What is: Personal Learning Network (PLN)

Personal Learning Networks (personal and community-focused)

Following up on the distinction between groups and networks, Downes says, “A group, in other words, is a school (of thought, of fish…) or a class of some sort. Or: classes and schools are just groups. They are defined as groups. Can we even think of schools - and of learning - without thinking at the same time of the attributes of groups? A group is elemental, defined by mass and sameness - like an ingot of metal. A group is a collection of entities or members according to their nature; what defines a group is the quality [of sameness] members possess and [their] number.”

One can certainly argue with Downes, but isn’t the slide interesting when thinking about schools as groups and online personal learning spaces as networks?

SOME CONTEXT

I’ve been thinking and studying a lot about personal learning networks for quite some time, on both a personal, individual level and also a shared, community level. The buzz words that resonate the most for me around these topics right now seem to be personal learning networks, personal learning environments, professional learning communities, communities of practice, and virtual learning communities. In this consideration, I don’t mean to leave out face-to-face communication, but am particularly interested in how web 2.0 technologies support and enhance personal and community-focused learning, and can even occur with great impact without any face-to-face contact at all.

Individualized Networked Learning

The problem of the edublogasphere (and actually the whole blogasphere) in the context of learning is that people in the sphere do not - at least often - form any groups (an entity of individuals with an objective).

As I’m trying to think more and more deeply about what networked learning really means in the context of how I might want my own children to apply it their own lives, I think this quote struck me because it made me consider how little I’ve actually engaged in group learning around a particular objective within the network. It is, as Teemu says something that doesn’t really appear very often. This has become, for me at least, a very individualized experience. I’ve referred to it in the past as “nomadic learning” because it happens in a very non-linear, concrete objective-less way. (Technically, I think most are attaching the word nomadic to it because of the mobility of the technology to learn, not the randomness of it.) My learning has a general focus and direction, to be sure, but it’s trajectory is determined by whatever is in my aggregator or on my screen at the moment. There are no written down goals or outcomes that I am attempting to achieve which is one of the reasons this is so different from classroom learning.

What does learner-centric look like?

There is a paradigm shift from instructor-centric to learner-centric model of learning. (Refer to diagram)

The priority at upper management level may well be principally around the cost-cutting benefits of online delivery, but it is a different story for those who have operational responsibility for the outcomes achieved by e-learning and blended learning programmes.

There is already an 'old days' of organisational learning, looked back on by few with nostalgia, when it was all about the 'country house' model; very 'event-driven', very 'top-down' in character. Times have definitely changed.

The most obvious difference, with the advent of the internet, is one of location. Learning can now take place in a variety of environments, including the workplace, a learning centre attached to the workplace, or even in the home.

This change is not only being driven by what is happening within the training departments, however. The way we work has been altered radically, in many cases, by the advent of email, web access and intranets. These provide tools for just-in-time learning, reference and knowledge management much of which falls outside the remit of training per se, but which is nevertheless altering attitudes to what constitutes a learning experience.

As a result, a new generation of learners is coming up that expects to access learning in different ways.

So what is it that these new learners want, exactly, from a learning experience?

Moving from 'training push' to 'learning pull'

When the mode of the music changes, wrote Plato, the walls of the city shake. Since the advent of e-learning, and particularly blended learning, there has been a definite change of tune from the training and development function (now rebranded 'the learning community'). A chorus of voices - heard in conference and exhibition halls across the land - urges us to 'put the learner at the centre of the experience'. We need to move, it is trumpeted, to learner-centric learning.

And indeed, this particular change of mode poses a palpable threat to certain key bits of masonry within the ambit of organisational learning. We're not talking solely metaphorically here. More than one global concern in recent times has closed down its bricks-and-mortar training centre in favour of an online equivalent.

Are we experiencing a paradigm shift? Or is this no more than mood music designed to cover the sound of axes being swung? Is the real driver behind e-learning adoption a cost-cutting agenda - which seeks merely to pare away expensive face-to-face interventions, while leaving existing organisational structures untouched?

What do learners want?

Clearly, not all learners want the same thing.

What they want might vary widely depending on the type of company they are in, as we have seen. Likewise, different groups of learners within an organisation will have different needs and priorities.

Segmentation is the art (or science) of dividing up an audience into appropriate target groups for marketing purposes. It allows these sub-groups to be marketed to according to needs and motivators that they share in common. It also allows an appropriate allocation of resources among the various groups according to the value that can be expected to be derived as a result of marketing activity.

The learner-centric organisation will need to take this logic on board when marketing its learning provision internally. The first step in doing so is to establish what the various needs and motivators are.

Useful information in this line can often be derived from looking at take-up of existing learning programmes. For instance…

Marketing water to horses

Early experiments in creating learning-centred environments, where generic e-learning was offered without any marketing or line manager support, and with no blending, had disappointing results. The moral of this story was that you can lead a horse to water, but you can't make it drink.

So let's take a marketing approach to this problem.

The horse needs to be thirsty (incite desire). It might need some reassurance about the quality of the water (create a trusted brand). If it is an extremely sceptical horse it might need to be convinced that drinking water here will deliver health improvements (sell the benefits), and told a little about the deleterious effects on health of not drinking water in the long term (okay, a bit of stick). Lastly, and most importantly, it needs to be told about these things in a language that it can understand - i.e. horse language...

What Is: Web Caching

Web Caching Overview

Web caching is the temporary storage of web objects (such as HTML documents) for later retrieval. There are three significant advantages to web caching: reduced bandwidth consumption (fewer requests and responses that need to go over the network), reduced server load (fewer requests for a server to handle), and reduced latency (since responses for cached requests are available immediately, and closer to the client being served). Together, they make the web less expensive and better performing.

Caching can be performed by the client application, and is built in to most web browsers. There are a number of products that extend or replace the built-in caches with systems that contain larger storage, more features, or better performance. In any case, these systems cache net objects from many servers but all for a single user.

Caching can also be utilized in the middle, between the client and the server as part of a proxy. Proxy caches are often located near network gateways to reduce the bandwidth required over expensive dedicated internet connections. These systems serve many users (clients) with cached objects from many servers. In fact, much of the usefulness (reportedly up to 80% for some installations) is in caching objects requested by one client for later retrieval by another client. For even greater performance, many proxy caches are part of cache hierarchies, in which a cache can inquire of neighboring caches for a requested document to reduce the need to fetch the object directly.

Finally, caches can be placed directly in front of a particular server, to reduce the number of requests that the server must handle. Most proxy caches can be used in this fashion, but this form has a different name (reverse cache, inverse cache, or sometimes httpd accelerator) to reflect the fact that it caches objects for many clients but from (usually) only one server.

http://www.web-caching.com/welcome.html

Improving Browser Caches with Extensions and Personal Proxies

A number of companies have offered products in this area. Many of these were ill-designed, and so only a few remain.

• Web 3000's NetSonic Internet accelerator replaces your browsers cache with its own larger one, plus it notifies you when the content has changed (when you are looking at an old version of the page). For Windows.
• MicroSurfer organizes links, provides offline viewing, and background page loading. For Windows.
• Imsisoft's Net Accelerator prefetches available links and graphics, and keeps your favorite links up-to-date. Uses browser cache.
• eAcceleration offers Webcellerator, a web accelerator that provides caching improvements, and is free when their portal is used as your home page.

http://www.web-caching.com/personal-caches.html

Proxy Caches

Here are all the available proxy cache systems and services known to me. Note that features and performance vary, such as which net protocols (such as HTTP, FTP, GOPHER, etc.) are supported for caching, and which inter-cache communication methods are used (ICP, CARP, WCCP).

Thanks to Duane Wessels' Information Resource Caching FAQ for many of the entries on this list. There is also a table comparing some of the commercial systems available.

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Products listed: AllegroSurf, Apache, Appcelera, Avantis ContentCache, Avirt, Blue Coat, CachePortal, CacheXpress, CacheRaq, engageIP, CERN/W3C, Certeon (InfoLibria), Cisco Cache Engine, DeleGate, Fireclick Blueflame, Harvest, IBM Websphere Edge Server, iMimic DataReactor, Jigsaw, Lucent's IPWorX, Microsoft Internet Security and Acceleration Server, MOWS, NetCache, NetFilter, NetHawk, Netplicator, Netscape Proxy Server, Rebel.com NetWinder, Oops, Oracle Application Server Web Cache, Polipo, Pushcache Cuttlefish, RabbIT, Roxen, SoftRouter Plus, Spaghetti, Squid, Stratacache, Sun Java System Web Proxy, 3Com SuperStack 3 Webcache, Swell Tsunami, SwiftSurf, TeraNode, Viking, Wcol, WebCleaner, WinGate, WinProxy, WinRoute, WWWOFFLE, and XCache.

