Bill Gates, Mike Dertouzos – World Economic Forum 1997

Bill Gates, Mike Dertouzos – World Economic Forum 1997

gentlemen, welcome. We’re looking forward to
informative and fun discussion. Bill and I will look at the
future, the road ahead– or what will be, depending
on what book title you like. We have agreed to focus
on the bigger picture, further out, longer range
rather than shorter range, stay away from brand name
discussions and issues, try to see how it might
affect our way of living, our lifestyle, our society. Bill will begin. We’ll go for 10 to 15 minutes,
maybe 12 and 1/2, plus or minus 2 and 1/2. And I will do the same. Then maybe we’ll fight with
each other for five minutes and turn it over
for Q&A live, Q&A with microphones, to the floor. So let us begin– Bill. GATES: Well, it’s a
very, very exciting time, in terms of giving people
better tools of communication. Actually, calling them
tools of communication may not give the full import of
what a variety of things people will be able to do with PCs
connected up to the internet. I’ve created a new term,
which is that people either live a web lifestyle or they
don’t live a web lifestyle. And what I mean by
that is that somebody who several times a day goes
to the web, several times a day checks electronic mail,
sends electronic mail– and for any new topic or
anything they want to do, they take it as a
given that they’re going to turn to the
internet to be informed and to collaborate– that’s somebody living
a web lifestyle. And very few people
are doing that today. If you want to find large
groups that meet that test, you have to go to universities,
particularly some university campuses in the
United States, where the only way you sign up for
courses is to get on the web. The way you arrange
things with your friends, the way you order pizzas,
is through the web. And my view is that, as
those young people move into the economy, and
more and more people have that kind of experience,
that those consumers will demand companies to use the web
in a very, very creative way, whether it’s for paying bills
or taxes or selling products or simply just informing them. I think we can already
see that the efficiencies to be gained through the new
medium are pretty incredible. One distinction you can
make is that some people will live a web
lifestyle in their office well before they do it as
part of their home life. There’s quite a divergence in
terms of the bandwidth that will be available to
businesses in the near term and in the office,
versus in the home. If we take, though,
a 10-year period, I think the internet has
been greatly underestimated. In the next two
or three years, I think it’s almost
been overestimated. Some of the articles
that go on and on about how everybody’s
going to be shopping there or banking there
or buying their cars there– it’s just not realistic. It takes time for
this to happen. Some of the key breakthroughs
have not been made yet. Flat panel screens with
wonderful resolution are not yet available. Now, there are lots
of companies pursuing quite a variety of
techniques, including straightforward refinement of
approaches that we use today, as well as revolutionary
approaches, that I feel certain will
deliver that sometime in the next 5 to 10 years. There are many
software companies working on the
very tough problems of letting you interface
with the computer in some way other than using a keyboard
and a pointing device. The Microsoft Research
group is very optimistic that speech recognition, speech
synthesis, visual recognition, will be primary ways of
working with a computer. And the cost of the
hardware to do these things is very straightforward. You need a pretty
good microphone and a semi-decent camera. But the extra cost of those
built into any type of device will be on the order
of $100 or well less as the volume
goes up there. And so when we talk about the
PC and where the PC is going, it’s important to keep in
mind the rapid innovation, particularly the rapid
innovation in the user interface. A year ago, people
were talking about that the internet and the PC
didn’t really go together. Well, today, through
our efforts and efforts of many other
companies, those things go together very, very well. In fact, if you buy a
new PC, the internet is a few clicks away. You just merely pick the
service provider that you want and how you want to
be billed for that, and you’re up and running. Even the software
that lets you do internet telephony, internet
meetings, all of those things are coming built
into the computer, so you don’t have to go out
and take a lot of trouble to set those up. Right now, people are worried
about the complexity of the PC. And this is a very
legitimate worry, whether it comes in terms
of cost of ownership or the difficulty
of updating software or the confusion people have. Once again, I have a very
optimistic viewpoint here, partly through inside knowledge
of things that are being done and partly just the view of how
rapidly software can improve. People are going to be
surprised probably in the next year, but certainly over
the next several years, on how that PC interface
can be improved, how we can take things and
hide them from the user, and be doing more for the user,
so that underneath, there’s a lot going on. But when you sit
down to use it, it’s very, very straightforward. You just think of the
documents you want to use. You think of the topics
you’re interested in. And that kind of experience can
be delivered against the PC. It’s a very
competitive business. It’s a business where no
product that’s out today will be popular in
three or four years. So it’s simply a question
of the companies who make products– are they going
