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Information society, work, and the generation of new forms of socia l exclusion

Exploitable results

The concept of technological practices directs policy makers’ attention from the supply-side to the demand-side perspective of the information economy. It also underlines that companies can benefit most when they combine advanced technology use with a bundle of social innovations, including intra- and inter-organisational restructuring, the use of skilled employees, new forms of employee participation, flexible work regulations, and the introduction of innovation as the main achievement criterion. Above we have discussed how policy makers can support the development of these productive and innovative technological practices. The agenda suggested often cuts across departmental and ministerial responsibilities. There is a need for an integrative approach that involves various policy areas, including science policy, labour market policy, education policy, and technology and innovation policy. Here we want to stress the three elements of such an integrative approach: the development of a national or regional Leitbild which gives some overall guidelines for future socio-economic development, the formation of policy networks, and discursive co-ordination as a new form of governing the development process. A Leitbild, as argued above, includes a set of general ideas of socio-economic development, but it also has a normative dimension, as which it becomes the basis of practical restructuring processes. In some of the participating regions, the 'networked informational economy' has become some kind of Leitbild for socio-economic development. Policy networks represent a new understanding of the role of the state in socio-economic development processes. The relationship between government, on the one hand, and economy and society, on the other hand, is no longer seen as a hierarchical one with the government as the central authority to develop and implement policy programmes. Instead, the concept of policy networks reflects a growing participation of non-government organisations and agencies, such as large companies, unions and trade associations in political decision-making. In policy networks the role of the state in technical macroeconomic management may decrease, but its role as a facilitator and orchestrator of private economic actors remains strong. Discursive co-ordination means that co-ordination of economic activities among various decision makers takes place through continuous discourse and mutual adjustment. Systemic discourse can be viewed as a platform to jointly create and exchange information among economic actors. Discursive co-ordination is not intended primarily to create consensus among the participants; it rather aims at initiating learning processes. It is important to mention that an umbrella policy for developing the information society has to combine the restructuring perspective with the social exclusion perspective, as the benefits and costs related to the widespread use of modern ICT and its organisational embedding are often unequally distributed among various groups of employees. If the emerging information economy leads to increased social segmentation and social exclusion, we can expect that restructuring losers registering only the negative side of the information economy will oppose the transformation process. This is why social cohesion is crucial for the information economy. Focusing only on the diffusion of modern ICTs and related social innovations to make their use more effective may not be a sustainable strategy in the information economy. Such an integrative approach should not deal with the two aspects separately, that is, support the techno-organisational transformation process while leaving the negative side of the emerging information economy to a labour market policy compensating for the costs among the most disadvantaged people. Instead, a comprehensive approach is needed which tackles both aspects together. This may imply a transformation of the traditional 'caring welfare state' into a 'co-operative social state'. The latter can be characterised more as an intermediator and an enabler than as a producer of benefits. The co-operative social state no longer concentrates on social aid as a compensation for resource deficits; it rather supports self-organising entities. This means that the main aim is to empower people to participate in the learning processes taking place within companies.
The development of the information economy is based on two pillars: on the development of a new information sector and on the diffusion of modern ICT throughout the whole economy. While there is no doubt that being a leading producer of modern ICT will have a positive effect on national and regional competitiveness, the informatisation of work and the efficient use of modern ICT within production processes may have an even greater effect on economic growth and employment. So far policy makers who aim at supporting the development of the information economy seem to focus more on the supply side than on the demand side. They intensively support the development of a new information sector or cluster, while giving less attention to changes in the mode of production. Informatisation of work and the effective use of modern ICTs in production processes does not seem to be in the centre of policy activities that aim at developing the information economy. We do not argue here that the traditional supply-side policy should be abandoned, but there is a need to shift attention from the supply side to the demand side of the information economy in order to boost growth and employment. In addition, policy makers should give particular attention to the question how to link a policy supporting ICT production with a policy that focuses on the diffusion and use of modern ICT within companies. What is needed is an 'umbrella policy' to cover and integrate both sides of the information economy. The need for a diffusion-oriented policy is supported by the results of our research project, as technical factors are often mentioned as barriers to investment in modern ICTs. Particularly SMEs seem to have difficulties in assessing the value of modern ICTs for their business. Policy-makers should therefore support co-operation between producers and users of modern ICT. Closer cooperation with and consultation by producers of modern ICT may particularly help SMEs to overcome their concerns with respect to ICT investments, such as spreading costs, incompatibility with the existing technical system, software problems and others.
