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UK's Gordon Brown Addresses Google Conference

PM addresses Google conference

Gordon Brown has praised the internet industry as a model for the global economy in a speech at the Google Zeitgeist Conference this morning.

Speaking to business leaders at the summit in Hertfordshire, the PM said that the openness and flexibility of companies such as Google highlighted the global need for open, flexible and non-protectionist economic measures.

The PM said:

"The global economy will not work for people unless it is open, flexible, about free-trade, non-protectionist, inclusive, empowering and about building a society.

"The issue is not between change and no change but helping people to cope with change."

Mr Brown said that despite current economic turbulence there were reasons to be optimistic about globalisation, namely that the world economy will double in size "in the next 20 to 25 years", opportunities for social mobility will mushroom and technological advances will "empower people".

The Prime Minister today launched his own Ask the PM initiative on YouTube, calling for questions by video from people throughout the UK, as well as a joint project between Google Earth and the Met Office to build an interactive map of climate change.



Gordon Brown has praised the internet industry as a model for the global economy in a speech at the Google Zeitgeist Conference.

TRANSCRIPT: Can I welcome you all, distinguished business leaders from all over Europe, to this great conference today. And can I begin by congratulating Google, ten years ago a research organisation, now a $180 billion company, an expert in social innovation - Google Labs, Google Maps, Google Earth, Google Tutors - making great strides in putting services to the people of this country and many other countries.

And I want to congratulate Google particularly today on the launch of a project with us, the UK Government, a new map of the world, an interactive map of the world, whereby with the Meteorological Office and with the British Antarctic Survey we will chart with Google, Google Earth, the changes that are taking place in our climate both now and prospectively, and I think this will be a huge tool for making people aware of all the great climate changes of our time.

I think everybody recognises we are in the biggest economic and social change since the industrial revolution. I think behind the credit crunch and what is happening to oil and food prices round the world, people sense we are in the biggest restructuring of the global economy we have seen in our history. I think people also sense that there is a shift of power taking place, from west to east, as Asia is in the ascendant, rising as an economy, and I think as we have just heard, people also accept we are seeing a shift of power from state to people that is propelled by the new technology that Google and so many of you are making available to people.

And I think people may sense that we are in the throes also of creating the first truly global society, people able to communicate with each other, organise with each other, and at the same time find that they have common cause with each other.

Churchill once said that those who try to build the present in the image of the past will miss out entirely on the future. And he also warned about people who were facing change, resolved to be irresolute, he said, adamant for drift, solid for fluidity, and all powerful for impotence - and that is a warning to all of us.

So this is I think not the time for standard political speeches, not the time for the sort of speeches that politicians make going round the country where they go to each different town and give exactly the same speech, and usually are bored giving that speech themselves. This is the time for doing something different.

There is a story told about Einstein, the great physicist, who ventured into the realm of politics as you know at certain points in his life, and he published a book about his thoughts and went round all the different towns of Britain giving a speech, and he gave exactly the same speech to an audience that was in the different towns and cities of the country. And he got so bored with doing it that one night his chauffeur who had been driving him around, who had listened to all the speeches during the time he had been travelling the country, his chauffeur offered, having remembered everything that he had said, to give the standard speech instead.

So Einstein sat in the audience and the chauffeur went up and gave the speech, and it went very well because he remembered every word of it, until something went wrong. The chairman for the night decided to invite questions from the audience and the first question was, how do you relate your theory of relativity to the intricacies of quantum mechanics? And the chauffeur was stumped, didn't know what to do, and he said: "Look friends, this question is so easy that I am going to ask my chauffeur to come up from the audience to answer it."

Now I want to say today that your industry is driving the next stage of globalisation, that the lessons we learned from the success of this industry are the lessons we have all to learn if we are going to make globalisation work for the future, and that we can also learn lessons about how we build not simply a successful global economy but a global society.

Now what do I mean by that? I mean first of all that you stand for an open and non-protectionist economy. The only way the internet and the new technology can work is if there is openness and if we are not protectionist. And I like to think that in Britain we have created the opportunities for the mobile phone market to develop, for the broadband market to develop, that we have pioneered the release of audio visual spectrum, we are moving in on the broadband and trying to make it more available to people, and we have got a light touch regulatory system - and we can talk about that in the questions - that benefits an industry where we are seeing the convergence of the telephone, the television and the computer.

