5 Sink or Surf? Social inclusion in the digital age

Alex MacGillivray and David Boyle

Introduction

Can't surf, won't surf? Not for long. The government has set itself the goal of ensuring that everyone in the UK who wants it will have easy, affordable access to the internet by 2005.¹ If you're not wired up via a home computer, DTV, mobile phone or personal digital assistant (PDA), then you should at least be able to surf at work– if you have a job – or in a handy UK Online centre. A stubborn or unfortunate minority will not ‘want’ access; we estimate that these will total about 10 per cent of the population in 2010, mainly well-to-do and elderly people, those with extreme disability, and the most hard-pressed of the socially excluded. However, if Tony Blair has his way, everyone else will be able to surf. The dreaded ‘digital divide’ will have been largely bridged.

This chapter looks beyond the issue of technical access, vital though that is. We start from the encouraging assumption that the government can meet its – highly ambitious – target and achieve near-universal access to online opportunities. Our focus is on whether e-commerce can be the missing piece of the jigsaw in the fight against ingrained patterns of poverty, deprivation and social exclusion. Comfortable Middle England is already beginning to reap the benefits of e-commerce. Fingers crossed, many believe that low-income communities will follow suit – if we can get them surfing (see Box 5.1).

Yet other critics argue that there is a dark side to the e-revolution; that the new economy could create new exclusions, no matter how many people are wired up. In this chapter, we argue that the structural tensions between local and global economies will be more than a match for local vim and vigour. Left unchecked, the commercial pressures of e-commerce could exacerbate exclusion and drain poor communities of precious cash flow and resources.

At the same time there is an emerging policy agenda full of opportunities to create the new human networks and new currency systems that will be needed to make e-commerce really work for poor people. The solution will lie in harnessing the power of e-commerce to invent:

• brilliant new ways of keeping money circulating among hitherto non-existent networks of producers and consumers; and
• surprising new forms of electronic currency – some based on time – that are more effective in linking local needs with local resources.

If seized, these opportunities will help sink estates and deprived rural communities alike to surf successfully on the e-commerce wave. How we tackle e-inclusion will provide valuable lessons for other countries that are hot on our heels. Encouragingly, the government's recent urban and rural white papers explore some of the necessary innovations; but more progressive initiatives are needed, particularly in the area of what we call ‘t-commerce’ – using time as a new internet currency. The opportunities we outline are aimed at entrepreneurs and venture capitalists from all sectors. They point towards large and untapped e-markets, which need to be catered for if all sectors of society are to become full participants in the digital economy.

Beyond the digital divide

Access for all?

Only 5 per cent of the world's population has access to the internet; half the world's population has never even made a phone call.² Compared to this, the UK's digital divide doesn't look so daunting. But management consultants Booz-Allen & Hamilton still predict that only 60–70 per cent of the UK population will be online by 2003 without a more concerted effort to achieve universal access.³ The government's response to this challenge is the UK Online initiative, which aims to ensure that everyone who wants it has access by 2005, at home, at work or in a nearby internet centre.

One in three homes in the UK is already connected to the internet, with almost one million homes going online in the three months to August 2000. Around half the adult population has already accessed the internet one way or another, and the advent of DTV and internet-compatible mobile phones, coupled to falling computer prices, will boost these numbers dramatically over the next few years. Yet despite this rapid growth, near-universal access is still an ambitious target. Government statistics show that women, ethnic minorities, the elderly, disabled people, and unskilled workers are less likely to use the internet – not always for reasons which are fully understood.⁴ There will also be those who don't want to surf, particularly among the elderly. Add in severely disabled people and some categories of prison inmates who won't be allowed access, and you end up with up to 5 per cent of the UK population – three million people – remaining off-line.

And what about the socially excluded? Figure 5.1 shows how extrapolating current trends could bring practically all low-income households online in five years (the dashed line). However, there is an equally plausible scenario – the dotted line with its flatter s-curve – in which up to one-fifth of people on low-incomes fail to get online by 2010.⁵ This would add up to another three million people who theoretically could get access to the internet, but who for a variety of reasons – poor education, grinding poverty, overwork, cultural prejudice, drug addiction, alienation – will not.