to replace their own product, or are they going to let
somebody else come in and do that? I thought the picture
that Andy painted today was a very important picture. Another speech of his that
I think was quite good was one that he gave
at COMDEX, where he looked 10 years out
at what kind of chips Intel would be making. And when he talked about
gigahertz, clock speeds, and the instruction speeds being
100 times what they are today, it’s very clear that we
need to do more than just run a spreadsheet
or a word processor to take good advantage of that. And that’s where supply
and demand come together and the software that
learns about the user and becomes a reasonable
assistant in helping you in every way, in this
information economy, comes across. A final concept is one that
I talk about in my book, and that’s friction-free
capitalism. These tools are going to take
capitalism, which has always had the frictional problem
of buyers and sellers locating each other, it’s
going to take that and reduce the frictional costs
very, very dramatically. And so even markets
in consulting, which are very poorly
mediated today– it’s hard to find
the best consultant. When you find a consultant
you don’t know– that you didn’t look at all the
people who are willing to do that work– it’s just that a
friend mentioned it to you– markets like that– the
availability of people, their references, their price– all will be there. And your ability to collaborate
with them at a distance will be very dramatic. So it’s a good thing
capitalism works, because this tool will
be used to bring it to new levels of effectiveness
on a global basis and really make the world
a far smaller place. Okay? DERTOUZOS: This is a lot shorter
than 12 and 1/2 minutes, Bill. Well, let’s see. I believe we’re
headed to about half a billion to one
billion interconnected computers by the year 2007. Andy thinks my half a
billion estimate is low. Now, what will all these
computers, the interconnected computers, and the people
behind them be doing? I have a simple model
I like to think of. It’s called the
information marketplace, and it says that all these
computers and their people will be doing three things,
one of three things, or more of them. They’ll be buying, selling, or
freely exchanging information and information work. Now, to me, the latter
is very important, because when we
think of information, we think usually of text,
pictures, video, sounds– what I like to call
information as a noun. But there is this other thing,
which is information work– massaging information,
altering it, which is information as a verb. It’s done by computer
programs, like Bill’s Microsoft Word and others, and it’s done
by people, like accountants and tax clerks, and so on. It turns out that the fraction
of the industrial economy that consists of office
workers is huge. It’s about half of the economy. So I think a lot
of this new medium, this new world, the
network society, will really have information
work flowing over it, as well as, of course, information
as a noun, which is the one we talk about, and
the content, and so forth. But this huge amount,
which is $9 trillion of information work,
gives us an idea of how big things could
be on the financial side. But there will be also free
exchanges and things that will be not measured in dollars. One of the things I discuss in
what will be is the possibility of a virtual Peace Corps, a
gigantic clearinghouse where the providers of help and those
who wish to receive help find their place over
the World Wide Web– it’s going to be a big
site there, a big server– but with a lot of compartments
for different kinds of activities. There is a lot of
this in the world. There are a lot of people who
need help, a lot of people who can provide it, and why not
provide a clearinghouse where these two could be matched? And the help doesn’t have to
go all ways from the wealthy to the not wealthy. I could envision a Sri Lankan
doctor providing medical help through the network society
to a homeless person in San Francisco, where the
care would be affordable. Now, I think the movement
that we’re seeing will be fully integrated
into our lives. It will be pretty much
like air, water, breathing. It will not be a cyber-space
out there that we go visit. It will be in everything we do. I agree with Bill. I think speech will be
the dominant interface, because the technology
is here and because we’re born with mouths and ears,
rather than with keyboard and mouse sockets. In terms of what
are the big forces– can we reduce all
these thousands of things we’ve been
talking about here to a few fundamental forces? I believe we can. I believe the first
course is, what I like to call,
electronic bulldozers– the ability of our computers
to offload human work from the human brain. I’m not talking about
creativity or complex things, but simple work that we do
repetitive work, processing, and X-ray annotating
it, et cetera. Offloading human work– now,
we think that we’re doing this, and we are to some extent. But if you look at what we
do with a World Wide Web and with electronic
mail, we are using 100% our eyes and our brains. In pre-industrial terms, it’s
as if we had shovels shoveling. Then somebody handed us a shovel
that said high-tech shovel, and we kept shoveling. It’s time to stop doing things
with our brains entirely– clerical, simple things– throw the high-tech
shovels away, and automate a lot of the
activities among the machines to relieve us of work. I know that computers are
good for a lot of other things beyond increasing
our productivity. But no socioeconomic
movement worth its salt has lasted if it didn’t also
help human productivity. And I think this
one will, and it might take us even as high
