Expectations and realities

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In recent years, much has been learned through the quantification of ICT access and use (see, for instance, Statistics Canada 2003a). More competitive marketplaces, infrastructure deployment and falling prices have contributed to high uptake rates of ICTs in many countries². As a result, access is no longer the dominant issue - at least in developed countries³. Usage takes place from many locations and, as applications and uptake move in tandem, it becomes more diversified. E­mail has emerged as an indispensable communications medium, while information and entertainment uses proliferate. As well, e-commerce is taking hold - whether browsing for product characteristics and prices or placing orders online.

In the process of such wholesale technological, economic and social transformations, progress has also been made in both quantifying ICT-related change and appreciating the value of such information. Nevertheless, it takes time to measure change and find analytical approaches to use the data. In the meantime, hypotheses are postulated and get frequently passed on as conclusions. Now, some harder quantitative evidence can be used to see what has really happened - and what has not. However, it is still early and this work must proceed with caution.

2.1 Expected outcomes

Quite frequently, the early stages of important new developments can be subject to euphoric hype and impatience regarding prospective possibilities. One manifestation of this is associated with premature inferences about allegedly 'predictable' outcomes. Take the example of rural electrification; the 1920s and the 1930s produced claims that with the development of this new technology, work and workers would move from the cities to the countryside once they adjusted. Today, cities are still growing while rural communities are still shrinking (Brown and Duguid 2000). Although not based on hard evidence, which is invariably non-existent during those early stages, such beliefs may become engrained into people's psyche and, consciously or not, begin to influence decision-making⁴. In the extreme, these beliefs are typically communicated

as premature announcements of 'the end'; the end of distance (Cairncross 2001), the end of place⁵ (Kelly 1998), and even the end of history (Fukuyama 1992). The emergence and rapid diffusion of new ICTs was no exception, but quite typical of such behaviour. It gave rise to several expected outcomes, which have not yet been realized or can not yet be supported by factual evidence. Some of these expectations are explored below.

2.1.1 The paperless office

The arrival of the personal computer in the early 1980s and its speedy diffusion later in the decade, combined with the arrival of networks that made it possible to electronically capture, store, access, display, manipulate and transmit documents, gave rise to much talk of a 'paperless office' and, by extension, a 'paperless society' (Sellen and Harper 2001; Business Week 1975).

However, the production and use of paper products is at an all-time high. Data reveal that consumption of paper for printing and writing alone has increased significantly over the last two decades (Table 1). In Canada, consumption more than doubled between 1983 and 2003 - with most of the growth occurring during the first of the two decades. As the growth rate of consumption (139.3%) outstripped the rate of growth of the population (23.6%), per capita consumption increased by 93.6% to 91.4 kilograms in 2003. This is equivalent to almost 20,000 pages⁶ per individual, enough to cover an area of almost 1,200 square metres.

Per capita consumption in the U.S. is comparable to that of Canada; but increased consumption is not confined to developed countries. Worldwide production and consumption of paper also more than doubled over the last two decades, with especially high growth in emerging Asian economies (particularly China, which absorbs a significant amount of Canadian paper exports). Society's addiction to paper is expected to intensify; paper consumption is projected to continue to grow, and more so in developing countries. According to the Forest Products Association of Canada (2004), growth over the next 15 years is forecast at 3.2% annually; 5.5% for developing countries and 2.5% for developed ones (Forest Products Association of Canada 2004).

Not only is the notion of a paperless society defeated by existing data, but a visit to any modern office workplace will confirm that printers everywhere continue to spit out massive amounts of paper, and paper recycling bins are full. Jokes concerning the printing of e-mails abound, and there are reports that e-mail alone has significantly increased printing. Estimates for additional printing by businesses due to the use of the Internet and e­mail range from 30-35% (Ivey Business Consulting Group 2003) to 40% (Sellen and Harper 2001) depending on enterprise size. If anything, "shred-it" businesses proliferate like never before and printers have also found their way into people's homes. At this juncture, the digital era appears hungry for paper.

Surely, there are more parts to the story concerning the relationship between ICTs and paper. There is no doubt that ICTs have brought about numerous behavioural changes - gone are the days of hand­writing or dictating text, a substantial amount of reading is done on the screen, and there is even the occasional office that gives the semblance of being paperless. There are also many other reasons why paper is thriving, including its versatility and its physical properties of tangibility and portability. The fact remains, however, that the paperless office is the office that never happened. This leads to the related issue of transporting paper.

