My Five Golden Rules to Get Ahead on the Internet

By McRae, Hamish | The Independent (London, England), October 14, 1999 | Go to article overview
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My Five Golden Rules to Get Ahead on the Internet

McRae, Hamish, The Independent (London, England)

WHAT, IF anything, should the Government do about the Internet? Suddenly a clutch of new technologies has burst upon the world, and every government with any technical savvy realises that how well a country copes with these will determine its prosperity for a generation. This is one you don't want to get wrong.

Our own Government is no exception. Every minister with any responsibility, however vestigial, for Net-related business is scurrying around wanting briefings from experts, discussion papers and meetings with Net entrepreneurs. Yesterday, for example, saw Education and Employment Secretary David Blunkett launching his "e- mail forum". Tony Blair has done the vision bit, saying that he wants to make Britain a global leader in e-commerce. Now the minions have to do the practical side and come up with policies to implement that vision. Expect a string of "initiatives" in the coming months, with lots of pictures of beaming ministers leaning over computer screens. It will be the equivalent of the minister opening a new factory for some Japanese company to make computer chips.

The trouble is that the Net is not like that. By its very nature it is not susceptible to government intervention. Governments can encourage inward investment by giving foreign companies the cash to invest here. Money is not, of course, the only reason for investing here, but it is a crucial one. And provided that a government is prepared to allocate taxpayers' money to that end, it is easy for it to do so.

Electronic commerce, by contrast, has grown up almost entirely independently of governments and, in its early stages at least, of big business. It is a bottom-up process, not a top-down one. True, the technical backbone of the Internet was originally developed by the public sector, but its applications have been developed entirely by tiny businesses - or, at least, businesses that were tiny until the Net propelled them to stardom. If you look at the way e- commerce has developed in the United States, the striking thing is how little the government or the corporate giants have had to do with it.

So would the best policy for our own government be to follow the course of the global leader, the US, and do nothing? Should it accept that its instincts to try to promote e-commerce - however well-meaning they may be - are not only wrong, but may have the perverse effect of inhibiting the native ingenuity of British people who are trying to make a bob or two?

Not quite. There are things that a wise government can do that would help this country to garner a slightly larger share of the global e-commerce cake than it would otherwise accrue. Here are five suggestions, golden rules about policy towards e-commerce for a government anxious not to muck things up.

Rule one is: do no harm. One of the many things that is truly different about e-commerce is that it is borderless. Any service can be located anywhere in the world and delivered at very low or even zero cost. So any act that inhibits such trade will drive it elsewhere. That does not mean that governments have no control at all, for there are ethical and moral standards that they should seek to uphold. For example, no country should seek to become a centre for trade in child pornography. But there are other types of e- commerce. For example, gambling over the Net, which as we have seen with the diversion of British betting to companies registered in Gibraltar, can be driven abroad.

That leads to rule two: watch taxation and if necessary lose some existing revenue in order to prevent taxation driving business abroad. The direct taxation base of governments all over the world is threatened by trade over the Net, for it is not just gambling that can move offshore.

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My Five Golden Rules to Get Ahead on the Internet


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