up the productivity curve as the industrial movement did. It may be that we’ll see a 300%
increase in office productivity during the 21st century. The second force is the force
of electronic proximity, as I like to call it. That is the very
exciting part of the web and of these other
technologies that brings people closer together. Now, it’s amazing how
big this force is. When we were in
the villages, maybe we could reach 200 people,
100 people, in our lifetime by walking. When the car came, that number
increased by a factor of 1,000. We could now reach potentially
200,000 people maybe. We wouldn’t reach
all of them, but we could reach them by driving. Now, the amazing thing to me
is that the information age increases this ability by
yet another factor of 1,000, and we can reach 200,000,000,
300,000,000 people. We won’t reach them, but we can. It’s a very strange notion. It brings all of
us closer together. And this world will
have its good things, like communities of seniors
and handicapped people, and all the network
groups that will be helping each other,
commercially and otherwise. But it will also have info
crime and info predators and all the problems
that come with proximity. Let me touch a little
bit on culture. There is a great fear that this
increased proximity is going to impose a universal
culture on the world or that some nation
will take its culture and try to impose it on another. I won’t mention any names. Let me suggest to you that this
new technology that we’re all witnessing has the very strange
capability of strengthening simultaneously
ethnicity and diversity. Let me explain. I’m a Greek, and half of the
Greeks are outside Greece. Half of the Jews
are outside Israel, and half of the Palestinians–
and I could go on. Even 20% of the Canadians
are outside Canada. And as the world becomes
increasingly global, more people will be
outside their landmass that is their nation. Now, if we could use the network
society to keep connected among us the Greeks
outside and inside, then we might have a
very strange situation where, 30 years from
now, 50 years from now, the Greek nation isn’t the
land mass in the Mediterranean, but it’s a network. It’s a frightening notion,
the Greek nation network. Actually, it’s much
closer, much closer, to the notion of nation– ethnos, the Greek
notion which implied that you could be anywhere and
being in that national circle– a fascinating thought. On the side of
diversity, let’s just look at the European Union. The presence of a
common language, like English, has
not obliterated the national differences. It’s a thin cultural
veneer that permits the people to communicate
with each other, along with other conventions–
taxation, and so on. But underneath are the gigantic,
national, indigenous cultures of Europe. The Greeks are Greeks. Italians are
Italians, and so on. I expect exactly the same thing
to happen in this new medium– no universal culture, but a
thin veneer, a thin veneer of shared culture, that’s
going to bind us and level some of our differences, help
us understand each other, but still strengthen ethnicity. Wealth– I believe– and here, we
disagree with Bill– that, left to its own
devices, the movement will increase the gap
between rich and poor people and between rich
and poor nations. The reason, to my thinking,
is that information helps the rich, because it
helps with the material goods that the rich have and the
services that they offer. So it helps them do
them more efficiently, and they get better and richer. The poor cannot afford these
technologies or to learn about them, so they stay behind. And the gap will increase. Mind you, I’m saying,
left to its own devices– that means we should help. We should help with a
variety of measures. But if we don’t, I believe
the gap will increase. The next point is that, if
we have a billion computers– which sounds reasonable
in 10 to 15 years– and on each of them,
there is between 1,000 and a million pieces
of information, the grand total, if I
do my arithmetic right, is between a trillion
and a quadrillion pieces of information. And what is useful to this
person is not useful to me. Or what’s useful to me is
not useful to that person. So there’s a huge amount of
info junk floating around. And I think that is going
to make necessary middleman brokers, people and, to
some extent, computers, that will help match
the various interests. It’s as if, in a
marketplace, people came from both sides,
huge numbers of people, there would be a tremendous
chaos, if there wasn’t a way to sort things out. I think this is another area
where we might disagree, Bill– agents, computer agents,
are overrated and overhyped, at this stage of
their history anyway, and because they can’t have
human intelligence or anywhere near it. So they can’t really help much. I think I’ve talked too much. I’d like to say something
about human relations and how they fare
through this medium, but I’ll save this
for a little later on. For the time being,
let me just conclude by saying that I think we
are into this third major socioeconomic movement,
and we need not fear it any more
or any less than we feared the automobile,
electricity, chemicals, steam engines. I think we ought to embrace it. We are, after all, the
same ancient humans. We’ve always been with the same
ancient goals and aspirations. All that’s changing
is a new set of tools. Thank you. [APPLAUSE] I think it’s between you
and me for five minutes. GATES: Okay, I want to talk
about rich and poor a little bit and see where the core
of the disagreement is. I disagree pretty strongly
about rich nation, versus poor nation. Today if you wanted to know what
somebody’s yearly income was, and you could only ask them
