Poor nations must help people before upgrading technology
GROUP of Seven summits are notorious for the studied blandness of their communiques and the frantic avoidance of painful conflicts. By that measure, the recent ``Information Superhighway'' Summit in Brussels was truly something special.
Rarely does such a boring event show the raw paranoia of an entire continent while also laying bare the woolly minded social welfare ethic that offers knee-jerk solutions to precisely the wrong problem. The summit discussions made House Speaker Newt Gingrich's proposal of free computers for America's poor seem positively enlightened. But then, Europe and the rest of the world is nervous about America's leadership in digital hardware, software and networks.
``Europeans must be the drivers, designers, constructors, content providers and financiers of the `global information society,' and not hitchhikers stuck on the sidelines of the information highway,'' insists European Commission President Jacques Santer.
Alas for Santer, most of Europe's media companies are already strategically sticking out their thumbs. Europe's richest publisher, Germany's Bertlesmann, just announced it will form a network joint venture with America Online, not with Deutsche Telekom, Siemens or Cap Sogeti. Industrialists like Olivetti's Carlo de Benedetti soberly acknowledge that the Continent is about ``10 years behind'' America in information technology.
If Europe -- with telecommunications network costs anywhere from twice to 10 times as expensive as America's -- aggressively deregulates, shatters its state-run telecommunications monopolies and accelerates the European Union's economic integration, then perhaps the Continent will only be, say, seven years behind the United States. To be sure, the problem isn't that Europeans lack the wit or technical fluency to be brilliant innovators. Indeed, the much-hyped and heralded World Wide Web on the Internet -- which is fast becoming the multimedia business district on the Net -- wasn't created by clever Silicon Valley engineers or Route 128 software wizards. It was created by scientists at CERN, the Swiss-based European center of high-energy particle physics. The World Wide Web is a sensational technical achievement. However, it has been American software entrepreneurs and American companies that have successfully figured out how to make money off the Web.
Europe has a shortage of both public and private institutions capable of swiftly and profitably commercializing digital innovations. Europe doesn't have America's infrastructure of venture capital. Its technical universities seem incapable of spinning off new enterprises or goading innovation from old ones, and the fragmented nature of the Continent's cultures and economies make it difficult to create strategic relationships with customers.
When all that is combined with the higher costs of telecommunications and the regulatory frictions, it seems clear there is no way Europe is structurally capable of catching up with America in the digital marketplace until well after the turn of the century. Until Europe undergoes industrial and regulatory restructurings even more traumatic than the United States endured in the 1980s, it will be selling and driving the equivalent of Yugos on the Information Superhighway.
Summit chatter consistently returned to the grim specter of ``information haves and have-nots'' and the noble goal of ``equal access'' to networks regardless of culture or economic class. To underscore the issue, South African Deputy President Thabo Mbeki told summit attendees that there are more telephone lines in Manhattan than in all of sub-Saharan Africa.
Unfortunately, the only meaningful response to that is, ``So what?'' New York -- and for that matter, Los Angeles -- also has more cars than sub-Saharan Africa. Should the G-7 thus make a commitment to export automobiles to Africa? What is so disappointing and, ultimately, destructive about this summit is the growing info-ideological dogma that says investing in technological infrastructures offers a better hope for the future than investing in people does.
The belief that more telephone lines in Somalia and Internet access in Rwanda and more personal computers in Greece will inherently lead to better lives for all is simply delusional. It ignores the reality that our technological networks live in the context of our human institutions.
Ironically but appropriately, the one global institution that has done the most to fund infrastructure -- dams, telecommunications networks and roads -- in the Third World has come to a similar conclusion. The World Bank has just announced it is shifting its investment focus. ``We have realized, maybe a little belatedly, that investment in people -- the social sector -- was neglected in the bank,'' said a World Bank representative in Geneva.
The bank is finally calling upon countries initiating economic reforms to invest more in health care and education. The G-7 summit and its participants did the world a disservice by asserting that digital networks matter more than human ones.
Michael Schrage is a writer, consultant and research associate at the Massachusetts Institute of Technology. He writes this column for the Los Angeles Times. Write to him in care of: Mercury News, Business News, 750 Ridder Park Drive, San Jose, Calif. 95190. Send e-mail to firstname.lastname@example.org on the Internet.
Published 3/13/95 in the San Jose Mercury News. This material is copyrighted and may not be republished without permission of the originating newspaper or wire service. NewsHound is a service of the San Jose Mercury News. For more information call 1-800-818-NEWS.