Although a majority of the UK population – perhaps 90 per cent or more – will have technical access within the next few years, the eventual size of these disparate groups who ‘can't surf, won't surf’ will become a major cause for concern.⁶

Figure 5.1 Internet access in the poorest third of UK households

Could surf, don't surf

In discussions around the digital divide, socially-excluded people are sometimes portrayed as passive and powerless recipients of new technology and government services; but e-commerce is not about giving information and patronage to the needy. It is the two-way interactive exchange of goods and services using:

• novel electronic networks of producers and consumers; and
• electronic currencies of agreed value as the medium of exchange.

There are four obvious barriers to internet-inclusion: the cost of access (hardware and charges); lack of skills or confidence; fear of fraud and harmful content; and simply not seeing the relevance.⁷ The first three are a major focus of government policy, particularly through the Office of the e-Envoy and the UK Online initiative. There are also numerous voluntary sector organisations which aim to improve access, such as Citizens Online, HumanITy and Cyber-Cycle,⁸ and business-led initiatives from companies like AOL, BT, Ericsson, and Hewlett-Packard. In general, there are grounds for feeling fairly optimistic about the progress being made in the provision of hardware and skills, and in levels of trust.

Yet there are some important exceptions. Long-term disabilities and health problems affect up to 8.7 million people in the UK.⁹ For them, e-commerce could be very empowering, enabling them to work and shop in new ways, and explore virtual reality experiences. However, despite the many valuable efforts underway to improve access for people with disabilities, it is important that internet access is not seen as a substitute for the provision of ‘real’, physical access to places and services. Other people who cannot get far on the web are those without good literacy and numeracy skills, estimated to be more than one-fifth of all adults of working age.¹⁰ Ethnic groups who are not fluent in English are also at a disadvantage because software and internet content are predominantly in English.

Getting all of these groups online is not going to be easy, but is just the start of the e-inclusion process. E-commerce also has a key role to play, but its impacts are still uncertain. It could impact positively or negatively on the bottom line of poor communities. It could build self-esteem and new networks, but could also isolate poor consumers with second-rate goods and services at higher prices. It could increase local cash flow, but may become another nail in the coffin of the local shop. Which is it to be?

Being taken into account: including consumers

Online, there are money-saving deals galore: higher interest rates, bulk-buy discounts and offers like PowerGen's ‘Surf and Save’, which gives a discount on electricity bills for internet users. All this is good news for consumers, unless you are one of the 6–9 per cent of people who have no bank account – mainly women, ethnic minorities, young people and the over-65s.¹¹

The government's still-sketchy plans for a universal bank accessed through the Post Office network, and new basic bank accounts like NatWest's Step account, could provide the answer;¹² but to enable people to participate in e-commerce, these accounts will need to provide flexible debit cards, or some other system for letting websites extract money. Young people are particularly excluded because they do not have plastic. US websites like flooz.com provide young people with buying power on the internet, but with an unappealing reliance on parental supervision.

Up to a quarter of all households are excluded from credit of any kind.¹³ A recent survey of Southwark residents showed that only four in ten had credit cards and less than a quarter had credit facilities for day to day purchases. It is suspected that many excluded people are blacklisted or ‘red lined’, unable to get credit simply because of their unfavourable postcodes.¹⁴ Yet e-commerce offers the potential to give all consumers high-quality, tailor-made services. According to management guru C K Prahalad, the low-income market, which many financial institutions and retailers shun, could become an increasingly attractive proposition to e-tailers. He tells multinationals to think laterally about innovative ways of cashing in on the purchasing power of consumers in the developing world – an argument that applies even more forcefully to excluded groups in the UK.¹⁵