2.1.2 The end of mail

The arrival of the fax machine more than two decades ago gave rise to talk about the drastic reduction in mail, including the fall to relative insignificance of the post office, a fixture in every country. This was multiplied manifold in the early to mid-1990s with the arrival of e-mail in its commercial incarnation.

Indeed, as early as 1998 the International Labor Organization (ILO) noted: "It is five years since the number of international messages sent by fax took a bigger share of the market than those conveyed by post. In 1996, for the first time, the volume of e­mail in the United States exceeded the number of letters delivered by the postal service" (p.12). Today, the volume of e-mail is many times higher and still growing enormously. More recently, electronic messaging through cell phones and other handheld devices is also exploding in several parts of the world. In Finland, for example, four out of five mobile phone users (and there are many with 74% of the population aged 15-74 using mobiles in 2003) report sending text messages weekly, with 1% sending between 100 and 200 messages! Nearly all those in the 15-29 age group sent text messages, including picture messages (Nurmela and Sirkia 2004).

Yet, despite the truly enormous rise in e-talk, data fail to validate the demise of transporting paper. The volume of postal deliveries, both by the public and private sectors, has increased, at the same time at which faxes are sent, and e-mails and text messages skyrocket. Canada Post's volume is up over a long period (Table 2) - albeit marginally lately, and down from its peak in the mid 1990s⁷. Even though the rates of growth are slower, or even if there was a decline, the trends of mail delivery are nowhere close to pointing to the imminent demise of postal offices. The additional volume of half a billion pieces moved around annually by private couriers and local messengers adds to the perspective, particularly if the growth of the last few years is factored in (Table 3).

Couriers and local messengers are proliferating today, as is their employment. Tables 4 and 5 show the industry's firm demographics and employment, respectively, for selected years - during which Internet usage and e-mail were high in Canada. These are clearly not signs of an industry in distress.

Therefore, the business of moving paper around is alive and well. In large offices, there are still people whose job it is to physically move paper around from one floor to the next. Once again it must be re-iterated that many things may have changed, including the operations of postal offices and the composition of mail, but not the activity itself. For instance, personal mail is down, but other types of mail make up for it. Moreover, operators have undergone serious reorganization and re-allocation of their activities, including franchising, and express mail services⁸ or e­mail (something more pronounced in countries where there was already a split between post and telecommunications). Junk mail makes up some of the lost ground as well, in parallel with the existence of spam and other telemarketing activities.

2.1.3 The end of professional travel

The case of human transport, in conjunction with the need for physical gatherings, such as business meetings, conferences, workshops, symposia and the like is also worth exploring. E-mail, the Web and videoconferencing were said to lead to the end of such movement as it would be more practical and economical to telecommute (Lyon 1988). This has not yet been the case, according to research which suggests that the greater the availability of information about activities and people of interest, the greater the travel to participate in those activities or meet those people (Mokhtarian and Meenakshisundaram 1999). This work further observed that e-mail and face-to-face meetings are the fastest growing modes of communication, and that travel is unlikely to be significantly reduced by the use of newer ICTs.

Although comprehensive and reliable Canadian data are limited, there is evidence to suggest that professional travel was actually increasing in Canada during the same time that new ICTs were being introduced to markets. Between 1996 and 2000 - a major period of ICT adoption by businesses - the number of domestic business (and convention) trips made by Canadian residents grew from 20.⁹ million to 26.5 million (Table 6). Business travel to Canada was also expanding, resulting in 735 thousand trips in 1999, a 6% increase over the previous year. The events of 9/11 likely had some effect on both domestic and international travel, as trips for business began to decline in the years following (Statistics Canada, Catalogue No. 66-201).

Consider also the anecdotal evidence of the volume of organized events today, not to mention comments by professionals about the need to be cloned in order to keep up with the demands for appearances, and the importance of personal interaction. All of this makes it abundantly clear that we have never had more movement, which probably reflects the need to meet, perhaps even more than before.

Even though there are definite advantages to distant forms of communications, and teleconferencing, videoconferencing and Web casting are indeed on the rise, they are still relatively small-scale, somewhat eclectic and seem to take place in parallel rather than replacing physical gatherings.

2.1.4 The end of traditional retail

Finally, there is the case of retail trade, which for many, was a cause for concern in the early days of e-commerce. Much has been written about the potential detrimental effects on retail of the new way to do commerce, including fears of unemployment, given the huge numbers of workers involved in the industry and their relatively lower qualifications, as well as fears that e-commerce may soon alter land use for bricks-and-mortar retail, particularly in downtown cores (Nie and Erbring 2002).