As argued above, the greatest benefits from the application of modern ICTs appear when their use is combined with other organisational assets, such as new business strategies, new organisation structures or more skilled employees. The successful integration of modern ICT into the production process in general requires major structural adjustments; modern ICT can hardly function effectively and support innovation activities when integrated in the traditional, Fordist organisation framework. Modern ICTs do not determine organisation forms; instead, they must be characterised as enabling technologies. This means that they create new organisation forms; these new organisation forms in turn provide new opportunities for technical design. Modern ICT can affect both the vertical and horizontal dimensions of organisation forms. For example, modern ICT can facilitate the sharing of information among different organisation groups and departments by enabling the introduction of flat hierarchies. On the other hand, modern ICT facilitates a technical integration of various processes or functions supporting the introduction of group work or teamwork. Our company survey reveals that companies often introduce only isolated organisational changes. But it is not enough to introduce some minor changes on the shop floor; the successful integration of modern ICT requires a fundamental restructuring approach, changing both vertical and horizontal forms of division of work information flows and co-operation. As our firm survey indicates, the development of an ICT-based network organisation is still an exceptional case. Companies often introduce modern ICT without adapting their organisational structures; others focus on organisational restructuring without introducing modern ICT as a backbone of new and more flexible organisation forms. And still quite a few companies have undertaken neither major technological nor organisational restructuring measures; they stick to the low-tech Fordist production model. While modern ICT has an important role to play with respect to internal organisational restructuring, the availability of a network technology, such as the Internet, results in an increasingly outward orientation of restructuring practices. Modern ICTs offer the potential to restructure the entire value chain, particularly companies’ interaction with supplier companies and with customers. But external restructuring needs to be combined with internal renewal processes, as inter-firm cooperation is most effective when it is based on decentralised decision-making. Despite the growing evidence that ICT-enabled organisational changes have a positive impact on companies’ productivity and innovativeness, policies aiming at supporting these restructuring processes and diffusing company-level good practices are not widespread. One reason is that companies cannot simply copy a particular organisation structure; instead, restructuring needs to be understood as a continuous open-ended learning process, as argued before. Regions or countries, however, often lack a broad policy approach to the new challenges confronting businesses. Innovation policy focuses more on the development of new technologies and the set-up of support institutions; it seldom integrates issues related to business restructuring and human resources development. Both education policy and labour market policy have also widely ignored the dynamic developments on the company and the industry level, challenging education and training institutions as well as the labour markets. But there is a potentially important role for policy makers in the transformation process towards the information economy. They can contribute to the transformation processes by supporting and enhancing companies’ techno-organisational restructuring processes. What SMEs in particular need is more advice, because they seldom invest in intangibles. As they do not introduce social innovations such as new business strategies and new organisation forms together with the application of modern ICT, they can hardly reap all the possible benefits from the new technologies. In addition, as the greatest restructuring potential of ICT lays in the redesign of inter-organisational relationships, policy makers should direct their attention more to networks of co-operating firms than to single companies. This means that there is a need to develop network policies of restructuring. 'Competitive benchmarking' and 'demonstration activities' initiated by policy makers can be seen as an important element of such a network policy.
