Opinion of the Economic and Social Committee on "New knowledge, new jobs"

(2001/C 14/21)

At its plenary session on 27 April 2000 the Economic and Social Committee, acting under the third paragraph of Rule 23 of its Rules of Procedure, decided to draw up an opinion on "New knowledge, new jobs".

In accordance with Rules 11(4) and 19(1) of its Rules of Procedure the Committee set up a sub-committee to prepare its work on this subject.

The sub-committee adopted its draft opinion on 2 October 2000. The rapporteur was Mrs Engelen-Kefer, the co-rapporteur was Mr Morgan.

At its 376th plenary session (meeting of 19 October 2000) the Economic and Social Committee adopted the following opinion by 83 votes to 23 with 6 abstentions.

1. Introduction

1.1. At the Lisbon Summit on 23 and 24 March 2000 the EU set itself a new strategic objective for the next decade: "to become the most competitive and dynamic knowledge-based economy in the world, capable of sustainable economic growth with more and better jobs and greater social cohesion"(1).

1.2. Implementation of the decisions taken in Lisbon will be a key component of the French Presidency's work programme. The French Presidency is focusing on the following topics:

- adoption of a social agenda, i.e. a new social policy action programme for the next five years;

- clearer prioritisation in economic policy;

- a leading role for Europe in the information society;

- creation of a genuine European economic area.

As a follow-up to its opinion for the European Council meeting in Lisbon(2), the ESC would now like to submit this own-initiative opinion as a concrete contribution to the conference on "New knowledge, new jobs" to be held in Paris on 8 November 2000.

2. New Knowledge

2.1. Information society

2.1.1. There is general acknowledgement that the industrial age of Ford and Taylor has been superseded by the Information age. The nature of work and the structure of companies and organisations has been transformed by office automation, industrial automation and the new business processes built around data communications such as EDI.

2.1.2. What has not been so clearly understood is the significance of this for working people in whatever sector they work - public or private, industrial or commercial, production or service.

2.1.3. Information processing has itself evolved through the convergence of the technology, Media and Telecommunications industries (TMT). The raw material of these industries is information in all of its multi-media representations. This information, or data, in its machine form, is impersonal. Knowledge, however, is personal. Workers can be differentiated and categorised according to how they personalise and use information.

2.2. Knowledge and information

2.2.1. The dominant characteristic of the Information society/New economy/etc. is that it values human assets above physical assets.

2.2.2. Investment in human assets involves the development of capability and skills. In this opinion we define capability and skills as "knowledge".

2.2.3. Knowledge is dynamic. It accumulates with learning, with experience and with information received. The role of learning, particularly in the education system, is to provide the constructs, the rules and the principles by which we subsequently find, analyse and use information. People use their knowledge to process information to do their jobs. "New knowledge" is knowledge reinforced by information technology.

2.2.4. The challenge is to enable as many workers and as big a proportion of the public as possible to transform available information, and to incorporate it into manageable knowledge.

2.2.4.1. When a company or an organisation has been transformed by TMT all its records, its policies and its operating procedures are held in computers. All work relating to the central mission of the company or organisation is performed via workstations linked to this information system.

2.2.4.2. Enterprises and workers have to adapt to working methods defined by their relationship to information systems. Jobs are restructured, tasks are redefined. These changes require everyone involved to adapt - they need "new" knowledge.

2.2.4.3. A new system of jobs and tasks is emerging. At one end of the spectrum work means defining the rules, principles and policies used in programming the computers. This is not itself computer programming - it is professional work. At the other hand of the spectrum tasks can involve using workstations to follow the rules and policies by which the organisation operates.

2.2.4.4. It is in this way that new knowledge leads to new jobs. Information systems create a new working environment. Interacting with these systems creates new tasks, new jobs and a re-definition of previous jobs.

2.2.5. "New knowledge" is transforming all sciences, particularly biotechnology and genetics, with so many new possibilities, new dimensions of ethical behaviour and extended application of the precautionary principle is needed.

