I. INFORMATION TECHNOLOGY: INDUSTRIAL AND EMPLOYMENT OPPORTUNITIES

I. INFORMATION TECHNOLOGY: INDUSTRIAL AND EMPLOYMENT OPPORTUNITIESAuthor(s): KENNETH BAKERSource: Journal of the Royal Society of Arts, Vol. 130, No. 5316 (NOVEMBER 1982), pp. 780-790Published by: Royal Society for the Encouragement of Arts, Manufactures and CommerceStable URL: http://www.jstor.org/stable/41373477 .

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Ill THE NEW INFORMATION TECHNOLOGY I

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I. INFORMATION TECHNOLOGY: INDUSTRIAL AND EMPLOYMENT OPPORTUNITIES

by KENNETH BAKER , MP

Minister of State for Industry and Information Technology , delivered to the Society on Monday 10th May 1982,

with Sir George Jefferson , С BE, Chairman, British Telecom, in the Chair

THE CHAIRMAN: I was delighted to be asked to make this introduction because I share, with the speaker, his conviction that our information technology business has a vital rôle to play in creating the new wealth as this country struggles out of recession and that the job-creating opportunities in this country could indeed spring from our ability to grasp the opportunities presented by information technology. Like him, I am concerned that we have no time to lose if we are to do so successfully. Understanding and awareness of the opportunities are essential prerequisites for action, and we are grateful to the Royal Society of Arts for providing this opportunity of coming to terms with the implications of the new information technology. These lectures continue a tradition dating back to

1864, some twelve years before Bell's invention of the telephone. This evening, as you can see from some of the hardware around this great room, we have with us Prestei viewdata at our lecturer's command. Prestei has certainly played a substantial part in spurring on the new information and communications age and is something we can be proud of, becoming the first public service of its kind in the world in September 1979. It has since developed across the world, in a variety of ways and brought a standards and specifica- tion benefit. We in British Telecom are particularly interested in

this lecture, but we and most of the audience will also be particularly interested in the following two lectures in this series. I am especially privileged tonight to be introducing

the inaugural lecturer since his own degree of commit- 780

ment and involvement in the total spectrum of information technology is well known and widely apparent. In introducing Mr. Baker, I am in the happy position of wondering where to begin rather than what I might say. Kenneth Baker's appointment to ministerial office, in January of last year, was significant in that it made him not only Britain's first, but also the world's only, government minister with specific responsibility for information technology. Since taking on that office, he has launched into its challenge with energy and enthusiasm. There surely could be no one more appropriate to present the inaugural lecture in this Information Technology Year. Long before his present appointment, influenced by

his earlier personal industrial experience, he began to advocate the need for our so-called sunrise industries and technologies to catch up with those of our more successful international competitors. Even to-day, his energies are by no means confined wholly to that task. At home his collection of poetry and precious books shares prominence with the family's personal computer, and he has found time just recently to bring out his own new collection of poetry. Indeed he has persuaded a number of parliamentary colleagues to con- tribute. His earlier 1980 satirical anthology carried, for me, the intriguing title 'I have no gun but I can spit'. Perhaps that was a reminder of his spell as an artillery instructor to the Libyan army in the 1950s. He gained an honours degree in modern history at Oxford. He first entered Parliament in 1968, has sat for St. Marylebone since 1970, and was Junior Minister for the Civil Service between 1972 and 1974.



NOVEMBER 1982 INFORMATION TECHNOLOGY: INDUSTRIAL AND EMPLOYMENT OPPORTUNITIES The following lecture , which was illustrated, was then delivered.

WHAT IS IT?

I nology 83

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per fascinating. cent

a recent

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on

asked poll information

knew showed

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tech- that nology fascinating. The poll showed that

83 per cent of those asked knew nothing about information technology, yet 53 per cent of the same sample said that information technology was essential for our future industrial growth, the most important thing in the country. This shows that people, although they may know few details of technology, are aware deep down that the microchip has revolutionary implications for our industry, for our economy and for our society. Through the nineteenth and up to the mid-twentieth century, communication came in two distinct forms - the written word and the spoken word through the telephone, radio and television.

To-day's technology breaks down this distinc- tion and new types of communication are emerging. It is these new developments which have been given the name 'telematique' in France, the somewhat cumbersome term in America of 'compunications'. In Britain we call it rather more simply, 'information technology'.

The accepted definition of information technology is 'the use of computers, microelectronics and telecommunications to help us produce, store, obtain and send information in the form of pictures, words or numbers, more reliably, quickly and economically'. That's a mouthful, but let me try to explain it in this way. Informa- tion technology was born out of the convergence of previously separate disciplines - computers/ communications/office equipment/entertainment/ space. So this convergence means that we are talking of the Home of the Future, the Factory of the Future, the Office of the Future. I have talked of the factory and the office of the future but for some companies the future is already here. By linking up the various elements, the telephone, VDU, private viewdata, word processor, printer, telex, and file, the office can be turned into a fully interactive communications system.

The floppy disc can hold the equivalent of 40 pages of the Concise Oxford Dictionary, but the video disc the whole of the Encyclopaedia Britannica. In the Middle Ages, theologians argued for decades about how many angels one could sit on a pinhead. The question for tech- nicians to-day is how many encyclopaedias can fit on a microchip.

