Market Information - PEST Analysis
Political:
As one of the few countries that could realistically be described as an 'Information-Economy' it is vital that everyone can be involved in what could be a flagship state within the global economy.
The UK Government has set itself the target of becoming "the best environment in the world to do e-commerce" (DTI, 1998 White Paper, “Our Competitive Future: Building the Knowledge-Driven Economy”). The government recognises the immense potential of the Internet as more than just an enormous global library. The Internet could offer opportunities for all, providing resources and enhanced communications. In addition, access to information previously out of reach for many is now available in a virtual world. There is also the not insignificant potential for change in public services facilitating cheaper and more efficient services.
Tony Blair is committed to 'e-government', and Ian Watmore (Whitehall's Chief Information Officer) has said that he is more interested in getting people to use e-services than in dogmatically ensuring that every single service goes online. "What we want to do next is to get a high take-up and high impact of services that really matter and which touch people's lives." Central Government are committed to, “assisting local government to achieve 100% capability in electronic delivery of priority services by 2005, in ways that customers will use."
This question from Peter Blair of the ODPM is perhaps indicative of the political importance of ICT in the short to medium term, "Gemeinschaft vs Gesellschaft - if we can close the interrelation of state and community through technology, can the organization and order of local life and culture be reborn?" Such fundamental questions highlight the relative importance placed on ICT by government.
Economic:
It is often argued that we are living in the era of the 'Knowledge-Based' or 'Information' economy - yet little is known about what this actually means. The OECD state, "There is a clear trend in the OECD area towards a knowledge-based economy" but what does this actually mean? Apparently, "As a range of new indicators show, the knowledge-intensity of OECD economies is increasing. Investment in knowledge, particularly in R&D and software, is rising, as is investment in ICT."
The diffusion of information and communications technology is a key enabler of the knowledge-based economy. As the OECD show, "Access to ICT has grown rapidly over the past years. Internet technologies are diffusing very rapidly."
One of the surest planks in Labour's industrial policy has long been the primacy of the "knowledge-driven economy". The mantra has been consistent: in the old economy commercial value was generated by capital assets, whereas the new economy of the information age credits knowledge, creativity and enterprise. A company's wealth does not lie in land, factories or hardware - but in the skills and vision of its workforce. When developing countries, paying low wages, can produce goods cheaper than any British manufacturing firm, our only hope for economic survival lies in high-value, knowledge-based industries, which compete on brand loyalty and technology rather than cost. As this shows, knowledge and information based technologies are seen as key to our success within the global economy.
According to the Bank of England, "The internet lowers search costs, reduces barriers to entry and helps shorten the supply chain. These features should help boost productivity, lower profit margins and help cut the equilibrium rate of unemployment (NAIRU)." - So, according to our most influential economic institution, the Internet and ICT will play a key role in the economic future of the UK.
Bringing it closer to home, these same issues are identified by the Suffolk Development Agency in their document Expanding Suffolks Horizons: 2004-7. "Increasingly, Suffolk's businesses cannot compete on the basis of cost cutting for production costs are high in comparison to other countries... Suffolk's businesses need to compete on the basis of skills and know-how. Therefore efforts to build a knowledge economy must be central to the strategy."
Social:
While mainstream industry and government focuses on the individual, home and business ownership and use of new ICTs there is a quiet revolution going on as computers and all their applications from games to the Internet move into public spaces. Internet Cafes are not only sites for technical access, and for consumption and use of multimedia content and services, but public, physical, community and cultural spaces.
Internet Cafes may service and reflect the communication and information needs of people living in a global society, but they place this in a local context, providing a social space and a convenient and hospitable location for technology access: the ‘human face’ of the information society. The Internet Cafe can act as a gateway or portal between a local community, represented by individuals and formal and informal groups, and on-line communities and individuals.
There is a growing body of work which examines the way that the use of network technology affects or might affect contemporary life. Much includes ideas such as electronic commerce and government, exclusion and inclusion, and virtual communities. However there is often little interest in the points where IT use becomes public. This is reinforced by a dominant paradigm, supported by industry, of individual ownership, and individual use of multimedia and the Internet. However, surveys show that many people access the Internet in public spaces (16% in US, Spring 1998, 24% in UK survey, The Guardian, Summer 1998). The huge uptake of free web based e-mail accounts also indicates that many people do not have their own Internet access, or frequently access their e-mail away from their own computer.
While most cafes have to operate in the market, they are also social centres: they often offer a focus for a particular social group, or geographical community. The cafe is more than the physical space or the products it serves, it is the people who use it and work in it: a cafe is successful when it attracts customers back. Not that the physical aspect are not important - the decor, the drinks the games etc., but they are there to mediate, facilitate and lubricate the experience and activities of people.