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Rhinosoft's AllegroSurf provides proxies for various protocols, including HTTP, and provides prefetching of page links.

Anonimizer provides anonymous web services including browsing, email, and publishing.

The Apache HTTP server has a caching module.

Kintronics offers the plug and play Avantis ContentCache proxy appliance, supporting remote administration of a network of proxies.

Intelogis offers the Avirt line of internet sharing and caching products for the home as well as small and medium-sized business use under Windows. [Product used to be called Spaghetti.]

Blue Coat's proxy appliances provide visibility and control of Web communications to protect against risks from spyware, Web viruses, inappropriate Web surfing, instant messaging, video streaming and peer-to-peer file sharing - while improving Web performance through caching.

CacheXpress is a high performance proxy server for Windows environments supporting transparent and authenticated modes and WCCP 1 & 2.

NEC Solutions America released CachePortal, which accelerates corporate application performance.

The CERN/W3C HTTPd was the original proxy cache (actually a caching httpd server), developed initially at CERN and later maintained at the W3C.

The Cisco Cache Engine sits next to (mostly) Cisco routers and receives transparently redirected HTTP requests.

Certeon now sells and supports InfoLibria's product line.

DeleGate is a free multi-purpose proxy server which runs on multiple platforms (Unix, Windows and OS/2, source available).

Blueflame, by Fireclick, is server-based software to accelerate content-delivery by predicting requests and pushing those ojects to the client.

IBM Websphere Edge Server supports forward/reverse caching, server load balancing, and content filtering and runs on AIX, Linux, Windows NT/2000, and Solaris.

iMimic offers the DataReactor series of caching products with high price-performance.

Lucent offers the IPWorX product line, which includes web caching, redirection, as well as content management and reporting.

Jigsaw is W3C's reference implementation for HTTP/1.1 and has a caching module.

LogiSense offers caching solutions called engageIP cache server in an appliance form and for Linux.

Microsoft offers the Internet Security and Acceleration (ISA) server which incorporates caching and replaces the Microsoft Proxy Server.

MOWS is a modular, distributed web and cache server written in Java.

NetCache was originally based on the Harvest research code. In March of 1997, Network Appliance acquired the NetCache product.

NetFilter is a proxy cache with a specialized filtering capability and service, ported to many UNIX platforms.

NetHawk, a high-performance software HTTP proxy cache, was originally developed as Peregrine by Pei Cao and her students at the Univ. of Wisconsin-Madison, and was available from Tasmania Network Systems. In October 1999, Cisco purchased Tasmania Network Systems.

Unitech Networks offers Netplicator, a caching appliance that can function either as a proxy cache or a reverse proxy (server accelerator), along with IntelliDNS, a replacement for bind that can distribute requests to local mirrors instead of distant servers (as well as perform load-balancing and ensure high target availability).

The lead architect of the Netscape Proxy Server was also the primary developer of the CERN proxy.

Rebel.com offers a series of Linux-based NetWinder products and appliances that allow a single connection to be shared and use caching to speed access.

The Novell BorderManager FastCache is a proxy cache running under Novell and NT-based networks.

The Oops proxy server is a thread-based proxy cache with objects stored in a few large files.

Oracle offers a reverse cache solution called the Oracle Application Server Web Cache. It uses commodity hardware to cache and compress both static and dynamic Web content.

Polipo is a (mostly) compliant HTTP/1.1 web proxy supporting IPv6, pipelining, and SOCKS.

Pushcache.com offers Cuttlefish, an open-source implementation of their pushcache services based on Squid.

RabbIT is a web proxy that speeds up web surfing over slow links through compression, image re-rendering, ad-blocking, etc.

The free Roxen Challenger httpd server includes a proxy caching services. Available for UNIX and NT.

Squid is a freely available caching package, derived from the Harvest research software. Squid runs on many Unix platforms and caches HTTP, FTP, and Gopher requests.

Stratacache offers a line of proxy cache appliances.

Sun offers its Java System Web Proxy Server, supporting forward and reverse configurations, filtering, and authentication. 3Com sells the line of SuperStack 3 Webcaches as appliances based on Inktomi's caching software.

Swell Technology has a range of linux-based proxy caches in their Tsunami CPX series.

The SwiftSurf web proxy supports page filtering and authentication. Entera offered a multi-protocol caching system called TeraNode, but has since been purchased by CacheFlow.

Viking is a Windows proxy with support for many protocols (HTTP, POP3, SMTP, FTP, ICP) and works as an origin server. Also performs prefetching.

Vicomsoft offers a number of gateway and connection sharing products, including RapidCache, a Windows-based proxy cache, and their InterGate product which includes a caching component. Available for Windows and Macintosh.

Wcol uses prefetching to reduce latency at the expense of increased bandwidth. Also has a catalyst mode (non-caching) that just provides hints to another proxy cache.

WebCleaner is a filtering web proxy, supporting Linux and Windows. Deerfield.com offers WinGate, a proxy server for Windows 95/NT that also allows a local network to share a single Internet connection.

WinProxy, from Ositis Software, is a Windows-based proxy providing caching, filtering, and combined access for multiple machines via a single net connection.

Tiny Software offers a series of WinRoute Windows-based products to connect your workgroup or larger to the net using NAT, and includes a proxy cache component.

After it's 2000 acquisition of Workfire, Packeteer released Appcelera, which uses loss-less compression, page size reduction, client bandwidth detection, and intelligent page rendering in it's role as an httpd accelerator.

The World Wide Web OFFLine Explorer (WWWOFFLE) is a free, simple proxy server for use with dialup net links that caches contents, allows offline browsing, optional blocking, and more.

XCache Technologies (previously known as Post Point Software) offers a server-side software-based accelerator that caches and compresses Active Server Pages.
http://www.web-caching.com/proxy-caches.html

What's a Web Cache? Why do people use them?

A Web cache sits between Web servers (or origin servers) and a client or many clients, and watches requests for HTML pages, images and files (collectively known as objects) come by, saving a copy for itself. Then, if there is another request for the same object, it will use the copy that it has, instead of asking the origin server for it again.

There are two main reasons that Web caches are used:

• To reduce latency - Because the request is satisfied from the cache (which is closer to the client) instead of the origin server, it takes less time for the client to get the object and display it. This makes Web sites seem more responsive.
• To reduce traffic - Because each object is only gotten from the server once, it reduces the amount of bandwidth used by a client. This saves money if the client is paying by traffic, and keeps their bandwidth requirements lower and more manageable.

Kinds of Web Caches

Browser Caches

If you examine the preferences dialog of any modern browser (like Internet Explorer or Netscape), you'll probably notice a 'cache' setting. This lets you set aside a section of your computer's hard disk to store objects that you've seen, just for you. The browser cache works according to fairly simple rules. It will check to make sure that the objects are fresh, usually once a session (that is, the once in the current invocation of the browser).

This cache is useful when a client hits the 'back' button to go to a page they've already seen. Also, if you use the same navigation images throughout your site, they'll be served from the browser cache almost instantaneously.

Proxy Caches

Web proxy caches work on the same principle, but a much larger scale. Proxies serve hundreds or thousands of users in the same way; large corporations and ISP's often set them up on their firewalls.

Because proxy caches usually have a large number of users behind them, they are very good at reducing latency and traffic. That's because popular objects are requested only once, and served to a large number of clients.

Most proxy caches are deployed by large companies or ISPs that want to reduce the amount of Internet bandwidth that they use. Because the cache is shared by a large number of users, there are a large number of shared hits (objects that are requested by a number of clients). Hit rates of 50% efficiency or greater are not uncommon. Proxy caches are a type of shared cache.

Aren't Web Caches bad for me? Why should I help them?

Web caching is one of the most misunderstood technologies on the Internet. Webmasters in particular fear losing control of their site, because a cache can 'hide' their users from them, making it difficult to see who's using the site.

Unfortunately for them, even if no Web caches were used, there are too many variables on the Internet to assure that they'll be able to get an accurate picture of how users see their site. If this is a big concern for you, this document will teach you how to get the statistics you need without making your site cache-unfriendly.