However, e-commerce can just as easily be used to exclude or provide desultory levels of customer service to small spenders. Many etailers find that half their income comes from just a quarter of their customers, and the latest techniques of online ‘customer relationship management’ identify the most valuable customers from their buying history, so that e-tailers can make sure they receive warm, responsive service.¹⁶ A basic, automated service may be all that remains for less valued customers. The risk, say IT access experts Kevin Carey and Felicity Ussher, is that ‘companies with reputable products no longer wish to sell to the poor, confining them to a street market “loan shark” economy’.¹⁷

Staying afloat: including business

Small businesses, so crucial for employment in deprived neighbourhoods, have finally woken up to the internet; according to recent government figures, two-thirds of SMEs and 55 per cent of micro-businesses are now online.¹⁸ Yet only a small proportion of these are actually trading online, despite numerous examples demonstrating how e-commerce can extend geographical reach and attract new customers.¹⁹ For many, money and time are simply too tight to get online operations up and running. Ten local shops a day have closed over the last decade, and failure rates for new micro-businesses are alarming.²⁰ Big brand sites, with their ‘walled gardens’, can also make it hard for small business to gain access to e-markets.

Some neighbourhoods, particularly in rural areas, are already becoming retail deserts, and there is a risk that e-commerce will damage the profitability of the few remaining local shops, banks and services. According to the e-Envoy's office, ‘no methodologically sound studies of the change in purchasing habits on the internet have been found’,²¹ but

Forrester Research reports that just 9 per cent of US online spending in 1999 went to SMEs.²²

Some local businesses – like fast food and hairdressers – look safe from e-commerce competition; but local book, video and music shops and convenience stores are under direct threat. In East London, the Community Action Network, a network for social entrepreneurs, has recently linked its website to Amazon.co.uk. Sales generate much-needed funds for bursaries, but may have the perverse effect of undermining local booksellers.²³ The situation for local business in Europe is not as severe as it is in the US, where online sales are free of local sales tax. There, Amazon.com has begun to develop supportive links with local bookstores, seeing them as an important shop window that can complement the online browsing experience.

Local shops are most vulnerable, but many other SMEs in deprived areas will struggle to survive the fierce competition of global B2B e-commerce. Purchasing departments in large firms can now award contracts to the lowest bidder worldwide through a reverse auction completed in a matter of hours. On the internet, capital is more mobile than ever before, and there is little or no attempt to assess the impact of purchasing decisions on local jobs and communities.

Watertight or leaky? Including local economies

Socially-excluded groups face big opportunities and major challenges on entering the e-economy. On the negative side, poor neighbourhoods that already leak local cash flow could be hit even harder by e-commerce. Local money flows have been identified as a key issue in the government's new strategy for neighbourhood renewal, yet the desired ‘multiplier effect’ – wherein local cash generates local jobs and more local spending – will be badly dented if small businesses collapse as a result of distant web-based competition, and if more consumer spending is diverted away from local shops.²⁴ More positively, inner-city estates and rural communities are a potent source of innovation and creativity, and could be a driving force in the development of new, more inclusive models of e-business. They have a tradition of making the most of non-financial resources, they urgently need more affordable products and services, and they will benefit most from vibrant online micro-businesses.²⁵

Is it even possible to predict, let alone affect, these contradictory impacts of e-commerce on our local economies? NEF is just starting the UK's first comprehensive research programme on local money flows. Called Plugging the Leaks, it will attempt to measure these trends and impacts.²⁶ In the next two sections, we draw on lessons learnt elsewhere in the local economy to identify how e-commerce could be used to support small enterprise and keep local resources flowing.

New human networks

If e-commerce takes off in excluded communities, it will be about new networks between producers and consumers, and new currencies to enable trade among the cash-poor members of these new networks. Together, they could provide the key to socially inclusive e-commerce.

Building community networks

Community information networks are the online equivalent of cards in the corner-shop window; they enable local people to find or supply information about health, jobs, services, training and leisure. They are typically accessed in cybercafes, libraries, council offices, supermarkets or at home. One of the most successful, Newcastle's NewNet, now receives 12,000 visitors a month and acts as a virtual shopfront for community organizations across the city.