Internet Cafes are more than just technology access centres, they are also cafes in the traditional sense - they are public spaces where many age-old activities can be conducted, but mediated by modern technology. These can be social and personal uses, but they are not new activities. In contrast to the dominant trend, computers do not have to be kept in private or in formal premises; they can be public and informal.
Internet Cafes are also points of individual learning, the informal atmosphere makes it easier to learn, and to experiment. They are the ‘human face’ of computers and the Internet, technologies and services that are frightening to many people. Local, cheap, community access, seeing other people using multimedia, and non-expert help can all act as a trigger to bring someone across the ‘use threshold’. The technology itself, fast changing and new, needs this informal space in order to be appropriated and domesticated into community life.
More speculatively, Internet Cafes are more than an extension of existing cafes, they are community centres that bring together a wider range of people doing a wider range of activities than most cafes or other public venues. Local communities are fragmented and divided; Internet Cafes, by appealing to a broad range of users, and being more than casual centres of consumption, such as shops, create contact between customers that can form social, learning and sharing relationships around the use of technology and consumption of different media. They also allow communities to project themselves in ‘cyberspace’, and allow people to interact on global networks as part of a local community, rather than as isolated individuals. Internet Cafes are community centres for the 21st century. (Cafematics: the cyber cafe and the community, 2004, Stewart)
Placing this in a local context, Mid Suffolk is a predominantly rural area with approximately 75% of its residents living in villages. Despite having the fastest growing population in Suffolk, there is a decline in the number of young people. This represents a threat to the long-term sustainability of rural communities. This decline in young people is, in part, attributable to the lack of learning opportunities (no University in the county), and a lack of access to modern services and amenities.
Unemployment in Mid Suffolk is low, but average wage levels are also relatively poor, and much of the existing employment is in areas that are in decline, such as agriculture and food processing. One of the reasons that people look outside of the District for employment is the lack of new job opportunities, which is a reflection of the low level of new business starts. Unless people can live and work in the countryside, the sustainability of the rural economy is at risk (MSDC Community Strategy, 2004).
The internet helps to decentralise, lessening the attractive draw of cosmopolitan cities. Social spaces, that are in tune with 21st century ambitions, are one means of helping rural areas enhance their attractiveness to young adults.
Technological:
The nature of the computer industry has always been one of rapid change and with the evolution of the internet the pace of change has become even more rapid. Coupled with the relatively high costs of production of computer hardware this has meant that expensive equipment is out of date quickly, making it difficult for the average home user to keep up-to-date with the cutting edge of ICT.
Broadband access in the UK is becoming more widespread. This 'always on' connectivity has helped to realise the internet as a true virtual world. This means that the internet is fusing with all aspects of everyday life. Publicly accessible ICT could play a part in bridging the gap to enable a fully integrated technological future.
Increasingly, some services are only available online, or are cheaper online. A specific example from local government highlights the point. The Local Plan used to be available for the public to buy, at a cost of £100. Since being made available online (for free), people can only now get copies of it, not as a whole, but at a cost of £5 per A4 photocopy. This means that while it's a huge step forward that it is accessible at no cost online, availability has been reduced for those without access to the Internet. Hence, the gap between those with access to ICT and those without, widens.
In September 2004, the Pew Internet Project conducted research titled, "The Future of the Internet: In a survey, technology experts and scholars evaluate where the network is headed in the next ten years". The results highlighted a variety of directions and expectations. Firstly, there was little disagreement among experts that broadband adoption will grow and that broadband speeds will improve. Nor was there much doubt that vastly more people and objects would be linked online in the next decade. Experts envision benefits ranging from the ease and convenience of accessing information to changed workplace arrangements and relationships. At the same time, a majority of experts agreed that the level of surveillance by governments and businesses will grow. Some of the results of this research show that:
57% of them agreed that virtual classes will become more widespread in formal education and that students might at least occasionally be grouped with others who share their interests and skills, rather than by age.
56% of them agreed that as telecommuting and home-schooling expand, the boundary between work and leisure will diminish and family dynamics will change because of that.
At the same time, there were notable disagreements among experts about whether internet use would foment a rise in religious and political extremist groups, whether internet use would usher in more participation in civic organizations, whether the widespread adoption of technology in the health system would ameliorate the most knotty problems in the system such as rising costs and medical errors, and whether internet use would help people expand their social networks.
The experts are startled that educational institutions have changed so little, despite widespread expectation a decade ago that schools would be quick to embrace change. They are unhappy that gaps exist in internet access for many groups – those with low income, those with lower levels of educational attainment, and those in rural areas. And they still think there is a long way to go before political institutions will benefit from the internet. This is particularly worrying in the context of a common prediction, that “Government will be forced to become increasingly transparent, accessible over the Net, and almost impenetrable if you're not on the Net.”