THE frame of our world, the fabric of our lives, are being transformed in this end of millennium. The speed of change is such that, anchored in our routines, we do not really perceive it - as if we were watching the slow pace of a changing landscape from the window of our airplane.

Yet, in the rare moments of lucidity, a feeling of vertigo sets in - not only because of the magnitude of the change, but because of the powerlessness most of us experience, vis a vis the processes that are affecting the way we live, we die, we produce, we consume, we enjoy, we, suffer, we think, and we dream.

On the surface, major geo-political events and giant social processes have altered the world as we knew it in the last half century - while fundamental social trends have modified our personal experience:-

Loading article content

* The sudden - and yet to be explained - collapse of the Soviet Union, and with it the demise of international Communist movement - meaning the end of a Cold War that had conditioned every bit of our politics and ideology for most of the century.

* The gradual, but irreversible unification of Europe, calling into question the sovereign nation states in our area.

* The growing tendency for major problems on our planet to be managed in a multilateral and transnational way - from security to ecology, and from human rights to human poverty.

* The emergence of the Pacific as one of the three major regions of the global economy - ending the domination of Western countries and cultures that had marked the industrial era, ushering in an era of economic interdependence that rests on a multicultural foundation.

* The rise of a global criminal economy that threatens financial stability and political legitimacy throughout the world.

* Increasing inequality and social polarization around the world, with the emergence of a "Fourth World" of marginality - cutting across societies and countries, including most of Africa, substantial parts of rural areas in Asia and Latin America, and numerous ghettos and depressed areas in the developed countries.

* The spread of religious fundamentalism (be it Christian, Islamic, or from other origin), and of radical nationalism as a fundamental source of political mobilization in the age of cosmopolitanism.

And while these trends affect the economy and polity of our societies, others directly impact on our lives. The crisis of the traditional, patriarchal family comes as a consequence of both the informational economy, and of the feminist challenge to unjust male domination. It also undermines a millennia-old institution that was providing security at the price of oppression: men and women are now forced to search for new forms of conviviality and friendship, at the very moment uncertainty is spreading to all spheres of existence.

The crisis of patriarchalism opens the way for the expression of traditionally subdued identities, such as gay and lesbian identity - allowing people to explore their sexuality, and redefine their personality. This means increased personal liberation, but also social bewilderment, at least in this period of historical transition. Work is transformed, and employment patterns are fundamentally altered: the job stability that had become the foundation of personal autonomy and family life during the industrial era, is profoundly shaken.

THE NETWORK SOCIETY

I contend that all these transformations are linked, and can be understood. In fact, this is what I have tried to do in my trilogy "The Information Age", just published, after 12 years of analysis of data gathered from all areas in the world, much of it from my own field work. As I see it, these transformations have four major processes at their origin. Largely independent from each other, they took place in the 1970s, and gradually converged to form a new society, which I call the network society . This convergence resembles the way that the industrial revolution of two centuries ago brought together several threads of change, to constitute the industrial society.

These four processes were - and are, since they are still unfolding - as follows: 1) the revolution in information technologies; 2) the emergence of an informational/global economy; 3) the networking form of organisation; and 4) the surge of culturally-based social movements.

The information technology revolution, organised around microelectronics, computers, and telecommunications, became a system around the mid-1970s. It spread, in sequence, into military applications, telecommunications, financial institutions and firms, manufacturing, media, office work, consumer services, health, education, leisure, and everyday life. Finally, the Internet exploded in the 1990s, as the channel for global interactive communication - currently limited to about 30 million users, but growing exponentially, and probably embracing hundreds of millions of users in the early years of the next century.

In addition, we are now in the early stages of a new technological revolution, centred in genetic engineering - which is also, to some extent, an information revolution, since it deals with the decoding and recoding of the codes of instruction of living matter. Fully supported by electronic technologies, the biological revolution is expanding our capacity to manipulate all information, including life and nature. Around this hard core of information technologies, computers are linking up all kinds of new technological discoveries, providing the tools for a full reshaping of everything we think, do, and undo.