one question about themselves, the question you would ask is,
what country do you live in? That is the dominant factor
for vast differences in income. I claim that, with this
network, the question you will ask 10
years from now is, what is your education level? And that you’ll have a much
better predictor asking about education level than you
will about their geography. Now, what do I mean concretely? I mean that the high-paying jobs
today are service-related jobs. Manufacturing jobs were allowed
to move around the world, to the person who was willing to
bid for them at the best price, by low cost transportation. This network now allows that
same geographic dispersion of the high-paying jobs. You can design things. You can translate things. You can do all those nice
service-oriented things. You can even be a
lawyer and in laws of another country, if people
are willing to pay you enough. And you can deliver that in
a nice video conference way and collaborate. And so countries that don’t
have good educational structures will have a problem with this. But the human resources
of developing countries, of India and China,
there basically is a pretty reasonable
educational system there. And the motivation to become
well-educated in these areas will be so dramatic,
that I think we’ll actually see a leveling. And it won’t take that long
before we’ll see this leveling. DERTOUZOS: Okay, I fully agree. I fully agree about
the potential, and I fully agree even that
we can use that technology to help in various
parts of the world with health, with learning,
with matching labor to other parts of the world. I fully agree with all that. My problem is that, left
to its own devices– I just did a calculation
and checked it– in the US, we spend 10% of our
economy on computer hardware, computer software, and
the salaries of the people who write computer programs. So you could say computing
is about 10% of our GNP. Germany and Japan
are pretty close. I checked that
number in Bangladesh, and we had a lot of
trouble getting the number. We had to go all the way up
to the Bangladeshi embassy. Finally, we estimated it. It was less than
1/10 of 1% today. Now, that’s to be expected. But Bill, where will the poor
nations and the poor people within any nation find the
money to buy the hardware, to buy the software, to get
educated about the indigenous things that
computers need to do, so that they can give of
their education and services? GATES: Well, I guess it
shows my faith in capitalism. There will be middlemen
that will emerge who will invest in the education
and equipping with hardware people in Bangladesh in
order that they can take a 10% fee on the
wonderful service work that those people will to. The power of capitalism
to mediate that, I think, is pretty incredible. Now, I have to admit
governments have a big role here in terms of putting in the
communications infrastructure. In terms of the large
cities in these countries and the universities
there, I think we’re probably okay on that. Going out beyond that,
I’m partly very optimistic about satellite systems,
including the Teledesic one or others like that,
coming along and providing very high speed bandwidth
to every part of the globe. And I’m quite
optimistic about, even as PCs become more powerful and
simpler, that the average price will go down. So the act of mediation
required here, I don’t think, is very difficult. The one
and only one question mark on my thing is, is the
education systems– will they rise to
that challenge? Another factor I
think comes into this, is rich countries a
little bit get lazy. And the poor
countries try harder. Given a chance, they
try harder, and you get this leveling effect. DERTOUZOS: So our
difference seems to be that you believe that,
through capitalism, middlemen will help. And I seem to think
that we need to help a little more through perhaps
our governments setting up some libraries, some places
where people can use and learn about the machines, and through
individual and corporate donations of help and
money and hardware. GATES: No, that’s not the
point of disagreement. I think it’s important that not
be the point of disagreement. I am absolutely a big
believer that anything we can do to make this
come true sooner is great. My claim is that year by
year, the gap gets less. But I think it’s
absolutely worth having governments and
philanthropists accelerate that. The disagreement is, do they go
apart and then come together? I claim they go together,
and it’s in our power to make that sooner than later. For example, in the
same way that books have been available to
people to give them a chance to read and learn, I think
that in those libraries, we should have PCs
connected to the internet. Anybody should be able
to go in and use those. And I want to make sure that
happens sooner than later. DERTOUZOS: Let’s leave
that to be the last word. And we spent five minutes
fighting– not too hard. But maybe we can do some
more fighting later. Audience, we have taken 30
precious minutes of your life. Now we’d like to hear from you. Please, questions. I know at first, were timid. But after a while, you’ll be
competing for the microphone. So give it a try. GATES: If you raise your
hand, there are mics around. Someone will bring
you a microphone. DERTOUZOS: There is a
hand on that quadrant and another hand
on this quadrant. [FOOTSTEPS] AUDIENCE: Bill,
Mike– a question– how many hours in
your research do you find people are able or
willing to spend in front of a screen on a daily basis? And how will that affect
all the distribution that you plan to
put through the PC? DERTOUZOS: Don’t
use us as examples. GATES: Well, the average
American household somehow sits in front of a
