Way to a www.onderful world? The Internet is already changing lives, but the IT revolution is only just starting. Should the world be grateful or worried.

If, like me, you routinely use the Internet to exchange emails, find information on the World Wide Web and occasionally take advantage of other on-line services, then you are part of a massive wave of change that is sweeping the world. Marketing firm Global Reach estimates that 391 million people worldwide already use the Internet, and the figure is projected to reach 774 million by 2003. Of those currently `wired', 169 million are US citizens--over 60 per cent of the population. In Britain, half of all adults have Internet access either at work or home, with numbers still rising rapidly. But the fastest take-up is in China--currently 40.7 million, and set to quadruple in the next two years.

The technology too is rapidly advancing. A phenomenon in the computing industry known as `Moore's law' states that every 18 months the computing power per dollar quadruples.

As with the advent of the telephone, the value of the service rises as more people join. In developed countries, it seems realistic to assume that almost everyone will have access to the Internet in the not too distant future, though there is concern about the minority who, for lack of money or skills, are left out.

A report for the British Government by Booz-Allen and Hamilton Associates in March 2000, recommended setting targets to ensure that at least 70 per cent of individuals in the UK used the Internet on a regular basis by 2003. They wrote: `While the UK has become Europe's leading e-commerce market, research shows an emerging "digital divide" that threatens to leave 20 million people excluded from the "knowledge economy" in three years time, a gulf with severe economic, educational and social implications.'

Once universal access is more or less achieved, what kind of world will emerge? Is the Internet any different from previous tools of communication? According to Brian Reid, one of the pioneers of the Internet and author of The Church and the Internet, there are some fundamental differences. For example, psychological studies have shown that people feel less inhibited typing into a computer than when meeting people face to face, so they are more likely to share secrets, or write offensive things. And because messages can easily be copied and passed on, it is more difficult to keep secrets on the Internet (though it is often easier to trace the leak).

Dr Reid also notes that the Internet makes it easy to communicate simultaneously with many others, no matter how far away they are; to import material that is illegal or obscene; to pose as somebody that you are not (paedophiles try to attract real teenagers by posing as teenagers online while police try to catch the paedophiles by posing as teenagers).

As Reid points out, technology itself doesn't change things but it `changes the possibility or price of things, and people then change the world'.

The Internet is already greatly increasing the mobility of money and investments. The stock markets, once the preserve of the wealthy, are now open to anyone at little cost through online brokers.

Many individual savers, the big banks, pension funds and all the players on the financial services market are also using the Internet. The result is that money is being moved around the world at a greater rate than ever before as the `electronic herd', to use a phrase of Thomas Friedman in The Lexus and the olive tree(*), chases the best return. He writes, `If the herd comes your way, it can, in short order, rain billions and billions of dollars on your country's stock and bond markets, as well as directly into the plants and factories.' But when the herd gets worried about its investments it `can transform what might have been a brutal but limited market adjustment downward into something much more painful and exaggerated, and it can also transmit instability much more quickly between markets, and from bad markets to good markets.'

Such a panic hit Mexico in 1995, sending the currency into free-fall as investors pulled out of the country almost overnight.

The `herd' doesn't like surprises. Nowadays, South Korea's Ministry of Finance, for example, sends out an e-mail to global investors detailing its currency reserves at the end of each business day. Greater transparency, standardized accounting procedures and the possibility for any Tom, Dick or Harry to look at the books are what the electronic herd likes, and when, by 1908, Mexico had got it right, it attracted the herd's billions once again.

The Internet also gives people in developing countries a chance to speak directly to investors. Ghana, for example, has a website outlining investment opportunities as well as information about Ghana's accounting standards and regulatory framework.

Governments will increasingly find that as well as needing to satisfy foreign investors they will have to be more open with their own citizens. Where governments manipulate their country's media, people will go online and get their news elsewhere. And when they don't like what their government is doing, they will use the new technology to organize themselves. The downfall of Philippines' President Estrada's regime in January this year was made possible by cell-phone text messaging. Professor Alex Magno, one of the leaders of this popular uprising was quoted as saying, `In revolutions people used to say "keep your powder dry", now they say "keep your cell-phone charged".'

For those who want it, the Internet gives access to the best information, and the possibility of communicating with others locally or around the world. It enables what Friedman calls `super-empowered individuals' who can campaign effectively on a variety of issues. He cites the example of the Pantanal, a vast nature reserve in Brazil. Local environmentalists who were concerned about some potentially destructive development plans used the Internet to engage US environmentalists. They in turn pressurized the Inter-American Bank into withdrawing investment so that the plans had to be shelved.