Another concern is that caches can serve content that is out of date, or stale. However, this document can show you how to configure your server to control this, while making it more cacheable.

On the other hand, if you plan your site well, caches can help your Web site load faster, and save load on your server and Internet link. The difference can be dramatic; a site that is difficult to cache may take several seconds to load, while one that takes advantage of caching can seem instantaneous in comparison. Users will appreciate a fast-loading site, and will visit more often.

Think of it this way; many large Internet companies are spending millions of dollars setting up farms of servers around the world to replicate their content, in order to make it as fast to access as possible for their users. Caches do the same for you, and they're even closer to the end user. Best of all, you don't have to pay for them.

The fact is that caches will be used whether you like it or not. If you don't configure your site to be cached correctly, it will be cached using whatever defaults the cache's administrator decides upon.

How Web Caches Work

All caches have a set of rules that they use to determine when to serve an object from the cache, if it's available. Some of these rules are set in the protocols (HTTP 1.0 and 1.1), and some are set by the administrator of the cache (either the user of the browser cache, or the proxy administrator).

Generally speaking, these are the most common rules that are followed for a particular request (don't worry if you don't understand the details, it will be explained below):

1. If the object's headers tell the cache not to keep the object, it won't. Also, if no validator is present, most caches will mark the object as uncacheable.
2. If the object is authenticated or secure, it won't be cached.
3. A cached object is considered fresh (that is, able to be sent to a client without checking with the origin server) if:
• It has an expiry time or other age-controlling directive set, and is still within the fresh period.
• If a browser cache has already seen the object, and has been set to check once a session.
• If a proxy cache has seen the object recently, and it was modified relatively long ago.

Fresh documents are served directly from the cache, without checking with the origin server.

4. If an object is stale, the origin server will be asked to validate the object, or tell the cache whether the copy that it has is still good.

Together, freshness and validation are the most important ways that a cache works with content. A fresh object will be available instantly from the cache, while a validated object will avoid sending the entire object over again if it hasn't changed.

How (and how not) to Control Caches

There are several tools that Web designers and Webmasters can use to fine-tune how caches will treat their sites. It may require getting your hands a little dirty with the server configuration, but the results are worth it. For details on how to use these tools with your server, see the Implementation sections below.

HTML Meta Tags vs. HTTP Headers

HTML authors can put tags in a document's section that describe its attributes. These Meta tags are often used in the belief that they can mark a document as uncacheable, or expire it at a certain time.

Meta tags are easy to use, but aren't very effective. That's because they're usually only honored by browser caches (which actually read the HTML), not proxy caches (which almost never read the HTML in the document). While it may be tempting to slap a Pragma: no-cache meta tag on a home page, it won't necessarily cause it to be kept fresh, if it goes through a shared cache.

On the other hand, true HTTP headers give you a lot of control over how both browser caches and proxies handle your objects. They can't be seen in the HTML, and are usually automatically generated by the Web server. However, you can control them to some degree, depending on the server you use. In the following sections, you'll see what HTTP headers are interesting, and how to apply them to your site.

• If your site is hosted at an ISP or hosting farm and they don't give you the ability to set arbitrary HTTP headers (like Expires and Cache-Control), complain loudly; these are tools necessary for doing your job.

HTTP headers are sent by the server before the HTML, and only seen by the browser and any intermediate caches. Typical HTTP 1.1 response headers might look like this:

HTTP/1.1 200 OK

Date: Fri, 30 Oct 1998 13:19:41 GMT

Server: Apache/1.3.3 (Unix)

Cache-Control: max-age=3600, must-revalidate

Expires: Fri, 30 Oct 1998 14:19:41 GMT

Last-Modified: Mon, 29 Jun 1998 02:28:12 GMT

ETag: "3e86-410-3596fbbc"

Content-Length: 1040

Content-Type: text/html

The HTML document would follow these headers, separated by a blank line.

Pragma HTTP Headers (and why they don't work)

Many people believe that assigning a Pragma: no-cache HTTP header to an object will make it uncacheable. This is not necessarily true; the HTTP specification does not set any guidelines for Pragma response headers; instead, Pragma request headers (the headers that a browser sends to a server) are discussed. Although a few caches may honor this header, the majority won't, and it won't have any effect. Use the headers below instead.

Controlling Freshness with the Expires HTTP Header

The Expires HTTP header is the basic means of controlling caches; it tells all caches how long the object is fresh for; after that time, caches will always check back with the origin server to see if a document is changed. Expires headers are supported by practically every client.

Most Web servers allow you to set Expires response headers in a number of ways. Commonly, they will allow setting an absolute time to expire, a time based on the last time that the client saw the object (last access time), or a time based on the last time the document changed on your server (last modification time).

Expires headers are especially good for making static images (like navigation bars and buttons) cacheable. Because they don't change much, you can set extremely long expiry time on them, making your site appear much more responsive to your users. They're also useful for controlling caching of a page that is regularly changed. For instance, if you update a news page once a day at 6am, you can set the object to expire at that time, so caches will know when to get a fresh copy, without users having to hit 'reload'.

The only value valid in an Expires header is a HTTP date; anything else will most likely be interpreted as 'in the past', so that the object is uncacheable. Also, remember that the time in a HTTP date is Greenwich Mean Time (GMT), not local time.

For example:

Expires: Fri, 30 Oct 1998 14:19:41 GMT

Cache-Control HTTP Headers

Although the Expires header is useful, it is still somewhat limited; there are many situations where content is cacheable, but the HTTP 1.0 protocol lacks methods of telling caches what it is, or how to work with it.

HTTP 1.1 introduces a new class of headers, the Cache-Control response headers, which allow Web publishers to define how pages should be handled by caches. They include directives to declare what should be cacheable, what may be stored by caches, modifications of the expiration mechanism, and revalidation and reload controls.

Interesting Cache-Control response headers include:

• max-age=[seconds] - specifies the maximum amount of time that an object will be considered fresh. Similar to Expires, this directive allows more flexibility. [seconds] is the number of seconds from the time of the request you wish the object to be fresh for.
• s-maxage=[seconds] - similar to max-age, except that it only applies to proxy (shared) caches.
• public - marks the response as cacheable, even if it would normally be uncacheable. For instance, if your pages are authenticated, the public directive makes them cacheable.
• no-cache - forces caches (both proxy and browser) to submit the request to the origin server for validation before releasing a cached copy, every time. This is useful to assure that authentication is respected (in combination with public), or to maintain rigid object freshness, without sacrificing all of the benefits of caching.
• must-revalidate - tells caches that they must obey any freshness information you give them about an object. The HTTP allows caches to take liberties with the freshness of objects; by specifying this header, you're telling the cache that you want it to strictly follow your rules.
• proxy-revalidate - similar to must-revalidate, except that it only applies to proxy caches.

For example:

Cache-Control: max-age=3600, must-revalidate

If you plan to use the Cache-Control headers, you should have a look at the excellent documentation in the HTTP 1.1 draft; see References and Further Information.

Validators and Validation

In How Web Caches Work, we said that validation is used by servers and caches to communicate when an object has changed. By using it, caches avoid having to download the entire object when they already have a copy locally, but they're not sure if it's still fresh.

Validators are very important; if one isn't present, and there isn't any freshness information (Expires or Cache-Control) available, most caches will not store an object at all.

The most common validator is the time that the document last changed, the Last-Modified time. When a cache has an object stored that includes a Last-Modified header, it can use it to ask the server if the object has changed since the last time it was seen, with an If-Modified-Since request.

HTTP 1.1 introduced a new kind of validator called the ETag. ETags are unique identifiers that are generated by the server and changed every time the object does. Because the server controls how the ETag is generated, caches can be surer that if the ETag matches when they make a If-None-Match request, the object really is the same.

Almost all caches use Last-Modified times in determining if an object is fresh; as more HTTP/1.1 caches come online, Etag headers will also be used.

Most modern Web servers will generate both ETag and Last-Modified validators for static content automatically; you won't have to do anything. However, they don't know enough about dynamic content (like CGI, ASP or database sites) to generate them; see Writing Cache-Aware Scripts.

Tips for Building a Cache-Aware Site

Besides using freshness information and validation, there are a number of other things you can do to make your site more cache-friendly.