So you stand for an open, non-protectionist economy. You also stand for a flexible economy that is capable of responding with light touch regulation, not heavy touch regulation, to the challenges of the time. You stand for innovation and therefore the flexibility that we need to support innovation and I like to think that we are making it possible for people not only to use new technology but to develop new technology in our country with the support we are giving for science.

And you stand for inclusion, and of course there are only 5% of people in Africa who can access the internet, but the demand is growing and your ability to provide that in all the different continents of the world is something that makes me confident about the future. And you stand for a technology that empowers. So it is people that are empowered by everything that is happening.

And these are exactly the lessons that we have got to learn if we are going to have a successful global economy. We will not have a global economy that works for the people of this world unless it is open, it is flexible, it is about free trade, it is non-protectionist, it is inclusive, it is empowering and it is about building a society.

The problem we have got at the moment is that protectionist sentiment is growing in almost every part of the world. If you go to America today the debate is about how they can restrict imports from China and other countries; if you go to parts of Europe today the debate is about heavy-handed regulation of hedge funds, or of sovereign wealth funds, or of other instruments of finance in the economy; if you look round the world at the moment you have got a fearful population, partly because of the credit crunch, partly because of the rising food prices, partly because of the rising oil prices, and there is absolutely no doubt that protectionist sentiment is growing, particularly in America and Europe.

So what you stand for: an open, flexible, and what I stand for, an open, flexible free trade economy, is under threat from public sentiment. And why is that the case? It is because of course a million manufacturing jobs are being lost every year from America, Europe and Japan, to Asia; a quarter of a million service jobs are moving to India and to other countries as call centres and others are developed there; 60% of our computers and 50% of our textiles are produced in China; Asia is now out-producing Europe. And you can see the public reaction in the States and in Europe as people become more fearful about their jobs.

And ironically all the great successes of globalisation, which is to cut the price of consumer goods, which is also in addition to that, to keep interest rates low, because inflation is low as a result of the counter-inflationary factor of Asian prices, are forgotten by people as they worry about their jobs, they are insecure and want to see politicians intervene to protect, to shelter, to stop the clock, to freeze frame, and that is the debate that we are seeing in many parts of Europe and America at the moment.

When I was at the International Monetary Fund meetings some months ago there were demonstrators outside, and one of them had a placard saying 'Worldwide Campaign Against Globalisation'. And that is the irony, that all the beneficiaries of globalisation, particularly in Europe and America, see globalisation as a threat, they feel themselves victims and not beneficiaries, and at the same time they feel themselves losers and not winners.

So here we have this contradiction. We know that the only way we can have a successful globalisation is following the principles of your industry - open, flexible, inclusive, empowering. We know also that public sentiment, just as at other times of rapid change, is moving to be protectionist.

So what do we do about it? It seems to me pretty obvious, that we have now got to put the case for globalisation. First of all we have got to show people that the growth in the world economy as Chinese and Indian people become consumers is going to be very substantial in the years to come. I expect the world economy to double in size in the next 20 or 25 years, and even although we are going through the credit crunch and growth is faltering in America and Europe at the moment, we must not lose sight of the basic optimism of a world where producers become consumers in Asia and the world economy is going to grow at a very rapid rate.

The second thing that I think we can tell people that is about an optimistic view of the future is of course this - that there are huge opportunities for people in every continent of the world. It is estimated that there will be a billion more people in skilled or professional jobs within the next 20 years. So the opportunity for social mobility, not just in China or India, but the opportunities for people to make the best of their talents in countries like ours and in America and across the whole of Europe are enormous indeed.

The third thing of course is that technology will empower even more. And just as I look at what we can do in the public sector in Britain to empower people in healthcare with greater access to information for self-medication and everything else, in education greater access to information for people to study at home and to draw on the lectures and the lessons that come through the internet from schools, and colleges, and universities; in crime, for people to map the areas where crime is happening and to be far more aware on a day to day, sometimes hour to hour basis of what is happening in their neighbourhoods. All these great advances that are possible will empower people with new opportunities for the future.

And I think it is also true, something else that we should say to people, we can in the next 20 years create a truly global society. Think of the monks in Burma. 20 years ago, 10 years ago, even 5 years ago they would have had sentries standing over fax machines to stop information getting into a country and now, even with a repressive regime like Burma, information cannot be repressed forever, information cannot be suppressed and it comes out of a country.

Think of the Philippines where President Estrada was brought down by what people called, after a million people texted to come together in a demonstration, the first 'coup de text' in history. And think of Make Poverty History, millions of people round the world, linked by the internet, galvanising their efforts together to bring about substantial social change.

