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• ImpacT 2001

March 1996

Foreword by
Hon Maurice Williamson MP

Table of Contents

1. Acknowledgements
2. Foreword
3. How Information Technology will change New Zealand
4. Information Technology
5. The Knowledge Society
6. Education and Training
7. Work Changes
8. Industry
9. Transport
10. Health
11. Entertainment and Leisure
12. Empowerment
13. Social Equity
14. Privacy, Security and Censorship
15. International Competitiveness
16. What it all Means for New Zealand Society
17. References

Foreword

When we look at the changes in lifestyle in our parents' and grandparents' lifetimes it is hard not to agree that life has improved substantially. Most of these changes have been driven by technology, such as improvements in medicine and the advent of flight. Technological change shows no sign of slowing down - in fact, the rapid growth of telephones, computers and the Internet heralds deeper changes than those seen so far.

The last time the world faced changes of this magnitude was when technology made possible what is now called the industrial revolution. People relocated from the country to cities, transport improved markedly, and consumer goods became widely available. People's main activity changed from tilling a small piece of soil to working at more specialised jobs as part of large enterprises. Society was never the same again. The citizens of those countries who were able to industrialise fastest reaped the greatest rewards from the changes. However, some people - those who, through no fault of their own, could not adapt or learn appropriate skills - coped very badly with the changes, as described in the novels of Charles Dickens.

On the threshold of the twenty first century we are entering a period of change as far reaching as any we have seen. Since the industrial revolution people have had to locate themselves in large centres where they could work with others, but now new technologies are rendering distance unimportant. The skills that are needed in tomorrow's society will be those associated with information and knowledge rather than the industrial skills of the nineteenth and twentieth centuries. Changing technology will affect almost every aspect of our lives: how we do our jobs; how we educate our children; how we communicate with each other and how we are entertained.

This report is about the future, what it could hold for each of us, and about where New Zealand may be going. The ideas in this report open a window on the future, which no-one can predict with any degree of accuracy. The one thing we can be completely certain about is that New Zealand in the future will be very different from how it is today. We owe it to ourselves and to our children to prepare New Zealand in the best way possible.

Louis Pasteur, whose discoveries underpin so much of modern medicine, said "Chance favours the prepared mind." By understanding the changes that are occurring now we can prepare ourselves and New Zealand to take maximum advantage. This book challenges us to think about what that will mean to us as individuals, as members of families, communities or organisations and as citizens of New Zealand. I hope you will take up that challenge.

(signed)

Maurice Williamson
Minister for Information Technology

1 March 1996

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How Information Technology will Change New Zealand

New Zealand is rapidly becoming a `knowledge society' with a workforce largely composed of a wide variety of `knowledge workers'. These workers have special skills which require continual updating, so a top quality education system is essential.

Information technology (IT) is a vital feature of the move to a knowledge society. Information technology is a generic term covering computers, broadcasting, telecommunications, data networks and the `smart' components becoming increasingly common in cars, TVs and home appliances as shown in the diagram opposite.

This infrastructure is technology-based, but its most profound effects will be on the people and society using it

A networked information infrastructure is well established and expanding rapidly as demand for services increase. It includes the telephone system, the Internet, fax machines, and many computers. The components of this infrastructure are technology-based, but its most profound effects will be on the people and society using it.

This report answers questions about the impact of IT over the next five years on key aspects of New Zealand society and the infrastructure that supports them. For instance:

• What IT developments will significantly influence our lives?
• How will our work and our education change?
• What changes will IT developments make to the way we communicate and our recreation and entertainment?
• How can we all benefit?

The first two sections discuss the development of information technology and the knowledge society. Subsequent sections look in detail at education, work, industry, transport, various social issues and New Zealand's competitiveness.

The final section, What it all Means for New Zealand Society, pulls together this material and presents the decisions and changes facing us now.

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Information Technology

The basic technologies of many IT applications likely to be introduced over the next five years are already known. They depend on developments in the following broad fields:

• Wired and wireless telecommunications
• Increased capacity and performance of personal computers
• Software
• Universal use of the microprocessor in appliances and applications. Some devices and processes likely to be introduced or in widespread use by 2001 include:
  • wall panel displays to manage home security, lighting and temperature, which can also be controlled remotely
  • personal health diagnosis and monitoring devices
  • intelligent ovens, washing machines and robot vacuum cleaners
• Home multimedia machines, allowing for:
  • interaction with the `information superhighway', including email, receiving and producing sophisticated text, graphics and video, particularly for educational and recreational use
  • home-shopping and electronic commerce generally _ on a global scale _ which will change business procedures and structures, including retailing and taxation
  • television programming where many preselected channels can be recorded and viewed when desired and more detailed coverage of particular items supplied upon request. Software and high-speed telecommunications will help to turn the television into an interactive appliance
• Use of `smart cards', a more useful and intelligent version of today's credit card, containing microchips encoded with various classes of confidential information, such as:
  • personal financial information, allowing transfers from one's bank to various payees
  • personal medical information, accessible only to qualified medical care-givers, allowing appropriate medical treatment
• Mobile videophones in vehicles, enabling the transmission of traffic, map and accident emergency information. Mobile communications will be transformed by the integration of visual and data information. The amount of bandwidth available will determine the extent of this type of application. Vehicles will be electronically controlled to a considerable degree
• Electronic note-pads with voice and handwriting recognition, speech command and dictation capabilities.

All these developments use existing technologies. They will require high-speed networks, a wide variety of new hardware and software, and the development of a wider range of applications and services.

The "Information Superhighway"

The evolving international network of information-sharing _ especially the Internet _ has been a most remarkable development. First designed in 1973 under a US Defence Department project, its community now comprises more than 20 million users in 180 countries. In New Zealand the number of users grew by 440% in 1994.

Some observers consider that this development will prove as significant as the invention of the microprocessor:

"We are witnessing one of the great transformations in society in the past quarter of a century or more. Even the growth and impact of the personal computer was not as strong as the growth and impact of the Internet." (Roche, 1994)

"The popularity of the Internet is the most important single development in the world of computing since the IBM PC was introduced in 1981." (Gates, 1995)

The Internet will continue to expand and diversify over the next five years, especially in the area of electronic commerce through both business-to-business use and on-line home shopping. Selling goods electronically can be 40% to 50% cheaper than by conventional means, mainly because of the huge size of the market.

" the requirements for this Tomorrowland would be vast: a universal network linking homes and businesses to thousands of databases, technical standards enabling all the different computers to understand one another, interfaces that help ordinary users define their needs easily and precisely, and software that can find what users are seeking amid countless terabytes of computer files " (Sherman, 1994)

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The Knowledge Society

New Zealand is one of several developed countries evolving into a `knowledge society'.

Knowledge workers are skilled in a wide range of subjects and technologies, and are continually updating their skills through on-going education

When social change began transforming these countries, they were agricultural economies with generally land-based work where most workers were farmers. Then followed the rapid development of manufacturing and the creation of a class of blue-collar workers, who became the largest group within the workforce. More recently, service industries have become the largest employers. Numbers of traditional industrial workers have fallen because of the need for more highly-skilled and qualified workers, and because many jobs have been automated.

We now are seeing the rise of knowledge industries (such as: biotechnology, genetic engineering, software development), where the numbers of service workers are falling and those in the workforce are improving their skills. Knowledge workers are skilled in a wide range of subjects and technologies, and are continually updating their skills through on-going education.

Drucker (1994) said that the sequence of sociological change in developed countries has happened independently of political systems and governments and "has proceeded with a minimum of friction, with a minimum of upheavals, and, indeed with a minimum of attention from scholars".

He also draws attention to the strong position of knowledge workers compared with previous classes of worker. In manufacturing enterprises, machines and capital equipment owned by the firm are the most valuable assets, but in knowledge enterprises the indispensable asset is what workers know, i.e. they `own' the tools of production and can have considerable bargaining power.

Knowledge _ generally acquired through schooling _ is becoming the key resource, so educational institutions (from pre-school through to tertiary) and libraries are at the knowledge society's centre. They must be empowered to operate in a first-class, internationally competitive manner. We must resist any tendency to make schools organs of social policy at the expense of their prime role.

Governments and communities are in a position to influence the rate at which social change occurs. In particular, individual countries now face the challenge of managing appropriate social change to accommodate the knowledge society in ways which maximise both international competitiveness and social equity. These dual objectives involve a delicate balancing act. Although much of this will be non-political and, to a degree, inevitable, political decisions and strategies will influence the rates of change.