• Refer to objects consistently - this is the golden rule of caching. If you serve the same content on different pages, to different users, or from different sites, it should use the same URL. This is the easiest and most effective may to make your site cache-friendly. For example, if you use /index.html in your HTML as a reference once, always use it that way.
• Use a common library of images and other elements and refer back to them from different places.
• Make caches store images and pages that don't change often by specifying a far-away Expires header.
• Make caches recognize regularly updated pages by specifying an appropriate expiration time.
• If a resource (especially a downloadable file) changes, change its name. That way, you can make it expire far in the future, and still guarantee that the correct version is served; the page that links to it is the only one that will need a short expiry time.
• Don't change files unnecessarily. If you do, everything will have a falsely young Last-Modified date. For instance, when updating your site, don't copy over the entire site; just move the files that you've changed.
• Use cookies only where necessary - cookies are difficult to cache, and aren't needed in most situations. If you must use a cookie, limit its use to dynamic pages.
• Minimize use of SSL - because encrypted pages are not stored by shared caches, use them only when you have to, and use images on SSL pages sparingly.
• use the Cacheability Engine - it can help you apply many of the concepts in this tutorial.

Writing Cache-Aware Scripts

By default, most scripts won't return a validator (e.g., a Last-Modified or ETag HTTP header) or freshness information (Expires or Cache-Control). While some scripts really are dynamic (meaning that they return a different response for every request), many (like search engines and database-driven sites) can benefit from being cache-friendly.

Generally speaking, if a script produces output that is reproducable with the same request at a later time (whether it be minutes or days later), it should be cacheable. If the content of the script changes only depending on what's in the URL, it is cacheble; if the output depends on a cookie, authentication information or other external criteria, it probably isn't.

• The best way to make a script cache-friendly (as well as perform better) is to dump its content to a plain file whenever it changes. The Web server can then treat it like any other Web page, generating and using validators, which makes your life easier. Remember to only write files that have changed, so the Last-Modified times are preserved.
• Another way to make a script cacheable in a limited fashion is to set an age-related header for as far in the future as practical. Although this can be done with Expires, it's probably easiest to do so with Cache-Control: max-age, which will make the request fresh for an amount of time after the request.
• If you can't do that, you'll need to make the script generate a validator, and then respond to If-Modified-Since and/or If-None-Match requests. This can be done by parsing the HTTP headers, and then responding with 304 Not Modified when appropriate. Unfortunately, this is not a trival task.

Some other tips;

• If you have to use scripting, don't POST unless it's appropriate. The POST method is (practically) impossible to cache; if you send information in the path or query (via GET), caches can store that information for the future. POST, on the other hand, is good for sending large amount of information to the server (which is why it won't be cached; it's very unlikely that the same exact POST will be made twice).
• Don't embed user-specific information in the URL unless the content generated is completely unique to that user.
• Don't count on all requests from a user coming from the same host, because caches often work together.
• Generate Content-Length response headers. It's easy to do, and it will allow the response of your script to be used in a persistent connection. This allows a client (whether a proxy or a browser) to request multiple objects on one TCP/IP connection, instead of setting up a connection for every request. It makes your site seem much faster.

See the Implementation Notes for more specific information.

Frequently Asked Questions

What are the most important things to make cacheable?

A good strategy is to identify the most popular, largest objects (especially images) and work with them first.

How can I make my pages as fast as possible with caches?

The most cacheable object is one with a long freshness time set. Validation does help reduce the time that it takes to see an object, but the cache still has to contact the origin server to see if it's fresh. If the cache already knows it's fresh, it will be served directly.

I understand that caching is good, but I need to keep statistics on how many people visit my page!

If you must know every time a page is accessed, select ONE small object on a page (or the page itself), and make it uncacheable, by giving it a suitable headers. For example, you could refer to a 1x1 transparent uncacheable image from each page. The Referer header will contain information about what page called it.

Be aware that even this will not give truly accurate statistics about your users, and is unfriendly to the Internet and your users; it generates unnecessary traffic, and forces people to wait for that uncached item to be downloaded. For more information about this, see On Interpreting Access Statistics in the references.

I've got a page that is updated often. How do I keep caches from giving my users a stale copy?

The Expires header is the best way to do this. By setting the server to expire the document based on its modification time, you can automatically have caches mark it as stale a set amount of time after it is changed.

For example, if your site's home page changes every day at 8am, set the Expires header for 23 hours after the last modification time. This way, your users will always get a fresh copy of the page.

See also the Cache-Control: max-age header.

How can I see which HTTP headers are set for an object?

To see what the Expires and Last-Modified headers are, open the page with Netscape and select 'page info' from the View menu. This will give you a menu of the page and any objects (like images) associated with it, along with their details.

To see the full headers of an object, you'll need to manually connect to the Web server using a Telnet client. Depending on what program you use, you may need to type the port into a separate field, or you may need to connect to www.myhost.com:80 or www.myhost.com 80 (note the space). Consult your Telnet client's documentation.

Once you've opened a connection to the site, type a request for the object. For instance, if you want to see the headers for http://www.myhost.com/foo.html, connect to www.myhost.com, port 80, and type:

GET /foo.html HTTP/1.1 [return]

Host: www.myhost.com [return][return]

Press the Return key every time you see [return]; make sure to press it twice at the end. This will print the headers, and then the full object. To see the headers only, substitute HEAD for GET.

My pages are password-protected; how do proxy caches deal with them?

By default, pages protected with HTTP authentication are marked private; they will not be cached by shared caches. However, you can mark authenticated pages public with a Cache-Control header; HTTP 1.1-compliant caches will then allow them to be cached.

If you'd like the pages to be cacheable, but still authenticated for every user, combine the Cache-Control: public and no-cache headers. This tells the cache that it must submit the new client's authentication information to the origin server before releasing the object from the cache.

Whether or not this is done, it's best to minimize use of authentication; for instance, if your images are not sensitive, put them in a separate directory and configure your server not to force authentication for it. That way, those images will be naturally cacheable.

Should I worry about security if my users access my site through a cache?

SSL pages are not cached (or unencrypted) by proxy caches, so you don't have to worry about that. However, because caches store non-SSL requests and URLs fetched through them, you should be conscious of security on unsecured sites; an unscrupulous administrator could conceivably gather information about their users.

In fact, any administrator on the network between your server and your clients could gather this type of information. One particular problem is when CGI scripts put usernames and passwords in the URL itself; this makes it trivial for others to find and user their login.

If you're aware of the issues surrounding Web security in general, you shouldn't have any surprises from proxy caches.

I'm looking for an integrated Web publishing solution. Which ones are cache-aware?

It varies. Generally speaking, the more complex a solution is, the more difficult it is to cache. The worst are ones which dynamically generate all content and don't provide validators; they may not be cacheable at all. Speak with your vendor's technical staff for more information, and see the Implementation notes below.

My images expire a month from now, but I need to change them in the caches now!

The Expires header can't be circumvented; unless the cache (either browser or proxy) runs out of room and has to delete the objects, the cached copy will be used until then.

The most effective solution is to rename the files; that way, they will be completely new objects, and loaded fresh from the origin server. Remember that the page that refers to an object will be cached as well. Because of this, it's best to make static images and similar objects very cacheable, while keeping the HTML pages that refer to them on a tight leash.

If you want to reload an object from a specific cache, you can either force a reload (in Netscape, holding down shift while pressing 'reload' will do this by issuing a Pragma: no-cache request header) while using the cache. Or, you can have the cache administrator delete the object through their interface.

I run a Web Hosting service. How can I let my users publish cache-friendly pages?

If you're using Apache, consider allowing them to use .htaccess files, and provide appropriate documentation.

Otherwise, you can establish predetermined areas for various caching attributes in each virtual server. For instance, you could specify a directory /cache-1m that will be cached for one month after access, and a /no-cache area that will be served with headers instructing caches not to store objects from it.

Whatever you are able to do, it is best to work with your largest customers first on caching. Most of the savings (in bandwidth and in load on your servers) will be realized from high-volume sites.

A Note About the HTTP

HTTP 1.1 compliance is mentioned several times in this document. As of the time it was written, the protocol is a work in progress. Because of this, it is virtually impossible for an application (whether a server, proxy or client) to be truly compliant. However, the protocol has been openly discussed for some time, and feature-frozen for enough time to allow developers to use the ideas contained in it, like Cache-Control and ETags. When HTTP 1.1 is final, expect more vendors to openly state that their applications are compliant.

