Today's conference is an important initiative. Not just because it is Government, business and employees coming together in partnership to look at a key economic issue. But because of what we're here to look at - the new, knowledge-based economy, and its importance to Britain's future.
I strongly believe that the knowledge economy is our best route for success and prosperity.
But we must be careful not to make a fundamental mistake. We mustn't think that because the knowledge economy is the future, it will happen only in the future. The new knowledge economy is here, and it is now.
This new, knowledge-driven economy is a major change. I believe it is the equivalent of the machine-driven economy of the industrial revolution.
But our job is to help people with that change. Not to resist it, and so suffocate opportunity. But not just to let change happen, regardless of the consequence. Our approach, what I call the Third Way, is to manage that process of change to extend opportunity and prosperity for all. To find a way which provides for efficiency in the knowledge economy, and ensuring that everyone feels its benefit. Enterprise and fairness. That is our goal.
For some people, the advent of the new economy may be a matter of nervousness - even fear. Whole countries may be staring at the prospect of being outpaced, and left behind.
For Britain, the new economy is unquestionably a challenge. But it is a challenge we are now better equipped to face with confidence because of the tough decisions we have already taken to secure a sound economic base - an economy based on a platform of stability, and steady growth.
Because macroeconomic stability is the first key element of the new economy. Without stability in the economy, businesses - particularly businesses in rapidly-moving areas like E-commerce - can't plan and can't invest and can't grow. Stability is not an optional extra. It is central to the new economy.
The second element is the revolution in technology - and especially information technology. Britain has long been a pioneer in advanced forefront of technology and scientific development. But science and technology is advancing faster than ever before. For business the key to success is how fast they can adopt and adapt these new technologies.
IT and communications are vital parts of this. Businesses based on or using IT are at the cutting edge of the new economy. E-commerce and the Internet are already changing business fast. Transaction costs are tumbling. One US bank estimates that the effect of e-commerce is to reduce its cost per transaction from $1 to 1 cent. Astonishing.
The Internet is dissolving physical barriers, and levelling the business playing field. It doesn't matter how small a company you are. You have the choice now of defining your business as global. Standard business thinking used to see big as inevitably beating small. Now fast beats slow. The opportunity is there for business to take.
E-Mail and the Internet may still be a closed world to some people. But especially for the new band of young e-entrepreneurs, and indeed for many young people generally, the Internet is a normal part of life. The e-generation is with us.
Unleashing the full potential of people - our most valuable resource - is the third element of the new, modern economy. In one respect, that means reforming welfare, making work pay, establishing the work ethic for the whole of society. Tackling exclusion. In another, it means an endless emphasis on education, and on skills - a ceaseless focus on driving up standards in order to ensure that opportunity for all is real.
I want Britain to be at the forefront of the knowledge economy. Europe too.
Britain was the first industrial power. Our role as the workshop of the world stemmed from our character as a creative and hard-working people. The combination of adventure and application was a potent mix for Britain. And it still is.
For businesses, the challenge they face is widening the reach of the new economy.
Many of the British companies already involved in E-commerce are eagerly embracing the opportunities the new economy holds out. But we know we have a good way to go. The new knowledge-driven economy is not just about the new, high-tech industries like biotechnology or software development - companies which have built directly on the UK's university and science base. The new economy isn't either just the new technologies like IT and the Internet.
It is instead about new sources of competitive advantage. The ability to innovate. To create new products. To exploit new markets. Using whatever means which are appropriate, including IT and E-commerce. And that applies to all businesses, in all sectors. High-tech and low-tech. Manufacturing and services. Businesses in long-established sectors can find ways of using these new approaches to refresh and revitalise their operations. The knowledge economy can become an indivisible part of the way all businesses work.
For individuals, the opportunities and benefits the new economy offers must not be the sole domain of elite knowledge workers.
Learning is the key to individuals succeeding in the new economy. At school, in further education, throughout people's working lives. The key capability for people to survive and thrive in the new economy is their capacity to learn, and then to apply that learning.
So we have to make sure that the new economy is not just for a privileged few - for the relatively small number of companies working in the world of E-commerce, for example, and for the relatively tightly-drawn social grouping which tends to use the Internet today.
Looking just at the Internet, currently half the people in Britain who are online come from the very top social groups. Almost forty per cent are in a single age band of 15-24. We have to make sure people are not excluded from this revolutionary technology.