In the home, IT can control the central heating system, provide us with teletext and viewdata, electronic games, video recorders, improved washing machines and cookers, and cable-based entertainment, home shopping and home banking and also allow us to work at home. The British Computer Society is in fact employing a young disabled graduate to work on administration, using computing and word- processing facilities installed at her home.

THE IMPORTANCE OF THE FIRST OF THE GREAT ECONOMIC CYCLES

At various points in our history technological advances have occurred of such magnitude and pervasiveness that they have driven forward the growth of our economies. In the first half of the nineteenth century we had the rôle of steam power, the first of the great economic cycles, followed by the railroads in the second half; the twentieth century saw the impact of electric power and the automobile - these are the second and third cycles - and now with the fully fledged impact of computers, microelectronics and information technology we are entering the fourth cycle.

I am also persuaded that there is a 'life cycle' process at work in industries - that industries take off, achieve rapid growth and then mature in their products, processes and technologies such that their markets become saturated and their production standardized. Without the re- juvenation brought about by, for example, new products or technologies, old age takes its inevit- able toll. Each stage of this development has different characteristics. In the first, take-off phase new initiatives, enterprises and products abound, with flexibility, creativity and innova- tion being the hall-mark of management, the work-force and organization. The second phase of rapid growth is also characterized by high technological change, but at this stage competitiveness through scale economies and learning effects becomes crucial. IT is an industry which is at a stage of development which displays characteristics of both these phases.

The forecasts we have available show that in only five years the world market in IT products and services may be worth over £300 million a day at 1980 prices. The world trade in IT products was around £54 billion in 1980 and is expected

781



JOURNAL OF THE ROYAL SOCIETY OF ARTS to rise to £105 billion by 1985. Compare this 14 per cent a year average growth rate with the more mature world car manufacturing industry, which some forecasts expect to grow by 3 per cent per year to 1985.

But the crucial question is whether Britain can share in the growth of world IT industries and fully enjoy the technological impetus to growth which is offered. Shall we be able to shift the balance of the economy in favour of these vigorous high growth activities and away from senility?

JOBS If we fail to develop, exploit, adopt and sell the technology then the consequences for jobs are likely to be very much more severe than the impact on jobs of accepting the technology. This is an often made claim which some have found less than persuasive. I should like to take this opportunity to explain why I believe it is justified.

Let me first of all describe how the growth of demand for information in our Western economies has led to an increase in information related employment. If we look at what has happened in the United States over the last 100 years, we see that from employing less than 10 per cent of the US workforce in 1880, information-related occupations now employ almost half. The OECD have noted similar trends in other industrialized countries.

In the UK this trend has continued throughout the period from the 1950s to the present. Infor- mation occupations made up:

in 1957 - 27 per cent of the total 1961 - 32 per cent of the total 1971 - 36 per cent of the total 1979 - 40 per cent of the total

The number of people employed in these occupations has risen by 1 million over the last decade to 10 million in 1979.

'Information Sector' and information related occupations may appear rather abstract labels. Figure 1 shows how the 10 million can be categorized according to more familiar broad occupational groups. I think few would dispute the importance of these workers to the economy, and this perhaps helps to illustrate in more con- crete terms the significance of information in our modern, complex society. The generation and dissemination of information is an essential pre-requisite for economic growth and development. All those activities which make for com- 782

PROCEEDINGS

FIGURE 1.

petitive enterprise - investment, product design, production control, marketing, quality control, work organization and the co-ordination of all these activities - require information which can be easily and flexibly handled.

Information creation, management and control are as much an input of our economy as capital equipment and labour, and this is the unique feature of information; it is also an output like oil, chemicals, machine tools or cars. Like any other 'product', information needs to be produced with the same eye to cost and quality as our competitors.

The increase in information occupations which I have described occurred at the same time as the rapid development and application of computers. You will remember that when computers were first introduced for office applications, people predicted that large numbers of clerical workers would be displaced. What happened? In the USA in 1960, clerical workers numbered about 10 million, and accounted for about 1 5 per cent of employment. By 1 980 there were no fewer than 18 million clerical workers and they accounted for 19 per cent of the total. The age of homo bureaucraticus has come.

In Britain, the picture is much the same. In 1961, clerical workers numbered about ЗУ2 million. By 1978 they numbered nearly 4 million. In both countries, the number and pro- portion represented by clerical occupations are forecast to increase.

It is perhaps also interesting to note that along with the productivity increases associated with word processors have come reports of a broadening of secretaries' job content, to include a



NOVEMBER 1982 INFORMATION TECHNOLOGY: INDUSTRIAL AND EMPLOYMENT OPPORTUNITIES

greater variety of duties and more complex tasks - and greater job satisfaction. Both the public and private sectors offer similar examples of an increased quantity or quality of service.

North Yorkshire County Library, which I visited recently, has a computerized cataloguing and book issue system. Each reader's card and book has a light-readable bar code which is scanned at the counter. When a book is due back, the computer can automatically send out a reminder. If you want a book the library does not have, the computer can pinpoint where else in the country it is available and enable you to send out an order. The borrower gets a book more quickly, the stock of books can be better managed by the librarians, the defaulter gets chased more quickly and the community in North Yorkshire benefits from a service which would literally have cracked and almost broken down through the sheer complexity of the administrative process. So this is better service to the borrower, better value to the North Yorkshire ratepayer. Between 1972 and 1980 the number of credit and debit clearings handled by the banking sector doubled to 3,000 million annually. Without an increasing reliance upon computerization it is highly unlikely that the banks would have been capable of handling this growth in business at a price acceptable to their customers.

