Government Should Act Now To Unlock The Potential Of The Digital Economy Or Risk Damaging Consequences

A report released today by think-tank Forum for the Future calls on the Government to seize the social and environmental opportunities created by the internet and e-commerce. With the right blend of policy and incentives, the new economy could become cleaner, greener and more socially inclusive than then old. But without concerted action now, we run the risk of problems in the future from increased social exclusion, to streets jammed with half-empty delivery vans and a substantial growth in air freight.

The report, which is the culmination of the year-long Digital Futures inquiry into the impacts of e-commerce on society and the environment, calls on Andrew Pinder, the new e-Envoy, to put social and environmental innovation at the heart of government e-policy.

The report sets out 10 'dot-commandments' for a sustainable digital economy and a series of detailed supporting recommendations. Recommendations to Government include:

• The Government should invest a share of its new economy windfalls (for example, from the auctioning of spectrum licenses) into a social venture fund for projects which use internet technologies to promote social cohesion and improve quality of life.
• The Government has pledged 'to make the UK the best environment in the world for e-commerce'. As part of its commitment to environmental sustainability, it should set an additional target: 'to make UK e-commerce the best in the world for the environment.'
• Government should provide assistance for the development of the world's first 'ecobot' a search engine capable of locating products and services on the basis of their environmental or ethical performance.
• Regional Development Agencies should develop a template for 'sustainable e-Regions' to integrate policy on e-commerce, social inclusion and environmental protection.

The report also recognises that business has a central role to play. Among the recommendations are:

• We need to join the dots - dot-coms, dot-govs and dot-orgs need to share ideas and work together to embed sustainability in every area of the new economy.
• E-business should become a trailblazing sector for environmental and social reporting, by pioneering new online techniques. Using the latest e-technologies, progressive dot-coms could leapfrog the old economy world of dull, two-dimensional reports, and set new standards for real-time, multimedia reporting and stakeholder dialogue.
• E-tailers should share storage and distribution facilities to reduce the demand for warehouse space and cut unnecessary van movements.

Forum for the Future today also announced the launch of Digital Europe, a 1631 million follow up project supported by the European Commission and corporate sponsors including Vodafone and Sun Microsystems. Digital Europe will apply the lessons learned from Digital Futures at a pan-European level by studying the environmental and social impacts of e-business in eight sectors: financial services, music, pulp & paper, food retailing, auto-manufacture, books, PCs and second-hand goods. The project will be run in conjunction with the Wuppertal Institute in Germany and Foundazione Eni Enrico Mattei in Italy.

Patricia Hewitt, e-Minister, DTI, said in response to the report: I would like to congratulate the Digital Futures consortium for producing such a challenging and thought-provoking report. It represents a significant step forward in our understanding of the environmental and social opportunities of the knowledge-driven economy. The findings are challenging, and in some cases they are not what we might have expected. Government is already doing a great deal to tackle the digital divide. On the environmental side, the debate is less well developed, but as this report shows, there is real potential to use the internet and e-commerce to improve resource productivity and reduce traffic congestion

James Wilsdon, Senior Policy Adviser at Forum for the Future, said "unlike traditional sectors, e-business is uniquely well-placed to incorporate environmental and social concerns at the design stage. With a mixture of vision, imagination and intelligent policy, it should be possible to splice sustainability into the DNA of the digital economy."

Wilsdon added: "Taking up the sustainability challenge requires creativity, innovation and alliance-building. It requires a different way of thinking. But this is what e-businesses are so good at. We need to channel their dynamism and creativity for the benefit of all: to turn the new economy into a force not just for economic good, but for social and environmental good too."

The Digital Futures inquiry was launched by Patricia Hewitt in February 2000. During the course of the year, three government departments, eight think-tanks and fourteen companies, have worked together to better understand the social and environmental opportunities of the new economy. The full research reports have been published as a book - Digital Futures: living in a dot-com world (Earthscan, March 2001) and are summarised in Digital Futures: an agenda for a sustainable digital economy (Forum for the Future, March 2001).

The book will be launched and full findings announced at a conference on 1 March where speakers will include Patricia Hewitt (e-Minister), Michael Meacher (Minister for the Environment), Brian Eno (musician and artist), Shanker Trivedi (UK Vice President, Sun Microsystems), Martha Lane Fox (lastminute.com) and Jonathan Porritt (Forum for the Future).