TV 100 hours a week. Now, somebody who
sits in front of a TV zero hours a week, I
find it mind-blowing. I mean, it’s not a very
high-quality screen, and it’s not interactive. So people’s ability to sit
in front of a video display seems to be very high. And the quality of these screens
will improve dramatically. I don’t read The Wall Street
Journal or The Economist, long things, off of the screen. I still read them on paper. If I want to look for
a specific article or get it a little bit
faster than I can otherwise, then I’ll go onto
the electronic. But I admit that the screen, the
field of view and resolution, still has some drawbacks. But that will go away. Eventually, your whole
desk will be a screen. Your walls will be screens. [CHUCKLING] Seriously– come to my house. [LAUGHTER] DERTOUZOS: You’re invited. GATES: Absolutely. DERTOUZOS: Let me let me
add a little bit here. From the history of
this business, which I’ve been watching for the last
35 years and living it, at MIT, we would get students that would
sit in front of the terminal. In fact, the guy who
invented the spreadsheet was a student of mine– Frankston. He used to just work so
long that he would finally fall asleep with his
face on the terminal. And we had to lift him, not
because we were compassionate, but to free up the terminal. [LAUGHTER] But even Frankston, and
everybody else– or perhaps not Frankston– but the
people who exhibited this addictive behavior, after
a while, lower down [INAUDIBLE].. And my point is
that we human beings have thousands and
thousands of years of experience in adapting. And my answer to
you, sir, is that we will adapt to whatever
it takes, so we don’t get too tired, too
anxious, and so forth. More questions? AUDIENCE: A couple of
[? telegraphic ?] questions– my name is [INAUDIBLE]– regarding the future
of the network society or the global
information society, and just rethinking
the way things happened during [? this ?]
century regarding having people who thought
about having cities, having buildings, having
highways, and at the point in time they put the blueprint
of the society around them, and putting what you’ve
just said, both of you together, don’t
you think we need to put, at different
levels, government, industry professionals, the blueprint
of this global information society? One; two– what about
the Teledesic project? Is it still in the
dreaming phase? Or there is anything
which is more than what has been reported
that you can share with us? GATES: Well, let me start
with the second part. Teledesic’s a very
exciting company, because their goal is to build
a very high-speed internet in the sky. And it’s very
complementary to what’s being done by communications
companies around the world, in terms of running fiber. There are parts of the
world where you just don’t have the density– even the rural United
States, rural Europe– you just don’t have the
density to ever run out the fibers to give those
people the capacity. And that’s where the satellite,
a lower orbiting satellite, can come in and give you
extremely high capacity in these areas, and
then transfer that– if the destination
is into a city, transfer it down
to a ground station where it goes through the optic
fiber network, or vice versa. And so Teledesic– I
hope it’s not a dream. They’re spending serious
amounts of my money, and it’s a capitalistic
venture, where Craig McCaw, who is involved
in the [? seller ?] industries, is the chairman of the company. There are other
people doing things that are slightly different. So it’s not the only company
going after data connections in the sky. And I tell you with
great confidence that one or multiple of these
schemes will fill in the gap that the world has
in this connectivity. The beauty of these
satellite systems is that the marginal cost
of making it available, when you’re over, say, Mali, or
some territory where you might not get much revenue, because
the marginal cost is zero, you’ll find a price,
a clearing price, to offer connectivity for
every point on the globe. And so it’s a fairly
leveling development that, with luck, will be in
place within five to six years. DERTOUZOS: Okay, I don’t
want to comment on Teledesic. But all the comments
that Bill made apply to all the other
satellite schemes, namely the geosynchronous
satellites that cost a huge amount of
money– $300, $400, million, to put up into orbit. But of course, they
don’t have the ability to go around the world, like
the low-earth orbit ones. But all the other
issues– reaching a lagoon in the Pacific and
absorbing bursts of traffic from the cities– are there. I think satellites
are going to be a very important part of this. Now, onto your blueprint
question, sir– I don’t know exactly
what you mean by this. The European Union has
already been working on this through their various papers. And government in
the US has been studying the national
information infrastructure. But I think the
bulk of this drive is happening by the people,
who are finding ways to use the internet, and
entrepreneurial companies are being born. And isn’t this a little
bit similar to what happened before, when
manufacturing and the factories were set up, and then when
electricity and the automobile came, there was a lot of
activity by a lot of people and, if you wish,
capitalism, which gave rise to these things. So I’m not sure how much
centralization and planning should take place here. Probably it will vary
through the various cultures of the world. GATES: I would say
one thing, which is I think the goal of
writing a book about this is to get a broad set of
people to think about what are the societal issues, to
start thinking about privacy, and have, versus have-nots. And so to the degree