Information Technology in the Knowledge Society

Information technology has played a central role in enabling the growth of the knowledge society. In all areas of human intellectual creativity, IT is able to facilitate the analysis and development of ideas and concepts.

Social issues such as ethics, law, policy and sociology must be sorted out, in order to solve issues like universal access, privacy, government jurisdiction

The rapid expansion of knowledge in so many areas during the past 30 years _ such as genetics, medicine, space science and the environment _ would have been impossible without the ability of IT to order and integrate large quantities of data. For example, elucidating the human genome (the complete description of the genes of the human species) is now nearly complete thanks to a combination of biochemical and IT analysis.

Telecommunications and IT also facilitate the creation and operation of global networks of people with particular interests _ commercial, scientific, religious, artistic and so on. As people and organisations become more adept at managing global work, these global networks will further influence all sorts of intellectual, social and commercial activity.

Social Change

Information technology will continue to play a key role in social change during the first few decades of the 21st century, as the knowledge society develops its information infrastructure.

But, as Lucky (1995) has pointed out, although science and technology will enable these developments, their interaction with social factors will determine their immediate usefulness and ultimate effect. This interplay is especially apparent in the current evolution of cyberspace, or the information superhighway. Social issues such as ethics, law, policy and sociology must be sorted out, in order to solve issues like universal access, privacy, government jurisdiction and so forth. Lawyers are just as involved in these cyberspace issues as scientists.

Against this general background we will develop an overview of the interactions between the adoption of IT and its impact on New Zealand society over the next five years. We limit ourselves to this relatively short timeframe because the rate of technological change in IT is so rapid. But our thinking is conditioned by the major trends set in the longer timeframe summarised above. Individually and collectively, New Zealanders must make important strategic decisions during the next five years _ decisions which will have a long-lasting influence on our lives.

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Education and Training

In the knowledge society, education is central to personal, organisational and national well-being. New Zealand's international competitiveness well into the 21st century will be directly related to the educational attainments of its population.

Our attitudes must change. The status of teaching as a career is still quite low

Our attitudes must change. The `tall poppy' syndrome in relation to academic attainment still prevails. The status of teaching as a career is still quite low.

Educational attainments on a life-long basis will be accorded high monetary and social value. Opportunities for distance and global learning will increase and the wider use of skilled specialist teacher resources in interactive distance learning will develop steadily. Training teachers in the use of various IT approaches must be given high priority.

Important strategic policy decisions on education must be taken within the next few years. These decisions must reflect the need to:

• recognise the need to change organisational structures in the public ad private sectors to enable them to deliver learning efficiently in an information society, from pre-school to old age
• Adapt and develop curricula to take advantage of the opportunities afforded by IT to boost creativity, give greater access to information, and improve learning capability
• Retain the best parts of our current educational culture in the quest for high standards of scholastic attainment.

Schools

In a Utopian approach to North American schooling, Dixon (1994) observes that:

"The way to make students sophisticated in technology is to make the school a technologically rich environment. That most children are not fully computer literate long before the end of elementary school is a stunning indictment of the present model of schooling and of the people who run it. In a revitalised school system in which self-propelled, active learning is the norm, training for computer literacy must include competency testing on every aspect of using the current generation of computers and specific remedial and developmental training for those whose test results indicate need. Every student must have a notebook computer that is compatible with the school's computer, and every student must make routine use of living room camcorders, faxes, copiers, phones, and so on. If we want controlled evolution from the present publicly operated schools to computerised publicly operated schools, every nation must create and fund a comprehensive plan that will phase in these changes."

Dixon's `vision' is very prescriptive _ and over emphasises technology for its own sake rather than as a tool to improve all educational goals _ but the twin goals of planning for provision of equipment and for training teachers to use IT in learning will be vital.

The shift from top-down to bottom-up is making a huge difference in teachers' willingness and eagerness to use IT

This is developed further by Andy Reinhardt (1995) who points out that the penetration of technology into the classroom redefines established teacher-learner relationships, with teachers changing from omniscient leaders into tour guides for the `infosphere'. Appropriately used, technology can reduce costs, increase access, boost learning retention rates, and reduce boredom and misbehaviour.

Especially promising are interactive video, networking and collaboration tools; they can spur creative thinking, promote enterprise and arouse curiosity. However, reaping the benefits first requires extensive teacher training, new materials and changes to educational models. Individualised, hands-on learning, teamwork and guided discovery of information will be emphasised. Teachers become facilitators, collaborators and brokers of resources. The networks have the information, but the students need a guide.

In summary, IT technology can result (according to Reinhardt) in:

• More curiosity, creativity and teamwork
• Changed roles for teachers
• The re-emergence of customised teaching and training as given to apprentices or given by tutors (this has always been an effective learning model)
• Reduced intimidation and frustration among students
• Reduced behavioural problems, improved concentration and self-image, and higher retention rates of students
• Access to more information, with guidance given on the selection and management of information
• Breaking down the classroom walls, and integrating home, town and world views.

Why, asks Reinhardt, is such a major change in education happening just now and not earlier? Because:

• Falling system prices and the wider use of networking are making the shift more feasible
• Learning materials are of better quality
• Pressure to implement computers in schools used to come from technology specialists at the district level. Now parents and teachers are saying they need it. The shift from top-down to bottom-up adoption is making a huge difference in teachers' willingness and eagerness to make the leap to using IT
• Many parents work in companies with easily available and sophisticated computer technology. They are starting to ask why schools lag behind, and to force school boards to spend more on technology.

In New Zealand, considerable organisational changes will be necessary in our schools:

• We must ensure that teachers teach well, and are not used as agents for social policies to the detriment of their primary goal
• Gifted teachers must be given high financial and social recognition, because in the internationally competitive knowledge society, they will be national treasures! Teachers need a merit-based salary scale and should be paid on performance - judged by their peers and their `clients' on their ability to teach children how to learn
• All teachers must be well-trained in using IT to raise the quality of teaching - both for content and in helping students acquire knowledge. Colleges and Schools of Education must take the lead in this. IT should also be used to help develop learning skills to extrapolate principles from facts and make deductions _ not just for superficial `trivial pursuits' on a computerised scale.

These trends are already occurring in New Zealand and must be fostered. Examples include the many valuable contributions to the Computers in Schools periodical published by Otago University, and a CD-ROM on Teaching and Learning with IT -Examples from New Zealand Schools (1995, CED Distributors).

Providing IT facilities for schools is a challenge. It is not just a question of the number of computers, but also the age of the equipment, and the availability of modems and telephone or satellite links, as well as operating costs. The rapid rate of change in IT is a problem in relation to the adequacy of school facilities.

Availability of IT in students' homes will be an increasing feature of the educational scene, particularly in rural areas (Perelman, 1995). For most students, home use will complement their use of IT at school and is likely to comprise a substantial portion of their total study time.

Tiffin and Rajasingham (1995) of Victoria University have recently made an important contribution to this debate. Looking beyond 2000, they foresee that the coming together of computer and telecommunications technologies could lead to the `virtual class' as the primary focus of learning in society.

In an information society, the education system will be distance-independent, although classrooms will still exist and learners will switch between a virtual class and a real class. They predict the conventional classroom of the future will be a community classroom for people who live in the same locality and have common interests. Education in a conventional class will be a manifestation more of community than national needs and will emphasise personal and social development. In contrast to this will be the virtual class, which will mirror the way the information society works, with guided access to the best sources of teaching and learning in particular areas.

Tertiary Education

The quality of tertiary education and effective delivery systems will be of prime importance. The sorts of changes required in the American setting are discussed in two papers by Dunn (1994) and Twigg (1994). These papers are summarised below and related to the New Zealand situation.

Students will spend more time learning how to learn and less time studying content

Twigg points out that our definition of learning is changing. A tertiary student at the bachelor level should not aim to master a body of knowledge as a complete preparation for a lifetime career, but should concentrate on acquiring skills in critical thinking, quantitative reasoning, effective communication and finding needed information.

Dunn agrees and summarises general curricula changes as follows:

"First, general education programmes will devote some time to teaching students about the use of technologies in learning. Students will learn about information highways, information utilities, and how to use the equipment available on campus, in homes and in business establishments.

Second, there will be less specialisation by discipline as real-life approaches to the uses of knowledge impact the way education is delivered.