In the developing world only a small proportion of people have access to the Internet. This has led to concern about a world-wide digital divide. But at a conference in October 2000 on `Creating Digital Dividends', sponsored by the Washington, DC-based World Resources Institute, Microsoft boss Bill Gates made the point that other priorities come first. `About 99 per cent of the benefits of having [a personal computer] come when you've provided reasonable health and literacy to the person who's going to sit down and use it.'

Gates has set up a charitable foundation which gave $1.2 billion last year to health projects in developing countries, and another billion to projects designed to overcome the digital divide in the USA.

The digital divide in developed countries will become increasingly significant as more and more access to public services is routed through the Internet. Governments have been quick to grasp the potential benefits of the Internet and it is now possible to access many public documents and even fill in licence applications and tax-returns online. The primaries for the recent US Presidential election saw the world's first legally binding Internet voting in Arizona and Alaska.

John Chambers, President of Cisco, which makes much of the technology that powers the Web, predicts that the Internet will `level the playing field' of the next Presidential election. Candidates will be able to reach people with their message using much smaller amounts of money.

For the ordinary citizen there are already many new opportunities to engage in the democratic process. In Britain, both local and national government websites give detailed information about policies and proposals and invite participation in the debate.

Business, too, faces big changes. Information and communications technology has reduced the edge that large companies used to enjoy, as even the smallest company can now advertise its products cheaply. Small advances in know-how have become all important as they can give the edge over rivals--giving rise to the `knowledge economy'. One positive result is that it is possible to have economic growth without actually producing more things (thus reducing the environmental impact).

The knowledge economy may look a little different from traditional economies. The authors of The cluetrain manifesto, possibly the first case of a website spawning a best-selling book, proclaim `the end of business as usual'. Their premise is that markets are conversations, and that people will increasingly want to conduct that conversation in a human voice, rather than listening to `corporate-speak'. Indeed, it is already happening as people communicate in the informal language of e-mail. People buy services not because they have read the glossy brochure, but because they have a relationship with someone in the company who listens to suggestions about how to make the product better. More than that, `to speak with a human voice, companies must share the concerns of their communities. But first, they must belong to a community. Companies must ask themselves where their corporate cultures end. If their cultures end before the community begins, they will have no market.'

This theme of community exercises Steven McGeady, Vice President of Intel's New Business Group. At a Harvard University conference on the Internet and society, he compared surfing the Internet with `wandering around a shopping mall that has been neutron-bombed. There are beautiful store windows and all this beautiful merchandise enclosed behind glass ... but there are no other people there. It's a very spooky, very lonely feeling to be in this place where you see lots of rich information but have no idea whether there's a crowd of people around it or whether it's completely vacant.' Certainly there is a risk that the seductions of computers can lead to individuals becoming isolated, and perhaps the vast market for Internet porn is a sign of this.

Yet the Internet can also enhance community. Last year, Britain's Channel 4 TV channel conducted a ground-breaking experiment. It gave the residents of a street in Sunderland computers and Internet access for two weeks, equipped them with a website and chat room and observed what happened. Interestingly, although opinion polls have found that 80 per cent of people over the age of 55 think they'll never use the net, it was the older people in the experiment who found it most useful.

Residents used the Internet to buy things, to pursue particular hobbies and even to search for romance. But, encouragingly, it also enabled them to meet others in the street they had previously only exchanged greetings with. As common interests were discovered, meetings in cyberspace led to meetings in the pub. One resident reported, `There's a better atmosphere in the street and everyone's walking around with a smile on their face.'

The Internet will certainly change our lives, and probably those of our children even more. Above all it gives greater possibilities to exercise freedom, and with that goes a corresponding increase in responsibility. Sometimes the responsibility will not be of our choosing--the father who finds his 10-year-old son's e-mail bombarded with pornographic junk-mail will have to talk to him about sex, money and exploitation sooner than he would have wished.

Ultimately it will be us who determine whether the Internet is a force for good or evil. Those who are pessimistic about human nature have grounds to be gloomy about the Internet. As for me, I'm one of the optimists.

(*) `The Lexus and the olive tree' by Thomas Friedman, Farrar, Straus and Giroux, USA, 1999.