friends, I'm glad to be here with you, and I thank your Board. Jerry
Carbone and my longtime friend David Ewing for inviting me. David
is a stickler for the law, and even though he was inviting me only
to visit for this talk with you. I was fully prepared for him to
have me take the oath that your State Law requires of new voters,
and to pledge that Ill be of "a quiet and peaceable behavior."
I promise. I also promise not to try to analyze the whole world,
a subject beyond my limited experience and qualifications.
evening, I want to talk solely about how technology is changing
the world around us, the little changes that we see, and the bigger
consequences of those changes, that we don't yet see. I want to
show you and pass around for you to see for yourself
an actual original presentation medal that I hold in my hand. I'll
read the inscription:
resolution of the Congress of the United States, March 2, 1867,
to Cyrus W. Field of New York, for his foresight, faith and persisting
in establishing telegraphic communication by means of the Atlantic
Telegraph, connecting the Old with the New World. Honor and Fame
are the Reward. Indomitable Perseverance and Enduring Faith Achieved
not easy for us to realize that until a century and a half ago,
there wasn't even a single physical connection between the old world
and the new. If you wrote a message to Europe, you put it on a ship
and sent it there. When the ship arrived, your message would be
delivered by horse and carriage. It was only after the American
Civil War that Cyrus W. Field combined the new technology of the
steamship with the technology of the telegraph to lay the very first
cable connection between the continents so that electricity in the
form of dots and dashes could instantly deliver your message under
the ocean to the other shore.
communications developments are happening today. For example, recently,
the international telecommunications companies completed a new undersea
fiber optic cable linking San Francisco to Honolulu to Agana in
Guam, to Okinowa, and finally to Japan. This new cable is just a
few threads of glass carefully wrapped as protection against fishermen's
dragnets. It will begin by carrying 600 thousand telephone circuits,
able to carry 600 thousand simultaneous phone calls or faxes or
Internet accesses. And with new optical technology, those 600 thousand
circuits can be multiplied almost as needed and at negligible additional
results will quickly become visible. How on earth can they get 600
thousand people in the USA to want to talk or e-mail or fax Japan
at the same time, to keep all those 600 thousand circuits busy and
producing a return on the capital investment? There's only one way:
keep cutting the cost of use until it's so low that 600 thousand
people will want to keep using it every minute. Probably very soon,
perhaps in a year or two but hardly longer, you will see international
telephone rates dropping very low to Japan. AT&T's lowest rate
now is 16 cents a minute. Soon, it may be forced to drop to maybe
a dime a minute. Perhaps even five or six or seven cents a minute.
Perhaps even the same as you now pay for your local phone calls
to your neighbor over in Newfane or Dummerston. Lower rates and
increased use will come quickly.
the larger and more significant impact will come more slowly. This
new cable will lead to many more contacts of all kinds across the
Pacific Basin. Surely, it will make it easier for trade and commerce.
More business relationships. More tourist travel. It will broaden
world markets. Communication on the Internet will open trading possibilities
with America for countries like Mongolia. I cite Mongolia as an
example because its geographical remoteness has prevented its export
of copper, its animal products, its cashmere and wool. Its remoteness
has prevented it from receiving modern technology.
are many Mongolias on the world scene. The Internet, combined with
cheap telecommunications as the carrier, will pull them into the
circle of world trade. That will be the long term international
impact of this new cable. Already, world trade is expanding, will
expand more rapidly. The world economy will become more closely
enmeshed. If there's a recession in the United States, China will
feel it quickly and severely in the form of shrinking exports. And
a recession in France will impact the economies of North and Western
Africa. All because inexpensive communications has tied many countries
together more closely, made them more dependent on each other. That
will be the larger consequence of one undersea fiber optic cable.
tens of thousands of foreign students come to America for a university
education, especially in fields like medicine, engineering and various
branches of science. But that is a very costly experience. Costly
for their parents who must pay for it. Costly for the foreign students
who are uprooted from their homes. And costly for other countries,
because a certain percentage of those American-trained graduates
choose never to return home; the Brain Drain. And millions of Americans
who need a college education to get a decent job in today's world
are finding that tuition has gone beyond reach; a university education
has simply become too costly.
it reasonable to suppose that some people will obtain their college
education on the Internet? (Not in brain surgery, I hope). They'll
listen to professors and instructors on the Internet, ask questions,
get replies, and finally take their exams on the Internet. And not
all the greatest universities are in the United States. Suppose
Cambridge or Oxford University choose to give a few of their finest
courses online? Or the University of Heidelberg? Many universities
are scrambling to put their courses, and even offer their degrees,
on the Internet. Certainly, technology won't cause Yale and Harvard
and Dartmouth to hurt for students in the near future. But many
other less distinguished universities will hurt and perhaps
soon. Because the Internet will slash the costs of a college education.