that there needs to be a broad agreement
on a blueprint for those tough issues,
I agree with you. In terms of a blueprint
of what it all looks like, it’s a lot better to just let
marketplace competition play this thing out. The opinions about
what people are going to do on the
internet– you know, just think two years
ago what they said would be happening now. I mean, people were
wrong, 90% wrong. And I think the way that
companies succeed and fail, this is a wonderful thing
for high-risk capitalism to jump in. DERTOUZOS: More questions? AUDIENCE: Gentlemen, given the
fact that our society today– all our social systems
and value systems are centric around
employment, and given your ideas about massive
increases of productivity, what’s your vision of that
relationship between technology and employment? DERTOUZOS: I
struggled with this. I struggled with this. Thank you. It’s a very good question. And I even got spanked
several times by my colleague Bob Solow, the Nobel
Prize winner in economics. Here is what I know,
and it’s very little. I believe productivity
will increase. We have no assurances, okay? But we believe– I
think, generally, there’s a belief it will increase. After all, things are
done inefficiently today. And when we apply
all this horsepower to things that are done
haphazardly and efficiently, you expect some improvement. So that will increase. The problem is that for
employment or unemployment to move, we have to understand
what happens to demand. Because unemployment
happens when those two are out of kilter. The productivity
increases, and demand doesn’t increase, for example. Then people are thrown
off on this side, and they cannot do work. Now, there will
be displacements, even if those two attract. So I’m convinced that there
will be changes in jobs. People who are doing
job A now will not have that job in
the future, even if productivity doesn’t change. But the key issue
behind your question, what will happen to
employment/unemployment, hinges on what will
happen to demand. And all my economist
friends say we don’t know. So I’m afraid the
answer is we don’t know. GATES: I have a little bit
more optimistic view of this. Essentially, demand in
some areas is finite. When farmers got
very, very productive, and the price of food
came down, people didn’t eat 10 times as much. I mean, they ate meat,
so they eating more cows. But there was a limit. When radial tires came into the
car market, people then say– wow, these tires are better;
we’ll drive a lot more– and so that the amount of
society’s resources in the car market shrank. If you think of the resources
that go on today to printing bills and mailing them out
and answering questions about those, that’s huge. And this technology will greatly
reduce the number of people you need to handle that. But there are areas where
I see near infinite demand. Take education. You know, why not? If there’s productivity
here, why not have five children
in a classroom? Take medicine– if there’s
all this productivity, why not have much better
personalized health care? Take leisure time activities– with all this productivity, we
should have more options there. We’ll have more
wealth to spend there. Eventually, you’ll even
shorten the workweek. People will choose to
take more time off. Maybe Americans will
take longer vacations. I think that would be nice. DERTOUZOS: That’s
not in the cards. GATES: Not in the near term– but if you’re talking
about a situation where all these productivity
plays out 20 years from now, I believe it’s very, very
much what will happen. DERTOUZOS: In principle, elected
leisure is available to us. The thing that’s scary is
that the Industrial Revolution made it possible for us,
with this multi-fold increase in productivity, to basically
live in an essential way, the way we lived before
the Industrial Revolution, by working much less. But our working hours kept
up and even increased, so there is something inside
us that keeps us working hard. But I agree with you. Elective leisure is an option. And maybe in the
long future, it may be a way in which we will go. Let’s get some more questions. Yes? AUDIENCE: A follow-up on
governance point that we are discussing, the impact of
information sharing on the way the societies will be run– NBC, MS, CNN, Berlin Wall,
penetration of information to the society at large– what do you think it will do
to the role of the governments, governments and
governance at large? DERTOUZOS: Do you want
to take that or not? GATES: I think there’s
some exciting opportunities with government. I think citizens will be
more educated on the issues. They’ll have a chance not
just to read the headlines, but to dive in. If the headline says,
Budget cut by $20 billion, they can go in and see,
well, what was the budget? How was the money spent? How has that changed over time? There’s various debates
about how far we should go with direct democracy. But no longer will the argument
against direct democracy be that it’s just too
expensive to go out and consult all the people. We’ll have a mechanism that
makes that a possibility. And the economists pointed
out that Switzerland uses that with reasonable success. And I think we’ll see more
and more push along that line. I think government will be the
greatest beneficiary in terms of its efficiency, the
way it tracks things, uses paperwork,
gathers knowledge, shares that knowledge. It’s ripe. Take tax collecting
or medical payments– these things can be made
an order of magnitude more effective. I don’t think any
government will be able to restrict information
flow to its citizens as much as in the past. Every advance in communication,
from the phone to the fax machine, have made that
far more difficult, and the internet just