The concept of technological practices indicates that it is not ICT itself that can guarantee the leaps of productivity and innovation activities companies need in order to maintain their position in an increasingly competitive environment. Instead, it is a cluster of social changes, including organisational restructuring, cultural changes, changing business aims and achievement criteria as well as new skills and competencies, that contributes to the strengthening of competitiveness along with the use of modern ICT. Modern ICT is of course, an important part of technological practices and the technology itself has an impact on companies’ competitiveness. Modern ICTs have developed dramatically in the last decade. Such technical performance as storage and processing capacity, for example, has increased significantly. This indicates that modern ICT is a powerful technology already in stand-alone configurations. But the full potential benefits emerge when modern ICT is used in the form of integrated systems. For example, the standardisation of microprocessors, communication intersection, system components and user software enable the compatibility of various technical subsystems, forming a large platform that can be used for information and knowledge exchange and for collaborative production. While there is a trend towards network applications, a significant number of companies still make use of isolated computer systems only. Particularly SMEs use advanced ICT systems comparatively seldom. And the fact that companies often apply a variety of different systems, which can hardly be connected to each other, also becomes an important hindering factor that increases competitiveness significantly. Policy makers should support particularly SMEs in modernising their technical equipment to be able to gain the benefits from network applications. We have argued, however, that it is the use practice of modern ICTs in the first place that determines both the nature and extent of benefits being gained from this technology. There is no single logic of using modern ICT, which can be derived from the technology itself; instead, modern ICT represents a multifunctional technology, which can be used for different purposes. This means that we have to change from an artefact perspective to a perspective that focuses on the functions that modern ICT can serve. In this respect, we can differentiate between an automation function, a control function as a surveillance function, a tool function, an organisational function, an informating function and a communication function. The application of modern ICT systems and more advanced use practices focusing on the organisation, informating and communication functions become increasingly important, because the rules of the competition game have changed together with the globalisation of markets. Companies now require quality, innovation, costs, and speed to market for business success and among these factors particularly innovation will become even more critical in the future. Modern ICTs can be crucial for supporting innovation processes, because they make it easy to transfer knowledge-based information from one place to another and to disseminate information worldwide. The more companies are forced to improve their innovation capacity, the more they can profit from applying modern ICTs and making advanced use of them. Furthermore, the technical potential of modern ICT can motivate companies to reflect on their strategic aims, focusing more on innovation activities. The use of modern ICT, as our empirical findings show, is closely linked to companies’ dominant achievement criteria. The network character of modern ICT and its potential as communication technology is of particular importance in an economy dominated by innovation competition because it allows knowledge sharing and, as a consequence of this, specialisation processes within and between companies. A policy aiming at accelerating ICT use needs to underline the close relationship between innovation and ICT use. This means that the diffusion of modern ICT and its adequate use should become an important part of company-oriented innovation policy. A policy aiming at encouraging innovation should integrate measures to support the application of modern ICT and its advanced use. Our research shows that policy makers are faced with a huge task. On the one hand, only a small minority of companies considers innovation to be the most important achievement criterion. On the other hand, many companies have to be convinced to focus on the communication function and network potential of modern ICT. Even companies with modern ICT systems make limited use of the multi-functionality of this technology. They turn to more traditional functions such as automation and process control, while hesitating to use the full potential of ICT systems. Elaborating our argument further, it is important to mention the Internet’s key infrastructure applications, the World Wide Web and the browser, that have greatly expanded the potential of ICT. These technologies integrate the existing computer and communication systems at a relatively low cost in an open network that significantly increases their utility. The use of the Internet for electronic commerce provides a faster, more reliable and potentially more cost-effective way of connecting companies; through the application of electronic commerce technologies, existing business processes can become more efficient. When applied to business-to-business relationships, these technologies may lead to significant productivity gains. According to our company survey, nowadays almost all companies have access to the Internet, but generally they make only limited use of it. For example, business-to-business applications are still rare and also connections to paid databases can be found very seldom.