It will improve the quality of higher education. It will expand
its frontiers. A profound upheaval lies ahead in the economics of
go beyond the immediate impact on the students and universities
themselves. What probable impact lies ahead for she larger society?
If Internet education drains off students from State universities,
church-connected colleges and community colleges, many colleges
and universities will have a difficult time to survive this competitive
onslaught. Dozens, perhaps hundreds, will collapse financially.
So a few courses on the Internet will in the longer term yet unseen,
bring profound consequences to our whole society in the whole world.
another example of immediate impact already visible versus unseen
but certain bigger consequences that lie in the future. As you know
well, L. L. Bean over in Freeport, Maine sells millions of dollars
worth of clothing and other items by catalog, over the telephone
and on the Internet. Most of such goods would otherwise have been
purchased in local stores on the Main Streets and in the shopping
malls of the nation. This trend will keep growing, because many
people will find it more convenient to buy by phone or computer
in the evening or weekends than to go into a crowded store and encounter
sales clerks of questionable helpfulness. How many retail stores
of all kinds will be driven out of business? Not only on Bond Street
in London or the Champs Elysee in Paris, but in every city and town
in the world.
already seen the banks change. Those big stone buildings, with all
the teller windows and the desks out front for the loan officers
they're gone. All over America, and now in Europe and Southeast
Asia too. Banks don't need big space on Main Street any more. They
open little storefronts with a few ATM machines, and that does the
job. Banks can't afford to employ many tellers these days. ATMs
do most of the job of taking deposits and giving out cash. And the
loan officers? They're mostly gone too. Loan decisions are now based
on computer analysis at a central database 'maybe out in South Dakota,
where Citibank moved theirs, or on some Caribbean island. The immediate
result we're already familiar with greater convenience.
a larger impact will soon become visible. In most cities of the
world, the two biggest users of storefront space are retail establishments
and the banks. Now, both of those categories are shrinking fast.
With fewer retail stores and banks, cities will look different.
sharply reduced real estate demand will reduce property values and
cut the tax income of entire cities and towns. Forty years ago,
shopping malls destroyed downtown areas. Now we'll see downtown
areas converted to residential living' as retailing and banking
close down. And municipal governments will struggle to find other
sources of tax income. Now, all Internet sales escape sales tax.
When more sales go to the Internet, municipalities will lose more
tax revenue. The entire financial structure of local government
in our country will have to be changed. And if the Federal government
collects the Internet tax, inescapably, that will give the Federal
government more authority over local government. Who's thinking
at the stock market. You're familiar with some of the changes that
have already happened, like a 24-hour trading day, online trading,
reduced brokerage commissions. The New York Stock Exchange and all
the great exchanges in the world, London, Paris, Frankfurt, Tokyo.
Hong Kong are feeling these things already. London and Frankfurt's
answer is to merge. More of that will come. Those exchanges today
are very important to society, because they bring together in a
highly efficient way, those who have capital to invest, with those
who need money to build and modernize. The exchanges thrive because
of their honesty and their transparency. Buyers and sellers can
see at every moment exactly what's being offered for sale at what
price and how much is being bought at what price.
in between buyer and settler always is the Market Specialist, the
person who matches buy and sell orders, for a slight fee, of course.
Those are the folks you see in those live TV shots of the Stock
Exchange, crowding around the trading floor. All those Market Specialists
and yelling men in the commodity trading pits in Chicago simply
won't be able to compete with computer systems that soon will match
buy and sell orders with an accuracy, efficiency and integrity that
the specialists can't equal.
as we speak, the computer is eliminating their jobs. And if you
don't need people to match buy and sell orders. What do you need
a Stock Exchange for? Their days are surely numbered. Give them
maybe another two years of life. That isnt long range forecasting.
