and social exclusion, including the setting of medium to long term targets, varies a good deal across Member States. The report adopted by the Commission singles out as good examples of a strategic approach the national action plans of the Netherlands, Denmark and France.

Indicators The European Council in Nice defined appropriate objectives in the fight against poverty and social exclusion, and invited Member States and the Commission to seek to develop some common indicators. Work has progressed fast and a first set of commonly agreed and defined indicators on social inclusion is expected before the end of the year, in time for the Laeken summit.

A common base of social indicators is essential in order to allow progress in this complex area to be measured. The work, which is being carried out by the Indicators Subgroup of the Social Protection Committee, has built upon the set of social indicators used in the Commission's report to the Stockholm Council, to focus particularly on :

the elaboration of the concept of relative income poverty, in order to draw a set of common indicators covering the key aspects of monetary poverty, such as level, persistence, depth, changes through time, as well as the key breakdowns by gender, age, household types and occupation.

the multidimensional aspect of poverty, in order to complement the income-based measurement with key indicators in the areas of employment, housing, health and education - areas to which Member States have devoted a particular attention in their National Action Plans against poverty and social exclusion.

Given the complex nature of the problems and the diversity of practices and analytical approaches across Member States, it is fair to say that the work has progressed satisfactorily. Consensus has already been reached on 14 indicators covering relative monetary poverty, health and employment, and a number of priority issues for further development have been identified. The Commission has been active in supporting the work of the Indicators Subgroup and, in its draft report on social inclusion, has made use of the indicators for which there is preliminary agreement.

The progress report that was presented to Council on 8 October sets out the main points where consensus has already been found. The final report of the Indicators Subgroup will

be submitted to the Social Protection Committee on 18 October 2001. It will include an executive summary together with the list of commonly agreed indicators in the field of poverty and social exclusion to be approved by Council in December in time for the Laeken summit.

It is planned to associate other key stakeholders in the fight against poverty and social exclusion (social partners, representatives of civil society) to the debate about social inclusion indicators.

The 'digital divide' Information technologies and on-line services have a wide potential for breaking down traditional barriers which exclude the most disadvantaged in our society. New technologies can serve to distribute knowledge more creatively and more equally. They allow faster and easier access to public services. Digital literacy is a must for seizing the job opportunities of the knowledge society.

A recent report drawn up by the Commission's services together with a high-level working group highlights a broad range of best practices to tap these opportunities. But Eurobarometer data presented in this report also underline that huge gaps in ICT access and literacy persist, and that digital exclusion is more and more felt as a real barrier for people's lives.

Commissioner Diamantopoulou said : "Our challenge is twofold. We must fully exploit new technologies in order to fight and prevent social exclusion. And we must ensure that all Europeans can take full advantage of the economic and social benefits the knowledge society offers. This is why employment and social policies are central to the European Union's efforts to drive forward the knowledge-based economy."

Background Articles 136 and 137 of the Amsterdam Treaty, which came into force in 1999, provide that the fight against social exclusion should be one of the EU's social policy goals. The Lisbon summit of 2000 agreed to make a clear impact with regard to the eradication of poverty by 2010. It also agreed that co-operation in this field should be based on the 'open method of co-ordination' (common objectives, national action plans, a joint Commission/Council report). The Gothenburg summit this year also encouraged candidate countries to make use of Member States' experience as presented in this joint report.

Social inclusion report:http://europa.eu.int/comm/employment_social/soc-prot/soc-incl/index_en.htm e-inclusion report:http://europa.eu.int/comm/employment_social/soc-dial/info_soc/esdis/documents.htm For more info: Andrew Fielding, 02/2959660, 0498/959660

Foro: Technology and Social Exclusion

Report of a symposium 23rd February 1999 Goring Hotel, London Brief overview of the discussion Steve Carver (University of Leeds) The new electronic technologies have potential advantages for social inclusion in the context of participative decision making: information can travel both ways; anonymity in communication can be less inhibiting to participation; speed of reporting and decision making can be increased. However, other current problems reinforce existing issues of social exclusion: lack of training and expertise; public apathy/antipathy; copyright and confidentiality issues. Since environmental decision making problems - for example, village restructuring, National Park management and radioactive waste disposal - are inherently spatial, they lend themselves to geographical information systems. Sally Wyatt <../projects/wyatt.htm> (University of East London)