It is true that although e-commerce started small, it continues to grow steadily and at a healthy rate - just as retail is. Table 7 shows comparative data over recent years for which the value of e-commerce sales is measured in Canada. Total private sector sales over the Internet more than quadrupled between 2001 and 2004 (an average compound annual growth rate (CAGR) of 43%), to account for 1.05% of total sales. Similarly, e-sales in the retail industry more than tripled (35%), accounting for 0.8% of the total (Statistics Canada 2005a).

While e-commerce takes hold and begins to mature, data show that the number of retailers, retail space and employment in the industry have all increased -at stronger rates in recent years (Table 8).

While 'clicks did not destroy bricks', e-commerce has permanently stamped its mark on the retail -and wholesale - industry, as consumers use the new medium for information, product characteristics, pricing, etc. The Economist (2004) states that not only do people buy more online but "...they are also increasingly adept at using the Internet to decide where and how to spend their money offline" (p. 9). The fact remains that retail does not seem to be in danger, although there are indications that online retail sales are now growing more quickly than off­line sales (Uhrbach 2005). Moreover, other adjustments are taking place which are not necessarily linked to e-commerce.

Parallel developments during the 1990s, like the 'big box' phenomenon, "sprouted across the country, dramatically changing the face of retail" (Lussier et al. 2003). At the same time, many stores bought into the one-stop shopping philosophy, expanding both their physical size and selection of merchandise. There have also been many shifts in the composition of sales, such as the increased share of health and personal care products, and automotive products at the expense of food and beverage, and clothing.

2.1.5 A time of change

These are some of the expected outcomes associated with ICTs that have made the news over the last several years. While all of them contain implied causality, and even grains of logic, so far they have not materialized. The paperless society, the end of mail, the end of traditional retail and numerous other such proclamations have all been grossly exaggerated with quantification at this point in time proving them faulty.

Presumably, it can always be argued that these predicted outcomes may still happen - they just have not happened yet. Another way to explain why what was supposed to happen has not yet happened is by acknowledging that many forces are at work simultaneously, some of which concern people's behaviour. Thus, it may well be that the ICT forces are indeed pointing in the alleged directions, but all kinds of other influences, pointing in opposite ways, dominate. Such interactions are quite complex and do not result in straight-line movements for a multitude of reasons. In the very least, the ceteris paribus assumption (all other things equal) does not hold true between ICT causes and their supposed effects.

In addition to macro factors, ICTs involve people's behaviours, reaction to the new, inertia, inter-generational attitudes and more. In any event, such a view would manifest itself in changing composition and patterns of usage, and this seems to be the case. It is evident that ICTs have significant implications on each of the above areas. For example, although the paperless office is not here, people's behaviour has changed profoundly and continues to do so. Working lives are certainly not what they used to be, and even family lives have changed - with implications for time-use and personal interactions. The composition of mail has changed, as have the operations of the post office, including prices. Retail will never be the same as consumers have never been more empowered. The list can go on and on. Thus, ICTs have powerful and lasting influences, albeit different from the "obvious" ones predicted at early stages of deployment and use. By all accounts, the transformations associated with ICTs are not yet complete.

2.2 Realities

Having explored what has not yet happened, it is instructive to examine the realities of what has happened.

Fact 1. People talk on the phone more than they ever have

Years ago, and at a time when the telecommunications industry was still dominated by monopolies, a vast amount of literature was converging on the low price elasticity of the demand for telecommunications services (voice telephony and particularly long distance). Of course, it is easy to refute now, but the literature could not have been more wrong. This conventional wisdom came crashing down from the very early stages of opening up the markets.

Traffic data reveal that the use of wireline networks alone has increased enormously over the last twenty years. Both the frequency of calls and the talking time have gone up. In Canada, lines increased from about 11.5 million in 1983 to approach 20 million by 20039, and in the U.S. from 102.2 million in 1980 to 188 million by 2001. Notwithstanding the big increase in the number of lines, average calls per line increased, as did average calls per capita. More significant was the increase in time spent on the phone¹⁰. In the U.S., the estimated volume of conversation time increased from about 1.7 trillion minutes in 1980 to approach 5 trillion by 2001, while in Canada, the volume in 2003 was estimated at just short of half a billion minutes¹¹ (Table 9). In 2001, this represented 71 minutes per line per day in the U.S., up from 46 minutes in 1980. Estimates for Canada are a bit lower (see Technical Box for complete methodological explanations).