Wider networks, like the north-east's Regional Electronic Economy Programme (REEP), aim to link all relevant local networks together. And ukvillages.co.uk provides a template for all 28,000 villages and urban neighbourhoods in the UK to provide their own content, although the actual content is still patchy. At their best, these networks can deliver crucial information to individuals, allowing them to be active citizens, look for jobs, and update skills. Yet much more can still be done to make them searchable, interactive and fun, if they are to build enabling networks of individuals and communities.

Building local infrastructure for e-commerce

A simple logistical problem has provided the inspiration for some radical thinking about e-commerce infrastructure; bulky items bought online cannot be delivered successfully during working hours. Recent DTI and Cabinet Office reports have highlighted the potential for post offices and local shops to act as centres in which customers can collect their e-purchases and deal with returns.²⁷ In addition to its vast network of sub-post offices, the great strength of the Post Office is that it is highly trusted by consumers, particularly pensioners and the unemployed. Many corner shops also act as social centres, holding spare house keys for forgetful regulars and keeping an eye out for people who fail to pick up their newspaper.

The government is right to identify the role that post offices could have in e-commerce fulfilment. However, with investment and imagination, they could also become:

• universal banks coupled with time banks for LETS and credit unions for savings;
• online communication centres, including one-stop shops for central and local government services;
• demonstration and rental centres for the latest hardware and software;
• consolidators for online purchasing clubs to reduce delivery costs and obtain bargains in online auctions; and
• micro-manufacturing centres with CD writers, high-speed colour printers and other pieces of kit too expensive for most individuals to own.

Transforming themselves into local e-commerce centres could provide a sustainable livelihood for post offices and local shops that goes beyond benefits, scratch cards, fags and mags. To cope with such a varied workload, provide a friendly service, and train those who are all fingers and thumbs on the internet, will be a major challenge for staff. However, post offices and local shops have shown themselves to be enterprising and adaptable in the past, and the digital economy creates new opportunities for them to spearhead a renaissance of distinctive local high streets.

Building local skills networks

IT skills are a crucial requirement for participating in e-commerce. Thanks to government support, there is now widespread and affordable provision, but lack of time and motivation mean that many training resources in the community are not being taken up by the socially excluded people who really need them. The internet offers new ways to bring resources together with unmet needs. One such project is Learn-and-Earn, pioneered by LINCT (Learning and Information Networking for Community via Technology), based in Long Island, New York. The idea is that people, especially the young and old, can earn time credits while being trained on computers, which they can then cash in to buy a computer at the end of the course.²⁸ The lesson here is that being trained is a commitment that should be rewarded. Around 15 million computers are disposed of every year in the US, so it makes sense both socially and environmentally to refurbish them and make them available for these kinds of courses. Similar approaches are now being piloted in the UK.²⁹

Building networks to keep money flowing

Real economic benefits can flow from the community information and advice networks that are being created – especially those that support the ability of SMEs to use the internet. However, the full potential of e-commerce for local economies is unlikely to be achieved unless they develop more direct ways of ensuring that local resources circulate locally. SMEs can be more flexible and faster than their larger counterparts, and there is potential for them to increase their economic clout by banding together in new e-clusters for purchasing and marketing.

Many of the best models for using the web to win new customers for local markets come from the developing world; for example PEOPLink, which links 130,000 artisans in 14 developing countries, allowing them to display and sell their products online. A similar idea is used by the UK company Tropical Whole Foods, which links together a range of fairtrade fruit cooperatives around the developing world. Other exciting examples include a farming coop in Chincheros in Peru; it multiplied its income by five by creating an online partnership with a US export company. There is also a project in Papua New Guinea that allows village elders to sell their highly accurate advance forecasts of coming storms.³⁰

