Predcitability and the role of government

Predictability is essential to give industry, communities, families and individuals the level of confidence needed to plan, to invest, to commit to long-term priorities. History suggests that commerce depends on a range of externalities before it takes holds and develops in a particular society.

For example, without insurance and the law of contract (whether the common law or the Napoleonic version), the mercantilist societies of Europe, on which modern capitalism is built, would not have been possible. This is true of the information economy also.

Without the trust that is placed in contractual instruments, large transactions would be possible, but would remain infrequent or would be hedged with such caution that entrepreneurial activity would be stifled. If individuals and enterprises lack trust in a system, that system will remain unused or underused or even be stillborn.

There are signs that this is what is happening with e-commerce today. Individuals and enterprises have not developed the level of trust in existing systems and processes that is required to unleash the full force of commercial initiative that exists in any modern economy.

Government has a unique role in developing an efficient, flexible and adaptive regulatory framework, where significant reliance is placed on appropriate standards to guide behaviour. Government also has a role in aligning education and training with future needs. In such an environment, the complex web of factors required for e-commerce to take hold may crystallise more easily and take hold and grow.

Uncertainty is the enemy of business and of enterprise.