UK: Government Policies

Overview:
An important aspect of the UK Government’s role is to promote progress toward the more beneficial use of information accessed through the information superhighway, and augmented by electronic commerce and value-added network services.  In February 1996, the Government launched the Information Society Initiative (ISI), which seeks to include and enroll everyone in Britain in the use of information technology and related communications systems through various initiatives.  A new program called ‘IT for All’, offers the public a wide range of opportunities to try out and to understand the new communications technologies.  The ‘Program for Business’ offers business and commerce wide-ranging resources, support and funding to create economic growth through the use of technologies.

UK Formulates Long-Term R&D Vision
Competition, enterprise, flexibility, and innovation have long been the watchwords of any thriving economy. In today's UK, businesses, government laboratories, and universities are all addressing these concepts with new vigor as the Department of Trade and Industry (DTI) sets about implementing the new ten-year industrial policy framework published in its Competitiveness White Paper.  As an essential part of this, the White Paper set out the aim of achieving leadership for the UK in the global digital economy.  It committed the Government to:

• Developing the UK as the best environment in the world for electronic trading by 2002, and
• Bringing UK small businesses up to the level of the rest in the G7 in exploitation of information and communication technologies.

Introducing that document, Prime Minister Tony Blair spoke of the need for the government to open markets and invest in British capabilities when companies alone can not. "We must promote creative partnerships that help companies to collaborate for competitive advantage, to promote a long-term vision in a world of short-term pressures, and to benchmark their performance against the world's best," he says.

At the heart of government, competitiveness is clearly a buzzword. In January of 1999, a new top-level cabinet committee on productivity and competitiveness was set up under the leadership of the Chancellor of the Exchequer. A new "competitiveness index" rates the UK's progress via newly developed performance indicators, and an advisory Competitiveness Council drawn from a cross-section of business people advises on the index and other issues. The government has new targets for promoting electronic commerce, increasing start-up companies (the aim is 10,000 a year by 2001), and modernizing the intellectual property rights system. It also plans to review business support schemes for small companies, and to look, for example, at their tax credits for R&D.

Fiscal incentives for eCommerce

• 100 % first year capital allowances for investment in information and communications technology (ICT): small businesses will be able to write off immediately against their taxable profits the whole cost of their investment in ICT made between 1 April 2000 and 31 March 2003.
• A new Enterprise Management Incentives scheme to help small companies recruit and retain essential personnel through highly favorable share options packages.
• Discounts for electronic filing of tax returns in 2000-01, worth up to a total of  £150 for small businesses.
• R&D tax credit for small employers (SMEs): introduced in April of 2000 to encourage investment in R&D by increasing the 100% tax relief on current R&D spending by SMEs to 150%.
• Corporate venturing scheme: designed to promote mutually beneficial technology-driven investment which aids innovation and product commercialization by providing tax relief on companies’ investments in small higher-risk trading companies.

The UK in the online world

 In September 1999, e-commerce@its.best.uk reported that the UK was the leading eCommerce player among the major European countries, but it lagged behind the United States, Canada, Australia, and Scandinavia on key measures of business and consumer eCommerce use.  Since then, the UK has narrowed the gap with the G7 leaders in most areas.

 Significant developments have been:

• For Individuals
• Number of households on the Internet up form 13% to 25% in one year,
• One third of the UK population is now online, more than any other major European country.  A 50% increase since September 1999 has brought UK closer to the USA, which is still ahead with almost 50% of the population online;

• For Businesses
• 90% of UK employees now work in businesses which are connected to the Internet- on a par with US at 93%;
• 33% work in UK businesses which engage in online financial transactions with customers or suppliers – a higher proportion than the USA, Sweden, Germany, France, Japan, or Canada;
• Spending online
• Fourfold increase in online spending (to £2 billion);
• UK is now the largest eCommerce market in Europe;

• Government online
• 33% of Government services now available online;
• Cost of Internet access
• UK peak-time rates are now below the OECD average.
• IT, electronics and communications (ITEC) sectors
• 8% of UK GDP, and one third of GDP growth;
• Growing faster than the ITEC sectors in Germany, France, and Italy, but behind the USA.