Implementation Notes - Web Servers

Generally speaking, it's best to use the latest version of whatever Web server you've chosen to deploy. Not only will they likely contain more cache-friendly features, new versions also usually have important security and performance improvements.

Apache 1.3

Apache (http://www.apache.org/) uses optional modules to include headers, including both Expires and Cache-Control. Both modules are available in the 1.2 or greater distribution.

The modules need to be built into Apache; although they are included in the distribution, they are not turned on by default. To find out if the modules are enabled in your server, find the httpd binary and run httpd -l; this should print a list of the available modules. The modules we're looking for are mod_expires and mod_headers.

• If they aren't available, and you have administrative access, you can recompile Apache to include them. This can be done either by uncommenting the appropriate lines in the Configuration file, or using the -enable-module=expires and -enable-module=headers arguments to configure (1.3 or greater). Consult the INSTALL file found with the Apache distribution.

Once you have an Apache with the appropriate modules, you can use mod_expires to specify when objects should expire, either in .htaccess files or in the server's access.conf file. You can specify expiry from either access or modification time, and apply it to a file type or as a default. See http://www.apache.org/docs/mod/mod_expires.html for more information, and speak with your local Apache guru if you have trouble.

To apply Cache-Control headers, you'll need to use the mod_headers module, which allows you to specify arbitrary HTTP headers for a resource. See http://www.apache.org/docs/mod/mod_headers.html

Here's an example .htaccess file that demonstrates the use of some headers.

• .htaccess files allow web publishers to use commands normally only found in configuration files. They affect the content of the directory they're in and their subdirectories. Talk to your server administrator to find out if they're enabled.

### activate mod_expires

ExpiresActive On

### Expire .gif's 1 month from when they're accessed

ExpiresByType image/gif A2592000

### Expire everything else 1 day from when it's last modified

### (this uses the Alternative syntax)

ExpiresDefault "modification plus 1 day"

### Apply a Cache-Control header to index.html



Header append Cache-Control "public, must-revalidate"

• Note that mod_expires automatically calculates and inserts a Cache-Control:max-age header as appropriate.

Netscape Enterprise 3.6

Netscape Enterprise Server (http://www.netscape.com/) does not provide any obvious way to set Expires headers. However, it has supported HTTP 1.1 features since version 3.0. This means that HTTP 1.1 caches (proxy and browser) will be able to take advantage of Cache-Control settings you make.

To use Cache-Control headers, choose Content Management | Cache Control Directives in the administration server. Then, using the Resource Picker, choose the directory where you want to set the headers. After setting the headers, click 'OK'. For more information, see http://developer.netscape.com/docs/manuals/enterprise/admnunix/content.htm#1006282

MS IIS 4.0

Microsoft's Internet Information Server (http://www.microsoft.com/) makes it very easy to set headers in a somewhat flexible way. Note that this is only possible in version 4 of the server, which will run only on NT Server.

To specify headers for an area of a site, select it in the Administration Tools interface, and bring up its properties. After selecting the HTTP Headers tab, you should see two interesting areas; Enable Content Expiration and Custom HTTP headers. The first should be self-explanatory, and the second can be used to apply Cache-Control headers.

See the ASP section below for information about setting headers in Active Server Pages. It is also possible to set headers from ISAPI modules; refer to MSDN for details.

Lotus Domino R5

Lotus' (http://www.lotus.com/) servers are notoriously difficult to cache; they don't provide any validators, so both browser and proxy caches can only use default mechanisms (i.e., once per session, and a few minutes of 'fresh' time, usually) to cache any content from them.

Even if this limitation is overcome, Notes' habit of referring to the same object by different URLs (depending on a variety of factors) bars any measurable gains. There is also no documented way to set an Expires, Cache-Control or other arbitrary HTTP header.

Implementation Notes - Server-Side Scripting

Because the emphasis in server-side scripting is on dynamic content, it doesn't make for very cacheable pages, even when the content could be cached. If your content changes often, but not on every page hit, consider setting an Expires header, even if just for a few hours. Most users access pages again in a relatively short period of time. For instance, when users hit the 'back' button, if there isn't any validator or freshness information available, they'll have to wait until the page is re-downloaded from the server to see it.

• One thing to keep in mind is that it may be easier to set HTTP headers with your Web server rather than in the scripting language. Try both.

CGI

CGI scripts are one of the most popular ways to generate content. You can easily append HTTP response headers by adding them before you send the body; Most CGI implementations already require you to do this for the Content-Type header. For instance, in Perl;

#!/usr/bin/perl

print "Content-type: text/html\n";

print "Expires: Thu, 29 Oct 1998 17:04:19 GMT\n";

print "\n";

### the content body follows...

Since it's all text, you can easily generate Expires and other date-related headers with in-built functions. It's even easier if you use Cache-Control: max-age;

print "Cache-Control: max-age=600\n";

This will make the script cacheable for 10 minutes after the request, so that if the user hits the 'back' button, they won't be resubmitting the request.

The CGI specification also makes request headers that the client sends available in the environment of the script; each header has 'HTTP_' appended to its name. So, if a client makes an If-Modified-Since request, it may show up like this:

HTTP_IF_MODIFIED_SINCE = Fri, 30 Oct 1998 14:19:41 GMT

Server Side Includes

SSI (often used with the extension .shtml) is one of the first ways that Web publishers were able to get dynamic content into pages. By using special tags in the pages, a limited form of in-HTML scripting was available.

Most implementations of SSL do not set validators, and as such are not cacheable. However, Apache's implementation does allow users to specify which SSI files can be cached, by setting the group execute permissions on the appropriate files, combined with the XbitHack full directive. For more information, see http://www.apache.org/docs/mod/mod_include.html

PHP 3

PHP (http://www.php.net/) is a server-side scripting language that, when built into the server, can be used to embed scripts inside a page's HTML, much like SSI, but with a far larger number of options. PHP can be used as a CGI script on any Web server (Unix or Windows), or as an Apache module.

By default, objects processed by PHP are not assigned validators, and are therefore uncacheable. However, developers can set HTTP headers by using the Header() function.

For example, this will create a Cache-Control header, as well as an Expires header three days in the future:

Remember that the Header() function MUST come before any other output.

As you can see, you'll have to create the HTTP date for an Expires header by hand; PHP doesn't provide a function to do it for you. Of course, it's easy to set a Cache-Control: max-age header, which is just as good for most situations.

For more information, see http://www.php.net/manual/function.header.php3

Cold Fusion 4.0

Cold Fusion, by Allaire (http://www.allaire.com/) is a commercial server-side scripting engine, with support for several Web servers on Windows and Solaris.

Cold Fusion makes setting arbitrary HTTP headers relatively easy, with the CFHEADER tag. Unfortunately, setting date-related functions in Cold Fusion isn't easy as Allaire's documentation leads you to believe; their example for setting an Expires header, as below, won't work.

It doesn't work because the time (in this case, when the request is made) doesn't get converted to a HTTP-valid date; instead, it just gets printed as a representation of Cold Fusion's Date/Time object. Most clients will either ignore such a value, or convert it to a default, like January 1, 1970.

Cold Fusion's date formatting functions make it difficult generate a date that is HTTP-valid; you'll need to either use a combination of DateFormat, Hour, Minute and Second, or roll your own. Of course, you can still use the CFHEADER tag to set Cache-Control: max-age and other headers.

Also, Remember that Web server headers are passed through with some implementations (such as CGI); check yours to determine whether you can use this to your advantage, by setting headers on the server instead of in Cold Fusion.

ASP

Active Server Pages, build into IIS and now becoming available in other implementations, also allow you to set HTTP headers. For instance, to set an expiry time, use the properties of the Response object in your page, like this:

<% Response.Expires=1440 %>

specifying the number of minutes from the request to expire the object. Likewise, absolute expiry time can be set like this (make sure you format HTTP date correctly):

<% Response.ExpiresAbsolute=#May 31,1996 13:30:15 GMT# %>

Cache-Control headers can be added like this:

<% Response.CacheControl="public" %>

• When setting HTTP headers from ASPs, make sure you either place the Response method calls before any HTML generation, or use Response.Buffer to buffer the output.
• Note that ASPs set a Cache-Control: private header by default, and must be declared public to be cacheable by HTTP 1.1 shared caches. While you're at it, consider giving them an Expires header as well.