takes that to a new level. And so governments will have
to operate in an environment where citizens have access to
the full range of opinions. DERTOUZOS: I fully agree
with what Bill said. Let me add something else– big question raised
in various settings here in Davos about
governments is what is their role
insofar as the information crossing national boundaries? Whereas, the internet
isn’t subjected to any passports or checkpoint. I have some suggestions
about that for governments. I think within a
nation, the government should try to preserve
the cultural status quo of that nation by using
technology to that end. Let me explain. If you believe, in your nation,
that anonymity should never exist, then you
can use technology of public key cryptography,
require every message to be signed, which will
call for a public key to be used to read it. And then you’ll know
who sent that message or who was it that signed. If, on the other hand, you want
to be open, you can do that. If you want to have
a rating system, there is technology so that
even third parties can rate the sites that you can access. So within a nation,
I think governments should try to preserve
the cultural status quo. Because thousands
of years have been spent to build up this cultural
status quo, and nothing has changed. The people are still the same. But the difficult thing is
what happens between nations? And there, I think governments
should strike agreement among each other
internationally. We’ve had the same
situation with crime. We’ve had the same
situation with trade. And I think we
should do the same. They should begin
striking agreements as to what they will
do with each other if there are violations through
their boundaries and borders. GATES: Well, I think I
can agree with all that. But there are a few
very tricky problems. Let’s say somebody in
the US writes something that is sort of Nazi propaganda,
which is clearly allowed by the freedom of
speech in the US and is clearly banned
by German laws. Who should deal with that? Well, the US
government is not, I can almost assure you,
going to force a rating to be put on that page. In Germany, you have many
internet service providers, none of whom have the resources
to filter the World Net and see if there’s anything
appropriate out there. So in between the
person who published in the US and the person
who’s receiving that– which, say, the Germans
don’t want to have happen– who’s going to find
that and block it? And unfortunately,
country by country, you’re going to have to get
resources together to see which things
are out there that you don’t want to come in. You can have a policy of only
letting things in that you review, but that would
probably overwhelm you, and you’d lose the
benefits of the internet; or have a policy of just
blocking certain named things. But you’ll have
to accept the fact that things will get through. And so whatever
culture has relied on restricting
information flow, that won’t be there as a tool
as much as it has been. DERTOUZOS: Well, I agree that
there will be imperfections. I don’t want to take
more time debating this. Let me make a couple
of announcements. First of all, following
immediately after this session will be the president of
South Africa, Mr. Mandela, who has agreed to come and
speak for a short while. And the audience is asked to
please stay for his address. The second announcement
I’m asked to make is speakers, please identify
yourselves– your name and where you’re from–
before asking your question. Let’s move on to a
next question, please. AUDIENCE: I have a question. DERTOUZOS: Yes, ma’am? AUDIENCE: Margaret Wilson,
chairman of Scarborough’s, Austin, Texas– I’m interested in
your perspectives on future meetings of
the World Economic Forum, either here in Davos
or around the world, and how technology
may affect these and how they may be
different as a result, realizing that Klaus
Schwab has already brought a great deal of technology
here and provided us with computers to use for
messages and other services? And secondly, would
be interested, Bill, in your sharing a little bit
more with us about your home as related to technology
and how that may affect our homes in the future. [LAUGHTER] GATES: Okay, well, if
my home is the future, then there’ll be a
lot of large homes that take a long
time to get built. [LAUGHTER] The key neat thing I’ve
done with this home is really pushed the limit
on screen technology and by– put a lot of screens
all over the place, that it’ll be quite some time
before those are mass market type items. There are LCD
projector technologies. There’s a chip technology
called direct digital mirror device that’s a Texas
Instruments approach. And these are very neat
ways of displaying images with incredible quality. And so there are
many companies that are gathering image
libraries and putting those onto the internet. I’m involved with
a company called Corvus that does that and does
it at very high resolution. And those images are indexed so
that you can find them easily. So if I’m, one day,
at home, saying, hm, I’m interested in
Russia, I can have images come up on
all the screens of the house about Russia. And if I’m passing by one– I’m curious about its background
and more images like that– I just click on a
little remote control and get that information
and see more. So whether it’s Renaissance
art or sailboats or sunsets, any topic, those images come in. And it’s very fun,
informative, and educational. That’s probably the
thing that’s been done that’s the most unusual. DERTOUZOS: Okay, let me take
the other part of your question, about the World Economic Forum. To answer that question,
it’s a broader question that you’re raising,