2.3. The rules of the game are changing in the knowledge society

2.3.1. Traditional competitive factors as well as distance are becoming less important. The barrier of distance has been overcome by telecommunications. What counts is creativity and flexibility more than scale or cost. Of overriding importance will be the formation, growth and contribution of SMEs. These are the source of so much innovation. Some larger companies tend to acquire SMEs in order to develop and maintain their market leadership.

2.3.2. The most important competitive advantage for an organisation(3) to have will be its ability to learn, i.e. the ability to generate new knowledge from old, to come up with ideas and innovation, as quickly as possible. The price which information and knowledge-based products fetch on the market depends less on the work that has gone into them than on their exclusivity, which may be short-lived.

2.4. Innovation requires a radically different climate than that which can be provided by forms of management and enterprise that were introduced 100 years ago to organise the production of goods in an efficient manner. The system of obeying orders and supervision will increasingly have to be replaced by flexible and participatory forms of collaboration in which knowledge and individual skills could be given freer rein.

2.5. The social and management organisation of the core cadres of workers will continue to change. There will be an emphasis on multidisciplinary collaboration (in car manufacturing, in health care, etc.). The inter-relationships between these workers and with the organisation are likely to be modified significantly. Working locations will also be more varied with more home working. Even so, such workers are likely to be contracted to a knowledge-based organisation.

2.6. Council and Parliament agree on the need to reform education and training systems to meet new needs in the knowledge society, coordinate an active and pro-active employment policy more closely at European level, modernise social security systems and gear the whole of social policy towards promoting social integration. The ESC fully endorses this approach, believing that combating unemployment is a fundamental requirement if the knowledge society is to include everyone. The best protection against social exclusion is a good-quality job.

3. Employment in a knowledge-based society

3.1. The last decade was one of mass unemployment in the EU. At first sight it seems as if new technologies are the cause of these job losses. But technology only does away with jobs when innovation is limited to rationalisation and substitution. Hitherto in the EU innovation has not kept pace with globalisation to a sufficient degree. The job creation potential of TMT and its applications have not yet been fully exploited.

3.2. New knowledge, new technology and new organisations are creating, changing and eliminating jobs in all sectors. The speed with which the EU economy and society adapts to these new realities and the ability of EU organisations to improve the productivity of the work force will be the measure of both new job creation and the earning power of those jobs. In turn, this depends on the speed with which jobs and tasks are redefined and adapted to the information age.

3.3. In addition, the information society is creating new needs which can only be satisfied by new jobs. There is no reason to assume that there will be no growth in the future. The following are just some of the sectors involved:

- technology, media, telecommunications (TMT)

- education, health, fitness and life style

- entertainment, tourism and leisure industries generally

- trade, transport and financial services

- environment and housing

- domestic, personal and business services.

3.4. With new working patterns, new working relationships, new private life activities and schedules, the social scene is set to change radically. If the EU is to preserve the ethos of its social model it will need to be changed dramatically to fit the circumstances of the knowledge society in the twenty-first century.

3.5. The TMT sector

3.5.1. the knowledge economy is very dependent on the TMT sector. All "core" workers will interface with electronic equipment which is in turn networked to information sources.

3.5.2. the provision of TMT equipment and services is therefore a big employment opportunity for the information age. The impact of TMT in "old economy" sectors can be even greater since it is via TMT that old economy businesses must transform themselves or risk being squeezed out of the market.

3.5.3. There are, even today, huge shortfalls in the number of skilled workers available to fill IT jobs. This is an important and exciting employment opportunity. Member States should mobilise human resources to fill these jobs. There are opportunities for public sector employment initiatives, private industry initiatives via apprenticeship schemes, and IT industry initiatives via their in-house education and training facilities. In general, education and training planning will take on increasing importance.

3.5.4. TMT also facilitates the formation of new economy businesses (business to business, business to consumer, consumer to consumer) in a variety of fields. For EU economies to benefit, business formation, venture capital and SMEs need a favourable environment(4). If new company formation does not flourish, E-Europe will not emerge.