Over the last few days, we have seen a number of important announcements about how people can best use the Internet. My point is this: this technology is revolutionising the way we work, the way we do business - the way we live our lives. Our job is to make sure it is not the preserve of an elite - but an Internet for the people.
We have to democratise the new economy. We must ensure that it is open to all.
But it's not only Britain which needs to embrace the new economy fully. Europe needs to as well.
We're privileged to have Antonio Guterres with us here today. He will address you shortly. He and I and other European leaders will be meeting in Lisbon in a few weeks' time for a European Council.
A decade ago, a European Council on economic and social policy would have been all about regulation. Now, there is a transformation.
We are meeting in Lisbon with a clear strategic goal in mind: to make the European Union the most dynamic and competitive area in the world.
We want to see a Europe of full employment in modern labour market conditions. A Europe based on an innovative and knowledge-driven economy. We want a Europe with macro-economic policies which will give sustainable growth. We want to ensure people have the skills they need. And we want to see a reformed economy which will promote competitiveness.
I know this is a challenging agenda. But I know if we can achieve it, the Lisbon summit should come to be seen as a landmark in modern economic and social policies for Europe for the next decade. The prize is great: better growth, better employment and better social cohesion.
We want to see as well the remaining barriers to e-commerce removed. We want to see fast and cheap access to the Internet. Britain is now leading Europe in the new Internet economy. Looking at E-commerce trading, we are ahead of Germany and ahead of France. Four times the European average.
Over one in six homes in Britain now have access to the Internet. A quarter of our businesses are online.
Other areas, like Scandinavia, have seen remarkable growth too in communications technology and e-business. But Britain is undoubtedly doing well in the European E-league.
But that is no reason for complacency. With a technological revolution on this scale, we have to try harder. We have to maintain and enhance our performance.
That's why I've set the goal of Britain being the best place for e-commerce by 2002.
We already have a bold programme for Internet access:
* We will connect all our libraries and schools to the Internet by 2002
* We will have 1000 IT learning centres open by next year
* We are leasing inexpensive refurbished computers to 100,000 of our poorest families
* We are giving through learning accounts an 80% discount on the cost of basic IT courses
But we want to do more. Because, the one clear lesson of the Internet is you can't stand still.
We will get costs down, through competition. When we published our strategy for e-commerce in the autumn, we were told the key barrier was the cost of Internet calls. Americans used the Internet for longer, mainly because most of them don't pay a per-minute charge.
Gordon Brown has challenged the industry to get internet access prices down. Ministers have been working with Oftel and the telecommunications industry to overcome that barrier.
And we're seeing change. New proposals for unmetered access have been announced by two major companies - BT and Telewest. As we've seen this week, Altavista is now offering Internet access on the basis of relatively low subscriptions.
I'm pleased to see this progress. Our goal must be to see prices comparable with anywhere in the world - including the USA.
And today there is a new and further step forward. Another major cable company, NTL, is announcing a new offer - the chance for their customers to use the Internet entirely for free.
I'm sure that others, including BT, are now ready to break new ground themselves.
Obviously, I am not endorsing any of these companies' products. Different products will suit different customers. But the key point is that we are pursuing policies to get prices down. Giving people a choice. Putting consumers first.
And I'm delighted to say this. The Americans have been predicting entirely free Internet access for a while. But Britain has got there first.
Today I want to raise our aspirations again.
Today I want to announce a new goal. I want Britain to aim for universal access to the Internet by 2005.
Making sure everyone has access to the Internet will both improve our competitiveness and reduce social exclusion. Policies of enterprise and fairness - working together.
I am today publishing a report by the management consultants Booz Allen which explains the case for this policy. But there is no one-technology solution to deliver it.
Some people will access the Internet, as now, through a PC. Others through a mobile phone or digital television. Some will do so at work, others at home. For those who can't afford any of these technologies, we will ensure there is a nearby public access point.
Universal Internet access is vital if we are not only to avoid social divisions over the new economy but to create a knowledge economy of the future which is for everyone. Because it's likely that the internet will be as ubiquitous and as normal as electricity is today. We cannot accept a digital divide. For business. Or for individuals.
Knowledge and skills, creativity and innovation, adaptability and entrepreneurship are the ways by which the winners will win in the new economy. We all have a responsibility to ensure that we are all equipped to succeed in it. That way we can all prosper. All our people. And all our businesses. For the benefit of Britain.