Technical details

Digital Futures involves a consortium of government departments, companies, NGOs and think-tanks:

• Government partners include the DTI, ODPM (DTLR) and the Cabinet Office.
• Corporate partners include Amazon.co.uk, AOL UK, BT, BP, Ericsson, Kingfisher, The Post Office, NatWest, Nationwide Building Society, Royal & SunAlliance, Sun Microsystems, Unilever and WH Smith.
• Participating think-tanks include Demos, Forum for the Future, Green Alliance, Local Futures Group, New Economics Foundation, SPRU Science and Technology Policy Research, Town and Country Planning Association, UK CEED and University of Bradford.

Digital Futures is co-ordinated by the think-tank Forum for the Future. Founded in 1996 by three of the UK's leading environmentalists Jonathon Porritt, Sara Parkin and Paul Ekins. Forum for the Future works in partnership with government, business and higher education to accelerate the building of a sustainable way of life.

The 10 'dot-commandments' for a sustainable digital economy

1. Beyond the hype there's hope E-commerce creates new opportunities for environmental and social sustainability.
2. The e-economy can access all areas The digital revolution could refresh the parts that other revolutions haven't reached, by spreading benefits to all regions of the UK and all sectors of society.
3. Community is alive & clicking Online relationships, supported by e-commerce, can add a valuable extra dimension to real world interaction.
4. 'e' is for environment E-commerce could help cut energy and resource use, and improve environmental productivity.
5. HTML - Heavy Traffic Made Lighter? Virtual traffic can replace real traffic. With the right policy framework, e-business could create more efficient logistics and distribution systems.
6. Trust me, I'm a dot-com E-commerce is changing the relationship between companies and their stakeholders, and could usher in a new era of corporate transparency and accountability
7. But right now, matter matters more (not less) Potential environmental gains won't be realised without a concerted effort from government and business to align e-commerce with wider sustainability objectives.
8. Smart technology needs smart institutions Technology is developing at breakneck speed. Institutionally we're struggling to keep up. Sustainable e-business will depend not just on technological innovation, but also on social and political innovation.
9. We need to join the dots Partnership will be key to the creation of a sustainable digital economy. Dot-coms, dot-govs and dot-orgs need to work together more often and in new ways.
10. It's about time A year in cyberspace is said to be four months. As the internet accelerates the pace of life, we need to change our attitude to time and long-term responsibility.

Summary of findings

A look at the social and environmental impacts of e-commerce from the perspective of the public, Captains of Industry and the dot.com companies themselves.

Are dot.coms really more likely to care?

• 8 in 10 Directors at dot.com companies think that e-commerce will bring about positive improvements for society overall.
• In parallel with this, the majority of dot.coms believe that they are more likely to care about social and environmental issues than traditional companies - yet in reality three-quarters have no social responsibility policies or systems in place at all (in comparison, 61% of SMEs involved in activities in their local community ).
• Directors at traditional companies are very much sceptical of dot.coms, with 8 in 10 disagreeing that dot.coms are more likely to care.
• Fewer dot.coms than SMEs believe social and environmental issues will become more important in the future (around half of dot.coms feel social and environmental issues will be more important in the future1, whilst among SMEs the figure is over three-quarters2).

Is e-commerce an enabler for more responsible behaviour?

• Each audience holds different opinions.
• Captains are 2:1 against the idea that e-commerce will enable business to be more responsive to social and environmental concerns.
• Yet dot.coms are much more bullish, being 3:1 for the idea1.
• The general public is polarised (16% agree, 26% disagree).

Will e-commerce lead to social exclusion?

• 4:1, the public feel it will.
• Captains and dot.coms agree with each other, but opinions within both groups are polarised.
• 13 Million people in GB currently have access to the internet.
• 15 million say they never intend to have access (16% of whom are under 35).
• Half of the population (48%) feel they are getting left behind by technology.

The positive impact of e-commerce

• Captains and dot.coms are very optimistic that the positive impact will outweigh the negative (79% dot.coms, 88% of Captains).
• The public are yet to make up their mind about the impact of e-commerce on society.