3.6. Services

3.6.1. there are many categories of service work and these will continue to evolve.

3.6.2. Important classes of knowledge work will be central to the core mission of the organisation. The workers will use work-stations and be networked on-line to the organisations' information systems. Everything possible must be done, in terms of organisation and training, to ensure that certain workers are not "driven" by their work stations.

3.6.3. Certain categories of service work, while for the benefit of an organisation, are likely to be contracted out (e.g. catering, cleaning, gardening, security, etc.) These jobs have the characteristic of not being on-line to the organisations' core information systems. Contracting companies are an important element of the new economic order. These companies will also have knowledge work at the apex of their pyramids. But some risks of contracting out should not be neglected. There must be a right balance between maintaining integrated services and contracting out.

3.6.4. the provision of personal/domestic services is a growth sector which will also benefit from qualification and delivery by professional service organisations. certain service activities provide personal services to other workers. As these use TMT technologies to migrate towards 24/24-7/7 job involvement, the need for service support increases.

3.6.5. Changing attitudes in society and the increase in the number of working parents are stimulating the demand for "out of home" and "out of hours" service availability, especially banking, health care, education and local authority services.

3.6.6. In sectors where there is a shortage of skilled staff, earnings are relatively high. They are likely to remain so and it will be difficult to avoid an increasing disparity between the earnings of highly skilled workers and the earnings of less skilled workers. The earnings growth of service workers will depend on productivity improvements which will in large part depend on them receiving management, motivation and training.

This trend is also stimulating the demand for qualified workers in these industries and the demand for training.

3.7. Innovation

3.7.1. IT is a key technology which unlocks the door to many innovations. But the specific advantages also make innovations in the information sector easier to copy so that only a rapid pace of innovation can ensure that we remain one step ahead. Stable growth in this context depends primarily on dynamism.

3.8. In former times, innovations mostly came about step by step. Development, production and marketing departments worked in linear fashion, and outside input was limited. Nowadays innovation originates from many sources, both internal and external. The whole process is much more flexible and market-oriented. Some innovative companies are unsuccessful because they remain isolated.

3.9. Without research, many innovations would not see the light of day, but research is not innovation per se. Young companies in particular, who use and develop the latest technologies, need effective links to research. They need useful ideas, prototypes and skilled employees. State-funded research has an important function in support and preparation. The ESC recommends the creation and promotion of centres of excellence to give visibility to results with practical applications and to streamline the transfer process(5). Consultancy services for young companies should also be expanded.

3.10. The ESC supports the Council's efforts to improve the networking of national and joint research programmes as well as to disseminate the latest R& D. The same goes for the work to develop open methods for co-ordinating the benchmarking of R& D policy and the removal of barriers to the mobility of researchers in the EU.

3.11. Promoting high-quality, sustainable economic growth is the foundation for improving the employment situation in Europe. With no growth there is no way the current problems can be overcome. The EU-wide target of at least 3 % growth must therefore be achieved. In addition to quantitative targets, we also need qualitative targets as far as possible in order to achieve lasting results(6).

3.12. Lasting successes in employment policy can only be achieved through consistent and long-term global policy. The various processes which go to make up the European economic and employment strategy (Luxembourg, Cardiff, Cologne) give high priority to the interplay of economic, financial, monetary and labour market policies and the adaptability of workers and enterprises. The national action plans also show, however, that the implementation of the employment strategy still needs strengthening if more use is to be made of the opportunities afforded by the information society.

4. Education and training in the knowledge society

4.1. All innovation springs primarily from the skills and motivation of those involved. It is therefore essential as an element of European policy, especially in view of its need to adapt jobs and tasks to the information environment, to enhance employability through a comprehensive training policy. Even with all the other elements of innovation fully operative, sufficient jobs might not be created unless there is a supply of skilled labour(7).