References and Further Information

HTTP 1.1 Specification

http://www.w3.org/Protocols/
The HTTP 1.1 spec has many extensions for making pages cacheable, and is the authoritative guide to implementing the protocol. See sections 13, 14.9, 14.21, and 14.25.

Web Caching Overview

http://www.web-caching.com/
An excellent introduction to caching concepts, with links to other online resources.

Cache Now! Campaign

http://vancouver-webpages.com/CacheNow/
Cache Now! is a campaign to raise awareness of caching, from all perspectives.

On Interpreting Access Statistics

http://www.cranfield.ac.uk/docs/stats/
Jeff Goldberg's informative paper on why you shouldn't rely on access statistics and hit counters.

Cacheability Engine

http://www.mnot.net/cacheability/
Examines Web pages to determine how they will interact with Web caches, the Engine is a good debugging tool, and a companion to this tutorial.

About This Document

This document is Copyright © 1998, 1999 Mark Nottingham <mnot@pobox.com>. It may be freely distributed in any medium as long as the text (including this notice) is kept intact and the content is not modified, edited, added to or otherwise changed. Formatting and presentation may be modified. Small excerpts may be made as long as the full document is properly and conspicuously referenced.

If you do mirror this document, please send e-mail to the address above, so that you can be informed of updates.

All trademarks within are property of their respective holders.

Although the author believes the contents to be accurate at the time of publication, no liability is assumed for them, their application or any consequences thereof. If any misrepresentations, errors or other need for clarification is found, please contact the author immediately.

The latest copy of this document can always be obtained from http://www.mnot.net/cache_docs/

Version 1.32 - June 19, 2000

http://www.web-caching.com/mnot_tutorial/

What Is: Cloud Computing

Cloud computing

From Wikipedia, the free encyclopedia

Cloud computing is a computing paradigm shift where computing is moved away from personal computers or an individual application server to a “cloud” of computers. Users of the cloud only need to be concerned with the computing service being asked for, as the underlying details of how it is achieved are hidden. This method of distributed computing is done through pooling all computer resources together and being managed by software rather than a human.

The services being requested of a cloud are not limited to using web applications, but can also be IT management tasks such as requesting of systems, a software stack or a specific web appliance.

This simplifies IT management as well as increases efficiencies of system resources. IT administrators no longer need to install software and manually setup all the systems, but instead they have management software do this. Resources are used more efficiently as computers can be consolidated to be used for more tasks. This ensures underutilized systems do not sit idle.

Architecture

The architecture behind cloud computing is a massive network of "cloud servers" interconnected as if in a grid running in parallel, sometimes using the technique of virtualization to maximize computing power per server.

It is made up of a front-end interface which allows a user to select a service from a catalog. This request gets passed to the system management which finds the correct resources, and then calls the provisioning services which carves out resources in the cloud. The provisioning service may deploy the requested stack or web application as well.

User Interaction Interface: This is how users of the cloud interface with the cloud to request services.

Services Catalog: This is the list of services which a user could request.

System Management: This is the piece which manages the computer resources available.

Provisioning Tool: This tool carves out the systems from the cloud to deliver on the requested service. It may also deploy the required images.

Monitoring & Metering: This optional piece tracks the usage of the cloud so the resources used can be attributed to a certain user.

Servers: The servers get managed by the system management tool. They can be either virtual or real.

What Is: Financial Literacy

Financial literacy

International findings

An international OECD study was published in late 2005 analysing financial literacy surveys in OECD countries. A selection of findings^[2] included:

• In Australia, 67 per cent of respondents indicated that they understood the concept of compound interest, yet when they were asked to solve a problem using the concept only 28 per cent had a good level of understanding.
• A British survey found that consumers do not actively seek out financial information. The information they do receive is acquired by chance, for example, by picking up a pamphlet at a bank or having a chance talk with a bank employee.
• A Canadian survey found that respondents considered choosing the right investments to be more stressful than going to the dentist.
• A survey of Korean high-school students showed that they had failing scores - that is, they answered fewer than 60 per cent of the questions correctly - on tests designed to measure their to choose and manage a credit card, their knowledge about saving and investing for retirement, and their awareness of risk and the importance of insuring against it.
• A survey in the US found that four out of ten American workers are not saving for retirement.

“Yet it is encouraging that the few financial education programmes which have been evaluated have been found to be reasonably effective. Research in the US shows that workers increase their participation in 401(k) plans (a type of retirement plan, with special tax advantages, which allows employees to save and invest for their own retirement) when employers offer financial education programmes, whether in the form of brochures or seminars.”

Financial literacy is the ability to make informed judgements and effective decisions about the use and management of money. It's an essential skill for functioning in modern society and is becoming increasingly important to the long-term wellbeing of individuals and the community.

http://www.anz.com/aus/aboutanz/Community/Programs/FinLit.asp

What Is: Financial Inclusion

Promoting financial inclusion

Over a million adults in Britain still live their lives without the most basic of financial products. Some 6-9 per cent of all households do not have any kind of bank or building society account and 14-23 per cent live without the flexibility of a current account. [Footnote 1] There is a large minority of people for whom the financial services revolution has effectively passed them by; they are financially excluded. Against this backdrop, Faith Reynolds assesses some current initiatives that are attempting to promote greater financial inclusion.

The reality of financial exclusion
Underpinning financial exclusion are problems of poverty, ignorance and environment:

• Poverty: being on a low income, especially out of work and on benefits.
  
  
• Ignorance: low levels of awareness and understanding of products caused by lack of appropriate marketing or low levels of financial literacy.
  
  
• Environment: lack of access to financial services caused by several factors, including:
  
  – geographic access to bank branches or remote banking facilities;
  – affordability of products such as insurance, where premiums often price out those living in the most deprived and risky areas;
  – suitability of products like current accounts, which offer an overdraft and an easy route to debt;
  – regulatory barriers, such as the money laundering guidelines requiring proof of identification which many people find difficult to provide;
  – cultural and psychological barriers, such as language, perceived/actual racism and suspicion or fear of financial institutions.

The implications of being financially excluded
Living without financial products is a significant disadvantage in an age where cash is slowly being replaced by debit cards and automated transactions, and living on credit is the norm. Having no insurance exacerbates the effects of theft. Outside of mainstream financial products, saving options are informal and unreliable. Discounts on utility bills for paying by direct debit are inaccessible. Affordable short-term credit is replaced by sub-prime lenders offering credit on APRs that often exceed 100 per cent, pawn brokers and loan sharks. Being financially excluded can cost and it is the most deprived who pay the price.

Toynbee Hall and SAFE: Services Against Financial Exclusion
Toynbee Hall is a voluntary organisation that was established in 1884 to alleviate poverty in the East End of London, an area with a history of deprivation. Toynbee Hall has a tradition of developing innovative services. Indeed, Child Poverty Action Group started at Toynbee Hall in 1965.[Footnote 2] A more recent addition is SAFE: Services Against Financial Exclusion. SAFE was launched in March 2002 and currently offers financial information and education, promotes access to basic bank accounts and to the Saving Gateway, a government pilot savings scheme. SAFE also works in partnership with Toynbee’s free legal advice service, The Environment Trust and Quaker Social Action to promote free debt advice and access to free training opportunities and micro-finance (through the Community Finance and Learning Initiative).

The problems underpinning financial exclusion are interlinked and need to be addressed jointly as well as individually. Financial inclusion is a key part of the Government’s social inclusion policy and it has applied pressure on its departments to review, reform and regulate where necessary. Others have taken up the baton, including various policy makers, the Financial Services Authority (whose job it is to promote public awareness of UK financial systems) and the voluntary sector. Some financial institutions have also made costly, if, in some cases, half-hearted steps towards promoting financial inclusion. ‘Joined-up doing’ (as well as thinking) is needed to ensure financial inclusion becomes reality.

There are many initiatives being established across the country with the aim of tackling financial exclusion. The following discussion highlights three common themes of these initiatives and some of their policy implications.

The community Toynbee Hall serves There are a number of different factors which aggravate financial exlusion and which make residents vulnerable to financial (if not other) forms or exclusion:
Being on a low income:	In 1999 over 60 per cent of households had a gross income of less than £10,000.
Being unemployed:	11.8 per cent are out of work, compared with the national average of 3.8 per cent.
Suffering long-term illness or disbility:	9.2 per cent of Tower Hamlets residents are in receipt of incapacity benefit, compared with 6.2 per cent for the UK.
Being in certain ethnic groups:	Nearly a quarter of the entire British Bangladeshi population live in Tower Hamlets. This group is the most deprived in the UK with 70 per cent in the bottom 20 per cent of the income range.
Living in areas of high deprivation:	The ward of Spitalfields is ranked 41st on the index of deprivation and st for housing deprivation.