Some developing countries shy away from the new technologies because elaborate administrative systems are seen as a fruitful source of job creation. This only serves to slow down the process of their development. An efficient public and private service sector is essential to the growth and development of a strong economy. There are lessons here for us, too.

EMPLOYMENT PROSPECTS AND INFORMATION TECHNOLOGY

I'm often asked what the effects of the new information technology will be on employment: won't the development of IT curtail the future growth of information related jobs? Won't the development of production technologies such as robotics depress even further the prospects for manufacturing employment?

Significant productivity improvements and reductions in unit labour costs can be achieved by the application of IT. In the car industry, the introduction of automatic welding by BL and Volvo reduced labour requirements for welding

by 80 per cent; the Japanese firm of Yamatake- Honeywell reported a reduction from 40 to 4 men employed on the machining of valves following the installation of an FMS (flexible manufacturing system - a combination of numerically- controlled machines, robots, and materials handling equipment). Again in Japan, the replacement of mechanical parts by microelectronics in the production of watches reduced the number of parts by 90 per cent and 'drastically reduced' the labour needed for assembly. In printing and publishing savings of 50 per cent on labour costs from new technology are not unusual; and in the office, a change from con- ventional typewriters to word processors can increase the productivity of typists by over 100 per cent. I could continue, and if the story of the employment effects of IT stopped here, with these potential (and not always easily achieved) productivity changes, then you would probably conclude that the impact of IT on jobs could only be negative. After all, if the productivity of a particular production or office operation is improved then it must follow that the same level of output could be achieved with fewer workers. But this is precisely where the analysis should not stop, and it is unfortunate that many of the estimates of employment effects are based on analyses which have not proceeded beyond this point.

They ignore what are termed compensation effects - the same type of effects which ensured that, in the nineteenth-century, stage-coach passengers did not merely move to rail but that a whole new era of personal mobility had arrived, and with it a major new range of job opportunities. Moving on several decades, imagine if at the turn of the century a Herr Benz had come to you and said: 'I can sell you a new kind of engine which can do the work of a horse, and my col- league, Herr Daimler, and I will make for you a horse-less carriage.' If some Victorian sociologist had then asked you to predict the employment consequences of all the carriages in Britain becoming horse-less, what would you have said? You would have been able to predict the wholesale disappearance of postilions and blacksmiths, hay-carters, grooms, stable-men, ostlers and bridle-makers; distress among farmers who grew oats and hay, bankruptcy among horse-breeders, loss of fertility of the land through the lack of manure and the break- down of the rural society which had served the country so well over the centuries. What you

783



JOURNAL OF THE ROYAL SOCIETY OF ARTS PROCEEDINGS would not have been able to predict would have been the appearance of all those jobs which have been created as the horse-less carriage of the nineteenth century has evolved into the motor car of to-day. Design, manufacture and sales apart, look at the countless numbers of jobs dependent, at one stage removed, on the internal combustion engine - the road builders, the traffic-light manufacturers, the makers of cats' eyes - and traffic wardens.

These are the lessons to be drawn from past experience:

(a) In the first place, the introduction of new technology requires that the technology be manufactured, and if this occurs in Britain then additional jobs may be created in these sectors. Though I must admit that employment in the sectors manufacturing IT products has fallen during the 1970s in the UK, the decline has been less marked than in manufacturing as a whole. All manufacturing employment fell by just over 3 per cent per annum between 1973 and 1981 but IT manufacturing employment dropped by 1 per cent less.

By 1981 IT manufacturing employed 13V2 per cent of all workers in manufacturing compared with 12 per cent in 1973.

There is no doubt that IT manufacturing is a growth sector in output terms, but it is also a highly internationally competitive one and it is undergoing its own transition from electro- mechanical to electronic devices with lower unit labour requirements. This explains the rather diverse picture of employment trends in this sector between countries and reinforces the need for Britain to increase its competitiveness in order to enjoy both output and employment growth.

(b) Increased productivity through technical change in one operation may well create a need for increased employment in other associated operations or release scarce labour to deal with bottlenecks elsewhere, or it can help to develop diversified products which otherwise could not be contemplated.

A Japanese study concluded that, following the introduction of microelectronics, the manufacturers of measuring equipment and office and commercial machines experienced losses of employment in manufacturing operations but increases in development design, sales and maintenance employment. A recent Anglo- German study goes further and suggests that, although the introduction of CNC machine 784

tools will relieve operators of work-piece handling, it will not necessarily reduce shop-floor employment but will rather increase the number of planning, programming and machine-setting operations which are brought to the shop-floor.

The application of IT to manufacturing increases the flexibility of operations and the capability of developing and handling a greater diversity of products.