4.2. The transition to a society of information and knowledge requires not only increased investment in education, it also imposes a completely new set of requirements on education policy. It calls for a radical redefinition and reshaping of education and learning.

4.2.1. The continuum of primary, secondary and tertiary education needs to ensure that students at all levels are counselled and taught to achieve their potential. In addition there needs to be an emphasis on social skills and a wide general education as a basis for lifelong learning.

4.2.2. It is essential to provide life-long learning opportunities to facilitate both continuous professional education for existing disciplines and to allow men and women to achieve new disciplines. This will require employer support and the "out of hours" availability of primary, secondary and tertiary teaching.

4.3. Maintaining employability requires lifelong learning. Everyone, men and women, must have good opportunities to keep themselves employable. New teaching and learning arrangements should be developed to allow learning to be self-defined and self-directed, and to make use of networks. In addition, structures suited to learning throughout one's life need to be in place; transparency and advice on learning processes must also be increased. Realistic approaches to promoting lifelong learning in a comprehensive manner should be developed at both national and EU level.

4.4. The EU employment policy guidelines and the EU economic policy guidelines both call for better incentives for investment in human capital. In these guidelines, the Member States - and where possible businesses, trade unions and other players - are asked to report on their efforts in favour of human capital, setting out their objectives in concrete terms and updating them on an ongoing basis. The ESC calls for systematic observance of best practices and is prepared to play an appropriate role in this connection.

4.5. The ESC also welcomes that the EU employment guidelines call for equipment for all schools and Internet access for all pupils by the end of 2002. It should be possible to provide free Internet access to pupils and educational establishments. New ways must be found to provide training in IT and to promote job mobility for people who have no access to training at present.

4.6. In order to meet the new requirements of work, social skills such as communication and team working are of key importance alongside IT knowledge and media skills. IT training and the promotion of social skills must begin at school level and then continue as a complement to all forms of training and business activity. The rapid pace of technological change makes it essential that systems of initial and further vocational training in particular are constantly updated. In addition to providing sufficient training places with prospects for the future, a key task for European employment policy is to link together general education and initial and further vocational training into a coherent continuum of lifelong learning.

4.7. Education systems must be open so that everyone has the chance of a job in the information society. Those who have so far been excluded must be given access to new learning opportunities, including showing then how to use IT technologies in a socially responsible way. Efforts should be made to promote vocational training models which favour the social integration of disadvantaged groups and to ensure equal opportunities for women and men. The ESC supports the Council's efforts to combat illiteracy more effectively.

4.8. In some countries the often inadequate training facilities and slow pace of modernising initial and further training structures have produced the frequently cited training deficit. In the case of some ICT professions requiring a university degree, the strong demand far exceeds the supply of appropriately qualified people. In view of the worldwide competition to employ such people, training initiatives in this particular area are needed in some EU countries. Recruitment from outside may bridge the gap in the short term, but the medium and long-term solution must be to mobilise and train up home-grown human resources. The ESC therefore proposes an initial and further training offensive for IT skills in all Member States with verifiable targets.

4.9. At present in most Member States considerably more men than women are trained for careers in the information society. There is an urgent need to encourage women to opt for such careers and improve their employment prospects.

4.10. There should be systematic feedback between the courses on offer and those in demand. Thus universities must offer their students a wider range of more practical courses to make them more employable. The range of available further education courses should be expanded. Entry conditions must be simple and as open as possible. At the same time studies, vocational training and research should be promoted at European level through common standards and the reciprocal recognition of courses, stays abroad and qualifications. Recognised standards for qualifications are also required in respect of vocational training and further training, making the value of such qualifications less dependent on the product spectrum, the individual company or the particular labour market situation. The Committee advocates a substantial expansion in cross-border work experience places involving ICT training. There should be more sponsorships between businesses in the ICT sector and educational establishments.

4.11. Interactive learning between teachers and pupils in the ICT sector is essential. Teachers should be encouraged to acquire practical experience in business and administration and develop the necessary skills through lifelong learning. The Committee would suggest a recognised general system for attesting knowledge society skills. Additional qualifications in the field of information and communication should be attested by certificates recognised throughout Europe.