I strongly believe that the knowledge economy is our best route for success and prosperity.
But we must be careful not to make a fundamental mistake. We mustn't think that because the knowledge economy is the future, it will happen only in the future. The new knowledge economy is here, and it is now.
This new, knowledge-driven economy is a major change. I believe it is the equivalent of the machine-driven economy of the industrial revolution.
But our job is to help people with that change. Not to resist it, and so suffocate opportunity. But not just to let change happen, regardless of the consequence. Our approach, what I call the Third Way, is to manage that process of change to extend opportunity and prosperity for all. To find a way which provides for efficiency in the knowledge economy, and ensuring that everyone feels its benefit. Enterprise and fairness. That is our goal.
For some people, the advent of the new economy may be a matter of nervousness - even fear. Whole countries may be staring at the prospect of being outpaced, and left behind.
For Britain, the new economy is unquestionably a challenge. But it is a challenge we are now better equipped to face with confidence because of the tough decisions we have already taken to secure a sound economic base - an economy based on a platform of stability, and steady growth.
Because macroeconomic stability is the first key element of the new economy. Without stability in the economy, businesses - particularly businesses in rapidly-moving areas like E-commerce - can't plan and can't invest and can't grow. Stability is not an optional extra. It is central to the new economy.
The second element is the revolution in technology - and especially information technology. Britain has long been a pioneer in advanced forefront of technology and scientific development. But science and technology is advancing faster than ever before. For business the key to success is how fast they can adopt and adapt these new technologies.
IT and communications are vital parts of this. Businesses based on or using IT are at the cutting edge of the new economy. E-commerce and the Internet are already changing business fast. Transaction costs are tumbling. One US bank estimates that the effect of e-commerce is to reduce its cost per transaction from $1 to 1 cent. Astonishing.
The Internet is dissolving physical barriers, and levelling the business playing field. It doesn't matter how small a company you are. You have the choice now of defining your business as global. Standard business thinking used to see big as inevitably beating small. Now fast beats slow. The opportunity is there for business to take.
E-Mail and the Internet may still be a closed world to some people. But especially for the new band of young e-entrepreneurs, and indeed for many young people generally, the Internet is a normal part of life. The e-generation is with us.
Unleashing the full potential of people - our most valuable resource - is the third element of the new, modern economy. In one respect, that means reforming welfare, making work pay, establishing the work ethic for the whole of society. Tackling exclusion. In another, it means an endless emphasis on education, and on skills - a ceaseless focus on driving up standards in order to ensure that opportunity for all is real.
I want Britain to be at the forefront of the knowledge economy. Europe too.
Britain was the first industrial power. Our role as the workshop of the world stemmed from our character as a creative and hard-working people. The combination of adventure and application was a potent mix for Britain. And it still is.
For businesses, the challenge they face is widening the reach of the new economy.
Many of the British companies already involved in E-commerce are eagerly embracing the opportunities the new economy holds out. But we know we have a good way to go. The new knowledge-driven economy is not just about the new, high-tech industries like biotechnology or software development - companies which have built directly on the UK's university and science base. The new economy isn't either just the new technologies like IT and the Internet.
It is instead about new sources of competitive advantage. The ability to innovate. To create new products. To exploit new markets. Using whatever means which are appropriate, including IT and E-commerce. And that applies to all businesses, in all sectors. High-tech and low-tech. Manufacturing and services. Businesses in long-established sectors can find ways of using these new approaches to refresh and revitalise their operations. The knowledge economy can become an indivisible part of the way all businesses work.
For individuals, the opportunities and benefits the new economy offers must not be the sole domain of elite knowledge workers.
Learning is the key to individuals succeeding in the new economy. At school, in further education, throughout people's working lives. The key capability for people to survive and thrive in the new economy is their capacity to learn, and then to apply that learning.
So we have to make sure that the new economy is not just for a privileged few - for the relatively small number of companies working in the world of E-commerce, for example, and for the relatively tightly-drawn social grouping which tends to use the Internet today.
Looking just at the Internet, currently half the people in Britain who are online come from the very top social groups. Almost forty per cent are in a single age band of 15-24. We have to make sure people are not excluded from this revolutionary technology.
