Gasoline and bureaucracy

Luís Ángel Fernández Hermana - @luisangelfh
1 August, 2017
Editorial: 119
Fecha de publicación original: 12 mayo, 1998

It never rains but it pours

Last week, the Catalan branch of the Internet Society held its annual conference under the title of “The Internet and Catalonia: Civil Society and the Next Generation of the Internet. Proposals for meeting the challenges of the Global Information Society in Catalonia”. Taking as their point of departure the constant growth of Catalan cyberspace and its diversification into individuals, organisations and companies which offer a wide variety of services for the distribution of information and knowledge, some 30 speakers from administration, industry, the academic world, research institutes and the society in general, took a look at what the strategic bases for stimulating a powerful and innovative industrial sector of the Information Society should be and how they could be adapted to the cultural framework of Catalan civil society. The preliminary conclusions were unanimous: we face a historical opportunity for participating in a revolution already firmly established in the Industrial sector, research, design and innovation, all of which are characteristics which abound, in one way or another, within the Catalan social network. This initial diagnosis, however, left some aspects in the dark. In the first place, the need for an agreed strategic vision between the administration and the financial sector with the rest of society, who, as every survey done so far shows, participate more and more in the economic, social and political model sustained by information technology. In the second place, the characteristics of this model itself, whose basic developmental premises are not exactly favourable for attaining this goal. And here I would like to put at the top of a long list, the process of creating the businesses that will achieve this strategic vision.

As I have already pointed out in other editorials, one of the distinctive features of the Information Society is that it is made up of a vigorous network of small companies. This is no coincidence. Thousands of people, whether individuals or groups, as well as other small entities and organisations, enter cyberspace and open a site with the aim of participating in this new virtual space of information and knowledge. In the vast majority of cases, they don’t even see themselves as businesses but as members of a vast community thriving in the new platform, the Internet, which came out of nowhere and whose destination is unknown. Once inside, they have no alternative but to begin to adopt business-like procedures. For instance, it is necessary to organise the flow of information, manage it, process it (fabricate it) and broadcast it (put it onto the information market). This activity occasionally generates some revenue (and then the hackneyed question of who makes money in cyberspace automatically comes up).

On the whole, then, the Internet is a vast business breeding ground for what will undoubtedly become the industrial culture of the Information Society. Within its bosom, the rules of the present economic game in the real world are being subverted. To name one, thousands of paid workers from the real world are becoming independent business people in the Net, although they still fulfil both roles simultaneously at the moment. And, many of them are not really businessmen and women in the true sense of the word (they haven’t set up companies), but they nevertheless function as such because of the way they work in cyberspace, whether they are trying to make a living or simply enjoying themselves. The Internet is not a contemplative world, it demands action, intervention and interaction, and all this generates organisation within a healthy chaos. This is one of the reasons why it is so difficult to analyse the Internet from an economic and sociological point of view.

Nevertheless, when we get down to earth again things get even more complicated. In Spain, if you want to set up your own information and knowledge company, there is no-one there to help you do it. The paperwork involved in establishing a business in our country takes up to six months, added to which are the costs. In the USA, the same procedure takes half a day. This is, comparatively, a phenomenal disadvantage. We have to go through 13 to 14 bureaucratic procedures, according to the European Business Survey conducted by the OECD, the organisation of the industrialised countries. If you want to set up a public limited company, there are 5 more to go through. Each step involves a mountain of documents and involves six different organisations. If you survive this first phase, then there is the second obstacle: the financial one. The OECD’s survey points out that 43% of the Spanish companies questioned, mentioned financing as one of the greatest short-term stumbling blocks to their expansion.

Both factors, the bureaucratic and the financial, make up a complicated labyrinth impossible for those starting businesses with no experience in administrative and legal fields to get through, which is exactly the case of those involved in the new sector of information and knowledge. There is no social and industrial fabric to protect, guide, orientate and facilitate things for them. The only thing there is, is bureaucratic wrangling and investment, just what nobody needs to start working in the Internet or at least not in any appreciable way to prevent one from getting connected and beginning to develop an information system. Until a solution to this bottle-neck situation forms part of the strategic vision for developing the Information Society, its advance will certainly be in fits and starts accompanied by a structural weaknesses which put each step at risk. In the meantime, the US can allow itself the luxury of turning the Internet into a fertile training ground for learning by trial and error, because the costs of the venture are minimal and the potential profits enormous. Basically, this is another version of the “gasoline factor”: fuel costs 7 times less on the other side of the Atlantic than in our countries. Consequently, the comparative advantage Americans have when setting off on any business venture is phenomenal, and the cost of bankruptcy minimal (apart from the fact that it is constitutionally “rewarded”). The above-mentioned survey pointed out that the costs of a failed business venture in Spain are so high that people are loathe to take risks. And, it is precisely this that the Information Society demands of us at the moment – taking risks in order to create its industrial framework. If the administrative and financial sector do not agree to open up these floodgates, a large amount of the effort put into active participation in this strategic sector will come to nothing.

Translation: Bridget Kinng.