5. Innovation in firms and organisations(8)

5.1. Building a knowledge society does not, however, mean only a "learning society" but also "learning firms" and "learning organisations" which exploit the potential of technology creatively.

Firms and other organisations should themselves shoulder some responsibility for actively promoting the knowledge society by supporting lifelong learning through appropriate in-company training.

5.2. The structures of firms and organisations are being modernised to keep pace with the new requirements of the knowledge society. "On-the-job learning" is being encouraged by introducing new, participative forms of work organisation. The old functional and hierarchical forms of organisation are being replaced by networks of smaller units with more autonomy. Such forms of organisation are more conducive to learning because communication does not have to overcome so many barriers and levels of hierarchy. For the future organisations will have to adapt to constantly changing conditions and redefine work and tasks in terms of the knowledge, skills and experience required.

5.3. Experience with Japanese management strategies has shown that the ability and strength of firms to innovate cannot be measured by technology alone. Success depends increasingly on social innovation as well. This means adapting jobs to the abilities of workers and motivational approaches which require personal responsibility and collaborative management styles.

5.4. The personnel policy of companies has a key role to play in shaping the organisational structures of firms. It can establish a balance between technical, corporate and work/employment-related interests.

6. Social inclusion, not exclusion

6.1. In principle, the adaptation of work and tasks in the information society - the phenomenon of "new knowledge, new jobs" - can promote integration as well as leading to exclusion.

6.2. In particular the ESC is concerned about young people without the literacy and numeracy to use workstations, older workers in danger of being by-passed by new working arrangements and the disabled.

6.3. For the disabled the information society can be a win-win situation. Employment moves from muscle to brain power, and IT can be adapted to mitigate so many physical and mental handicaps. Social provision for the handicapped needs to focus on IT adaptation while employers will have new ways to achieve their employment targets for the disabled and the handicapped.

6.4. Experience shows that school-leavers with few qualifications undergo the least further training during their working life and have the least chance of acquiring vocational qualifications. In-house training cannot generally offset differences in educational achievement between groups of employees. This continues to be a primary public responsibility.

6.5. Firms' investment in human resources should not be confined to career planning for up-and-coming managerial staff, but offer all employees appropriate further training. This could include in-house and outside courses and should be agreed with employees, taking the interests of both the firm and the individual into account.

6.6. Special labour market strategies are also needed for unqualified workers to enable them to acquire skills and be integrated. Social services should be available irrespectively of income insofar as they serve to create equal opportunities and avoid social polarisation.

6.7. Demographic change also poses a serious challenge to the knowledge society. Personnel policies should take account of the ageing of the workforce(9) and be geared to preventative measures in this respect. The scope diminishes for recruiting young blood to infuse new knowledge into the firm; if the older generation retires all at once, their accumulated experience cannot be passed on adequately to the next generation.

6.8. Greater attention should also be paid in the information society to assisting people with disabilities. Information technologies can help many groups of disabled persons actually to use their employment opportunities.

6.9. In order to provide equal conditions of access to knowledge and information within the EU, special efforts should be made to develop the potential of the working population in disadvantaged regions and remote areas(10).

6.10. Unequal opportunities for access to new knowledge run the risk that the social divide may grow wider. Social marginality is not only hastened by a lack of training but may also go hand-in-hand with a failure to accept new technologies, e.g. skilled employees who cannot manage new technologies. There is a need for national labour market and social policies specifically targeting these groups and assisting them in the transition to appropriate employment. Social integration should be mainstreamed in employment, education, training, health and housing policy.

6.11. The social partners should review traditional distinctions between blue- and white-collar workers and public-sector employees, agree on the principles of corporate reorganisation and ensure that the training policy of firms incorporates new models for new forms of work and corporate structure.