Our research reveals that ICT-based organisational restructuring might not be a positive sum game. Besides restructuring winners, we can also find groups of workers that are threatened by social exclusion risks. Various approaches have been developed to prevent or combat social exclusion. They are based on a concept of social justice different from the one underlying the postwar social consensus, which simply insured the population against predictable risks. We can distinguish between individualistic and general approaches. Individualistic approaches often analyse social exclusion in terms of denial - or non-realisation – of social rights. The right to work can be seen as a key social right. The emphasis here lies on employment, not on income compensation through social welfare; integration into the work process is the aim of strategies to combat social exclusion. Therefore, the unemployed people and school leavers that have difficulties in finding a job are the main target groups. The following measures of an active labour market policy can be seen as key strategy elements: the readjustment of the unemployed to new labour market demands; the appropriation of wage subsidies for the creation of new jobs in companies; and the promotion of sheltered employment outside the official labour market. Training to readjust the unemployed to new labour market demands cannot be reduced to only developing digital skills or some other specialised skills. Instead, it becomes more important to strengthen workers’ labour market position in general, as an increasing number of workers have to cope with the perspective of flexible and uncertain careers in the future. Therefore, soft skills and competencies such as social competencies or organisational and management skills are becoming increasingly important. However, embracing intensive training programmes for the long-term unemployed is often not sufficient. For this group, job creation programmes also have to be financed. There is, however, always the risk that wage subsidies for companies will not create new jobs or at least no stable employment. It is therefore important to combine employment strategies based on wage subsidies with a qualification element. In addition, programmes which have a high growth potential to create jobs for the unskilled in the community and personal services must be included. The promotion of employment in sheltered areas outside the labour market which can be combined with a policy to guarantee employment for the long-term unemployed dissociates work from employment. This means that people become socially integrated, although they are not occupationally integrated. Furthermore, such a policy helps people to manage 'non-employment'. We know from various evaluation studies that employed people can acquire new skills and competencies more easily than people without employment. Therefore, protective training and competence development within companies becomes increasingly important. The realisation of the concept of lifelong learning may be helpful in avoiding precarious employment and may even support people in starting a new career in a more promising work environment. For workers in precarious employment and in the case of skills mismatch, training referred to as 'adaptive training' can be seen as a possible measure to avoid unemployment. As for older people, acquiring knowledge through continuous learning becomes a heavy burden and other measures have to be taken as well. In their case, it is possible to protect them from being made redundant and becoming unemployed through social protection schemes on the basis of collective agreements or legal regulations. The problem here is that protective regulations for specific groups increase the risk of other groups becoming unemployed. Such regulations have in effect proved to be an obstacle to the recruitment of job seekers or of new entrance to the labour market. In the following we present a five-stage model of social exclusion and suggest intervention strategies. The process runs from full integration (stable employment), through forms of precarious, intermittent or seasonal employment, to unemployment and long-term unemployment and results in the total exclusion from the labour market, when people become unemployable and have to live on social welfare. The process of social exclusion and options for political intervention: Stage 1: Stable and long-term employment. Intervention options: e.g., continuous further training. Stage 2: Precarious, fragile employment. Intervention options: protection agreements, training to overcome mismatches between needed skills and existing qualifications. Stage 3: Unemployment. Intervention options: wage subsidies, adjustment training. Stage 4: Long-term unemployment. Intervention options: job guarantees, promotion of employment outside the labour market, further training and wage subsidies for firms to create new jobs. Stage 5: Final exclusion from the labour market. Intervention options: training to keep workers employable, social aid.
We have argued that the effective use of modern ICT typically requires organisational changes and large investments in human capital. Intensive training is discussed as an important tool to combat reproduced and new forms of social exclusion. Policies to improve the application of modern ICTs and to make their use more effective as well as complementary policies are in some cases beyond the scope of national governments. While national governments can create an environment that supports ICT-based restructuring in companies and increases awareness of social exclusion risks, regional governments can take more concrete steps. The fact that regional governments can take a more active role in the building up of an information economy has several reasons. On the regional level, policy makers have a better overview of the concrete needs of the companies. Particularly with respect to SMEs, they can design more tailor-made policy programmes. Since regions represent genuine communities of economic interest, governments can take advantage of true linkages and synergies (economies of scale and agglomeration) among economic actors. It is much easier to co-ordinate various policy areas on the regional than on the national level and to form policy networks which include the main actors in the field. Particularly the co-ordination of policies supporting companies’ restructuring processes and education and labour market policy is easier to handle on the regional level. In addition, regions may be more suited to develop un-traded interdependencies and relational capital, which is important.