A few similar initiatives are now starting to emerge in the UK; for example the Gorbals Initiative, which was so surprised at getting 27,000 hits (40 per cent of which were from abroad) on its website in the months before its launch, that it now plans to help local businesses export their goods.³¹ The idea of using e-commerce techniques to strengthen local business is also taking off elsewhere in Europe, notably through the EU's three-year Infoville project.³²

The idea that local communities can trade their way out of disadvantage certainly shouldn't be dismissed. Pioneering examples of small firms that have benefited from e-commerce include the butcher Jack Scaife (jackscaife.co.uk), who now sells black puddings around the world. Trade associations and local retail forums could do more to replicate such examples, although this would require not just IT training for small businesses but e-marketing training too.

The internet can also be used by small hardware stores, pharmacies and bookshops to fight back against larger firms and retail chains. There are now several websites in the US which help local shops to stand up against the big brands. One of the most successful is Doitbest.com, a website cooperatively-owned by 4400 independent local hardware stores. The site stocks 70,000 items, and local stores pay just US$200 to join plus $15 a month. A percentage of each sale also goes to support the development of the site.

Other networks, such as Carbusters.com or Letsbuyit.com, allow ordinary people to generate online savings by buying in bulk. These networks don't distinguish between people or neighbourhoods, and could be used more creatively by community groups and voluntary organizations to bring cheaper prices to those who need them most. In future we are likely to see more online local clearing houses that promote local produce and build local e-commerce, as well as providing other kinds of support.

New currency systems

Money is round and rolls away. Most forms of e-commerce make it roll away even faster from local economies, as dot-coms siphon away yet more local cash. As we have seen, e-commerce can empower networks of excluded people, but enabling them to trade, often with very limited amounts of cash, will require innovative online currency systems.

Building ways to pay online

The universal bank account method may seem the most obvious way of giving excluded people access to e-commerce, but it is not the only one. The development of DTV, m-commerce, smart cards and electronic money is set to create new, pre-paid methods of payment. Some of these could be online versions of existing voucher systems; others could be more ambitious. Electronic cash is yet to take off in the UK, but elsewhere consumers are getting used to new ways of making payments or drawing cash electronically without using credit cards. Europay and Barclaycard are working on a payment protocol so that people with smart cards can interface with their computers. DTV set-top boxes (STBs) have smart card slots and some – notably the boxes distributed by Sky – have two. There are currently around 3.5 million STBs with smart card slots in Europe, and by 2003 there could be 29m.³³ As a result, it may be easier to provide smart cards for excluded people than it is to get the banks to broaden the number of credit cards in circulation, given the resulting danger of debt.

Building the trust to trade

Even when people have the networks and there are mechanisms to pay for trading, trust remains a major obstacle to the large-scale uptake of e-commerce. This may be about to change with the emergence of guaranteed electronic markets (GEMs). GEMs are the brainchild of Wingham Rowan, host of the TV series cybercafé.³⁴ He envisages a vast network of local exchanges, bringing many informal skills and assets into the money economy, with the guarantee of insurance cover from buyers and sellers and access to a government-backed arbitration service (see www.gems.org.uk).

A nationwide system of this kind would need major investment from government, not just in organizing the trading system, but also in setting rules for arbitration. It is no small project – Rowan likens it to the task of providing universal drainage or building the Channel Tunnel³⁵ – but there are ambitious local versions of the idea starting to emerge. Ericsson has been instrumental in trailing the concept in the small town of Vara in Sweden. AceNET in south-east Ohio includes 100 speciality food shops and farms selling their wares online. Digital City Amsterdam – which even includes a digital sex shop – attracts about 4000 hits a day.³⁶ Perhaps the most ambitious development is in Evanston, Illinois, where a coalition of the city council, university, school districts and chamber of commerce has created the e-Tropolis project.