Over the last few days, we have seen a number of important announcements about how people can best use the Internet. My point is this: this technology is revolutionising the way we work, the way we do business - the way we live our lives. Our job is to make sure it is not the preserve of an elite - but an Internet for the people.
We have to democratise the new economy. We must ensure that it is open to all.
But it's not only Britain which needs to embrace the new economy fully. Europe needs to as well.
We're privileged to have Antonio Guterres with us here today. He will address you shortly. He and I and other European leaders will be meeting in Lisbon in a few weeks' time for a European Council.
A decade ago, a European Council on economic and social policy would have been all about regulation. Now, there is a transformation.
We are meeting in Lisbon with a clear strategic goal in mind: to make the European Union the most dynamic and competitive area in the world.
We want to see a Europe of full employment in modern labour market conditions. A Europe based on an innovative and knowledge-driven economy. We want a Europe with macro-economic policies which will give sustainable growth. We want to ensure people have the skills they need. And we want to see a reformed economy which will promote competitiveness.
I know this is a challenging agenda. But I know if we can achieve it, the Lisbon summit should come to be seen as a landmark in modern economic and social policies for Europe for the next decade. The prize is great: better growth, better employment and better social cohesion.
We want to see as well the remaining barriers to e-commerce removed. We want to see fast and cheap access to the Internet. Britain is now leading Europe in the new Internet economy. Looking at E-commerce trading, we are ahead of Germany and ahead of France. Four times the European average.
Over one in six homes in Britain now have access to the Internet. A quarter of our businesses are online.
Other areas, like Scandinavia, have seen remarkable growth too in communications technology and e-business. But Britain is undoubtedly doing well in the European E-league.
But that is no reason for complacency. With a technological revolution on this scale, we have to try harder. We have to maintain and enhance our performance.
That's why I've set the goal of Britain being the best place for e-commerce by 2002.
We already have a bold programme for Internet access:
* We will connect all our libraries and schools to the Internet by 2002
* We will have 1000 IT learning centres open by next year
* We are leasing inexpensive refurbished computers to 100,000 of our poorest families
* We are giving through learning accounts an 80% discount on the cost of basic IT courses
But we want to do more. Because, the one clear lesson of the Internet is you can't stand still.
We will get costs down, through competition. When we published our strategy for e-commerce in the autumn, we were told the key barrier was the cost of Internet calls. Americans used the Internet for longer, mainly because most of them don't pay a per-minute charge.
Gordon Brown has challenged the industry to get internet access prices down. Ministers have been working with Oftel and the telecommunications industry to overcome that barrier.
And we're seeing change. New proposals for unmetered access have been announced by two major companies - BT and Telewest. As we've seen this week, Altavista is now offering Internet access on the basis of relatively low subscriptions.
I'm pleased to see this progress. Our goal must be to see prices comparable with anywhere in the world - including the USA.
And today there is a new and further step forward. Another major cable company, NTL, is announcing a new offer - the chance for their customers to use the Internet entirely for free.
I'm sure that others, including BT, are now ready to break new ground themselves.
Obviously, I am not endorsing any of these companies' products. Different products will suit different customers. But the key point is that we are pursuing policies to get prices down. Giving people a choice. Putting consumers first.
And I'm delighted to say this. The Americans have been predicting entirely free Internet access for a while. But Britain has got there first.
Today I want to raise our aspirations again.
Today I want to announce a new goal. I want Britain to aim for universal access to the Internet by 2005.
Making sure everyone has access to the Internet will both improve our competitiveness and reduce social exclusion. Policies of enterprise and fairness - working together.
I am today publishing a report by the management consultants Booz Allen which explains the case for this policy. But there is no one-technology solution to deliver it.
Some people will access the Internet, as now, through a PC. Others through a mobile phone or digital television. Some will do so at work, others at home. For those who can't afford any of these technologies, we will ensure there is a nearby public access point.
Universal Internet access is vital if we are not only to avoid social divisions over the new economy but to create a knowledge economy of the future which is for everyone. Because it's likely that the internet will be as ubiquitous and as normal as electricity is today. We cannot accept a digital divide. For business. Or for individuals.
Knowledge and skills, creativity and innovation, adaptability and entrepreneurship are the ways by which the winners will win in the new economy. We all have a responsibility to ensure that we are all equipped to succeed in it. That way we can all prosper. All our people. And all our businesses. For the benefit of Britain.