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CHESTER BURGER Sooner
Than You Think Address delivered to the Windham World Affairs Council, Brattleboro, Vermont, June 23, 2000 |
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My 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 I’ll 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. This
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:
It's 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. Significant 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 cost. Immediate 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. But 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. There 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. Today, 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. Isn't 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 higher education. Now 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. Here's 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. You've 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. But 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. The 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 about that? Look 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. But 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. Even 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 isn’t 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. Inexpensive 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. But 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. During 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. Today, 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. The 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. The 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 be believed. The 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. Another 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 urgently needed. It's 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. Increased 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. But 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. We 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. It’s 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. Today, 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. So 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. And 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. The 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. We 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. |