For local e-commerce to work effectively, a reasonable proportion of the population must use it. Even if reticence can be overcome by ideas like GEMs, the cost will deter some towns from following Evanston's example. The legal responsibility for faulty goods sold over local internets also needs to be clarified. However, there are exciting opportunities for local authorities and cable operators to cooperate on such projects. Linking them to smart card payment systems would allow local authorities to recoup costs by selling access to other services – such as sports centres or transport – on the same cards. Local authorities could also make a real difference to the success of local networks by using them wherever possible for their own purchasing.

Building systems that keep goods and services flowing

The problem for poor communities is that, although they may be relatively wealthy in terms of time, skills and other resources, they do not have the cash to set up mainstream enterprises. E-commerce lends itself to converting almost anything of value into electronic forms that can be exchanged over the web. This principle could be extended to enable socially-excluded neighbourhoods to barter goods or time on the web, in order to match local needs and resources. There are a range of electronic currencies that could be adapted in this way.

Trade dollars and other commercial barter currencies

Between 10 and 20 per cent of world trade is now thought to be barter. Many barter schemes issue electronic money as a way of facilitating transactions, and this takes on many of the attributes of hard currency. It can be spent before surplus bartered stock has been sold on and transferred using smart card technology. Bartering over the internet has already begun in the US with the emergence of Ubarter.com, the product of a 1998 merger between Canadian and US barter interests.

Organizational barter currencies

The EU has embarked on a major study of the potential for small-scale barter in Europe, and has funded four barter systems for voluntary organizations and SMEs in central Scotland, County Mayo, Madrid and Amsterdam. In Scotland, a currency called SOCS (Scottish Organizational Currency System) is issued to small businesses to provide them with interest-free mutual credit. Many such schemes are inspired by the Swiss currency system Wir, now 65 years old and Europe's most successful bartering operation.³⁷

Social currencies

Local exchange trading schemes remain relatively small-scale; few have been able to attract more than 200 members. The total UK turnover of LETS when it was last estimated in 1995 was £2.1m in sterling equivalent – or about £70 per member per year.³⁸ One of the reasons for such low levels of trading is that there is an imbalance between supply and demand, with more luxury services available than the basic services which members actually need. Electronic currencies are designed to bring unused resources together with unmet demand. Given that resources in disadvantaged neighbourhoods – people's skills and knowhow – go largely unrecognized and unmeasured by conventional measures of economic success, local barter currencies linked to e-commerce could provide an important means of giving people local buying power when they are short of cash. The strength of the systems would be in keeping local resources circulating locally, and reconnecting them with local needs.

T-commerce: internet trading using time as a currency

Excluded groups find it hardest to participate in e-commerce – but also have most to gain. Research shows that the main obstacle to using the internet is often time.³⁹ While some excluded people – notably single parents – suffer extreme time-poverty, time is one of the hidden assets of many poor communities. E-commerce could make use of this time to deliver ‘hi-touch’ as well as hi-tech services. New opportunities are emerging for time-based internet trading, or ‘t-commerce’, which would reward people for work in the local community, creating new relationships of care and trust. Distributed through a time bank, the proceeds of t-commerce could be spent on a range of goods and services, from meals and medical equipment to rent and computers.

Although time banking was originally used to boost healthcare programmes, it is now being brought to bear on other social problems like truancy and youth crime. In the US, where there are now over 200 schemes, participants can use their hard-earned time dollars to:

• buy services from other people on the system;
• act as a form of insurance for when they are too old to earn any themselves;
• give to elderly relatives;
• donate back to the system for people who are too ill to earn them themselves; and
• buy a range of other goods and services, like food, insurance discounts or student loans.

A dozen schemes are either running or projected in the UK. Several of these are IT-based, but none has fully capitalized on the potential of e-commerce yet. There are a number of projects which point towards the long-term potential for t-commerce.