There is some evidence that the emerging information economy triggers a trend towards up-skilling. This trend cannot be related to the introduction of modern ICTs only; instead, as stressed several times, one has to highlight the central role of ICT-enabled organisational change in a cluster of complementary and mutually reinforcing social innovations in order to understand the shift in skill demands. However, in order to identify trends in skills and competence development, we cannot focus on the traditional up-skilling versus down-skilling controversy. We have to analyse what new kinds of skills, competencies and capabilities become important. While it is obvious that the demand for digital skills is increasing due to the widespread use of modern ICT, it does not always seem to be the most urgent demand. Our empirical findings suggest that it is not the technology in the first place that causes new skills and competencies to emerge. Instead, the new network forms of organising work must be seen as the key factor that triggers changing skill demands, as companies stress increasingly the need for organisational, management and social skills. Particularly the competence to co-operate and communicate with organisation members and people from outside is often mentioned as an important competence. In addition, employees’ preparedness to take on responsibility and being trustworthy is also emphasised. When recruiting new employees, more emphasis is often placed on personal characteristics, such as creativity and entrepreneurship, than to formal qualifications. Also 'international skills', including the knowledge of foreign languages and openness to other cultures, are highly demanded. But probably most important is the development of learning-to-learn competencies. The changing skill demands also impact on training aspects. The company is becoming an important place for promoting human capital and acquiring new skills, knowledge, competencies, work attitudes and work virtues. A great number of skills and competencies will not be acquired in formal education processes separated from the work process. Instead, they have to be developed continuously in learning processes on the place. But the need for new impulses coming from formal training in various training institutions still exists and is even growing. This means that government’s role in providing certain types of education is still very important. In addition, as companies and particularly SMEs often under-invest in human capital, financial incentives are necessary to guarantee that all categories of employees are able to continuously renew their skills and competencies. What is needed is a diversity of learning places with different focal points. In addition, the process of acquiring new qualifications and competencies must be seen as a continuing lifelong learning process.
The argument that Europe has to find its own way to the information economy seems to assume that companies of all countries and regions in Europe have to apply more or less the same ICT-based restructuring strategies. Furthermore, this would imply that all regions are also confronted with similar labour-market and exclusion problems. Our research has shown, however, that although there are many similarities, the participating regions and countries are following different techno- organisational paths.33 Diffusion processes of modern ICTs and their social impact are to a certain extent region-specific, while sector specificity seems to be less important according to our findings. From our research we have learned that the participating regions do not differ significantly in the intensity of applying modern ICT. Differences result more from the way in which modern ICTs are used and organisationally embedded. Here we can identify regions in which a great number of companies still stick to the traditional Fordist production model, with some flexibility made possible by the intensive use of modern ICT. On the other hand, we can find regions where companies have started to orient their restructuring strategies more on the network model as a new restructuring Leitbild, benefiting more from the transformation potential of modern ICT through accompanying organisational, cultural and training measures. However, we could not find a single region coming close to the realisation of an ICT-based network economy. We do not understand the diversity of development paths into the information economy as a weakness, it may even be seen as a strength. By comparing various national strategies and their shaping through institutional structures, we may be able to identify good practices and new tools, which could then be 'borrowed' by other regions. For any region, the ability to adapt, diffuse and use products, processes, organisation forms, and even institutions developed abroad is a central aspect, not only for catching-up countries but for the leading ones as well. Due to such huge institutional diversity, institutional benchmarking in Europe is of particular advantage, as the cross-country and cross-regional comparisons of institutional performance are likely to strongly increase the political pressures for individual regions to address the underlying causes of poor institutional performance. The strict application of the method of benchmarking is very difficult, however. There are serious problems related to the method of benchmarking, the most important being that one can by no means expect that a particular institutional solution as part of a specific economy may function in the same way and with the same efficiency in another economy. We probably cannot relate economic success to isolated institutional or organisational factors; they are part of a specific economic structure and it is unrealistic to assume that isolating single institutional or organisational solutions from the whole setting and implanting them into a new structure will not affect their performance. Simple institutional borrowing and copying good practices may turn out to be very unsuccessful, as efficient functioning may depend upon the specific constellation of organisations and institutions in which the good practice is embedded. The method of benchmarking must therefore be applied very carefully. A less strict benchmarking - we may speak of intelligent instead of mechanistic benchmarking - may be helpful in better understanding the development of one's own economy, its strengths and weaknesses. It may give some further hints about how to improve the strategies of economic transformation, because we can learn from diversity. Institutional borrowing implies to a greater or lesser extent a process of institutional learning and adapting to new systems.