Third, there will be a greater focus on methodologies and access to information in the various fields of study rather than on content. As concepts of just-in-time learning come into play, students will spend more time learning how to learn in their various fields of study and less time studying content that may rapidly become outdated.

High-tech delivery of instruction will range from mainline courses which will become available through television, computer and multimedia delivery. In the more advanced courses, teachers will be able to spend more time in evaluation and analysis of student learning." (Dunn, 1994)

Both Twigg and Dunn regard the present tertiary teaching infrastructure as out-dated. The various highly autonomous institutions are organised according to a teacher-centred model of education, and have self-limiting, faculty-centred curricula and a generally poor quality of student services. Twigg says that:

"our institutions are reminiscent of other kinds of industrial-age organisations such as the factory and the department store _ characterised by size and centralisation _ in contrast to the distributed, networked organisation and mail-order shopping services of the 1990s."

Productivity should be increased as more advanced learning technologies are introduced, quality of teaching may be increased

Twigg considers we need a new national learning infrastructure, in which:

"Institutions of higher education will continue to assist students in organising their learning experiences and in linking them to appropriate international resources. The provision of high-quality student services will move to the top of the list in a learner-centred environment. Institutions will retain their degree-granting authority, determining the learning outcomes required for the degree and certifying that students have achieved them. But an institution's role of providing instruction for its `own' students will be radically different. The role of the physical plant will diminish as networked learning resources become more available. Faculties will continue to be important, but not as teachers: rather as mentors, group project leaders, and designers of instructional experiences. Because of the widespread availability of self-paced learning materials, direct faculty intervention throughout the learning process will lessen."

Dunn agrees, envisaging that over about 15 years there will be an evolution in the US to a national accreditation system focused on learning rather than teaching, that is, on outputs rather than inputs to the educational process. In New Zealand we are well advanced in the development of such a system with the New Zealand Qualifications Authority. Sufficient flexibility must be built into the system to allow for rapid changes in required outputs.

The Survival of Tertiary Institutions

Both Dunn and Twigg see considerable organisational change ahead. Because of loss of constituencies, irrelevance and loss of funding, Dunn considers that many American colleges and universities will close and higher education will emerge as a leaner and meaner industry. He considers the following changes need to be made:

• New leaders, with management training and experience, are needed. They must be prepared to work in market environments, and know about and be prepared to introduce high-tech management philosophies to the organisation
• Each institution will need to focus its work and not attempt to be all things to all people
• Productivity should be increased and higher student/staff ratios achieved as more advanced learning technologies are introduced, with no reduction in quality of teaching - in fact, it may be increased

Instruction must become student and learning oriented, not faculty and teaching oriented

• `Shamrock' organisation structures should be developed, where the core business is surrounded by other organisations which supply necessary services to the core. Only those activities that cannot be done better by another organisation are kept in the core
• Increased endowments must be made through substantial fund-raising
• Universities will have to adapt instructional delivery to a higher productivity, high-technology model.

  "Instruction must become student and learning oriented, not faculty and teaching oriented. Learning will be delivered to students as precision teaching in modules of various lengths, and not in terms of quarter- or semester-long courses. Evaluation and assessment must be personalised with narrative reports describing student mastery of bodies of knowledge. Students must be able to access classes in the modes that best suit their learning style, and place and time needs. Faculty members will become managers of instructional systems using the technologies appropriate to their subjects. Learning will go on throughout the year."

• Greater co-ordination will eliminate duplication and produce considerable savings
• Bureaucracy and operating costs should be reduced and the reductions passed on to clients in terms of reduced tuition fees.

In New Zealand, we face many of the same challenges. We should be able to solve them quickly because of our smaller size and more homogeneous population.

However, we must preserve the environment of lively and creative enquiry, which previously existed in sequestered academia but is now of much wider immediate interest to the community. We must also provide for the smooth uptake of pure and applied knowledge by clients from all sections of commerce, industry and the community at large.

In New Zealand's tertiary institutions the number of graduates per year has doubled over the last 10 years. We need to ask whether this is a case of cramming more students into the old system or a case of using new technologies to provide a better distributed, student/learning centred environment as envisaged by Twigg and Dunn.

Continuing Education

Another feature of the knowledge society is the life-long quest for knowledge, both for work and for recreation. This quest is driven by the pace of technological change, a mobile work force and increasing opportunities for leisure interests.

Separate, centralised training is being replaced by decentralised training, distributed to the desk-top

Andy Reinhardt (1995) observes that with the shift to a knowledge-based economy, workers need to be more flexible and better trained, especially in the use of technology. Organisations are linking learning to productivity _ so-called `just-in-time learning' _ rather than training in advance (see Robert Johansen (1994). Reinhardt describes the New York University School of Continuing Education's Virtual College which since 1992 has offered a small number of courses taught entirely in virtual classrooms. So far it has been used mainly for mid-career training of highly motivated students, but it seems to be a model with enormous potential for lifelong learning.

Industry is faced with the question of how to bring the workforce up to speed. One answer has been bringing information to employees at their workstations _ `training on demand'. The model of training as a separate, centralised department is being replaced by decentralised training services, distributable to the desk-top, and preferably interactive.

Davis and Botkin (1994) argue that the smart products and services being developed and provided will turn companies into educators not only of employees but also of their consumers:

"Consumers as a learning segment are under-estimated: they will be the newest and largest learning segment in the 21st century marketplace. As information technologies become so much friendlier and smarter, and as they become intrinsic to more and more products and services, learning will become a by-product (and by-service) of the customers' world. Never before have customers considered themselves learners and businesses considered themselves educators.

Business, more than government, is instituting the changes in education that are required for the emerging knowledge-based economy. School systems, public and private, are lagging behind the transformation in learning that is evolving outside them, in the private sector at both work and play, with people of all ages. Over the next few decades, the private sector will eclipse the public sector as our predominant educational institution."

Libraries

The future role of the libraries can be compared with the role they played during the industrial age when they were centres of self-education for many people, particularly the working classes. Future libraries are likely to play a very similar role in the knowledge society, particularly in relation to personal access to IT equipment and to the information superhighway.

The Danish IT-Political Action Plan 1995, states that even in the future _ when electronic publications may take over the role of magazines and books to a considerable extent _ libraries must maintain a major intermediate function as providers of published information to all citizens. They must help the public navigate through a rising flood of information.

Libraries must help us navigate through a rising flood of information

Hammond (1994) stated in a paper on the future of public libraries that the sheer volume of information available and the rate of increase of information make it essential that librarians become navigators of the Internet. The major problem facing information-seekers will be where to find the needle in the haystack of information _ a major task for everybody associated with information management in the future.

Librarians will also be able to help judge the validity of electronically published material, as compared with the printed word, evaluating the accuracy, quality and origin of documents published electronically.

Hunt (1995) states that, as a result of the radical changes in the way knowledge is being created, a new role for the librarian is being forged (along with new opportunities) _ one that is more profound, requiring an understanding of the context in which information exists. Librarians will use leading-edge technologies to identify, gather, interpret, filter, manipulate, enhance and deliver information. As more library users become self-sufficient, librarians will provide consultation, evaluation and training to others as necessary.

Archivists, historians and scholars will have a particular problem. Rothenberg (1995) warns about the need to ensure the longevity of digital documents in view of rapid technological changes which quickly make methods of storage obsolete. He points out that the classical Greek script in the Rosetta stone owes its preservation for 22 centuries to the visual impact of its content _ an attribute absent with digital data. To prevent digital documents from being lost, we must preserve them by copying on to new forms of media to ensure their accessibility. This will need ongoing effort to maintain an unbroken chain of data transfer, frequent enough to prevent media from becoming physically unreadable or obsolete before they are copied.

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Work Changes

Knowledge Workers

As New Zealand progresses towards developing a knowledge society, most new jobs will have a high knowledge requirement in particular areas. This applies to all work sectors. As Drucker (1994) has pointed out, the traditional industrial worker has been replaced by a `technologist', someone who works both with their hands and with theoretical knowledge. Examples include computer technicians, x-ray technicians, physical therapists. At the extreme end of such a group are neurosurgeons with very high levels of manual and specialist knowledge skills. In the US, 60% of the workforce are now knowledge workers and eight out of ten new jobs last year were in information-intensive sectors of the economy.