7. Working conditions in the knowledge society

7.1. Working time policy represents an important component of a comprehensive reform of the labour market. It can meaningfully supplement structural changes and make them politically more acceptable.

7.2. Variation in working time arrangements adjusted to the needs of the company and the needs of the employee can improve the quality of life of employees and strengthen the competitiveness of the enterprise.

7.3. Employees can benefit from working time arrangements if family life and job are better balanced, employment is safeguarded and loss of skills avoided.

7.4. Changes in working time policy need to avoid bottlenecks in the supply of labour caused by skills shortages. Within existing working time arrangements, adequate time needs to be allowed for planning and training measures to be taken.

7.5. Linking working time arrangements to vocational qualifications can set off innovative processes. The basic idea is to use a certain proportion of working time for vocational training. The northern European countries in particular provide models for such linking, e.g. working time credits, knowledge accounts and job rotation.

7.6. in many countries the potential for voluntary part-time working is far from exhausted. EU-wide about 6 % of working males are employed part time and about a third of working women.

7.7. Where full time working is the norm, management and employee representatives may need to jointly draw up a corporate plan for more voluntary part-time working and an improved balance between family and job. The prospects for an increase in part-time working are good if the social partners translate such initiatives into practical measures.

7.8. With the new corporate models, forms of work are springing up everywhere which we used to call "atypical": temporary work, teleworking, fee-based contractual work and other forms of more or less freely chosen self-employment. In the knowledge society income is no longer related so directly to the amount of time invested in the work, but depends to a greater degree on the skill, originality and speed with which new problems are identified and solved.

7.9. In some member states, this multiplicity of different arrangements means that the number of economically active people who are not or only inadequately covered by Member States' social security schemes is growing. Such shortcomings in social security cover need to be corrected.

7.10. The development of the knowledge society is changing the balance of education and training between employers and the formal education system. It is also causing companies to revise their own approach.

7.11. For the work force trained at a tertiary level, much of their training, except what is job and employer specific, comes from the formal education system. These are the skills on which companies depend most and, in general, competitive employers cannot afford to maintain these skills on anything other than the leading edge.

7.12. For other workers, their formal education is by definition incomplete. They are therefore candidates for both job specific training and broader based personal development. The ESC is concerned that employers may reduce or withdraw this broader based development education and training for reasons of economy or the misplaced view that training will be bought by competitors hiring their employees. Since employees are more likely to value employers who develop their skills and careers and since "developed" employees can contribute more all round, the ESC urges companies to redouble their training efforts in order to compete in the knowledge economy. Besides the responsibility of firms, individuals must increasingly assume responsibility for remaining employable by undertaking further training on their own initiative.

7.13. In the context of flexible working arrangements social, in addition to economic, criteria should also be a yardstick for shaping flexibility. More consideration should be given to workers' requests to adapt working hours according to personal circumstances. Concepts of "flexicurity" attest to the fact that flexibility, job security and social security are not necessarily opposites.

7.14. One of the most visible indications of the changes in work organisation and standard working conditions is the growth in teleworking. A new study shows that some six million people are employed in telework arrangements in Europe. The Committee is of the opinion that, with the right general conditions to safeguard the rights and obligations of teleworkers and their employers, this form of work can be encouraged.

7.15. Employer-employee-relations in their various forms (e.g. collective bargaining, company agreements) must continually adjust and shape the new conditions emerging from the knowledge society.

8. Safeguarding and rebuilding the welfare state

8.1. Social security systems have both a social and an economic function. For instance, social spending paves the way for private-sector production (qualifications for example). It also considerably cushions the problems associated with structural change.

8.2. Structural change can take place much more smoothly if individual risks are adequately cushioned and the opportunities for a new career are increased by active measures to promote employability. A modernised social security system is one of the foundations of dynamic economic development which aids social cohesion.

8.3. With the change in forms of work and remuneration and the growing proportion of electronic, virtually untraceable, transactions, there may be some erosion of those national tax and contribution systems which are tied to a specific firm and the geographical location of the employment. The ESC calls on the Commission to study this aspect carefully. A rapid and global solution must also be found for the non-discriminatory taxation of traditional trade vis-à-vis e-commerce.