• Commonweal in Minneapolis uses a debit card known as the Community HeroCard, which holds both dollars and time credits. This can be used in the mainstream economy to purchase goods and services with a mixture of hard cash and time. The Mall of America – the biggest shopping mall in the US – was an early backer, charging in time instead of dollars in the restaurants and the theme park to encourage people to come during quiet periods.⁴⁰
• TimeBank, a UK project with backing from the Home Office and the BBC, has a website (www.timebank.org.uk) linking people with local volunteering opportunities. This is not strictly e-commerce, but linked to a time bank at the local level it would enable people to earn time credits for taking part. During its first six months of operation in 2000, the TimeBank campaign attracted donations of over one million hours.
• iverb is a website (www.iverb.org) that provides a reserve of goods and equipment that time banks elsewhere can buy. Individual time banks donate products in return for time credits. Other time banks can log requests online, and iverb will match them with what they have, or approach corporate donors if they can't. They also organize the paperwork so that donors can offset their donation against tax.
• London Time Bank, led by the NEF, will be a network of time banks across London linked by an umbrella internet bank, which will perform a similar function to iverb, and will also allow people to access their time accounts online.⁴¹

T-commerce has great potential to give resources that are sorely needed by the human networks in socially-excluded neighbourhoods (and many wealthy ones too). Schemes will increasingly be transferred to the internet so that t-traders can rapidly exchange goods and services, check balances, and search for other volunteer brokers. Local authorities and multiple retailers will also be interested in the opportunity to link time banks with smart cards and other emerging technologies, as a way of providing the benefits of the internet to those who will never own a home PC.

There is a tax issue to resolve. Time banking has been zero-rated for tax on both sides of the Atlantic, but it would affect benefits if time credits were spent on goods like refurbished computers. This has to be changed so that IT equipment suppliers – whether new or secondhand – can accept payments in time from socially-excluded people. There is also a big task for central and local government, businesses and voluntary organizations to collaborate in building up a local infrastructure of time banks. But t-commerce could be a very powerful way to promote inclusion in the digital age.

Conclusions

It is customary for researchers to conclude with a plea for more in-depth research about the impacts e-commerce is likely to have on disadvantaged neighbourhoods, and there is no doubt that it will be important to develop a more sophisticated understanding of these impacts if we are to accentuate the positive and obviate the negative. However, we already understand enough to outline a package of opportunities that exist to address the human and social weaknesses in mainstream e-commerce.

Opportunities for government

The following are some of the ways in which the government could contribute to inclusivity. It could:

• provide financial support to enable local information networks to transform themselves into GEMs, which provide a secure and trusted environment for local people and small businesses to trade goods, skills and other resources online;
• invest in e-marketing training for SMEs, and develop infrastructure that links small e-commerce sites to regional development and tourism sites. This process could be coordinated by the Small Business Service;
• outline a bold and clear vision for the Post Office network in the new economy as a centre for e-commerce delivery, micro-manufacturing, time banking and credit unions.

Opportunities for business and venture capital

The following are some of the ways in which business could contribute to inclusivity. It could:

• work with local authorities and community organizations to develop new ways for people without credit or debit cards to purchase goods and services online, for example with local smart cards.
• Major e-commerce sites and portals such as AOL, Yahoo! and MSN should make a commitment to provide local commercial content.

Opportunities for voluntary organizations

The following are some of the ways in which voluntary organizations could contribute to inclusivity. They could:

• establish a new-economy equivalent of the Peace Corps – a major volunteering network that can train local people in IT skills and set up web sites for communities and small businesses in low-income areas;
• extend computer refurbishment schemes and link them to a new generation of recycling centres to adapt IT equipment for excluded groups and disabled people.

Taken together, these measures would go some way towards enabling poor communities to reap the full benefits of e-commerce, to surf rather than sink on the waves of the new economy.

Notes and references

1 Office of the E-Envoy (2000) UK Online Annual Report, www.eenvoy.gov.uk, September

2 Schenker, J (1999) ‘The Communications Revolution: Languages of Technology’, Time, 11 October

3 Booz-Allen & Hamilton (2000) Achieving Universal Access, London

4 Data vary: figures from National Statistics (2000) First Release on Internet Access, London, September, are higher than NOP's regular Internet User Profile Studies.