So what are the policy changes that I would propose we consider? First of all we have got to stand for free trade. We cannot allow protectionism to become the dominant mood because that will affect not just your industry but every industry and it will hold back the development of the world.

Secondly, we must stand for greater flexibility in markets. The two great protected industries of the moment are the two industries that are causing us the greatest problems today: the oil industry, with a cartel run by Opec; the food industry with high levels of subsidy that are preventing prices for people that at are at a realistic level, and preventing people from producing in countries and continents like Africa at a level that they should. And we need to have flexible markets there.

Thirdly, we have got to be more inclusive. The issue is not between change and no change, the issue is helping people cope with change. And that is why in every one of the industrialised countries the opportunities of education to get new skills as unskilled work becomes less relevant for people must be there and must be made available. So we will have to invest heavily in education as well as in innovation and research.

Fourthly, we will need global institutions that meet the challenges of global times, and we need an IMF where there is an early warning system for the world economy, a World Bank for the environment and not just development, a United Nations that can deal with the stabilisation that is necessary in countries that need to be reconstructed. And we will need of course to encourage the development of a global society in our times.

I believe that the challenges ahead for this world make us all optimistic rather than pessimistic. I believe that an industry like this can fight the protectionist sentiment that undoubtedly exists when people are fearful for change, but I believe that we must become proselytisers of a message, that instead of a worldwide campaign against globalisation being the common mood of the times, that we fight a worldwide campaign for globalisation.

It was said in ancient Rome that when Cicero spoke people said, from the eloquence of his remarks, "great speech". But it was said in ancient Greece that when Demosthenes spoke, and he too was eloquent about what should be done, the public then said "let's march".

And I believe that we should all be marching as one for a vision of globalisation, absolutely central to the industry that you represent - open, flexible, inclusive, empowering and building a global society in our times. That is a challenge that I believe we can all meet together.

Thank you.


Chairman: Great. So what can people in this room look forward to in the coming years in terms of making sure that the UK continues to be a positive environment for us to operate as an industry, for us to operate as businesses? Because as we discussed there is an opportunity for the UK to become sort of the best place for us to operate as an industry and I would love to hear your thoughts on how we could make that happen.

Prime Minister: I believe we have the most open economy in the world, so we have been the pioneers of free trade historically, we still are, and we will always fight protectionist sentiment. I also believe that because of the advantages we have - economic stability, a commercial law system that is good, the financial services system based in London, the home of a large number of the creative industries - that we offer good opportunities for people.

The job of government is to maintain the stability, to have a low-tax environment, at the same time have a deregulatory attitude to dealing with some of the problems that we are have inherited from history. And these are the things that we want to do and we want to be the natural location for people wanting to form and develop their creative industries in the new technologies in the world. And we will do everything we can with a light touch regulatory regime to make that possible.

Chairman: Fantastic. So we look forward to a light touch regulatory regime Prime Minister.

Prime Minister: Absolutely.

Chairman: We will take questions now from the audience. So if you have questions please step up to the mikes and please ask your questions. We would love to have more than one question at the same time so we can get a lot of questions in.

Question: Prime Minister, I am from India, I had the pleasure of hosting you in India at the CII event. You spoke about the cartel being operated by Opec. The Prime Minister of India on the 29th of last month said something to the same, that the Western action this time in the third oil crisis has been weak, if not absent. When will the global action be formed against the rising fuel crisis?

Question: Prime Minister I wondered if you could elaborate on the lessons that politicians can learn from the success of the web, in particular the extent to which it has acted as the solvent of hierarchy, and what Don Tapscott has called the net generation now, acting much more on peer-to-peer recommendation than on old habits of deference, and what influence the web might have on political practice in the future?

Question: You gave a very eloquent speech about globalisation, but I was thinking that inside Europe there are two things that the UK hasn't done: one is to join the euro, and the other one is to open up in Schengen. I wanted to hear your comments about that.

Prime Minister: Well my goodness. Shall we start with the last one? I want to see Europe develop. The problem for Britain with the euro has been that our economy has never been properly aligned with the rest of Europe to make it possible for us to join the euro without either causing huge immediate problems for the economy or requiring a massive amount of adjustment for that to happen.

So the argument is not about the principle of joining the euro, and about the principle of the single currency, it is about, because of our housing market and other factors in our economy and also the size of our financial services industry, what would actually happen to the British economy at the moment of joining the euro.