Asset-building and the Saving Gateway
The anti-poverty lobby and living wage campaign are well established. A more recent innovation is asset-based welfare policy. It is suggested that increasing an individual’s or community’s asset holding can increase social mobility and offer a positive route out of financial exclusion and poverty.[Footnote 3]

Raising income is part of the Government’s welfare policy and financial assets have a complementary role to play. [Footnote 4] Having money put aside smoothes peaks and troughs (and acts as an alternative to a short-term loan); it also allows people to take advantage of opportunities which might otherwise be denied (eg, paying for further education); in the longer term it can offer a more comfortable retirement. The act of saving reinforces longer-term thinking and a sense of responsibility for one’s future. Holding a savings product also reduces financial exclusion.

Research shows that people on lower incomes are least likely to save or hold assets.[Footnote 5] They are also unlikely to be affected by tax breaks, which might be attractive to people on higher incomes. The Saving Gateway is one policy the Government is piloting to encourage low-income households into saving. The scheme offers to match an individual’s savings, a pound for a pound up to a specified limit and is run through trusted community-based organisations, which act as intermediaries between the client and the delegated bank (the Halifax). Given the expense of the project and the target group, the Saving Gateway has caused much controversy.

One valid question raised by the Institute for Fiscal Studies [Footnote 6] is whether people on low incomes should be encouraged to save in the first place and incentivised with such high returns. Its work suggests that only one in eight of the poorest fifth of the population will benefit from the Saving Gateway in the way that the Government [Footnote 7] expects and that those left may indeed borrow to save into the scheme. Others argue that people on such low incomes do not have a disposable income in any case. If their low levels of income necessitate a hand-to-mouth existence, should longer-term thinking and financial planning be encouraged? Increasing income should be the priority.

Research from a similar scheme in America shows that people on low incomes can, and perhaps more importantly want to, save small amounts on a regular basis. For many people the Saving Gateway replaces an existing informal form of saving (the jam jar for instance). The saving scheme offers a decent return on very small savings that people on higher incomes would benefit from through tiered interest rates and tax breaks. Why should poor people not reap as comparable rewards for saving as people on higher incomes?

A balanced view needs to be taken on asset-based welfare policy: it is not a case of either income or assets, but of both income and assets. For those people who want it, there should be the opportunity of saving and reaping clear benefits. If the aim is to increase financial inclusion, the answer is not to keep people in ignorance, excluded from products that policy makers judge unsuitable. People on low incomes have every right to make the decision for themselves. Policy, therefore, needs to be equally concerned with what informs individuals’ decisions and how education can best be delivered to ensure that all people (whatever their income) are enabled to make the right decision given their circumstances.

Financial education
The five Saving Gateway pilots do not stand alone but, in all but one case, are run alongside a Community Finance and Learning Initiative (CFLI). One of the objectives of the CFLI is to promote financial literacy through the provision of financial education. The National Foundation of Educational Research describes financial literacy as the ‘ability to make informed judgements and to take effective decisions regarding the use and management of money’.

The delivery of financial education can be said to comprise three key themes: building skills, increasing knowledge and developing understanding and within each of these a client’s confidence should also be developed.

Building skills
Literacy and numeracy are fundamental skills in managing money and understanding the plethora of financial products available by which to do so. Research commissioned by the Basic Skills Agency (BSA) [Footnote 8] shows that there is a link between people who have low levels of literacy and numeracy and financial difficulties. Almost one in four people (23 per cent of population) do not have the basic skills expected of an 11-year-old. Moreover, research shows that whilst people with poor basic skills do hold financial products, they are less likely to do so.[Footnote 9] Consequently, the BSA has developed useful resources for delivering financial education to people with basic skills needs [Footnote 10] and worked with four financial institutions to train front-line workers in helping customers with basic skills needs.

Increasing knowledge
Raising awareness and increasing knowledge of financial products is key in helping people make informed decisions. Financial institutions tend not to market very deprived areas, where residents are more likely to already be financially excluded.[Footnote 11] As such, residents of these areas are even less likely to become aware of suitable products as they come onto the market. In terms of promoting financial inclusion, much of the work is simply in providing easily understood information in a safe and engaging environment. To this end the Financial Services Authority has produced a detailed consumer website, various free leaflets and a financial planning CD-Rom [Footnote 12] and these are publicly available through CABs, libraries, post offices and the like. Financial providers and other trusted local community organisations also make excellent vessels for disseminating such information.

Developing understanding
Whilst increasing knowledge is mostly about the provision of information, developing understanding is about giving an individual a strategy for dealing with this information, which might include skills for budgeting, planning, understanding the types of products available and shopping around to find the best deal. There is no definitive way for delivering this type of training but it is generally agreed that, for the client, there has to be ‘something in it for me’. Debt advice, basic skills courses and initiatives like the Saving Gateway can be useful ‘carrots’ for engaging people in financial education and resources like the Adult Financial Capability Framework [Footnote 13] give a sound structure from which to plan the training.

Building confidence
All aspects of training should build an individual’s confidence. The skills and confidence necessary for filling out forms, asking questions, getting further clarification and making complaints in an effective manner are all too often taken for granted. In all aspects of training there needs to be constant affirmation of the individual, the individual’s rights and significance as a citizen in our society (and of their consequent responsibilities towards others). An individual has a right to ask questions and receive answers that make sense to them from a person who is able to see beyond their own needs and react in a positive way.

Basic bank accounts
There is, however, no single solution for financial exclusion and a financially capable adult has little chance of becoming financially included if the environment is set against them. The Government has made significant moves to promote a more accessible environment [Footnote 14] but one initiative is of particular relevance at the time of writing: access to mainstream financial services through the provision of appropriate financial products.

Apart from wishing to promote a socially cohesive society more generally, the Government has a vested interest in advancing financial inclusion and access to mainstream financial services. In 1999 the decision was taken to move all benefits payments from giro to automated credit payments (ACT) by 2003, thus saving the Government (and the tax payer) approximately £650m a year in administration costs and fraud. [Footnote 15] However, this relies upon recipients having some kind of account to which benefits can be credited.

A universal bank was initially proposed. This was to be a no frills banking service available through post offices. Not only would the universal bank promote financial inclusion, but it would also advance benefits reform and modernise post offices. The cost of doing so, however, was considered too great and neither the Government nor the banking industry would pay the bill. Instead the paper-based giro has been replaced by the post office card account (POCA). This allows benefits (not salaries) to be paid by ACT and withdrawn in cash at a post office as before, but otherwise offers very little flexibility. Alongside POCA some 18 financial institutions have so far developed (or committed to develop) a basic bank account. These accounts vary by bank, but are similar to a standard current account without an overdraft facility or cheque book. With no overdraft users do not need to be credit scored nor fear losing control of their money. Customers can set up standing orders and direct debits, use their Solo or Electron card for debit transactions, as well as withdraw cash from cashpoints and their benefits from a post office.

There have, however, been some complaints about the lack of marketing for basic bank accounts and some banks’ hesitancy in embracing the basic bank account target group. The problem is that basic bank accounts are considered unprofitable.

It should not be forgotten that banks and building societies are profit-making institutions with shareholders and that the local branch is similar to any other shop – it is there to sell a product. It is estimated that if all 13 million benefits recipients decided to use standard or basic bank accounts (which is unlikely in the early years, but surely the ultimate aim for the future) then the total costs to the industry could be as high as £1 billion. Incremental costs could be £400-£650 million if each account costs £30-£50 per annum. [Footnote16] Whilst the Government will make considerable savings by transferring benefits payments to ACT, the banking industry, without any financial incentive or government subsidy, will pay considerable costs to support the initiative.