Japanese assembly workers in the watch industry were re-deployed to diversified product lines, and a similar tale can be told about Japan's major TV manufacturers. Slower market growth combined with a simplification and reduction in number of components, and automatic insertion led to a fall in employment in TV manufacture during the 1970s. In 1975 TV sets represented 37 per cent of Sony's output, by 1981 only 24 per cent. But Sony had got their skates on. They introduced large scale production of video tape recorders, and look what happened to employment. Even though they were making proportionately fewer TV sets, Sony's employment rose from 22,000 to 38,500. This shows what a company like Sony can do by keeping apace with developments. They moved from television sets to video recorders and they were of course one of the few companies in the world that realized that you could make products for joggers, i.e. the Sony Walkman, with antici- pated world sales of three million.

In services, I have already referred to the expansion of banking, insurance and clerical labour which was brought about, in part, by the application of technology increasing the number of new and diversified tasks which previously could not be contemplated. In addition the introduction of the technology requires it to be serviced. The doubling of computer services employment over the last ten years is an illustra- tion of this.

(c) Thirdly, and broadening the analysis to encompass the whole economy, increased productivity and improved product quality can improve competitiveness. This may be enjoyed in a variety of ways - higher profits, higher wages, higher output or some combination of these - all of which provide the basis for expansion of employment.

The recent Policy Studies Institute report found that the introduction of microelectronics in products was associated with employment increases deriving in large part from the increased



NOVEMBER 1982 INFORMATION TECHNOLOGY: INDUSTRIAL AND EMPLOYMENT OPPORTUNITIES attractiveness and competitiveness of the products. This job creation helped to compensate for the job losses that seemed to be associated with new technology applications in processes with the net effect on jobs being rather small.

The OECD has recently completed a report describing the studies which attempt to model the impact of micro-electronic technology on a country's total output, trade and employment. One of these studies was carried out by the Man- power Research Group at Warwick University. The study simulated the effect of increasing the rate of take-up of microelectronic technology in the UK and, under a range of assumptions, found an average positive effect on employment. This net positive effect was not large - an increase of some 80,000 jobs by 1990 compared to the base forecast. The important point to note from the Warwick findings is that the net positive effect was heavily dependent on the increase in trade competitiveness derived from improved product quality and sophistication.

Broadly supportive findings are reported by Rathenau for the Dutch economy. Here the conclusion is that the slower introduction of microelectronic technology into the Netherlands can have a worse effect on employment levels than keeping pace with other industrialized countries.

These results suggest that a slow introduction of the new technology is not the answer to fears for job security. Just the opposite. Speeding up the application of IT can improve international competitiveness in terms of price and product

quality, raise domestic investment, income and demand - and enhance the prospects for employment.

CONCLUSION It's to the 'second round' compensation effects that we look for employment growth from IT - to increased markets for better and cheaper products, and for those new goods and services which are as yet no more than a twinkle in an in- novator's eye. There is no received wisdom on how strong these second round effects are likely to be. Some tend to conclude that the overall net effect of IT on employment could be small but a crucial influence here is the extent to which a country keeps pace with the rest of the international field.

If we don't produce the technology domestically other countries will supply it; if we are slower in applying IT other countries will gain an increasingly competitive edge in product price and quality. The more rapid adoption of IT will make demands on management and labour but the alternative has been put rather baldly by the OECD: 'A low level of application in any in- dividual country may lead to its domestic economy becoming increasingly uncompetitive, and this may in turn lead to secondary effects on employment that could be far more serious than the direct displacement effects'.

It is an opinion I share: the message is automate or liquidate.

DISCUSSION

THE CHAlRMAN:Thank you very much for that immensely stimulating address. I think that Mr. Baker's final message, 'automate or liquidate', really is one that is both stark and hopeful; also we really need to understand the importance of timing, as well as of intention. Personally, I am fascinated by the all perva- sive nature of this new information technology. It is not something for those other chaps; it affects every- one. It is vital to businesses and it is also increasingly going to penetrate our everyday domestic life. It is not a question of substituting machinery for jobs; the new inventions really put us in a position where we can do things that we could not otherwise have done; I think this is immensely encouraging. These changes, of course, will affect individuals, businesses, customers, manufacturers and so on, and they will affect the very way in which we all do our work. The Minister has emphasized very clearly our need to

adapt to these changes and that time is not on our side.

Our success as a nation really does depend on our willingness and our ability to react to that challenge. There is one thing, Minister, about which you did not speak - and I wonder if I could stimulate some questions from the floor on this - and that is the effect that information technology might have on the sort of people we are or we are educated to be. The picture you have given us is one not of fear but of an enormous challenge and opportunity.

MR. GERALD VINTEN, MA, DPA, IPFA (Hon. Secretary at Toynbee Hall): Given that the expansion of information technology increases the scope for computer fraud and error, and given the fact that auditors and managers generally are hard pressed to keep up to date with developments, does Mr. Baker think that his Department should be giving extra assistance in procedures or software that can give managers and auditors the assurance that resources are being wisely and correctly spent?