Looking broadly past the collapse of the Stock Exchanges in their
present form, consider that the securities industry is the largest
employer in most cities where there is a Stock Exchange.
mass communications, television and the Internet, already have brought
the reality of battle into our living rooms. Communications satellites
enable the television news services to transmit picture and sound
instantly around the world. We have grown accustomed to see bombs
falling, pathetic victims, the wounded. Small mobile cameras show
us solders in battle. CNN showed our Cruise missiles as they sailed
into Baghdad. Reality comes into our homes with immediacy.
it was not always thus. During World War I, every government conducted
massive and generally successful censorship operations
to conceal its military operations. The horror days of trench warfare
tens of thousands of men died at Ypres in Belgium in a few days
could never have happened if the British and French and German
publics had been able to see for themselves what was going on.
the Korean War half a century ago, the technology of news coverage
was just beginning to improve. My interest in this subject is quite
personal, because in the Fall of 1950, I was Assignment Editor at
CBS Television News. When North Korea invaded South Korea, I had
sent what probably was the first television crew to cover a war.
Their equipment was heavy 16mm cameras, recording sound on film.
Those few brave cameramen and soundmen went as far forward toward
the battle action as they could go, but that wasn't very far. Mostly,
they interviewed officers and men in foxholes before and after battle.
It wasn't dramatic; I don't think we showed dead bodies, but nothing
of such immediacy and impact had been seen before.
it probably would be impossible to repeat the so-called glory days
of 1914 when thousands were willing to volunteer to fight and die
"for King and Country." Impossible today because people
see for themselves the harsh reality of war. In democratic countries,
it appears that the public would be unwilling to accept media censorship.
The broader. long-term impact of new news technology will make it
much more difficult for governments to enter wars, and perhaps even
to conduct peacekeeping operations. Today's pervasive communication
makes it much more difficult for governments to gain or retain popular
support for wars.
brutal Russian military campaign in Chechnya was preceded by a brilliant
and successful propaganda campaign. The government persuaded Russian
citizens that it was necessary to wipe out all those dark-skinned
Islamic fundamentalist terrorists. The result has been a civilian
death toll and a record of apparent atrocities that would trigger
a political revolt in most societies. As The New York Times
said, "In Russia it has not. It is because of the way this
war has been cast by the Kremlin authors as a test of Russian manhood.
if not of the nation's very existence." So far it has worked.
Soviet-style propaganda has thus far kept the truth from the Russian
people. When it does emerge at some point, maybe a year from now
as it surely will, the loss of trust in Prime Minister Putin will
make it extremely difficult in the future for any Russian government
to undertake military operations of any kind. Similarly, when our
own countrymen lost faith in the government's conduct of the Vietnam
Wan it altered our national policy right up to the present.
Russian experience suggests that new communications technology can
not halt or even reduce wars. But not many governments can control
the media, or lie on such a giant scale as Russia has done, and
immediate result of the new technology is to let us see what's really
going on. The more basic and more important impact is that if the
public in most nations is unwilling to support brutal warfare and
large scale killing of its youth, the burden of national defense
necessarily will shift to small numbers of highly trained and highly
paid volunteers who are willing to do the job. Western Europe is
moving in this direction right now, following the path set by the
United States Armed Forces after the war in Vietnam.
area where we see the impact of technology already is the erosion
of national frontiers. Great rivers of people are flowing from places
of poverty, hopelessness and joblessness to places where labor is
difficult enough, indeed impossible, for immigration officers to
check every visitor coming across a border. Governments worldwide
face this problem, including the United States. Over in Eastern
Michigan, along the St. Clair River, the U.S. Border Patrol has
only four officers to patrol 140 miles of coastline between the
United States and Canada. 24 hours a day, seven days a week. The
four Border Patrol officers are good, and very well trained. They
catch dozens of illegal immigrants, some of whom have paid smugglers
as much as $50,000 to get them inside our Golden Door. But the Border
Patrol can't stop the flow entirely. Surely, our government's technology,
its tamper-proof passports and its many sensing devices isn't going
to be able to halt this flow entirely.
migration will be part of the world scene in the years ahead. Look
at Germany, with its thousands of Turkish immigrants. And France,
with its Algerians. Spain needs labor and its birth rate is falling:
Moroccans need jobs and have none. Seventy thousand Moroccan immigrants
are in Spain right now, and the Spanish government is deciding whether
to legalize them, and allow them to bring in their families.
in certain circumstances, a freeing up of communications can deter
immigration. Examine India, a country with grinding poverty, but
also a nation with great universities. One of these is great University
of Mysore, centered in the city of Bangalore. Its thousands of graduates
are highly regarded software engineers and computer programmers.