This increase is even more telling because it happened during the period of the introduction of cell phones - which did not exist in the early 1980s - and their increased use, particularly over the last decade. Cell phone traffic follows the same pattern as the diffusion of cell phones - rather slow in the beginning but more rapid in recent years. In Canada, cell phone subscribers grew from 98 thousand in 1987 to 13.5 million by 2003; mobile subscribers in the U.S. increased from 92 thousand in 1984 to over 140 million by 2002.

At the same time, data show that in Canada the number of billed minutes increased by a factor of 20 over the last 10 years, from just over 2 billion in 1993 to approach 40 billion by 2003. Gradually, this has added an average of 8 minutes a day per cell phone subscriber or 4 minutes a day per capita in Canada (Table 10). In the U.S. billed minutes increased even more, from almost 27 billion to more than 720 billion by 2002. This amounted to 14 minutes per day per mobile subscriber or 7 minutes per capita in the U.S. This phenomenon is on the rise and there is no indication that a ceiling has been reached¹². These trends may be more pronounced in several European countries which are heavier users, and elsewhere in the world, where cell phones have overtaken fixed lines for some time now (International Telecommunication Union (ITU) 2004).

The combination of wireline and wireless voice communications points to the fact that, at this juncture of evolution, the Information Society is also a "talkative society". On the basis of the Canadian and U.S. figures, the amount of time spent talking on the phone went up somewhere in the range of half-an-hour to 45 minutes per person per day. This is only an average figure - if there was a distribution to take into account that just over half of the population has a cell phone, the time increases substantially for that part of our society that possesses and uses them.

Fact 2. People communicate more than ever with e-mail and spend more time on ICTs

The extra time spent on the phone as part of daily routines today is substantial, but still pales in comparison to the amounts of time absorbed by other ICT activities that did not even exist over two decades ago. Computers and the Internet - and more particularly e-mail - are inextricably linked to images of people in their daily lives, at the workplace and at home. Whether people actually type away on the keyboard, use printers and scanners, browse the Web or shop electronically, they do things of the past differently, and they also do new things.

E-mail has surfaced as the number one activity associated with Internet use. In Canada, for example, of the 64% of households that used the Internet in 2003, 95.7% used e-mail (Statistics Canada 2004a), and for many people everywhere this is a daily activity. Obviously, such usage claims an amount of time that was devoted elsewhere in pre-e-mail times. Moreover, this time represents a fraction of the time devoted to other ICTs. While precise estimates of such time-use are not available, and it differs by country, according to several marketing information sources estimates of total time spent on-line is 75 hours a month at work and somewhere between 25-30 hours at home. This order of magnitude is corroborated by data from Statistics Canada (Chart 1).

On average, individual Internet users (52.8% in 2000) spent 7.4 hrs a week on-line, averaging more than one hour per day. Younger people spend even more time and some are very heavy users. For instance, 10% of those in the 15-24 age group spent more than 2 hours daily - perhaps a lot more. There are also indications that such usage expands over time and would probably be even higher today. For instance, 2004 data for Canada show that the average time spent online per user ranged from 31 hours per month for the Prairies to 37 hours in Ontario (Comscore Media Metrix 2004). Time spent on off-line use of computers and other ICTs must be undoubtedly added to the total. For instance, 43.3% of Canadian computer users aged 16-25 years used computers at home for an average of one hour or more per day, while 18.1% used them for 2 hours or more (Veenhof et al. 2005) (See also Veenhof 2006).

Chart 1
Average weekly hours spent on the Internet, by age group, Canada, 2000

Source: Statistics Canada, General Social Survey, Cycle 14: Access to and use of information communication technology (ICT), 2000.

Fact 3. The extra time spent talking on the phone, communicating with e-mail and using other ICTs is in no way matched by decreases in the use of older, more passive and less interactive ICTs, such as television.

Some of this extra time devoted to new ICTs is taken away from more traditional media, notably radio and television. There is statistical evidence that time spent on television viewing and radio listening is declining. In Canada, for instance, data show a decline of just over two hours per week for television between 1983 and 2002, while radio listening has actually increased somewhat given its relative revival in the '90s (Chart 2). Similar evidence exists in the U.S. and many other countries. Aggregate data mask the fact that this decline is more pronounced among Internet users than non-users (UCLA 2004). On the other hand, however, such declines barely make up for the extra time spent on wireline phones alone¹³. For instance, it is estimated that on average one hour on the Internet reduces time spent watching television by about 10 minutes, and one-half hour per day for the user who is online about three hours a day (Beacham 2005).

It seems, therefore, that the time taken away from the television is a far cry from the extra time spent on the newer ICTs.