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JOURNAL OF THE ROYAL SOCIETY OF ARTS PROCEEDINGS THE LECTURER: Ultimately I think it is the duty

of the accounting departments of companies who introduce computing to ensure that they introduce systems that do not allow substantial computer fraud or error. And so the responsibility must be essentially with the user of these systems, as it is with controlling fraud on the petty cash book. But various software developments are available, often from the suppliers of equipment themselves, to ensure that if the opportunity for computer fraud or error occurs, then various stages have to be gone through. There are, for example, encryption devices, and work is being done at the National Physical Laboratory (one of the government laboratories financed by my Department) on encryption techniques which allow credit transfers to be passed over the wire in a totally scrambled form which it is impossible for other than a spy computer, I would have thought - even then one of the really big computers like the St. Mary's Cray computers - to unravel. You can as a result of technology obtain much greater security than you can from a manila folder with personal details, or a cheque book. Tech- nology properly used, properly planned and properly organized, can reduce the amount of fraud or error in a company's activities.

MR. DAVID PERRY: I think it is crucial that the Minister's message about employment opportunities is spread widely and vigorously, especially during In- formation Technology Year. Those of us involved in the IT82 movement are probably finding fear about employment opportunities one of the greatest problems to overcome. There is an ancient Hawaiian proverb: 'If work were a good thing, the rich would have kept it all to themselves.' Turning to the Minister's earlier comments about the steam revolution, railways, elec- tricity and finally the internal combustion engine, each of these technologies came with considerable national and international investment from the public sector. We are now dealing with a completely new technology, and I should like to ask the Minister what new ways the public sector can find to invest in this new technology as we have in the past to ensure the United Kingdom's position?

THE LECTURER: I agree that it is very important to allay anxieties which are widespread about the job implications of the new technologies. This is why I have chosen this occasion, the first of these lectures, to go on record as it were with, I think, some pretty con- vincing facts and figures. I have tried to define for the first time the numbers of information workers in the UK economy and the job implications of the Sony example, to try to allay anxieties. We are pressing ahead very rapidly at the moment with cable television, hoping to lay down in this country, beginning next year, the start of a totally interactive cable network. It will not just be extra television channels in 786

your homes. If that was what we were offering, another forty entertainment channels, we could rightly be described as pedalling wall-to-wall 'Dallas', but what the extra channels will provide is a huge variety of extra services. You could be wired up to the local police station, or the local fire station, the local library; you could have mail order shopping, home banking, educational services. Laying down that cable TV network will be as

important as the laying down of the railway network in Victorian England, because the railway network did not just create jobs in the railway industry - it also created new industries. At the beginning of the railway revolution there was a little stationer in London called Mr. W. H. Smith. By studying the railway timetables carefully and realizing that he could deliver to Edinburgh and Glasgow, Leeds, Manchester and Cardiff, papers that had been printed overnight in London, he virtually created the national newspaper industry. In the same way the cable TV network will create all sorts of new programme and service activities. Then you asked me about public sector investment.

Quite rightly Sir George is in the chair for this, but we have provided very substantial sums of money to the investment programme of BT. Since we came into office we have increased it significantly each year. It now amounts to £2.1 to £2.3 billion annually. It is by far the biggest investment programme in the country, it is scheduled by the middle of the decade to rise to three billion pounds annually, and if you can still do mental arithmetic you will see what that means per day in actual capital expenditure by British Telecom. We are now, as I said, moving into cable television, and I want the substantial sums of money which will be invested in cable television, the cable networks, and all the equipment that goes with it, to be provided from the private sector. After we have provided so much to Sir George there is not much left, but we are looking to the private sector to provide the vast sums of money for cable TV and for additional telephone communications networks like Mercury. I have no doubt that money will be forthcoming from the private sector.

PROFESSOR M. L. V. PITTEWAY, MA, PHD, SCD, F INST P, FIMA, FBCS (Head of Computer Science Department, Brunei University): Something which concerns me personally is the cuts which universities are suffering in the very disciplines which we need to produce top professionals in information technology. Some people may be surprised to learn that there are such massive cuts, for it was reported as an increase; but baseline figures were taken from 1976 entries and, as I am sure the Minister is well aware, much has happened since then. There is a further problem, because people are

attracted to employment in the new technologies. In areas such as computer science, electronic engineering



NOVEMBER 1982 INFORMATION TECHNOLOGY: INDUSTRIAL AND EMPLOYMENT OPPORTUNITIES and applied mathematics, people leave universities because they can get good jobs elsewhere, notably in America. We are suffering cuts in reality which are even more severe than the ones I have just described. I know there are very limited funds available for education, but what makes it particularly frustrating is that there does seem to be lavish funding available in other areas. For example, we have received government money for a course to produce craft teachers for schools. I know that there is a shortage of craft teachers; I am not decrying that. But I also feel that there is a shortage of computer professionals, and I do believe we should at least be allowed to run at the existing level.