Government’s Commitments

• Implements a strategy to make the UK the number one country for the supply of high-level ITEC skill.
• Invests at least £8 million to drive forward the ITEC skill strategy.
• Facilitates ITEC knowledge transfers.
• Ensures businesses maximize benefits from investments in science-based infrastructure.
• Implements an action plan for growth for the digital content sector, including through liberalized access to government information.
• Public information available in digital form.
• Works with industry to develop a UK strategy for m-commerce.
• Develops a strategy for secure, innovative introduction of m-commerce.
• Establishes new mechanisms to coordinate access and skills initiatives at national, regional and local level.
• Secures international agreement to a common framework for measuring eCommerce.
• Get all government services online.
• Integrates information and communication technology (ICT) skills in the education system and throughout lifelong learning.
• Invests £84 million in 2000-01 through the University for Industry (UFI).  By 2003, UFI aims to have 2.5 million people and businesses using its learndirect services in England, Wales and Northern Ireland;
• Spends £700 million to improve the ICT infrastructure in schools, further and higher education;
• Offers free ICT ‘taster’ courses to the unemployed;

• Spends £230 million to improve ICT skill levels among equators;
• Offers 80% discounts for computer literacy training;
• Offers high-quality lifelong learning content;
• Invests an additional £25 million over three years to help small businesses exploit the potential of ICT.
• Establishes a new framework for regulation of the converging markets of telecommunications and broadcasting.
  Publishes White Paper.
• Identifies and remove all remaining regulatory and legal barriers to electronic ways of working in the UK.
  Removes 70% of identified barriers by end 2001, and 100% by end 2002.
• Implements a package of measures to improve access to the Internet at home, work and in the community.
  Establishes a network of UK online centers, with 600 being open by March 2001. UK online centers will provide community-based access to the Internet, along with information & communication technology (ICT) skills training;
• Ensures that, by 2002, all public libraries offer Internet access and supporting trained staff;
• Invests £35 million to pilot new initiatives for post offices to help people access and use the Internet.
• Implements a program to evaluate the net economic impact of eCommerce.
• First economic impact study undertaken.
   

Measuring success

 The UK is making progress in developing reliable official statistics for measuring eCommerce.  The UK was the only country reviewed in the De Montfort research that had attempted to produce internationally comparative measures for eCommerce.  In order to allow for international comparisons, it is important for the UK to co-operate with other countries in developing common measures of eCommerce that can be used in a consistent way across several countries.

 Equally important is the assessing of economic impact of eCommerce.  The Treasury, Office of the e-Envoy and DTI are working on a joint paper on evaluating the net economic impact of eCommerce.

Scotland
Digital Scotland

Digital Scotland is a Scottish Executive initiative that aims to ensure that Scotland obtains and retains maximum economic and social advantage from information and communication technologies.

• Over £80 million has been made available to Scottish local authorities to develop the National Grid for Learning in schools.
• Nearly 4,800 (10%) of Scottish teachers have been helped to buy their own computers with a  £200 refund from the Scottish Executive.
• The Modernizing Government Fund will provide some £25 million over the next two years to innovate public sector projects which are aimed at improving the quality, effectiveness and efficiency of public services in Scotland often through the application of ICT.

Northern Ireland

• A budget of  £9 million has been received from the New Opportunities Fund’s Community Access to Lifelong Learning (CALL) to support:
• The development of ICT learning centers for adults;
• The development of appropriate community-based web sites which support the National Grid for Learning; and
• The creation of a network of online centers in public libraries.

The Electronic Libraries for Northern Ireland project has been established to procure for Northern Ireland robust systems that will support and enable the delivery of electronic information services to the Northern Ireland Community.  The Project is currently in negotiations with the private sector to implement such systems.  This will establish libraries as public information access points and connect all the public libraries in Northern Ireland to the National Grid for Learning providing an extensive network of ICT Learning Centers as an integral part of the UK Peoples Network.  Of the £9 million available to Northern Ireland, £4.50 million has been set aside to assist NI Libraries.[1]
 
 
 
 
 
 
 
 
 
 
 

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This report was completed in December 2000 for the class Impacts of National Information Technology Environments on Business given by Prof. Carmel  in the program of Management Of Global Information Technology at the Kogod School of Business at American University in Washington D.C.