Before today's electronic era, even if they had graduated, they
might have found no work, and been forced to emigrate to the western
world to find professional employment. Today, they have the best
of all possible worlds. They live at home in Bangalore. They work
in modern high-tech offices during the day, and go to their newly
built modern homes at night, with a high salary by Indian scales,
and a good salary by world scales. And before they go home, the
computer code they wrote this afternoon has already arrived by satellite
on the antennas of Texas Instruments in Dallas, and many other distant
companies too. It is raising India's living standard. It is keeping
Indian science al the front of world technology. And it is reducing
costs for companies in the United States. Immediate results: good
jobs. Longer term: a modernization of an entire society.
read almost daily that currency is flowing freely across national
borders. It eases the problems of world trade. It is well nigh impossible
for governments to control the endless stream of digits, the 0s
and the 1s that represent the electronic flow of money across frontiers.
What does that portend for the future? The long-term consequences
have not yet been appreciated. Its much more than a loss of
government control. It will overthrow governments. Because when
a government's policies are seen by its people as irresponsible
and dangerous to their life savings, they can and will quickly transfer
the money to a safer place. An electronic digital subtraction on
one computer: a digital addition to an electronic number on another
computer. Surely, that unstoppable flight of capital will bring
some governments down in ruins. The citizens won't have to wait
until the next election to vote them out of office. The digital
transmission of the national assets will do it for them.
businesses can be located anywhere, not just in metropolitan areas,
as long as they have access to good communications and transportation.
Your customers don't even need to know where you are: it makes no
difference to them. I often buy by telephone, I should mention
from a company called PC Connection. It has an 800 number,
so I don't even care where it is located. I buy from them because
they promise that if I order before 2 a.m. tonight, they will deliver
my purchase to my home anywhere in the USA sometime tomorrow. Saturday.
Before this talk tonight. I managed to locate them geographically
by finding their address on a catalog. They are on Milford Road,
in Merrimack, New Hampshire. They have high-speed data links to
a warehouse apparently adjacent to an airport somewhere in Ohio.
Their service is better, their prices equal, and the convenience
is greater than if I bought from a store down the block from my
home in Manhattan. With the growth of the European Union and the
European Common Market, many such companies will arise in the EU
to offer fierce competition to existing companies and surely the
entire European business picture will change.
you see that the immediate impacts we already are seeing hardly
suggest the real consequences that lie ahead. Some countries and
some people see the possibilities and welcome change. Others resist
it. Nothing new about that. Three years after Alexander Graham Bell
invented the telephone in 1876, the chief engineer of the British
Post Office, Sir William Preece, said, "I fancy the descriptions
we get of its use in America are a little exaggerated. Here we have
a superabundance of messengers, errand boys and things of that kind.
Few have worked at the telephone much more than I have. I have one
in my office, but more for show. If I want to send a message, I
use a sounder or employ a boy to take it." Not much short-term
or long-term vision there.
in the earliest days of the automobile, Mercedes Benz asked its
experts to analyze and forecast the future demand for cars. Their
answer was, the total market for automobiles would be less than
one million, because it would be impossible to find or train more
than one million chauffeurs. And you'd need a chauffeur, because
to drive a horseless carriage would require as much expertise and
strength as driving horses.
same resistance to change, and the same narrowness of vision is
present today in most countries of the world, and in most peoples
and most cultures. Never mind: fundamental changes will come, Faster
than we think, more profound than we can imagine, more unpredictable
than were the effects of the railroad, the telephone, or electricity.
In 1943, Thomas Watson, the chairman of IBM, said, "I think
there is a world market for maybe five computers." Even a great
visionary such as Mr. Watson couldn't foresee what would happen.
won't have to wait very long to see a different world. Technology
is changing the world, the results showing sooner than we can conceive,
pulling the whole world together, closer than Cyrus Field could
ever have dreamed when the famous steamship, ''Great Eastern'' dropped
his little copper thread underneath the North Atlantic all the way
from Newfoundland to Ireland. It's a new world.