THE LECTURER: I agree that we have to train the young people of to-day for the skills of tomorrow. We have started in the secondary schools with our micros in schools scheme which will put a microcomputer into every secondary school by the end of this year. When we started the scheme in April 1981 half the secondary schools had not even got one micro. By the end of this year virtually every secondary school will have a micro, and most will have several. I want fifteen and sixteen year olds who leave school in 1983 on- wards to have had actual experience of sitting at the microcomputer, which is just a television screen and a keyboard, and of working with it and communicating with it. We have made real progress in that area. We provided the grants for the hardware from my budget, and that has stimulated the Department of Education and Science to do software programming. We have also launched a national network of infor-

mation technology centres, These are based upon the technology centre at Hammersmith, Nottingdale, which has been running now for about two years and which takes in sixteen to nineteen year old unemployed, and largely unqualified, youngsters. They happened all to be black in that particular area. These were people who had gone through the educational system that we have in the country and had not really acquired any qualification at all, not an O-Level, and probably not a CSE. Within about nine months they have been trained as computer programmers, electronic assembly workers. I was so impressed when I saw this last June that I persuaded the Prime Minister to finance twenty of these, and then it went up to thirty, and at Christmas I announced one hundred. It is basically government money but we are persuading one company to adopt each one because I want a businessman to be associated with these centres; they are not just training centres, they are also small workshops. The one at Hammersmith makes small bits of electronic kit which the youngsters then go and sell at the local dances or the local fairs or markets, or to local businessmen. British Telecom is sponsoring one, maybe more, and several of the companies which may be represented here are sponsoring information

technology centres, in which case I should like to thank them. Tertiary education: the UGC was charged with the

task of allocating funds, moving them away from dependence on the arts to sciences, because we wanted to have a shift, rather a reverse sort of shift from the craft teachers example that you gave. Now the capacity of the government to do that shift is in fact, in our university system, as many of you will be aware, quite restricted since the university system is semi- independent. One can only indicate what one would like the UGC to do and the UGC can only indicate ín many cases to universities and colleges what they want them to do. We were trying to engineer a switch from arts subjects to science subjects so that by 1984-5 there would be more scientists and engineers in the university system than in 1980-8 1 . That is still our intention, but it has proved to be much more difficult to imple- ment because arts faculties don't like dying, they fight very hard to retain their positions, and the staff fight hard to retain their responsibilities. They naturally have a pride in their discipline even if it is craft teaching, and I did not mean to be in any way con- descending about craft teaching. We are looking again at the implications of this for the inflow of students in the sort of subjects which you are teaching, and we are discussing this now with the Department of Educa- tion and Science and the UGC. We have taken this in- itiative because we are concerned that this change is not occurring enough; there may in some cases be an actual drop, as there is in your case. I have had lots of letters including, I think, one from your department.

PROFESSOR M. SEAMAN, PHD (University Col- lege, North Wales): I wonder if the Minister would agree that in addition to the awareness about information technology there is a magnificent opportunity for considerable change in the environment? The Royal Society of Arts have done good work about the quality of education. These things could be added together and spearheaded by this very excellent contribution from the Minister.

THE LECTURER: That is a very useful suggestion, if I may say so. The pace of change is one of the most striking things about all the new technologies. I quote Sony again because it is a very good example. That company has changed rapidly from television manufacture to video, to Sony Walkman and now to cameras, and no doubt they will be moving into other activities. That does mean a capacity to change physical work lines, changing from a workflow domi- nated by the most automated equipment in television manufacture to something fundamentally different in other types of manufacture. Two years ago the number of man hours required to make a television set was six; it has now fallen to three, because British industry realizes that if they are going to survive they

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JOURNAL OF THE ROYAL SOCIETY OF ARTS PROCEEDINGS have to use the same production techniques as the Japanese. New machinery must be made, which is in itself job-creating. I am keen to ensure that we do not give the impression that all this new technology is for Cambridge double firsts and mathematical wranglers and geniuses. I have been particularly glad to get off the ground the whole movement of information technology centres because you are dealing there with youngsters who are not educationally gifted, but who can learn and communicate more quickly with the new technologies. All the studies that exist show that the least clever often learn more quickly through computers and screens than through traditional training methods. It is very difficult for the teaching profession to accept this, but evidence is now building up that this is the case. We will soon be extending our micros in schools scheme into primary schools, because the evidence shows that eight to ten year olds often learn spelling and simple arithmetic more quickly by communicating with a computer terminal than by strug- gling with pen and paper. You asked about environmental considerations. I

don't think that anybody has really thought enough about the changes in our life-styles. I gave an example of a disabled graduate employed by the British Com- puter Society to work at home, but once we get interactive broad band cable coming into all our homes and all our offices, it will be possible in a relatively short time to bring up on a screen at home your in-tray from your office. It will be possible, if you have a word processor and a printer, to originate a great deal of hard copy, or to send messages to your colleagues at work. However, huge office blocks will not suddenly disap- pear. Over the next ten years a great deal of routine office work will be done at home. People who operate in an advisory capacity - consultants, solicitors, ac- countants - will be able to operate from an enlarged home base rather than an expensive office in the middle of the City. That will of course have an impact on commuting, British Rail and London Transport investment, road investment, leisure investment, because if you stay at home you will probably eat at home with your wife or whoever you want to have lunch with.

MR. GEOFFREY WALKER (Citytec (Hackney) Ltd.): Would the Minister agree that one of the biggest obstacles to progress in this country has been the failure of management and the establishment to give qualified engineers the status they truly deserve? Is it not about time we started to fine every newspaper that refers to striking craftsmen as engineers?