Knowledge workers have specialist knowledge which represents the major asset of the organisations they work for

Managing knowledge workers requires certain structures and relationships:

• Increasingly, knowledge workers will have management skills in addition to their specialist skills. Tertiary students now often take business studies qualifications in association with other specialist qualifications
• Knowledge workers have specialist knowledge which represents the major asset of the organisations they work for
• The management structures required are therefore much flatter and more participatory than the traditionally hierarchical structures of the industrial age. Information about the organisation will be shared across a larger number of employees, with much networking
• Organisations will be smaller (with the break-up of large corporations into autonomous sub-units), to allow efficient operation of the flatter structures. `Virtual companies' will also be created for particular objectives
• Because of the highly individual skills of knowledge workers, individual contracts with employers will often be more appropriate than collective contracts
• There will be opportunities for knowledge workers to start their own small businesses and consultancies. In many cases they will operate wholly or partially from a home office - a situation possible because of IT. Self-employed knowledge workers will form a significant portion of the workforce.

Information Technology and Jobs

Jobs will be both eliminated and created through IT applications in the next five years in New Zealand. In the banking industry, for example, technological changes including `digital money', telephone banking, automated banking machines and smart cards are likely to make bank tellers obsolete and lead to the closure of many branches. Parallel changes can be expected in other service industries, such as insurance and superannuation.

Countries that are the first to introduce new competitive products, are the ones that get the jobs

On the other hand, the emerging information infrastructure can be an important net job creator. As a European Union study (EITO 95) points out, advanced information infrastructures, based on open competition (which New Zealand has), should improve productivity by: lowering telecommunications costs and improving the speed and accuracy of information exchange.

The convergence of various industries around computing and telecommunications will be an important contributor to job creation. Current examples are the creation of initiatives such as telephone based insurance businesses and Lotto (where a completely new entertainment industry has arisen with IT as an essential component). However, the EITO 95 review also points out that employment can be hindered by a lack of flexibility or skill shortage in the labour force.

Some of this rigidity reflects anxieties and uncertainties resulting from rapid and accelerating change, but faster and wider dissemination of information about job openings can help displaced or first-time workers find new jobs. This will create a more positive view of the inevitable social changes. New Zealand's deregulated environment encourages productivity and job growth in new or expanding knowledge industries with a high IT content. One can envisage the further growth of on-line job market services in New Zealand and their extension into the South Pacific.

The Danish Political Action Plan (1995) emphasises that `front-runner countries will get the new jobs' and states that:

"If we are to ensure a sufficient number of new jobs, this means that Danish companies must not only successfully introduce new technology for rationalisation purposes, it certainly also means that they must be able to transform new technology into new products to respond to special customer requirements. But speed is essential and it is of vital importance that action is taken ahead of other countries. Only then will it be possible to successfully enter the world market and, as experience shows, those countries that penetrate the world market, being the first to introduce new competitive products, are also the countries that get the jobs."

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Telework

Teleworking is best defined as a management strategy that enables and supports the performance of work at other than the traditional work place (Bevis England, pers. comm.). Many businesses are likely to adopt such a corporate strategy as they recognise that productivity is increased and costs reduced by a more flexible approach to where work is carried out, whether in remote offices, at home, in telecentres and so on. The term `telecommuting' refers to the use of technology to replace commuting. A US report (1994) by Jonathan Yarmis and Kris Balmer predicts that by 1999, more than 80% of firms will have at least half of their staff engaged in some form of teleworking. Their analysis gives the following data for current applications of teleworking in the US:

• Productivity increases per teleworker (measured by employers) are 10-16%
• Annual savings in facility costs per teleworker, US$3000-5000
• Average time spent in office per teleworker, one day per week
• Average work time increase per teleworker per day, two hours
• Annual corporate investment per teleworker, US$1000-2000
• Telecommunication equipment provided by employer (PC / fax modem / printer etc), US$2000-4000 per set-up. One estimate gives savings per employee at US$6000-12,000 per year due to increased productivity, and lower office space requirements and staff turnover.

Business Week estimated that in April 1995, the number of US teleworkers was 8.5 million. Other countries (Britain, Australia) have similar but smaller trends.

Managerial insights into human resource planning and task design are the keys to the establishment of successful telework practices (England, pers. comm.). The associated technology is of secondary importance and corporate telework initiatives should be careful not to over-invest in IT beyond actual requirements.

Many employers will regard telework with mistrust because of possible uncertainties about the remote `control' of employees. With appropriate mechanisms for accountability and suitable working environments, these problems can be overcome. If a particular job falls properly within telework capability, the greater flexibility it gives employees to integrate work, home and community responsibilities should result in contented, highly productive employees.

Global Work

IT will continue to enable the growth of global work, where large and small organisations operate across national boundaries. This will be especially significant for New Zealand because the historical tyranny of our geographical isolation will no longer be such a disadvantage. In a book on global work, O'Hara-Devereaux and Johansen (1994) point out that the key forces defining the successful global enterprise are:

• Dispersed, collaborative, mutually supporting networks of individuals and teams
• A deep commitment to continual learning about technological and organisational innovation
• A broad and deepening sensitivity to the fundamental role played by our own cultural values and those of others.

The authors identify four critical areas, namely:

• The global consumer. There is an explosive expansion of a middle-class consumer market in regions previously beyond the reach of all but strictly local business interests
• The global corporation: networks of lean machines. Corporations are virtually reinventing themselves through radical downsizing, reorganisation and the technology-enabled creation of worldwide webs of strategic partnerships and alliances
• Global jobs: the fragmented workforce. This phenomenon includes shorter periods of job tenure, new types of employment relationships, and increasing cultural diversity in the work force. Is it possible for employers to maintain the flexibility that comes with fragmentation of the labour force and at the same time maintain highly-skilled, competitive workers?
• Knowledge as a global product. Intangible products - ideas, processes, information _ are taking a growing share of total trade in the information economy's global marketplace from the traditional, tangible goods of the manufacturing economy. But little attention has been given to the magnitude of this trend or its implications.

Policy Trends

Some managers and workers will elect to opt out of these changes and go `local' and `tribal', rather than `global' and `networked'. In some cases, they may be choosing correctly. But for most workers the trends discussed here have a momentum and a logic which will result in widespread adoption.

A recent OECD Review (1995) points out that radical changes in traditional notions of job duration, location and function will pose significant challenges to all segments of society:

"Governments face the task of transforming a wide range of policies, programmes and laws that were modelled on the basis of past patterns of work. From the legal frameworks governing labour relations and workplace safety to the programmes underpinning pension, health and social security systems, policies will need to be significantly overhauled."

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Industry

In this section, we consider the influence IT applications will have on various industrial sectors, with considerable flow-on effects to society in general.

Food and Fibre Industries

New Zealand has developed sophisticated agriculture, forestry and fisheries to produce high quality foods and natural fibre products. In an earlier era, the emphasis was on exporting raw commodities, but these industries have been developed and refined to produce a large variety of products with added value, catering for niche markets in many countries.

Compare pre-war dairy farming with the sophisticated multi-national, biotechnological dairy industry of today

The sophistication extends from growing or catching the animal, plant or fish through to processing and transporting a diverse range of products to discriminating markets.

IT will continue to be of first-order importance in the development of these industries. The improving chains of knowledge and communication between markets and processing factories, farms, forests and the high seas of New Zealand's Economic Zone will facilitate the production of a greater variety of food and fibre products, supplied on a `just-in-time' basis.

Within the industries, IT will permeate production, processing and marketing processes in ways too numerous to mention here, except by example.

It is useful to recall the dairy industry as it was before World War II. Milk was collected in small cans from herds averaging about 40 cows. It was taken to local co-operative dairy factories and converted into butter, cheddar cheese and casein. These commodity products were sold in bulk, mostly to the British market.

Compare that with the sophisticated, multi-national, biotechnological dairy industry of today. Hundreds of individual products are designed for a wide range of world markets _ mostly food products, but also high-value biochemicals for the health industry and even some items for the apparel industry.

IT is an essential part of this.

• Dairy farmers use IT as a management tool on farms (which carry on average about 250 cows) in a variety of ways, from pasture management to monitoring milk production and farm accounts, and to receiving on-line technical and marketing information
• Dairy product processors use highly automated equipment in large regional dairy factories, which are part of an IT network including markets and research back-up support. The markets determine the patterns and quantities of particular products manufactured.

