Why paper will prosper in the electronic era

by Maynard Benjamin

VIEWPOINT

For thousands of years the words, ideas, data and art of our civilization have been created, transmitted and stored on paper. With the emergence of electronic technologies, some say that this will lead to a paperless society and put us out of business. I think this view is wrong. Rather than fighting the incoming electronic tide, I believe our industry will embrace and benefit from the new era.

I have an email address, my company has a web site, but I do not question for a moment that the paper industry will be a significant source of value, utility, employment and profits worldwide for decades to come. At first glance it seems absurd to suggest that electronic commerce will magnify the need for paper products and services. After all electronic catalogs will surely come into being, email will move some communication from the mail stream to the internet and electronic commerce will reduce the need for printing, paper, envelopes and postal services.

But wasn't the telephone supposed to reduce the need for correspondence by mail - and yet 100 years after the introduction of the telephone, mail volumes are hitting record highs. Wasn't television supposed to reduce the need for daily newspapers - yet 50 years on and newspapers remain a huge and profitable industry.

There is no doubt that the web and the internet represent a new and direct form of competition for our industry. There is also no doubt that some displacement will occur and that selected products and services, once monopolized by our industry, will now face competitive struggles.

Prepare well

We are on the cusp of a new era powered by a new technology. If we are to survive in the future we must learn from the past and the past provides an interesting reality. No paper company, no postal service, no mail equipment company, no ink manufacturer, no provider of glues and no envelope manufacturer has to fail because of the dawning electronic era. But some will. And you can be fairly certain that those which do fail will not have prepared for the changes we are about to see.

We understand and expect that electronic media will capture some of the business and activity now within the realm of paper-based communication. This is to be expected. The truth is though that communication does not exist in a static universe. Communication is not a zero-sum game. When someone else gets more, it is not true that we must inevitably get less.

The growth of electronic media does not present us with an "either/or" problem. As computer usage and online activity have expanded, so too has paper consumption. As much as we like our computers, traditional paper-related values have remained in place. These values are likely to remain with us, because electronic communication today is a medium for the economic elite. Internet access is an expensive consumer purchase perhaps $2,000 to $3,000 for equipment and software, plus $240/yr for access.

Guiding light
We are part of a growing world marketplace with much that favors our industry. But we also have a lot of work ahead of us if we are to maintain our position. Three baseline principles should be guiding our actions:

• first, we want to assure that the marketplace expands. Given the unmet needs of billions of people worldwide, the demand for communication services of every type will continue as far into the future as one can imagine. An expanding marketplace provides opportunities for everyone, so electronic communication should be welcomed, because for years to come, more commerce in general means more demand for our products and services in particular

• second, we want to assure that paper-based communication is a viable marketplace option. This means we do not want to be taxed or regulated to the point where paper-based communication is no longer desirable or competitive. It also means that alternative communication media must not be given preferential tax or regulatory treatment, which creates an artificial marketplace advantage

• third, we must assure that demand for our products and services continues to grow. This is entirely possible in an expanding marketplace - even if our relative market share declines.

The idea of a "paperless" world is continually put forward as an example of advanced thinking. It is necessary, however, to question this "advanced" view. If trees are a renewable, oxygen-generating resource and if paper is one of the easiest commodities to collect and recycle, what are the advantages of a paperless society? If paper is cheap and universal, why replace it with something expensive and exclusive? If we could wave a magic wand and create a paperless world tomorrow, would not millions of people be instantly unemployed?

Let us look to the future with confidence. Paper-based communication coexists today with telephones, televisions, satellites and radios. In each case dire predictions suggesting the erosion or the end of our industry have proven false. There is no reason why we cannot coexist with the internet and online media. n

Maynard Benjamin is president of the Envelope Manufacturers Association and executive director of the PaperCom Alliance. This view is an extract from his speech at the first World PaperCom Conference.