THE LECTURER: I agree with your broad senti- ment although I think your remedy is a little severe. It is perfectly true that engineers in Britain have not, with the exception of some glamorous and well known figures like Brunei, been given the place they deserve. 788

Scientists have had the prestige. This is not true in most of Europe, or in Japan where the engineer is several rungs up the ladder, whereas in the UK engineers do tend to imply oily rags and blue overalls. This is one of the reasons why we have established an Engineering Council following the Finniston Report and why we and Sir Kenneth Corfield, who is the Chairman of that Council, are doing everything possible to improve the status of engineers in our society. But they have got to some extent to reassert their own importance. We have to explain to people that engineering is exciting and important. We have never made enough out of the fact that, out of all our triumphs in space it is engineers that make the shuttle fly, and it is engineers that make space communications possible. I very much agree with you that a great job has to be done upon that. I am impressed by the number of small teams of

really outstanding engineers that still exist in Britain. I make a point of visiting one or two companies every week, and I usually try and find small or medium-sized ones. I am always surprised at the number of quite excellent teams of engineers that one finds making quite exceptional equipment. They are beginning to thrive again in Britain. What has often been the trouble in Britain is that we have not been able to develop the marketing potential of our engineering skills. Baird in- vented the first working television set in a room in Soho which is now an Italian restaurant. Other countries developed that industry. We did much of the con- ceptual thinking on the first generation of computers at Manchester University, and in fact made the first working computer; other countries have developed the industry. But there are, I think, growing hopes that our engineering activities and skills and abilities and inventiveness are beginning to come through to the market-place.

MR. KENNETH M. McK EE: I noticed in your list of occupations that were going to be affected by information technology, that engineers were not included. You mentioned scientists and managers; of course engineers can be managers. The third speaker in this series I know for certain is an engineer. I am sure you appreciate the importance of engineering in the con- text of information technology, because engineers are the people who are going to make these systems work.

THE LECTURER: When I next use that particular list I will have the word engineer on it. I am not sure which category they fall in, but I will get them in.

MR. bill McALiSTER (Director, Institute of Con- temporary Arts): The cheapest, quickest and most effective means of communicating with your colleagues in the House of Commons is to deliver six hundred and thirty copies of a document by hand to the House. This is not allowed. No matter who you are or what



NOVEMBER 1982 INFORMATION TECHNOLOGY: INDUSTRIAL AND EMPLOYMENT OPPORTUNITIES the document is, you are required to put a stamp on each envelope and mail the documents via the post office. This makes the exercise slower and very much more expensive. The House of Commons does not appear to be encouraging information technology with this kind of behaviour.

THE LECTURER: There are rules because so many people want to communicate with Members of Parlia- ment. They have to go through the Postal Services which are organized to do that. It sounds the very worst example of what I am trying to preach against. I sometimes despair of the House of Commons' un- willingness to use new technologies. I remember over ten years ago trying to persuade the House authority to computerize the tabling of questions, and I got nowhere. We have now some proposals made by certain companies in Britain for computerizing certain activities for MPs. I would hope to persuade some of my colleagues to use them. But the House of Com- mons as an institution is immensely conservative in the sense of clinging to long established procedures. I was on the last procedure committee in the last parliament which proposed lots of changes. We got some big changes through the select committees. Some of the others have fallen by the wayside. But we must move towards change because the new technology will make the House infinitely more efficient. We had enormous difficulty in changing the format of Han- sard. The format size was just a little bit bigger than A5, and to move it up to A4 required, I think, four debates and several votes over about two years.

MR. DENNIS HAWES, MA FLA (Head of Library Services, Polytechnic of the South Bank): Should we not be planning for a significant cut in employment? You have given us a scenario of American advances, yet there are still very high numbers of unemployed in the USA.

the LECTURER: Well I don't agree with that. There are certainly structural changes working through the whole employment pattern of Britain, some of which are promoted and stimulated by the new technologies, some of which have nothing to do with technology at all. A society tends to adjust within itself to the changes. Those who disagree with me will say this is something which is fundamentally different from what has happened in the past. No one can prove that and no one can prove what I am going to say, but I think historical analogy is on my side. If you took an agriculture-based and a service-based society, which was what society was before the industrial revolution, one could have forecast massive losses of employment simply by the use of mechanical threshers as opposed to hand threshing, or cutters as opposed to hand scything. What has happened, of course, is that there has been a significant job loss, but there has also

been a big increase in food processing of one sort and another. A shift within our society is already taking place to the information-based activities, to the service-based activities, away from the manufacturing-based activities. I think that many of them are very labour-intensive activities of their own.

MR. HAWES: I am talking about one of the most ad- vanced industrial countries in the world which still has not managed to master the problem.

the LECTURER: Well, Japan has. Japan has had a level of unemployment of about two per cent over the last few years. The American rate is rising. What I suspect will happen (this takes me way beyond technology) is that there will be a return to much more local-based activity. I can only generalize and therefore you can dismiss entirely what I am saying as personal reminiscence from what has been happening in our own village in Sussex. A small village of one hundred and fifty people, essentially a former farming village where the only employment was basically farming. Over the last few years a restaurant has started up in a farmhouse, someone has started kennels, someone has started a pottery (this is your craft teaching), a policeman who retired early has started a gardening service. Now I suspect that on a rather larger scale the same thing is happening quite frequently in our society. All these people seem to me to be very happy. I cannot believe that our little village is at all exceptional. I do know that in my own constituency there has certainly been a return to the inner city (I represent St. Marylebone) by craft work of one sort or another, and that is quite noticeable in various activities in Camden, and in some areas off the Edgware Road. I do not share the view that we have to prepare for a massive amount of unemployment which is described euphemistically as leisure.