This includes security arrangements for workers in the information society, including data protection and intellectual property.

8.4. By reinforcing preventive activities in the world of work, firms and social security systems can certainly avoid some of the nastier consequences. The potential of the IT in the field of health and safety at the workplace must be used, but new social risks also need to be studied. IT and also new forms of work organisation are tending to reduce physical fatigue, while greatly increasing the mental burden and stress. Additional research should be undertaken into workloads, work intensity and work-related stress.

8.5. With the loss of importance of the traditional firm and the displacement of social relations from the workplace into other spheres of life, the social risks are changing. In the knowledge society there is no less a need, but a different need, for social security. Social security systems should be reformed to take account of flexible working time, breaks in employment, etc. and to ensure that people employed under these flexible arrangements have equal opportunities. A variety of social bridges are needed to underpin the active transformation of society.

8.6. Reforms are needed in the Member States in order to bring policies more closely into line with fundamental changes in the areas of family, the division of labour between the sexes, the demographic trend and fundamental changes in the world of work. In this, greater consideration should be given to the concept of "flexicurity". The introduction of general conditions ensuring a stable employment future will promote the spread of innovative forms of work organisation and labour market flexibility.

8.7. The TMT industries are in the vanguard when it comes to developing new working arrangements which will change the face of industrial relations. The Committee calls on the Commission to examine carefully the effects of the new technologies and of internationalisation on cooperation within firms and the room for manoeuvre of the trade unions and various players in firms.

8.8. It should be ensured that teleworkers are treated equally in society; in particular they should be able to call on company networks for basic information on social security, health care and representation rights.

8.9. If work is redefined, employability must be fostered more strongly to help people earn a living for as long as possible. The more skilled and employable a person is, the more likely they are to find a job.

9. Summary

9.1. The rapid development of the knowledge society is affecting all sectors of the economy, organisational and work structures, working and employment conditions. It is having a profound impact in the economic, social and cultural transformation of our society.

9.2. The big three - new technologies, media and telecommunications (TMT) - are permeating all sectors, even if there are still many occupations and activities where they are not used directly. In particular they speed the pace of change by increasing exponentially the dissemination of knowledge and its global availability.

9.3. The knowledge society is opening up a wide potential for new forms of organisation and is creating the opportunity to turn the EU into a competitive and dynamic economic area. In order to exploit the opportunities for innovation in industry and society in an effective and socially responsible manner joint efforts must be made to improve and broaden the skills base.

9.4. The all-round ability to use the new TMT is nowadays a basic skill that everyone has to master, like reading, writing and arithmetic. The job-creation potential can only be fully realised if skilled workers are trained at all levels and everyone has the opportunity to maintain and expand their employability. This puts important new responsibilities on individuals.

9.4.1. To optimise the performance of human assets, we need systems of primary, secondary and tertiary education which educate and train for a knowledge society. We need companies to invest in human assets with development and training of their personnel. Continuing professional education and lifelong learning are more than slogans - they spell economic survival in the global economy.

9.5. Bearing in mind these requirements of the knowledge society, there is an even greater need for an active, forward-looking employment strategy supported by the main economic and social players that creates a new balance between investment in human resources and investment in machines, plant and infrastructure.

9.6. New knowledge, technical innovation and social innovation must go hand in hand in order to smooth the way to a society, firms and jobs based on learning.

9.6.1. New organisational and management principles are less status- and more process-oriented. Working relationships are more direct, team-oriented and require personal initiative and responsibility. Participative forms of work organisation are becoming increasingly important, with workers involved in the way the workplace, work routines and working time are organised.

9.6.2. In the knowledge society, human assets need more care than physical assets. Different working arrangements need to be offered and family friendly arrangements must be made.