5 Graph derived from NOP Internet User Profile Study, August 2000; data on actual access by D and E groups of partly skilled and unskilled workers, plus two s-curve extrapolations generated by NEF showing slow initial uptake, acceleration in the middle phase, and then a tailing off. In the pessimistic forecast, 20 per cent would not be online by 2010, meaning around three million people out of a population of 15 million low-income (DE) people in the UK over the age of 15.

6 This figure ties in with another estimate that puts DTV penetration at 87 per cent by 2008 (Henderson Crosthwaite Institutional Brokers, cited in ESRC Centre for Research on Innovation and Competition (1999) Exploring the Effects of E-commerce, ESRC, London)

7 Cabinet Office (1999) Closing the Digital Divide: Report of Policy Action Team 15, Cabinet Office, London

8 Department of Trade and Industry (1999) Unwanted Computer Equipment: A Guide to Re-use, London

9 Christie, I and Mensah-Coker, G (1999) An Inclusive Future? Disability, Social Change and Opportunities for Greater Inclusion by 2010, Demos, London

10 DETR (1999) Quality of Life Counts, HMSO, London, p74. See also www.standards.dfee.gov.uk

11 Mayo, E et al (1998) Small is Bankable: Community Reinvestment in the UK, New Economics Foundation/Joseph Rowntree Foundation, York

12 French, D (2000) The Case for Community Banking, New Economics Foundation Pocketbook, London

13 Kempson, E and Whyley, C (1999) Kept Out or Opted Out? Understanding and Combating Financial Exclusion, Joseph Rowntree Foundation, York

14 Unpublished New Economics Foundation survey for London Borough of Southwark, 2000

15 Prahalad, C K (2000) ‘Let's Focus on the Digital Dividend’ in Is E-commerce Destined to Divide Us? www.europeanbusinessforum.com

16 Williams, M and Boyle, D (1999) The Customer Contact Continuum: A Model for Customer Relationship Management, The Listening Company, London

17 Carey, K and Ussher, F (2000) Can Europe Make IT Happen? Full Participation in the Information Age, Centre for European Reform, London

18 www.ukonline.StatMap

19 Only 450,000 SMEs out of several million, according to DTI Press Notice P/2000/614, 11 September 2000

20 Mayo et al, op cit

21 www.ukonline.StatMap

22 www.forrester.com

23 www.can-online.org.uk

24 Social Exclusion Unit (2000) National Strategy for Neighbourhood Renewal, Cabinet Office, London

25 See www.innercity25.org, NEF's joint initiative with the Treasury to produce an index of the fastest-growing enterprises in inner-city areas.

26 Contact [email protected] for details.

27 Retail E-commerce Task Force (2000) Clicks and Mortar: The New Store Fronts, Foresight/DTI, London; Performance and Innovation Unit (2000) Counter Revolution: Modernising the Post Office Network, Cabinet Office, London

28 www.linct.org

29 See for example Boyle, D (1999) Virtual Currencies, Financial Times Management Reports, London

30 www.peoplink.org

31 www.gorbalslive.org.uk

32 www.digitalsites.infoville.net

33 Smart Card News, February 1999

34 Rowan, W (1997) Guaranteed Electronic Markets, Demos, London; Performance and Innovation Unit (1999) [email protected], Cabinet Office, London

35 Rowan, W (1999) Net Benefit: The Ultimate Potential of Online Trade, Macmillan, London

36 www.home.digitalcity.com

37 Douthwaite, R (1996) Short Circuit, Green Books, Hartland

38 Hudson, H et al (1999) Making LETS Work in Low Income Areas, Forum for the Future, Cheltenham

39 DfEE (2000) ICT Access and Use: Interim Summary Report, London

40 Boyle, D (1999) Funny Money: In Search of Alternative Cash, HarperCollins, London

41 Boyle, D (2000) Why London Needs its own Currency, New Economics Foundation Pocketbook, London

Response

by Kevin Carey