Parallel changes have occurred _ and will continue _ in other food and fibre industries. For example:

• Just-in-time marketing of top-quality fish and meat products to discriminating markets in many countries combines efficient transport technology with state-of-the-art IT
• Efficiencies of saw-milling timber will increase with the general use of computer-analyses of the optimum cuts to make in each log
• The sale of wool at auction will continue to be simplified and automated. Market demand by different end-users can easily be matched with the range of qualities and types produced.

These trends benefit rural societies, despite the considerable personal and cultural adaptations necessary in the short term.

New biologically-based knowledge industries will develop based on genetic engineering and biotechnology, e.g. animal breeding and the production of high-value biochemicals.

Manufacturing

Development and diversification will continue in the manufacturing sector in the next five years.

In areas such as engineering, telecommunications, embedded computer software and boat-building, New Zealand companies will develop in-house designs and innovations for niche markets. Often, these companies will be relatively small.

IT will be an essential ingredient, from the original design concept through to final niche market. These industries will all have a high ratio of knowledge workers. They will form an appreciable proportion of the `high-tech' industries which will blossom in the knowledge era.

Service Industries

Most service industries will change appreciably over the next five years. Telecommunications will show the greatest rate of change, while banking and the financial services group will continue to undergo considerable changes, with the provision of remote services through telebanking and so on. The insurance industry will be similarly affected.

We have commented elsewhere on the likelihood of new patterns in retailing and marketing, due to development of tele-shopping and telemarketing. It seems likely that many customers will prefer to tele-shop for routine purchases, and to shop in person using their discretionary income. Visiting shopping centres is often as much for social and recreational reasons as for serious purchasing.

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Transport

IT and the transport industry interact with one another in a number of ways, which will become more numerous and significant over the next five years.

IT will be favoured as traffic costs and congestion rise

More decentralised patterns of work and education _ including telework, video-conferencing, home shopping, electronic commerce and distance learning _ will have a major effect on transport patterns.

IT will be increasingly favoured as traffic costs and congestion rise, compared with rapidly falling costs of computer and telecommunications equipment and increasing familiarity with IT techniques.

Within the transport industry, IT will continue to increase efficiency and productivity in many ways:

• Microprocessors already improve the efficiency of motor vehicles in a number of ways. Currently they make up about 6% of a car's value. By 2001 the figure is likely to have climbed to 20% as anti-lock brakes, active suspensions and other computer-dependent technologies move into full production
• The operation of motor vehicles will be aided by a varied assortment of IT applications such as collision-avoidance systems and the provision of real-time information on accidents, congestion, routing and other roadside services
• Road, rail, sea and air freight transport will continue to improve their services by IT-mediated inventory control using `just-in-time' philosophies of merchandising.

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Health

Community Health

Probably the greatest community benefits will come from improved community and public health programmes. Because of increasing mobility for commercial, sporting and tourism activities, we need to think increasingly of public health on a global basis.

Medical consultation over a network will lower overall costs in smaller clinics and remote hospitals

La Porte et al. (1995) consider that a global health network should be developed comprising:

• Connectivity of all people engaged in public health work worldwide
• Tele-monitoring of diseases on a global basis to achieve higher standards of public health and prevent the spread of disease
• Establishment of a global health network university to raise public health standards
• Connections between health-related non government organisations such as the Red Cross
• Establishment of a global health network research server designed to replace biomedical research journals
• Training of `cyberdocs' (people trained in both public health and networking).

New Zealand must give top priority to preventive medicine through good public health programmes _ the ambulance at the top of the cliff! (A current example is the production of an interactive disc on `glue-ear' in children.)

Health Care

Intelligently used, IT can greatly improve health care. Higgins (1994) stated, for example, that $1 billion could be carved off New Zealand's annual healthcare costs by using technology for remote consultation and diagnosis. Potential benefits have been demonstrated in the successful operation of a pilot tele-radiology scheme in Northland. Medical consultation over a network will lower overall costs such as the need for expensive diagnostic technology in smaller clinics and remote hospitals.

Efficiency could be improved by establishing an electronic health network with systematic exchange of data between general practitioners, hospitals, pharmacies, municipalities and health authorities (e.g. references to specialists, excerpts of case records, prescriptions etc.). For example, an examination of working hours in a typical Danish county hospital showed that medical and administrative documentation (where IT could improve service and efficiency) make up some 30% of the working hours, while direct patient treatment and care takes up only some 16% of the working hours (Info-Society 2000, 1995).

Medical `smart cards' carried by all citizens are another possibility. These would carry personal medical information. Questions of privacy and confidentiality would be protected, with the information able to be read only by a G.P. or other qualified medical care-giver. It seems likely that most developed countries will have adopted this type of technology by 2000, because of the advantages in terms of speed and accuracy of diagnosis and treatment.

The development of more sophisticated mobile communications will enable mobile GPs to visit patients rather than the reverse, so that minor surgical and other services can be performed at home.

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Entertainment and Leisure

Leisure and entertainment activities will be greatly enriched by various IT applications. The entertainment/leisure market, rather than the business market, is already the main driver for further development of personal computers, and this trend will continue. Many notable IT firms see opportunities in this expanding market.

People will create their own TV programmes

We are already seeing three developments:

• Receipt of a variety of New Zealand and overseas TV channels, with the number likely to increase considerably with the advent of cable TV. People talk about 500 channels and say `What is the point? We don't watch the three we have now!' The point is that:
  • some channels will be for videophone
  • on the main entertainment channels there will be a mixture of `pay-to-view', free broadcast and subscription TV. Programmes will be selected in advance, recorded automatically and retrieved at will
  • on community TV networks, people will create their own programmes, so that TV is not just a passive medium. This is already happening in the networked communities of Pakuranga and New Lynn in Auckland
• Rapid growth in the use of personal computers for games. The sophistication of these games has increased steadily. Buying home computers is more often determined by their capacity to handle the more complex games than by any other criteria
• Increasing use of the Internet by people with particular hobby and leisure interests:
  • gaming will certainly diversify, with the ability to bet via the Internet from the privacy of one's own home
  • publishing on the World-Wide Web will facilitate the exchange of interests and skills with kindred spirits on a global scale.

We are now seeing the cross-linking of these sorts of developments, as a common `multimedia' architecture allows for a range of IT activities to be selected using one array of equipment. This trend will develop rapidly over the next five years and capabilities will steadily increase, accompanied by greater ease of use.

Further development of IT-based training and testing of athletes in the pursuit of sporting excellence will be given impetus by the proximity of the Olympic Games in Australia in the year 2000.

These training/testing programmes will have spin-offs for individual and community recreational sporting and fitness activities.

IT-enhanced tourism will take many forms:

• Virtual reality presentations will allow tourists to `participate' more fully, irrespective of terrain and weather conditions, and will help reduce the effects of over-use of major NZ resort areas
• Interactive networked reservation systems.

Overseas developments are likely to be the major source of inspiration for the NZ leisure/entertainment industries.

The boundary between work and leisure will tend to blur. Leisure interests will often develop into or generate work possibilities and vice versa.

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Empowerment

IT will enable groups and individuals to engage in activities which were previously impracticable. This will benefit individuals, collective productivity and our quality of life.

Our competitive advantage over more crowded and polluted countries will increase

Empowering Communities

New Zealand as a whole is being empowered through rapid developments in IT. The `tyranny of geography' which has kept New Zealand on the outer internationally in various fields _ commercial and cultural _ is increasingly being overcome. Through IT, New Zealand is becoming one of the world's most desirable places to live, with an unparalleled natural environment and no significant disadvantages arising from geography. Our competitive advantage over more crowded and polluted countries elsewhere can only increase during the next five years.

The same argument applies within New Zealand, with its far-flung rural population. IT is providing those living in rural areas with opportunities to diversify their commercial, business and recreational interests. It is increasingly common for a pastoral farmer, horticulturist or fish-farmer to be directly in contact with specialist markets in Europe or Asia through use the of IT. Equally, an increasing number of non-farming businesses are being run from farms or small town locations. As competition develops and new services arise to reduce costs the take-up of Internet in rural areas will increase. Already, Internet providers are offering innovative options such as freephone numbers.

IT offers unique opportunities for ethnic communities to keep their communications and culture strong

These developments will be particularly significant because of the considerable changes likely to occur in farming. The long-term outlook for both beef and sheep industries shows a very low return on investment, but the opportunities for technology-driven increases in productivity and diversification which are possible through IT will be taken up by the wider farming community, particularly in areas with better agricultural land.