Active labour market policy, including measures such as further training, wage subsidies or the creation of employment outside the labour market, is often seen as too limited for combating social exclusion. To fundamentally approach the problem of social exclusion, more acting in solidarity is needed. This is not meant in the sense of guaranteeing material security, but in the sense of re-establishing bonds between the excluded people and society. The sharing of work is seen as the key approach towards re-establishing solidarity. But it is still highly controversial whether the general reduction of working hours can have a significant impact on employment. It is more often seen as an instrument for stabilising rather than increasing employment. Promoting part-time work is also discussed as a strategy for sharing work among a larger number of people. As part-time work is often applied to less-skilled jobs, it may help to reduce the employment problem for less-skilled people caused by the shift in skill demands. Furthermore, the establishment of more flexible transitions from employment to other social spheres, such as education, leisure, family, community and retirement, is also seen as a promising approach to dividing existing jobs among more people. The idea of such an approach is that if people have a real choice between different activities without a risk of losing their jobs, the supply of labour will be reduced and more people can be employed. Dividing the existing working hours among more people is sometimes seen as a defensive strategy to deal with the problem of social exclusion, as low demand for labour is taken for granted. The problem is that of restoring strong economic growth conducive to massive job creation. The need for applying an innovation-oriented growth policy is increasingly stressed in order to combat social exclusion. It is important to note, however, that the relationship between innovation and employment is extremely complex; no direct relationship between these two economic variables exists. Particularly product and process innovations may have partly contradictory employment effects. In the case of process innovations, effects on the employment level in general are much less benign than in the case of companies developing new products or services. Can the introduction of decentralised, ICT-based production structures be seen as a measure to combat social exclusion or to promote social inclusion? According to the results of our company survey, while traditional companies without major organisational changes and low ICT use have mostly kept their workforce stable, those companies that have introduced technical and/or organisational changes have varied their workforce more often by both reducing and increasing it. It seems that particularly those companies that fundamentally restructure their production process to strengthen their innovativeness are the biggest job creators. Such companies derive competitiveness from the virtuous circle, which builds more explicitly on exploiting the flexibility and creativity of their workforce. It is important that governments support those innovative companies that aim at strengthening competitiveness through restructuring processes but rely on a highly educated workforce at the same time.
Modern technological infrastructure supported by new organisation forms opens up opportunities for intensive information exchange by giving employees access to all available information but it seldom produces the expected results. New techno-organisational structures alone cannot create an environment to foster continuous exchange of information and knowledge, they must be based on a supportive business culture. Companies increasingly introduce programmes of cultural strength as an important part of their renewal strategies. The new techno-organisational structures cannot function on the basis of distrust among organisation members. But one can have serious doubts about whether isolated cultural change programmes will be able to stimulate closer co-operation and information exchange. It is more important to create places and an environment in which trust can develop. The important elements of 'structural trust' include giving workers more autonomy in decision-making; integrating them into digital networks; allowing them access to relevant information; providing incentives for creative and innovative behaviour; establishing places for informal meetings; and providing training for employees, enabling them to take up new tasks and functions and to use modern ICT in a productive and intelligent way. It is likely that such an environment can motivate and stimulate intensive information and knowledge as employees exchange together with continuous interaction may create social capital, which can become the basis of more trusting relationships. The dimension of participation is an important aspect of organisation culture, since companies’ techno-organisational restructuring activities have to build on delegating responsibility to individual workers or work groups. Particularly the fact that it is difficult to implement and continuously update modern ICT without support from employees forces companies to give employees more participation rights. But employee involvement in processes of organisational changes is important as well, as they have the best knowledge about efficient work practices. There are thus inherent forces that promote employee participation in company restructuring processes. Our empirical findings show that many companies have realised the importance of involving their employees in processes of introducing and developing modern ICTs. However, we found rather big regional differences. It is important that companies throughout Europe become aware of the need for and benefits of employee participation in techno-organisational restructuring processes. Policy makers can support worker participation in restructuring processes by integrating the participation aspect into their 'benchmarking' and 'demonstration activities'. Employee participation should be seen neither as an alternative to the traditional forms of formal representation - trade unions or shop stewards - nor as a tool for gaining more power. It should be accepted as form of participation in its own right. The fact that union representatives in our case studies were only seldom involved in processes of ICT implementation may support such a view. Increasing employee participation nevertheless indicates that changes have taken place and that the traditional institutions of employee representation need to adapt themselves to the new situation. There is a need to clarify the functions of different forms of representation and participation in techno-organisational restructuring processes, and to develop ideas of how to integrate the various participation levels.