The first, direct impact is on the economy - which has become informational and global, while still being capitalist. Indeed, for the first time in history, capitalism reaches out to the entire planet, since the Communist system was unable to restructure itself to absorb the shock of the information revolution, and collapsed in its attempt to do so, as I have shown empirically in my books. The economy is informational because the productivity and competitiveness of firms, regions, and countries, depend upon their ability to generate, and adequately process, the relevant information and knowledge. This means that capital without information withers, while knowledge-based innovation ultimately generates capital - e.g. through the production of software, or the development of financial schemes. A wealth of statistics shows the direct association between information, technology, and competitiveness.

That productivity growth is now based on knowledge is a more contested statement. This is partly because statistical categories used in the industrial era cannot capture the growth of productivity in a service economy; and partly because of the time lag between technological innovation, and the way that organisations adapt to it, which is evident throughout the economy. However, recent studies both in Europe and the United States seem to indicate an upswing of productivity associated with technological innovation and diffusion.

This new economy is also global, in a very exact sense: the core activities in financial markets, production, information, technology, management, and merchandise trade - all these are inter-linked, and have the potential of working as one unit, in real time, on a planetary scale. However, most employment is local and regional: and labour markets are, by and large, scarcely internationalised. Besides, most firms are still rooted in their national markets, and government controls and regulations matter substantially. Yet, local and national economies around the world are highly dependent on global economic movements, particularly movements of capital and information, that supersede national economies and overwhelm the regulatory attempts of governments.

The fact that, in the summer of 1997, the devaluation of the Thai baht could trigger a process that exploded in the Hong Kong stock exchange a few weeks later, and from there affected capital markets everywhere, and thus national economies around the world, is a sign of the true meaning of globalization. This is a new reality, because it is entirely dependent upon the new technological infrastructure of information systems and telecommunications.

New information technologies allow the full deployment of a new form of organisation that is at the source of economic competitiveness, and the effective performance of all tasks: the network. Networks are flexible, open structures, able to add new, valuable units without changing their structure - while switching off anything or anyone that becomes unworthy. Networks are lean, dynamic structures that form and reform, surge or disappear, depending upon functional needs or market demand.

Large corporations have decentralized as networks; small and medium firms have formed networks of cooperation. Both large and small firms operate on the basis of strategic alliances - they bring together resources on certain projects, and dissolve the organisation when the project is completed, in a variable geometry of performance. Media, administrations, universities, cultural activities, and non- governmental organisations are adopting the network as their most effective tool. They are using the new information technologies to cooperate in their tasks, without merging into a single organisation.

In the same way that the large corporation and the industrial factory were the instruments of industrialism, the networking form of organisation - supported by flexible information technologies - is at the roots of a new social form that characterises our time: a form that could be properly named the network society. Still capitalist (at least for the time being), but representing a very different brand of capitalism - one incomparably more flexible, dynamic, efficient. But, if socially unchallenged, a capitalism that is potentially ruthless and exclusionary.

This networking form of organisation explains the truly important transformation of work and employment in our societies. Let me state this clearly: New information technologies do not cause unemployment. Technology may either create jobs or destroy jobs, on balance: it all depends on the strategies of firms, the policies of governments, and the industrial mix in each country or region. There are innumerable statistical studies and research monographs, all of them showing the lack of direct relationship between technology and employment. At the level of countries, the two major countries in the world with most advanced technology, and highest technological diffusion, the United States and Japan, are those with the lowest rate of unemployment (around 5% and 3%, in contrast to the European Union above 10% on average, and climbing).

In the U.S. in the last 5 years, 11 million new jobs have been created. Contrary to the image usually presented in Europe, the proportion of high-level new jobs is greater than the proportion of lowly-paid new jobs. In the world at large, we are experiencing the fastest and largest moment of job creation in human history - particularly in terms of industrial jobs, which have increased by 72% between 1965 and 1989, according to data from International Labour Office.

Indeed, the massive entry of women into paid work has changed the structure and size of labour markets everywhere. Unemployment in Europe is mainly due, as several studies have shown, to macroeconomic policies associated with the Maastricht convergence criteria, and, to a lesser extent, with rigidity of labour markets in some countries. However, there is indeed a fundamental transformation of work, associated with the networking that new information technologies permit. This is the substantial reduction of salaried work - meaning the full time job, with long duration, and assured stability.