Chart 2
Average weekly hours spent on television viewing and radio listening, Canada, 1983 to 2002

Note: Data for television viewing refer to all persons aged 2 years and over. Data for radio listening refer to all persons aged 12 years and over, except for the 1983-1986 period which refers to all persons aged 7 years and over.
Source: Statistics Canada, Television Viewing Databank and Radio Listening Databank.

Fact 4. The pattern of communications is changing

It is therefore well established that today people use the new means at our disposal and communicate much more than ever before. Data also reveal that within our significantly expanded communications, the pattern has changed quite a bit as well.

The rise of long distance...

While the number of all kinds of telephone calls and time spent on them went up, more telling is the growth associated with long distance. This is a process that has gone on for some time - Chart 3 shows the evolution of local and long distance calls in Canada from 1963 to 1987, data permitting - but it intensified in the '90s with market liberalization and the virtual collapse of prices (tariff re-balancing, etc.).

In Canada, the number of wireline long distance calls increased from about 1.5 billion in 1983 to almost 3.5 billion calls in 1992, while the volume of billed (not 'talked') long distance minutes almost tripled in a few short years, from 19.1 billion in 1995 to almost 56 billion by 2002 (Table 11). Long distance calling now accounts for a much larger proportion of total calling.

The situation is similar for cellular telephony. In Canada, the proportion of long distance minutes from cell phone calls has also increased more than local minutes (by a factor of 10 compared to 7) in only a six-year period from 1997 to 2003, even though it is still much more expensive to use cell phones for long distance calling (Table 12).

Chart 3
Number of wireline calls, Canada

Source: Statistics Canada, Telecommunications Statistics.

...and the explosion in international calling

As well, the phenomenon of increasing long distance increases with distance. This can be seen by data referring to the situation within a country and internationally. The significant increase in local calling in the U.S. is much smaller than that of long distance (intrastate and interstate), which in turn does not even compare to the staggering rise in international calling - particularly outgoing. The number of calls from the U.S. to other countries increased from just under 200 million in 1980 to 6.3 billion in 2001, and the number of incoming calls from 165 million to over 2.9 billion (and as outgoing traffic has increased much faster than incoming it creates a large deficit, in the order of US$3.5 billion). Chart 4 shows the evolution of minutes in index form for local, interstate and intrastate long distance, and international calling in the U.S. Long distance now accounts for a much higher proportion of the expanded volume of calling.

Chart 4
Wireline minutes, by distance, U.S.

Source: Federal Communications Commission.

This trend is mostly due to the collapse of long distance prices. For international calls, price per minute dropped from $1.34 U.S. in 1980 to 34 cents in 2001 (Chart 5). The decrease has been more precipitous in recent years - while prices decreased by less than one-third between 1980 and 1995, they dropped by almost an additional two-thirds between 1995 and 2001. The drop in average prices per call has been similar.

Moreover, from all indications this process is not complete. This pattern is expected to continue and even intensify due to Voice over Internet Protocol (VoIP), something with profound implications for the industry. Among other impacts, VoIP is expected to make long distance calls longer.

Chart 5
Prices for international calls, U.S.

Source: Federal Communications Commission.

Duration and scope

Time spent on the phone is reflected by both the number of calls and their duration. As people talk more and more often, additional questions arise related to the circle of our associations and the management of the extra time needed. Do people talk with the same people more often, to new acquaintances or both, and does this mean calls are shorter?

Data clearly show that the frequency of calls has increased, especially long distance, presumably to both new and existing associations. One way to cope with this is that individual calls become shorter, a hypothesis to which existing data provide only partial proof. More direct and detailed data would be needed to confirm this generally, but some available data show that the duration of wireline international calls has decreased as the volume of calls has increased. However, data on the duration of local calls, where the bulk still is, show that these calls last longer (Table 13), while that of domestic long distance oscillates. Thus, the existing evidence is inconclusive.

Additional data from wireless residential calls in the U.S. show that in 2002 the average duration of intrastate calls was 2.9 minutes, while interstate was 6.3 minutes. In fact, more than half (51.7%) of wireless residential intrastate calls lasted one minute or less, while almost three-quarters lasted two minutes or less. Among interstate calls, fewer than 40% lasted less than one minute.

While there is indirect evidence from existing telephone statistics that people have expanded their networks of communications, this has clearly been the case with e-mail, which knows no limits. There are even some statistics on the average number of online 'friends who have never met in person', which range from 1.1 in Japan, to 2.6 in the U.S. and 7.7 in urban China - and the statistics are higher for younger males (UCLA 2004).