IT offers unique opportunities for ethnic communities to keep their communications and culture strong. Many commentators (e.g. Naisbitt, 1994) point out that the more universal we become, the more tribally we act. Minority languages all over the world are achieving a new status as people hold more tightly to their heritage, as ballast to the creation of a larger, more economically homogeneous world. The ease of networking with IT enables all this to take place.

Individuals with disabilities already benefit from the liberating effects of IT

In New Zealand, there are good examples of Maori using IT in this way. Besides the growth in Maori broadcasting, there are also good examples of Maori using the Internet, for example, Te Puni Kokiri's Te Koteo network. IT facilities are well-developed on several marae _ this is a trend which is sure to strengthen and benefit Maori considerably. Tele-learning centres are being established, such as the one in Ruatoria. The use of IT is also strengthening linkages between Maori and overseas indigenous cultures.

These initiatives will develop considerably over the next five years and are important, not only for strengthening Maori culture but for encouraging Maori to develop the skills to enhance their unique contribution to New Zealand's knowledge society. We tend to undervalue the impact and mana Maori culture confers on New Zealand on the world stage.

Because of the ease of producing community TV programmes with one-person crews, neighbourhood stories can be thoroughly covered, leading to a much greater sense of community in areas previously divided by race or economics (Swedlow et al., 1995). "Communications and connections will be reshaped by these sorts of initiatives in ways that will bring unpredictable changes to the landscape of human experience."

Columnist and author Michael Wolff notes that the Internet is about empowerment through information and suggests it will change world culture. Enhanced cultural diversity will be possible through taking advantage of an information infrastructure that easily crosses geographical and national boundaries. The creation of geographically-independent, virtual communities can significantly broaden cultural links.

Empowering Individuals

Individuals with disabilities already benefit from the liberating effects of IT. This will continue to give enormous returns, from both humanitarian and cost-benefit viewpoints.

• Stephen Hawking, afflicted with advanced motor neurone disease, has contributed greatly to astronomy and physics, facilitated by personalised IT aids
• The blind are able to move about with greater confidence, guided by increasingly accurate radar sensors
• The deaf receive hearing aids with improving sound discrimination
• Convalescing patients or those with chronic complaints can live at home and still be monitored for vital functions.

IT will open new horizons for those who are isolated by disabilities

Any isolation suffered by those with disabilities can be lessened with the increasing developments in electronic communications and IT (Info-Society 2000, 1994). They will be able to participate in democratic processes and social activities more easily, and have an enhanced quality of life and better opportunities to exploit their own resources. Using other forms of IT (e.g. IT-based education, telework, access to databases, home banking, home shopping) will make possible active involvement in activities which were previously inaccessible to many.

Aged people will be particularly empowered to lead independent lives of high quality in their own homes thanks to electronically mediated health care and improved communications with friends, family and shops from home. The human and cost-benefit advantages will be large.

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Social Equity

Equitable access to IT developments across all parts of New Zealand society is a real concern. This concern has also been addressed in other countries. The following extract from a Circit Newsletter (1994), commenting on President Clinton's Agenda for Action for the Information Superhighway, is relevant:

"Historically, US telecommunications policy has focused on balancing private firms' business incentives with such public interest objectives as fostering competitive supply and universal service. Agenda for Action says the network will lessen `the constraints of geography, disability and economic status giving all Americans a fair opportunity to go as far as their talents and ambitions will take them.' However, many believe that instead classes of information `haves' and `have-nots' will emerge, as private network operators relentlessly search for ways to economise on resources and for high returns. Economically disadvantaged, rural and high-cost subscribers in the USA, and their counterparts worldwide, could find themselves on the outside looking in at the coming 21st century information cornucopia."

The broadest possible application of IT is the best guarantee that IT will not divide the population into an A-team and a B-team

There is considerable discussion in the USA concerning the need for equity of access by rural and city schools to on-line libraries.

A similar debate is proceeding in the UK, where Tony Blair, the Labour Party leader, has foreshadowed government intervention to ensure equity of access. If his party wins the next election, it will permit British Telecom to start broadcasting entertainment via its telephone lines in some areas from 1998 and nationally by 2002 (The Economist, 18 November, 1995). In return BT would undertake to wire up schools, colleges, libraries, hospitals and homes. Alternatively it is proposed by Britain's telecoms regulator that the definition of "universal service" should be expanded to include connecting all schools with fibre-optic links.

Denmark is moving pro-actively in this area, as seen in two recent publications, the Dybkjaer-Christensen Report (1994) and a Political Action Plan (1995). Strategic emphasis is given to the following factors:

• IT shall support democracy and individual access to influence
• IT shall contribute to personal development at the workplace and at home
• IT shall open up the public sector, making it more transparent and facilitating the delivery of better services
• IT shall be used to support the weak in society
• IT shall strengthen the international competitiveness of Danish companies.

A profound belief is expressed that the broadest possible application of IT is the best guarantee that IT will not contribute to division of the population into an Ateam and a B-team. There should be ready communication across society with computer and telecommunications networks making up a coherent system, as clear and easily accessible for ordinary citizens and companies as the telephone system. The traditional idea of a working life with accompanying demands for working hours etc. must in many ways be thoroughly changed. By effective use of public libraries and through primary and lower secondary education, those Danes who do not have the opportunity to use a computer at work or at home will become familiar with this basic instrument and have access to the information network.

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Privacy, Security and Censorship

In recent years, the suggested use of smart cards in New Zealand, especially in relation to government activities, has led to a negative emotional reaction from many quarters. As summarised in the Danish report From Vision to Action (1995):

"There is a risk that IT will lead to a `Big Brother' society putting the individual citizen under central surveillance and showing clear features of dehumanisation. A number of years ago, this was a great concern of many people. But after more than 25 years of experience with increasing computerisation of the Danish society, DANKORT payment cards, CPR (Central National Register) numbers etc, it must be concluded that the horror visions seen by some did not come true. We have developed a degree of experience and maturity enabling us to prevent or tackle problems, provided that we are constantly aware of possible risks and that we make a conscious effort to deal with them."

Rather than IT leading to a `big brother' society, it is more likely to result in the reverse, leading to more accountable services with greater transparency

It seems fairly certain that the initial reactions in New Zealand society against the storage of personal data on central registries and on smart cards will subside as the issues are carefully discussed, and with the reassurance that adequate safeguards concerning personal information are in place.

The most important reassuring factors will be:

• Increasing familiarity of the New Zealand population with IT
• Adoption of `smart-card' technology in various parts of the private sector such as tele-shopping, telecommunications and tele-banking. This is likely to be widespread within five years
• Freedom to decide whether to have a card or not
• Provable benefits accruable to the holder
• Penalties against those abusing privacy and security requirements.

This will naturally lead to popular demand for equally efficient, productive and transparent services from organisations such as health and social welfare services. Rather than IT leading to a `big brother' society, it is more likely to result in the reverse, leading to more accountable services with greater transparency. Failure to provide such services in the public sector will often result in the movement of services from the public to the private sector.

The case for the government sector in New Zealand to provide such services has been well argued by Prebble (1990a and 1990b) in two complementary publications. One examines the notion of redistribution as a whole, rather than thinking of taxation and benefit payouts separately, and also examines the privacy issues involved. The other examines the feasibility of using smart cards for various data and transaction processes.

Governments will need to take pro-active stances in instructing rather than legislating

Security and censorship issues will also be important in relation to the Internet. The growth of commercial transactions over the Internet has slowed, awaiting security being put in place. However, recent announcements by Mastercard and VISA suggest that this problem will soon be resolved.

Technology and censorship are often seen as opposing forces in the information age. Current thinking suggests it is almost impossible to control information without at the same time curtailing some of the benefits.

Ang and Naidarajan (1995) discuss how this tension is exemplified in Singapore, where censorship is being justified on historical and political grounds. Both the government and the people want it, favouring caution and prevention over liberalism. However, censorship of material on the Internet is proving very difficult.

New Zealand censorship practice is generally more liberal than that of Singapore. Even so, possession of certain kinds of material is an offence under the Film, Videos and Publications Classification Act (1993). Chief Censor Kathryn Paterson said that downloading or disseminating `objectionable' material _ this term is defined in law and refers only to what most would regard as extreme pornography _ is unlawful. However, merely viewing pornography through the Internet is less likely to be an offence.