The organisation man is being replaced by the flexible woman, at a bargain discount for similar performance. In the U.K. the proportion of non-traditional jobs (that is jobs that are not full time, salaried, stable jobs) reaches about 50% of the labour force. In the Netherlands, the new model country of the European Union, one third of the labour force works part-time, and the same trends can be found in every industrialised country.

This has many profound consequences. Labour markets become increasingly fragmented, and labour conditions become increasingly individualised. We face the potential demise of collective bargaining, and of the system of industrial relations and welfare states, on which our societies are still based. Negotiating a new social contract that will match these new conditions, both technological and institutional, is a major item in our political agenda at the turn of the century.

THE RISE OF IDENTITY, THE END OF THE NATION-STATE

Together with these transformations in our technologies, economies, and organisations, we have witnessed the emergence of powerful social movements. Some of them express a cultural critique against the unjust and destructive foundations of our lives. Others are a collective reaction against the uncertainties of the historical transition we are moving through. Foremost among the positive social movements are feminism, movements of sexual identity (such as gay and lesbian movements), and environmentalism. All propose a new model of human relationships, amongst ourselves and with Nature, thus creating solidarities between generations, and equality between genders.

These movements emerged independently, but were indirectly supported by the transformation of information technologies. The new service economy opened up jobs for women on a massive scale, albeit under discriminatory market conditions. Information technology provided the tools to assess the destruction of our environment. Environmentalism gained its reputation as a science-based movement, directed against the misuses of science and technology.

And all these movements are using new communication technologies and networking, to their advantage. Through this informationalism, they can create flexible structures of cooperation - an alternative to the vertical bureaucracies, run in a quasi-military style, that were characteristic of the industrial era. The decisive role of the Internet in the mobilization of African-American women in the "One Million Women March" in Philadelphia in October 1997 is but one example of this potential.

Other movements have insurged against the loss of control over their lives, their values, their economies, their countries - all as a consequence of informationalism, globalization, and cultural critique. They rouse themselves in defense of ethnic identity, in defense of God, of Nation - or (in less fundamentalist terms) in defense of historical identity, as in the democratic, peaceful, yet very firm Catalan nationalist movement. These movements are becoming key collective actors - particularly through their ability to focus the resistance of human values against faceless capitalist networks, and against technological development for technology's sake. Very often local and regional governments become the expression of this resistance: they are the actors that assist alternative projects to fight off, and then negotiate with, the global flows of the information age.

But what of the nation-state? Overwhelmed by global flows, and challenged by specific cultural identities, or by ideals defined outside the political realm (such as religion), the modern nation-state seems to be unable to control what matters - capital - and to represent what counts - its subjects. It is too small to manage global forces, and too large to represent a plurality of identities and cultural projects. Between the space of global flows and the domain of everyday life, the institutions of the nation state seem to be solidly planted on shaky historical ground.

To survive, nation states, particularly in Europe, band together in supranational institutions such as the European Union, or Nato, to which they delegate the essence of their power. Furthermore, in an effort to regain legitimacy, they decentralise power toward regions, and toward historic nationalities, such as Catalonia or Scotland.

So doing, they regain prestige: but they shrink their role even further, to a mere coordinating task between the local and the global. The resulting outcome is not the disappearance of the nation state - which would only have survived out of inertia and of the vested interests of the political class - but the emergence of a new form of state: the network state. It is a state made of bits and pieces of nation states, multilateral alliances, supranational institutions, regional and local governments, and even non governmental organisations - all these associations forming a network of interaction and shared responsibility.

Here the essential task for these new kinds of states is not that of commanding their subjects, but that of surfing the Net(work). Power does not disappear, but becomes a matter for negotiation through a whole set of interactions - between global flows, cultural identities, and institutions and firms now operating as networks. In such a society, we need a counterbalance to all these these abstract flows of money, knowledge and culture, so dominant over our everyday existences.

And that counterbalance will come from the solid anchoring of identities and human values in the institutions of civil society - so that citizens, and their political representatives, do not get lost in the endless, complex navigations of the networked world. To live, and indeed prosper in the Net, we need to know who we are. In the Information Age our lives, and our world, will depend on our capacity to link up the Net and the Self.

Manuel Castells is Professor of Sociology at the University of California-Berkeley, and author of the trilogy

"The Information Age: Economy, Society, and

Culture"(Blackwell,

1996-1998)