9.6.3. The spread of new working arrangements and new models reconciling paid employment, education, family and social activities, calls for changes in labour law and social security which take account of the new realities of the knowledge society. Flexibility in working arrangements should be accompanied by a panoply of social bridges to actively facilitate the transformation of society.

9.7. The knowledge society offers new opportunities for growth and employment. At the same time, new social risks and different social security needs may arise.

9.7.1. The social security system must be readjusted to flexible forms of work and life-style. The concept of "flexicurity" is intended to reconcile the flexibility seen as necessary by firms with the legitimate interest of employees in security.

9.7.2. In the knowledge society some groups are threatened by discrimination and exclusion; to counter this, all groups must play a part in developing the information society. Social exclusion must be avoided so that the pace of innovation and future prosperity are not reduced and social cohesion is not jeopardised.

9.8. Changes in work organisation bring with them changes in the system of labour relations. There is a greater need for joint initiatives between the social partners to ensure that the transition to the knowledge society encourages competitiveness and social cohesion in equal measure. Agreements on the modernisation of work organisation and in-house skills acquisition can smooth the way.

9.9. The all-embracing nature of the knowledge society means that its opportunities can be most fully exploited by those societies which best coordinate the innovations brought about by R& D - innovations in education and training, in infrastructure and services - and which play an active role in managing this process.

9.10. Europe will undoubtedly be on the winning side if a new balance can be found between market forces and those essential tasks which still devolve upon government.

The EU's prospects in globalisation are good if the economic and social potential of the knowledge society are used boldly in equal measure.

Brussels, 19 October 2000.

The President

of the Economic and Social Committee

Göke Frerichs

(1) Conclusions of the European Council Presidency (Lisbon) of 23 and 24 March 2000, point 5.

(2) See ESC opinion on "Employment, economic reform and social cohesion - Towards a Europe of innovation and knowledge" - OJ C 117, 26.4.2000, p. 62.

(3) Cf. the definition of the term "organisation" in paragraph 2.1.2.

(4) This point was already discussed in the ESC opinion for the Lisbon Summit (see ESC opinion on "Employment, economic reform and social cohesion - Towards a Europe of innovation and knowledge" - OJ C 117, 26.4.2000, p. 62).

(5) Opinion of the ESC on the "Follow-up, evaluation and optimisation of the economic and social impact of RTD: from the Fifth Framework Programme towards the Sixth Framework Programme" and opinion of the ESC on the "Communication from the Commission to the Council, the European Parliament, the Economic and Social Committee and the Committee of the Regions - Towards a European research area", OJ C 204, 18.7.2000.

(6) Opinion of the ESC on the "Implementation of the Employment Policy Guidelines for 1999", OJ C 209, 22.7.1999 and opinion of the ESC on the "Proposal for guidelines for Member States' employment policies 2000", OJ C 368, 20.12.1999.

(7) See ESC opinion on "Employment, economic reform and social cohesion - Towards a Europe of innovation and knowledge" - OJ C 117, 26.4.2000, p. 62.

(8) Cf. the definition of the term "organisation" in paragraph 2.1.2.

(9) The ESC is currently drawing up an own-initiative opinion on "older workers".

(10) See opinion of the ESC on "Guidelines for integrated actions on the island regions of the European Union following the Amsterdam Treaty (Article 158)", OJ C 268, 19.9.2000.

APPENDIX

to the Opinion of the Economic and Social Committee

The following amendments, which received at least a quarter of the votes cast, were rejected in the course of the debate:

Points 7.4 and 7.5

Combine into one paragraph, to read as follows:

"Changes in working time policy need to avoid bottlenecks in the supply of labour caused by skills shortages. Linking working time arrangements to vocational qualifications can set off innovative processes."

Reasons

The sub-committee did not discuss the link between working time arrangements and vocational qualifications, and this issue deserves proper consideration.

Result of the vote

For: 61, against: 63, abstentions: 7.

Point 7.12

Delete the third sentence ("The ESC is concerned ... hiring their employees.").

Result of the vote

For: 54, against: 63, abstentions: 5.