The optimistic and pessimistic claims for the Internet have uncanny parallels with claims for other new technologies made throughout history. She noted that the extraordinary growth of Internet usage (from zero to 30 million hosts in 30 years) actually comprises significant shifts in the nature and constituency of usage, and that this is likely to change again. Social exclusion is said to involve disadvantage in terms of consumption, savings, production, politics and social contact. Although up to 50% of a population might be excluded on one dimension, fewer than 5% are excluded on all 5 dimensions. This suggests that exclusion occurs in discrete life categories rather than as a joined-up phenomenon. The suggestion that the current 15-20% penetration of Internet usage is likely to triple within 5 years is thrown into doubt by US material showing that former Internet users now outnumber current ones. People stop using the Internet because they lose institutional access; become bored; find it too difficult to use; and/or it's too expensive. This further suggests that the basis of much current policy - that once people are connected the value of the Internet will become self evident - is erroneous. Roger Burrows <../projects/burrows.htm> (University of York)

The extraordinary growth in news groups (some 20,000) makes it difficult to find a single issue/facet of the human condition, which does not now have a virtual presence. This is in part a reflection of the new polity. There are now more people in self-help groups than are members of political parties (Giddens). This development has implications for the legitimacy and the quality of information, advice and support. The term "welfare direct" has been coined as analogous with the First Direct banking service (Loader). It is not just a question of access to the technology and who is wired; it is crucially dependent on what you do when you are connected. The emergence of a new virtual middle class. They have the time, inclination, disposition, knowledge, resources and the "reflexivity" necessary to gain systematic advantage. The key is the combination of strategic access both to information and to each other.

1. Patterns of usage are interesting but difficult to get a systematic handle on. There is evidence that teenagers are dropping off the Internet. Will they come back or will they just grow out of it? Homeless groups are enthusiastic users. Elderly people are using it much more than anticipated. There is evidence of a narrowing gap in the gendered use of Internet. This conceals interesting differences, for example, that girls use email much more and games much less than boys.

2. In each application it's important to ask what is the relation between real and virtual uses? We tend to think of technologies in the abstract as substituting for existing activities, and this is the marketing hype. But invariably they turn out to merely to augment or supplement existing activities.<BR

3. We need to avoid thinking of the Internet as either on/off or good/bad. Instead it should be recognised as good for some things and bad for others. It's especially important to understand the Internet as merely part of a network of related activities in which people engage. This is why, for example, it's necessary to do other things /activities to get people to use the Internet, for example, to send out mailshots informing people about web sites, or emails advertising web pages etc.

4. Are we overemphasising the position of the Internet in all this? Penetration of Internet is 15-20% whereas it's almost 100% for TV. Some 5 million people use teletext/ceefax each day (and ¼ million use it for more than an hour each day). Will Internet per se die out and its digital TV take over? Or will digital TV merely deliver access to Internet in the future?

5. Do people actually want to be in control of resources, information and access? Perhaps we shouldn't be too quick to assume the desire for access on behalf of all sectors of society. Different groups/people feel more or less comfortable, and hence more or less excluded, in different situations, for example cybercafes and telecottages. We also need to be aware that ridding (ourselves?) of the source of exclusion can also rob certain people of their sense of community and identity, for example in the area of deafness.

6. Is the category of exclusion infinitely elastic? Aren't some people excluded through lack of time? Aren't the super rich in some sense excluded ("exclusive")? A key criterion of inclusion is the ability to share information, experience and resources with peer groups (cf. the old Marxist distinction between a class in itself and a class for itself). It's not true that if you just give people the computers they will become included. (And in any case you also need to give them resources for ongoing maintenance). This follows from the fact that knowledge is socially distributed and, perhaps increasingly, is contested. Information by itself is insufficient. You need peer support of shared experiences and examples to make the information work, to perform or communicate. Thus, for example, there is unlikely to be an inevitable gravitation to general usage in the elderly as the population ages. We clearly need to know much more about: The nature, size and causes of uptake and dropping Internet usage. Whether or not (and why) particular inclusionary initiatives actually enhance, or otherwise impact on, a sense of community. Who is defining what is meant by exclusion? Who is trying to provide the solutions?