Ashton (1995) considers that modern technology and the information superhighway may have a positive impact upon humanity and rejects a conservative approach. With regard to the Internet, he points out that since it is an international broadcast medium, governments around the world will need to act together for the first time if they wish to institute regulations similar to those which have until now been their preserve as nation-states. In most, if not all, situations this is probably impracticable. Therefore he believes that, in future, with legislative deterrents of limited effect in a worldwide communications environment, much greater emphasis may need to be placed on educational deterrents. Governments will need to take pro-active stances in instructing rather than legislating.

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International Competitiveness

New Zealand is participating in a race with other nations to apply information and other technologies in order to maintain a competitive edge as a highly productive nation.

If we do not compete in the knowledge race with the same determination we show in sport, we will not get our share of the new jobs

We should regard it with the same seriousness we attach to our international competitiveness in sports such as rugby, cricket, America's Cup yachting and tennis.

There is no doubt that if we do not participate in this race with the same enthusiasm we show for sport, New Zealand will not gain a sufficient share of the new jobs being created internationally. This will adversely affect our standard and quality of living and we will also miss out culturally and strategically.

Policy Issues

Drucker (1994) identified three key policy areas for the knowledge society.

First, we must develop a coherent education policy, considering its purpose, values and content. This is a policy area where decisions will be made at various levels on a continuing basis _ by government, educational institutions, corporations, ethnic groups and individuals. At various levels of society, decisions promoting excellence and competitiveness will need to be made.

Drucker also notes that we will have to define more analytically the quality and productivity of education and find ways to measure both. Overall, educational goals must be well rounded and not focused too narrowly on specific technological areas.

Secondly, we need systematic work on defining the quality and productivity of knowledge _ which has not been done so far. The competitive performance of organisations _ large and small _ will depend on how effectively they grapple with these factors and can analyse them in relation to their own circumstances and opportunities.

Thirdly, we need to develop an economic theory appropriate to a world economy in which knowledge is the key economic resource and the dominant source of comparative advantage. Current economic theory is already badly flawed. It fails to deal adequately with major issues such as unpaid work and environmental values. Drucker believes that, because knowledge will be the dominant economic determinant, valuing knowledge requires new theoretical approaches. This must be a task of top international priority.

Marshalling as much IT-skilled brainpower as we can from all strata of society needs to be a prime national strategy

Ensuring maximum access to IT has been discussed in relation to social equity. Maximising the IT skills of the whole population is an important part of making New Zealand competitive in knowledge-based industries. Social equity in IT use is important in itself, but marshalling as much IT-skilled brainpower as we can from all strata of society needs to be a prime national strategy in relation to competitiveness.

All New Zealand organisations _ both private and public_ must put in place policies of constantly increasing productivity through applying new knowledge, usually through IT. These issues are well expressed in the American corporate context, in a recent article by Christopher Farrell and associates (1995). They consider that the US economy is now more productive and competitive than it has been for three decades, and state:

"The economy's productivity expansion follows a long gestation, which is hardly surprising. Whenever a new technology such as computers is introduced into an economy or workplace, productivity falters as workers and managers struggle to master unfamiliar skills. Learning how to exploit a frontier technology takes years of experimentation and organisational reshuffling. Over time, both management and labour move up the `experience curve.' At the same time, innovations make the technology easier to use, and falling prices speed the diffusion of this new technology. The pay-off: higher productivity."

Performance Indicators

A variety of measures can be envisaged for monitoring progress in the application of IT in New Zealand society, compared with other countries. New Zealanders are enthusiastically adopting two key technologies, namely `information networks' (especially the Internet) and personal computers.

• New Zealand is at the forefront of countries entering into the global Internet computer network. Measured on the number of computers connected directly to the Internet, per 1000 people, New Zealand is in fifth place behind Iceland, Finland, the US and Norway (Jackson, 1995) and New Zealand companies are joining the Internet at a compounding growth rate of 18% a month
• According to Metro magazine, in 1990, New Zealanders bought 64,000 personal computers. In 1994, they bought 230,000. The industry is expected to grow by about 25% per annum for the next five years. Certainly the 35% penetration rate which usually defines `mass market' should be within reach
• The New Zealand adoption of cellular phones is very rapid compared with other countries, with over 100 cellphones per 1,000 population
• Only in cable TV does New Zealand appear to lag behind many other developed countries, probably reflecting the small, dispersed population.

Nuala Beck (1995) has developed some measures for spotting growth in the knowledge economy. The most important is called the knowledge ratio, which is the percentage of knowledge workers to total workers in an industry or individual company. She finds that knowledge-intensive industries have a ratio of at least 40%. She claims that the knowledge ratio and other measures have helped her spot the beginning of the next era of the economy _ the new engineering era _ driven by genetic engineering, biotechnology and artificial intelligence.

It will be important to assess New Zealand industries for their knowledge ratios and to encourage the growth and development of industries with high knowledge ratios. It is interesting that two of the areas which Beck has emphasised _ genetic engineering and biotechnology _ are areas in which New Zealand already possesses considerable scientific and commercial strength, mainly because of our past emphasis on biologically-based industries _ agriculture, forestry and fishing. Our medical science is also of internationally high calibre.

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What it all Means for New Zealand Society

In the next five years, IT developments with a large social impact on New Zealanders will include:

• Growth and rationalisation of the information superhighway and of multimedia communications, with the development of electronic commerce and on-line shopping and with dramatic effects on education
• A diversity of `intelligent' home appliances and services
• Videophoning and mobile communications
• Near-universal use of smart cards for shopping and basic banking, and widespread use for other services such as health care.

Policies at all levels (government, organisational and individual) should aim to encourage the prudent uptake and evaluation of the various IT innovations so that they are used to best advantage.

Education

The emphasis on lifelong learning will have a profound social impact.

There should be considerable progress in developing a national learning infrastructure. Changes will include widespread use by school pupils in the classroom and at home of high-quality teaching materials developed for use with IT.

Government will need to encourage the development of national learning infrastructures in each of the primary, secondary and tertiary stages of education _ distributed networks, with appropriate degrees of autonomy at each node of the network. The tertiary learning infrastructure must provide for lifelong access by knowledge workers to re-training and updating. The private sector will become increasingly involved in providing education and training. Individuals will need to give top priority to achieving quality education and training on an on-going basis.

With the development of the `information highway', libraries will maintain a major intermediate function as providers of and guides to large amounts of published information. This service should be available to all citizens.

As an educational asset and an aid to maintaining international competitiveness, it is in the nation's best interests that libraries be funded to take a pro-active role in guiding people through the information maze.

Work

The changing nature of work will also have a large social impact.

Knowledge workers will use networked IT as an indispensable tool. They will be managed (or manage themselves) in flatter, more participatory systems in smaller units with considerable autonomy. There will be greater flexibility and mobility in work opportunities, including larger numbers of teleworkers and self-employed and greater access to work for those with disabilities. New Zealanders will increasingly work globally, learning particular communication and cultural skills.

Government will need to transform a wide range of policies, programmes and laws modelled on the basis of past patterns of work, in the areas of labour relations, workplace safety, pensions, health and social security. Organisations will flourish or falter depending on their ability to respond to the changing environment. Individuals will need to be responsive to the changing opportunities for work and the likelihood of several different jobs in a working career.

Our agricultural, horticultural, forestry and fisheries industries will continue their evolution as `knowledge' industries, producing a wide range of high-quality, high-value food and fibre products for niche markets world-wide. Globally networked IT will be indispensable in the production, processing and marketing tasks. New knowledge industries, based on genetic engineering, biotechnology, and environmental tourism will develop. The social effects will be generally beneficial for rural societies.

High tech manufacturing enterprises - often small scale - will continue to multiply and develop.

IT will be the main driver of change in most of the service industries _ telecommunications, banking, insurance, retailing and marketing, health, transport, and the leisure and entertainment industries. All these changes will have beneficial social impacts, through improving the range of services available, and the convenience, speed and efficiency of delivery of services.

The policy in each industry sector must be to add knowledge and information to the various operations so that the products or services are top quality and focused on the requirements of particular markets, customers or clients. The same general philosophy applies throughout both public and private sectors.

Transport, Health and Entertainment

IT will reduce transport requirements by promoting more decentralised ways of working, learning and carrying out various transactions. It will also continue to improve transport efficiencies.

Because transport is such an important component in the national economy and also has environmental quality aspects, the roles IT can play in rationalising transport and improving efficiencies will be major policy issues for government, organisations and individuals.