MRS. GWEN BAKER: I think the Government should keep its options broad. Whilst I subscribe to the views expressed about engineering, I would say that a broad curriculum in schools, options in colleges and retraining both in industry and in attitudes, have got to be encouraged effectively if the technological age is to work. It must not be said that young people educated entirely in technological skills will produce the best managers in the future.

the LECTURER: I would agree with that. I look upon the technological skills which children can ac- quire in school as only tools, just as I learned log tables and then mastered the intricacy of a cylindrical slide rule which is now just for museums. A BBC micro at home is only a tool which will let you move around information much more quickly. The youngsters should be aware of how to use the tools. If I were active in business to-day I would certainly want a private

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JOURNAL OF THE ROYAL SOCIETY OF ARTS PROCEEDINGS view-data system in my company which managers could bring up on the screen. We have one in our department and we are just grappling with how to use it because suddenly middle-ranking civil servants will have a terminal on their desk. They are not used to a terminal, many of them do not type, even in the civil service, and they are not used to seeing information on a screen as opposed to charts or paper, but we are trying to train them. There are systems whereby you have an automatic

up-date of all sales recorded in the company. Marks & Spencer could operate a micro electronic system which would give you hourly the sales of each item of merchandise if they wanted so to do, and that information could be collated and brought up on a screen on the managing director's desk if he wanted to see it. You could actually measure the movement of sales nationally of a particular product, and you could even make that information available (though you may not want to) to your suppliers, so that they could then adjust their production programmes. All that is available to companies if they want it to-day. It does require a substantial capital investment. Companies have bought a new press, a new foundry, bought new cut- ting equipment, new welding equipment, but feel that Nellie should make do with that old typewriter. Fifty per cent of British companies to-day do not use micro electronics at all. Perhaps the most modern thing that they have is an electric typewriter. When I quoted that example at a political meeting in my constituency about two months ago, a former chairman of my associa- tion who is a small garage proprietor in St. John's Wood, said 'Kenneth, that was a splendid speech. I fully agree with your entire message. I have got it. Next week I am going to buy an electric typewriter.' That is unfortunately the state of much of British in-

dustry to-day. This is why we have these awareness programmes persuading companies, particularly the small and medium-sized companies, to use the new technologies. We provide free consultancy grants of up to £3,000 for any company to come to us to see how technology could help them. We provide 33 Уз per cent grants for companies that introduce certain types of new products and processes using the new technologies. I agree with you entirely that the process of education has now to be a continual one in business. PROFESSOR JOHN ASHWORTH: Could you per-

suade your colleagues in government to make the fees for professional up-dating courses tax-deductible?

THE LECTURER: Professor Ashworth is a well known skirmisher in the intricacies of Whitehall, and he will know how difficult it is for me to persuade my colleagues to do sensible things like that. But I will take the point on board.

PROFESSOR R. BELL (Department of Engineering Production, Loughborough University of Technology): 790

The universities are sensitive to this high rate of change. Some of us looked to the Finniston proposals for arranging new experiments in engineering education. From your perhaps wider view have you any opinions on how we might reshape our activities?

THE LECTURER: On the question of the balance of engineering training, taking the whole of the science engineering faculty of universities, there has been considerable difficulty in obtaining the necessary changes, because the ans have fought very hard to retain their positions, and also within the sciences themselves there has been a great deal of skirmishing between different groups. Some time ago it was accepted wisdom that we were very short of chemists and therefore there had to be a tremendous drive to educate chemists at universities. Now it is very difficult for many chemists to get jobs, and so there is a shift needed from chemical studies to maybe physical, or mathematical, or computer science studies, but it is difficult to achieve. There is certainly scope in universities for taking somebody who has been trained in one discipline like chemistry and training him in computer sciences, or physics, or mathematics. That is probably going to have to happen more frequently. Within the engineering faculty there are often difficulties, because in many universities computer science is looked upon as a Cinderella. It is much more important to do mathematics or physics, and, after all, once you have those disciplines you can pick up computing in a long weekend. I am glad to say that many universities are now putting computer sciences much farther up the ladder. Of course electronic engineering is critically important, because you can absolutely confidently predict a world shortage of electronic engineers over the next ten years. They will certainly be able to command their status in society and their price.

THE CHAIRMAN: It is apparent from the great in- terest that the speaker has aroused that we have had a most stimulating and enjoyable lecture; one that touches many facets of our society. If I have got a personal message out of it, it is that the information technology revolution is all-pervading and that it is not just going to be a question of young people adapting to it. They will probably do very well, but businesses and society and people who are in their early middle age like me and one or two others of us here, have got our work cut out to make certain that we understand and try to adjust to these enormous new horizons that are opening up to us and this country. If we do not, then this country is not going to prosper in a competitive world. I should like to finish by thanking the Minister

most sincerely, for coming here tonight and giving us this wonderful lecture, and demonstrating so vividly the wealth of opportunities that arise from this new technology.



Documents

I. INFORMATION TECHNOLOGY: INDUSTRIAL AND EMPLOYMENT OPPORTUNITIES