On the other hand, however, it would be somewhat short-sighted to believe there is no business case for the basic bank account. The Government spends several millions of pounds in benefits and tax credits. This could be money flowing straight to financial institutions, which may not always flow straight out. The number of benefit recipients hits millions and it is plausible that a financial institution could expand its client base (and profits) significantly by actively marketing its basic bank account (especially in deprived areas) and later cross-selling products (eg, savings accounts). It is also likely that for some customers a standard account with an overdraft facility will be appropriate and profitable. For many, overdrafts offer a cheap and reliable form of short-term credit which in the longer term some basic bank account clients may graduate towards. Further development to structure the repayments of overdrafts could also increase confidence and a sense of being in control among potential users whilst keeping defaults low. The labour market and income levels are also variants which should be taken into account: today’s single mother with a baby on income support may well be next year’s new business entrepreneur.

A new approach to basic bank accounts and people on benefits needs to be adopted. By non-marketing the basic bank account and by giving staff no financial incentive to sell it [Footnote 17] a negative view of the target group is reinforced both to staff and society more generally. The cultural barrier between the financial institution and the financially excluded simply widens further.

Many banks already embrace corporate social responsibility, make generous donations and send volunteers to local community organisations. The next step is for corporate social responsibility to have an impact on the way banks do business. This is already happening to some degree through community banking programmes (for instance, the Bank of Scotland’s work with the Big Issue to provide basic bank accounts and an appropriate saving scheme [Footnote 18), initiatives like the Saving Gateway and training packages produced by the Basic Skills Agency, but it needs to happen on a much larger scale.

The voluntary sector has a key role to play in promoting initiatives like the Saving Gateway and other community banking programmes, as well as in informing, supporting and being positive about financial institutions’ steps towards financial inclusion. Similarly, some parts of the financial sector need to open their doors more widely, become aware of the neighbourhoods in which they work and promote a more outward-looking, customer-centric model to work alongside their target-based, profit-driven model.

Conclusion
In conclusion, there are many issues (some which are not mentioned above) which need to be taken into account when considering the best course towards financial inclusion. A recent report on poverty [Footnote 19] suggests that there has been little change over the last five years in the number of financially excluded people. There is still a long way to go, but the need for change becomes ever more acute. One of the main characteristics of the work should be that it is collaborative and ‘joined-up’, harnessing the strengths and expertise of all those involved, whether in policy, government, regulation, education, industry or the voluntary sector.

Faith Reynolds is the co-ordinator of SAFE (Services Against Financial Exclusion) at Toynbee Hall in the London Borough of Tower Hamlets

Thanks go to Ian McGimpsey and Luke Geoghegan of Toynbee Hall, and volunteers Sean Williams, Will Paxton and Gill Hind for their help with this article.

http://www.cpag.org.uk/info/Povertyarticles/Poverty114/financial.htm

Financial inclusion index

The importance of financial services in all of our lives has, in recent years, risen significantly. This is a consequence of both a growing and more prosperous United Kingdom economy, and an innovative financial services sector, which has developed ever more ways of meeting the needs of its customers. Exclusion from the financial system brings with it, therefore, real and rising costs, often borne by those who can least afford them, which is why promoting financial inclusion has been, and continues to be, a key priority for the Government.

To ensure that as few people as possible have to bear these costs, the Government has taken responsibility for developing a strategic policy response, working with key stakeholders from the financial services industry, the third sector, and elsewhere. The Government’s key goals for financial inclusion are about ensuring that everyone has access to appropriate financial services, enabling them to:

• manage their money on a day-to-day basis,effectively, securely and confidently;
• plan for the future and cope with financial pressure, by managing their finances to protect against short-term variations in income and expenditure, and to take advantage of longer-term opportunities; and
• deal effectively with financial distress,should unexpected events lead to serious financial difficulty.

The Government’s action plan for financial inclusion, Financial inclusion: an action plan for 2008-11, sets out in detail how the Government will use the £130 million Financial Inclusion Fund, announced in the CSR, to achieve its financial inclusion objectives over the next three-year spending period from April 2008 to March 2011.

Financial Inclusion - the way forward

This action plan builds on Financial Inclusion - the way forward, which sets out the policy framework for financial inclusion in 2008-11, including:

• a new Financial Inclusion Fund for 2008-11;
• an extension to the Financial Inclusion Taskforce until March 2011, so that it can continue to monitor and evaluate progress and advise the Government on financial inclusion developments; and
• a ministerial working group chaired by the Economic Secretary to the Treasury, with members from the Department for Work and Pensions, the Department for Business, Enterprise and Regulatory Reform, the Department for Communities and Local Government, the Cabinet Office and the Ministry of Justice to develop an action plan for financial inclusion in 2008-11.

Promoting Financial Inclusion

The Government's first financial inclusion strategy, Promoting financial inclusion, was published in December 2004. This:

• announced the creation of a dedicated Financial Inclusion Fund of £120 million for the 2005-08 spending period;
• announced a goal, shared between Government and the banks, to halve the number of adults living in households without access to a bank account, and to make significant progress within two years – recently announced that 60 per cent of the progress required to achieve the shared goal had been made; and
• established an independent Financial Inclusion Taskforce to advise the Government and monitor progress.

http://www.hm-treasury.gov.uk/documents/financial_services/financial_inclusion/Financial_inclusion_index.cfm

• • What is 'Financial Inclusion' ?
    "Financial inclusion is delivery of banking services at an affordable cost ('no frills' accounts,) to the vast sections of disadvantaged and low income group. Unrestrained access to public goods and services is the sine qua non of an open and efficient society. As banking services are in the nature of public good, it is essential that availability of banking and payment services to the entire population without discrimination is the prime objective of the public policy."

Areas of concern by banks

• The banking industry has shown tremendous growth in volume and complexity during the last few decades.

• Despite making significant improvements in all the areas relating to financial viability, profitability and competitiveness, there are concerns that banks have not been able to reach and bring vast segment of the population, especially the underprivileged sections of the society, into the fold of basic banking services.

• Internationally also efforts are being made to study the causes of financial exclusion and design strategies to ensure financial inclusion of the poor and disadvantaged.

• The reasons may vary from country to country and so also the strategy but all out efforts are needed as financial inclusion can truly lift the standard of life of the poor and the disadvantaged.

RBI's Policy on 'Financial Inclusion' :

• When bankers do not give the desired attention to certain areas, the regulators have to step in to remedy the situation. This is the reason why the Reserve Bank of India places a lot of emphasis on financial inclusion.

• With a view to enhancing the financial inclusion, as a proactive measure, the RBI in its Annual Policy Statement of the year 2005-2006, while recognizing the concerns in regard to the banking practices that tend to exclude rather than attract vast sections of population, urged banks to review their existing practices to align them with the objective of financial inclusion.

• No-Frills' Account :

  • In the Mid Term Review of the Policy (2005-06), RBI exhorted the banks, with a view to achieving greater financial inclusion, to make available a basic banking 'no frills' account either with 'NIL' or very minimum balances as well as charges that would make such accounts accessible to vast sections of the population. The nature and number of transactions in such accounts would be restricted and made known to customers in advance in a transparent manner. All banks are urged to give wide publicity to the facility of such 'no frills' account, so as to ensure greater financial inclusion.

• 'Simplification of 'Know Your Customer (KYC)' Norms :

  • Banks are required to provide a choice of a 'no frills account' where the minimum balance is nil or very small but having restrictions on number of withdrawals, etc., to facilitate easy access to bank accounts.

  • Further, in order to ensure that persons belonging to low income group both in urban and rural areas do not face difficulty in opening the bank accounts due to the procedural hassles, the 'KYC' procedure for opening accounts for those persons who intend to keep balances not exceeding rupees fifty thousand (Rs. 50,000/-) in all their accounts taken together and the total credit in all the accounts taken together is not expected to exceed rupees one lakh (Rs. 1,00,000/-) in a year has been simplified to enable those belonging to low income groups without documents of identity and proof of residence to open banks accounts. In such cases banks can take introduction from an account holder on whom full KYC procedure has been completed and has had satisfactory transactions with the bank for at least six months. Photograph of the customer who proposes to open the account and his address need to be certified by the introducer.

• Ensuring reasonableness of bank charges :

  • As the Reserve Bank has been receiving several representations from public about unreasonable service charges being levied by banks, the existing institutional mechanism in this regard is not adequate. Accordingly, and in order to ensure fair practices in banking services, the RBI has issued instructions to banks making it obligatory for them to display and continue to keep updated, in their offices/branches as also in their website, the details of various services charges in a format prescribed by it. The Reserve Bank has also decided to place details relating to service charges of individual banks for the most common services in its website

  http://www.iibf.org.in/financeq/iib_financeinclusion.asp