IT will lift standards of global preventive medicine and public health greatly, through better, faster communication of information and new methods of health worker training. The efficient networking of patient medical data among the various care-givers will improve patient care in terms of diagnosis, treatment and best use of resources. It is probably only a matter of time before all who want the benefit of rapid treatment anywhere will carry a `smart' card containing significant medical information.

As with education, there should be evolution towards a national health delivery infrastructure, based on a distributed health information network, and incorporating all public and private sector activities. Individuals will utilise more and more the personalised health services which will become available through IT, especially when travelling.

Entertainment and leisure industries will grow rapidly. Through multimedia applications, IT will play a major role in facilitating hobby and sports interests and in providing recreational entertainment and relaxation, both interactively and passively

The social changes which will evolve through the ability of individuals to watch and even participate in various interests and events on a global scale will be significant for governments, communities, organisations and individuals.

Social Issues

IT is already empowering various groups within society and this trend will accelerate as more people make use of the opportunities, for example those living in rural areas and ethnic communities.

Individuals, such as the aged and disabled, are already empowered through IT and will increasingly be able to have a quality of life which would otherwise be unattainable.

The improved quality of life and greater opportunities IT offers various groups in society will be significant and should lead to a greater social cohesion and national sense of purpose.

Policy initiatives will be necessary to ensure that there is the broadest possible application of and access to IT within society, so that it does not contribute to divisiveness. These initiatives should also help to increase international competitiveness.

During the next five years, public confidence will grow in the safe and secure use of IT for commercial and financial transactions in New Zealand and for the transmission of personal confidential information.

To ensure privacy and security, sound guidelines and mechanisms must be set in place and adhered to. Regarding censorship, government will probably need to be pro-active in education as legislation becomes less feasible as the public gets ready access to a global information system.

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International Competitiveness

New Zealand is doing moderately well in the race between nations to become internationally competitive in the knowledge era. As the competition intensifies, the next five years will be very important. Our rates of adoption of various IT applications and our balanced appreciation of associated issues will be vital factors. If we perform poorly, our quality of life will be adversely affected.

Government policies in the fields discussed above will significantly affect the outcome. A policy of encouraging wide public discussion and appreciation of the issues will be important.

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References

Information Technology

Gates, Bill (1995) The Road Ahead, Viking, p 91

Roche, Edward M. (1995) Business value of electronic commerce over interoperable networks, available via download through Commerce Net web server (http://www.commerce.net)

Sherman, S, (1994) Will the information superhighway be the death of retailing? No way. But get ready to do a whole lot of shopping on-line as interactive merchandising booms.Fortune, 18 April 1994, 56 _ 63

Knowledge Society

Drucker, Peter F. (1994) The Age of Social TransformationThe Atlantic Monthly. November pp. 53-80

Lucky, Robert W. (1995) What Technology Alone Cannot Do, Scientific American, September, pp164-5

O'Hara-Devereux, Mary & Robert Johansen (1994) Global Work _ Bridging Distance, Culture and Time. Jossey-Bass, San Francisco, 1994

Microsoft White Paper (1995) Creating the Global Information Society. Looking Ahead

Negroponte, Nicholas (1995) Being Digital, Hodder & Stoughton

Work Changes

England, Bevis. Work Raft. P.O. Box 118, Albany, New Zealand. Fax 09 473 1201

Highlights of the OECD Future Studies Information Base (1995) The future of work: towards jobless employment? Number 12, November 1995

O'Hara-Devereaux, Mary and Robert Johansen, op.cit.

Yarmis, Jonathan and Kris Balmer (1994) Portrait of a telecommuter: telecommuting changes work habits. Gartner Group

Education and Training

Davis, Stan and Jim Botkin (1994) The coming of knowledge-based business. Harvard Business Review. Sept /Oct pp.165 _ 170

Dixon, R.G. Des (1994) Future schools _ and how to get there. Phi Delta Kappan 75, pp.360-5

Dunn, Samuel S. (1994) The challenge of the nineties in U.S. higher education: from Camelot to the 21st century. Futures Research Quarterly Fall. p35

Perelman, Lewis J. (1993) School's out: public education obstructs the future. Wired (Premiere issue)

Johansen, Robert et al. (1994) Upsizing the individual in the downsized organisation. Addison-Wesley

Reinhardt, Andy (1995) New ways to learn. Byte, March 51 _ 74

Tiffin, John and Lalita Rajasingham (1995) In search of the virtual class. Education in an information society. Routledge. London and New York

Twigg, Carol A. (1994) The need for a national learning infrastructure. Educom Review 29, Numbers 4, 5, 6

Libraries

Hammond Reg (1994) The Public Library in the Future _ Are We Relevant? IT Policy Unit, Ministry of Commerce

Hunt, Patrick J. (1995) Interpreters as well as gatherers. The Librarian of Tomorrow ... Today Special Libraries, Summer 1995, pp.195-204

Ministry of Research and Information Technology, Denmark (1995). From Vision to Action Info-Society 2000, Statement to Parliament and IT Political Action Plan, 1995

Rothenburg, Jeff (1995) Ensuring the longevity of digital documentsScientific American, January pp. 24-29

Industry

NZ Futures Trust (1993) Economics and Trade.Future Times Issue No 2

NZ Futures Trust (1993) The Future of New Zealand's Trade.Future Times Issue No 4. pp.18-20

Tradenz (1993) Stretching for Growth

Transport

Butler, G.W. (1993) Transport and trade 1993 _ 2020, standpoint through to 2020 have been reviewed by Butler from a New Zealand standpoint. Future Times. Issue No. 4

Health

Higgins, J. (1994) Management August, p.23

Info-Society 2000 (1995) p.51 Ministry of Research, Denmark

La Porte et al. (1995) Inet vol. 2, pp.1027-9

Empowerment

Naisbitt, John (1994). The Global Paradox Allen & Unwin

Wolff, Michael (1995) Investor's Business Daily 21 September, 1995 A8

Swedlow, Joel L. (1995) Information Revolution. National Geographic Vol. 188 No. 4, October 1995. 4 _ p37

Social Equity

Circit Newsletter (1994) 6 (No. 1) p.3 `Agenda for Action' and the national information structure

Dynkjaer, Lone and Søren Christensen (1994) Info-Society 2000, Ministry of Research, Denmark, November

New York Times, (1995). Information `Have Nots' , Editorial 19 September

The Economist (1995) Telecoms policy. School daze. 18 November

Ministry of Research and IT, Denmark, (1995) From Vision to Action. Info-Society 2000 A Political Action Plan. March

Privacy, Security and Censorship

Ang, Peng Hua and Nadarajan, Berlinda (1995). Censorship and the Internet: A Singapore perspective. Proc. INET 95 pp.693-699

Ashton, Alan C. (1995) The social impact of new technology. Submission to National and State Governments. Word Perfect Corporation

Paterson, Kathryn (1995) Pulling the plug: Inform on line. Volume II No. 2, June 1995. See http://www.dia.govt.nz

Prebble, Mark (1990a) Information, privacy and the welfare state. Wellington. Institute of Policy Studies

Prebble, Mark (1990b) Integrated circuit cards: Is it smart to use a smart card?

International Competitiveness

Beck, Nuala (1995) Shifting Gears: Thriving in the New Economy. Harper Collins

MetroBit Players. September 1995 p.78

Farrell, Christopher et al. (1995) Riding High. Corporate America now has an edge over its global rivals. Business Week 16 October, pp.38-44

Jackson, Colin (1995) Sizing the Internet in New Zealand. Commerce Ministry. See http://www.govt.nz

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Acknowledgements

This report has been written by Dr Graham Butler of the New Zealand Futures Trust on behalf of The Information Technology Advisory Group and the Information Technology Association of New Zealand.

Copyright Notice

Reproduction of this report is permitted in whole or in part on the understanding that the source is acknowledged.

The author would like to acknowledge the help and assistance provided by: Jo Burnham, New Zealand Futures Trust; Neil Butler, Optimation New Zealand Ltd; Elmar Gailits, International Technology Group; Reg Hammond, Colin Jackson and Andrew Mulcahy, Ministry of Commerce; Mark Fowler, IBM Ltd; Norm Hosken, Teamwork Holdings Ltd; Tony Tait, ITANZ; Alick Wilson, Azimuth Consulting Limited; and Laurence Zwimpfer, Telecom New Zealand Ltd.

Printed by: Communication Arts Wellington Ltd

ISBN 0-473-03650-9