In 1930 a three minute telephone call
from London to New York cost about $250 at 1990 prices.(1) Now it costs $2. By the
year 2005 it may cost 10 cents.(2) In effect, it will be free. This dramatic fall in
the price of telecommunication will, predicts the World Bank, have the most profound effect
on our individual lives and the world economy.(2) Many of us will work from home.
Offices will shrink or disappear. We will shop worldwide without moving from our homes.
Transport will become less important; pollution and accidents will fall. In the developed
world we may redisperse from cities to the country, while people in the developing world may
not have to migrate to cities to find higher paid jobs. Most importantly, jobs will migrate
from the developed to the developing world. In World Bank speak: "An acceleration of the
rebalancing of wealth between nations in the various stages of economic development is the
fundamental effect."(2) This redistribution of wealth will do more to improve health
than all the world's doctors could ever hope to achieve.
Telecommunication charges have
fallen and will continue to fall for three main reasons. Firstly, there is overcapacity in
international links, mainly because of the introduction of fibreoptic cables. Price has not
yet, however, fallen as fast as cost. In September 1994 a call from London to New York cost
10 cents a minute but the charge to the consumer was 60 cents, a 500% margin. That margin is
unsustainable because of the second factor reducing charges: increased competition. The
third factor is technical advance, particularly digitisation and, soon, the replacing of
wire connections with radio. No need anymore to dig up all those roads or lay cables under
the Atlantic.
Telecommuting means working from home or from a local office - a
telecottage. By 2004, estimates the World Bank, about 20% of workers in developed countries
will telecommute. Once the cost of telecommunication is perceived as being close to zero,
half to two thirds of jobs may be held by telecommuters. This may mean that workers can look
for jobs far away from where they live, car ownership and use will fall, road building can
be suspended, offices will shrink, and corporate overheads should plunge. Offices will
become coordination centres for teleconferencing and social activities and "a corporate
symbol of visibility."
Up to half of managers' time is spent in meetings and travelling
to them, but less than 70% of the time spent on meetings is productive.
Videoconferencing-either in a specially designed room or directly in front of your computer
at home-opens up huge possibilities for saving. Consider a four hour meeting-and medicine
is full of them-with five managers or professionals travelling eight hours each way to the
meeting. The savings on that one meeting if it was held as a videoconference are likely to
be around $8000 plus a lot of time. I experienced my first teleconference (without pictures)
about 18 months ago: now I do two or three a month.
Soon electronic rather than paper
documents will hold businesses together. Electronic files will substitute for trading
documents such as invoices and order forms, as well as paper money, books and reports,
letters, and memos. These documents need minimal room for storage, can be sent instantly,
and can be edited at any time. Physical delivery-with its delays, uncertainties, and high
costs-will rarely be necessary. Hammersmith Hospital in London, for instance, is from this
year filmless. All images-from radiography, nuclear medicine, ultrasound, or whatever
modality-are kept on computer. The result is that physical storage space can be abolished,
digitally archived images can be accessed immediately on the wards and in the imaging
departments, and images are not lost. There are also extraordinary advantages in how the
images can be viewed. For example, by "subtracting" the heart and blowing up a small part
of the chest radiograph, much that could be seen only by the experienced can be seen by the
inexperienced (me). Next, the Hammersmith may provide opinions that are cheaper or higher
quality, or both, than local opinions on images taken in Wales, Beirut, or Moscow.
Basing
organisations on electronic rather than paper documents also means that new electronic
communities, or virtual organisations, can spring up. I spend one to two hours a day working
by email with people in Australia, Sri Lanka, the United States, Norway, Mexico, and other
countries, one of whom-the chief executive of a virtual organisation from California-has
hired and fired people he has never met.
Some of the most dramatic effects of
videoconferencing and the transmission of electronic documents may be seen in education. Why
go to a dud medical school in Drearyville when you can more cheaply access the courses at
Harvard? Or why study critical appraisal at Harvard when they have a better course in
Nottingham? And why if you are a teacher with a good course restrict yourself to teaching 15
students in Tromso when you can make your course available to thousands through
videoconferencing or the Internet?
Soon, predicts the World Bank, an international
tele-economy will appear not only in education but in most activities. Global competition
will increase, prices will be forced down, "disintermediation" will be rife as sellers
talk directly to buyers or authors to readers (p 1609),(3) work forces will be widely
distributed, and virtual corporations will form. The logical extension of teleworking is job
export. Why pay software designers in Dallas $1000 a day when equally good designers in
Madras will work for $200? There is no problem getting the work to them, and sometimes they
can be doing the work while you sleep. Some American companies have insurance forms
processed overnight in India: the service is both cheaper and faster. The World Bank
predicts that high level creative jobs and low level processing and clerical tasks will be
the first to be exported. Management jobs, particularly those in finance, will be the last
to migrate.
The result of all this, predicts the World Bank, will be fewer jobs in
developed countries and increased economic power in the developing world. Because neither
the economic regimen nor the telecommunications infrastructure are yet in place the major
changes will take 10 to 15 years to appear (as Trish Groves explains on p 1606, it still
takes more than eight years to get a phone in many African countries). The changes will also
depend on further reductions in international trade barriers, an encouragement of free
competition and electronic entrepreneurialism, and regulation of global telecommunications.
These political and human developments may be hard to achieve, but they are likely to be
driven by the simple fact of the unstoppable reduction in telecommunication costs.
Richard Smith
Editor
BMJ
London WC1H 9JR
1 Woodall P. The
hitchhiker's guide to cybernomics: making waves. Economist 1996 Sep 28; World Economy
Survey: 8.
2 Forge S. The consequences of current telecommunications trends for the
competitiveness of developing countries. Washington, DC: World Bank, 1995.
3
Laporte R. Rights, wrongs, and journals in the age of cyberspace. BMJ
1996;313:1609-12.