And so we continue to assess whether we want to join the euro and whether it is right to do so, but it is not a problem of principle, it is a problem of the detailed convergence that is necessary.

And I do think that while the euro was a great technical success in getting it moving with the currency now, with so many countries holding it, that there have been big problems of adjustment that have left Germany growing very slowly for many years, some countries with very high inflation now, not able to cope with the lower interest rate that exists in the euro area.

So while it was a great technical success, there are problems that I think have held back growth in the European economy. And so the issue for us is a great practical one of what would be the impact on the British economy if we were to join tomorrow or in the next year, and we will continue to assess that.

I think the bigger issue at the moment is obviously what is happening to oil prices, and it is, as people will recognise a scandal, that 40% of the oil is controlled by Opec, that their decisions can restrict the supply of oil to the rest of the world, and that at a time when oil is desperately needed, and supply needs to expand, that Opec can withhold supply from the market. And it is also a scandal in my view that it is an organisation that works very imperfectly, that if one country doesn't turn up at a meeting then no decisions are made, and so this can hold back the development of the world economy.

But there is a bigger problem, I mean let's be honest about this, there is a bigger problem that the supply of oil that is available over the next few years is less than the demand for oil. And I think people know that this year, next year, and the year after, despite the measures that have been taken to increase the supply of oil, that demand particularly from Asia is exceeding that supply.

And until we have a proper dialogue between consumers and producers that bring supply and demand into a better position in oil, we will continue to have problems. And yes, there may be elements of speculation, and yes there may be elements where people have unfairly restricted supply as an individual member of Opec, but we have also got to deal with the supply and demand question.

That will demand in the long term other sources of fuel, that will demand in the medium term greater energy efficiency and the use of existing fuel, and getting better value from the existing oil fields, getting a higher amount of production from these fields.

But it also demands that I think first of all that it should be at the centre of the agenda at the next European Council meeting, it should be at the centre of the agenda of the G8, a realistic dialogue between consumers and producers has got to happen, and that would be the start of breaking down the control that has existed by a cartel.

So it is not just a short term problem, there is a bigger long term problem about matching demand to supply. And it is exactly the same problem that we now face in food, where there is a shortage of food because the demand for food, particularly coming out of Asia as a growing country of consumers, is greater than the supply and we will need to make very great changes in the way that we organise food production in the next few years. So these are big challenges.

In my time as Chancellor I saw the oil price at $11 a barrel on one occasion, and now it is $125, 126, maybe nearer 130. So we have had a tenfold rise. In any other decade that itself would have brought a recession in almost every country affected by this, and of course it is causing problems now, but I believe that we can come through this with the proper management of resources.

Mathew asked a third question that I think is really relevant. If we look at the potential for the web it is about transferring power to people as individuals. And if the social networking, and the blogging, and everything else that is happening, it gives people power directly to influence change. And I think what is going to happen round the world is we used to say if only people could communicate with each other, if only people could connect, if only people could find that they had common ground with each other then things would change. Now people are in a position to do that.

And I believe that once people recognise, not only that they can communicate with each other but just how much common ground they share with each other, how much across the different religions, there is a similar view of the world, how much across the different continents, people have common interests that they want to develop, then I think that people power will become an explosive force in history, perhaps the most potent power in the hands of the world for the future, and I think it will start changing not just domestic policy in individual countries, but change the way we run foreign policy.

If for example Rwanda was happening now, then I do not believe that the world would have been as silent as it was because people would have known what was happening within the country and people would have been moved to action. And yes, it is true in Burma that we have not been able to get all the supplies of food into Burma and shelter that we want, but now a regime like Burma cannot hide from the world what used to be hidden when there was a cyclone, or when there was an earthquake, or when there was a famine, the world never got any information at all.

So the world is changing and direct people power is going to be a powerful force not just in domestic policy, but in foreign policy in the years to come. And I do not believe that the old idea of foreign policy run by elites in the interests of the few governments talking about mutual interests rather than about the values they share, can be the same again. I think values and what people think about what is happening, whether it is a famine, a cyclone, or a repression, will start to influence the way people pressure governments in every part of the world.

The problem however is that our international institutions are not strong enough to cope with the global changes that are taking place and we will have to reform the IMF, the World Bank and the United Nations if they are going at a global level do what the people of the world will increasingly demand them to do, and that is to act in situations that people find unpalatable.


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