I think, which is really what
kind of activities pass and do not pass? What kind of human
activities pass and do not pass through the wires and the
wireless links of the network society? And that’s a
fascinating question. Let me suggest some
pretty simple things– straight text information,
images, video, pass rather nicely. Video conferencing– we could
be talking to each other and passing signals
to each other. Emotions– I believe
they passed partially. We cry and laugh
in front of our TV. I don’t see why we won’t cry
and laugh in front of this. So to the extent you
cry and laugh here, you can carry that through
the electronic world. But there are some
things, I submit, that do not pass at all. And maybe I can demonstrate. Can I touch you here? GATES: Sure. DERTOUZOS: Good, thank you. [CHUCKLING] If Bill– I don’t know. Maybe he would react badly. [LAUGHTER] If Bill had not gone to
Harvard, if he had come to MIT, and if you hadn’t left Harvard– God knows what would have
happened to the software industry– but it would
illustrate my point. If he was graduating
from MIT, and he was my student,
and a good student, and all that, I could grab
him here by the collar, and I could say,
Bill, I expect you to do very well when
you graduate from here. Now, I could email
that to him, right? But it wouldn’t be the same. I could pass it
through video, and it would be a little better. But still, he wouldn’t
feel a pain here. Or I could use the things we
describe in our books, which are the tactile things you
talk about and the body nets and the bodysuits I talk about. So either he could wear a
suit and feel the pressure while he sees me approaching,
or a robot could grab him. I mean, any one of these
solutions could work. But let me– GATES: Or electrical shock. DERTOUZOS: Or electrical shock. [LAUGHTER] But let me make the point that
that is not the same thing. Now, this is a serious point. Why? Because both Bill
knows and I know that we can turn off the
switch and stop the robot. So the whole thing is cerebral. It’s not a primal force. And I believe these
primal forces of the cave, the forces that we felt,
when millions of years ago, we were in the cave– the
animal growling at the door or the nurturing we felt
for a loved one or the food, the wish for those things–
those primal forces cannot pass. Now, you’re going to say, how
many of these primal forces do we use in the
World Economic Forum? I suggest that we use a lot
of them in our daily life. The relationships
between siblings, between doctor and
patient, the trust that we build with
business associates are all based on the
forces of the cave. And at MIT, where we’re thinking
of having virtual classes, we will be requiring
students to come back every year or
every two semesters to take courses
on campus, so they can feel these forces of
the cave, build the trust, recharge the battery. So I think, in answer
to your question, a lot can happen
through the network. But ultimately, you’ll
have to come back to Davos. [LAUGHTER] [APPLAUSE] GATES: It’s a very
good question, because, although face-to-face
meetings will always be superior in
many, many respects to even the best video
conferencing environments, sometimes a face-to-face
meeting is so much trouble, you’ll take the lesser approach. Videoconferencing
business-to-business is going to catch on wildly. I mean, when people see
this welcome system, a lot of what
they’re responding to is high-quality
videoconferencing, whose price is getting
to be very reasonable. And so it’s a very good
question, how many things like this there will be? The speeches– we’re all
sitting in a room here– that can be recreated through
technology very easily. What can’t be recreated
is when you get up, and you’re mingling around,
meeting somebody new, running into somebody at dinner,
and kind of the isolation we have, that we’re all here
and in this common meeting– which is a very
important element of it. DERTOUZOS: Okay, I think we’ve
answered this one enough. Let’s go to another question. Yes, and then on the
other side, please– first here and then there. AUDIENCE: My question is– my name is [INAUDIBLE],,
president of Africa Online. My question would be, given
that the internet will encourage forces of capitalism,
isn’t there going to be a time where we’re
going to need regulation? And if we’re going
to need regulation, who would be doing it? Otherwise, the whole system
will crack at some stage. DERTOUZOS: Well, I
think I answered this by asking for regulation
first within the countries, for the activities within
the country, and then pairwise regulations, as
we do with trade and crime, for cross-border activities. But Bill, you may want
to add more to that. GATES: The question was
about restrictions on content primarily? DERTOUZOS: Did you mean
restrictions on content, sir? AUDIENCE: No, it’s
mostly international, mostly from an international
point of view– you’re going to get certain
companies getting really big, to the extent probably where
they can control regulation and other governments. And when they come
onstage, we probably should start regulating it early
enough before it’s too late. Is there a need for that? And if there is, who
would be the right body at the international
scale [? of ?] regulation at this stage? GATES: Well, it’s
never too late. AUDIENCE: This is
probably targeted towards Bill and
Microsoft, because there are people who are already
complaining that it’s already too big. GATES: Well, geez. Microsoft is actually a pretty
smart company, honestly. It may be one of the smallest
companies here at this event. It’s certainly not in the
top 1,000 large companies. Sectors of the economy,
where prices can come down by a factor of four, as
they have in software, by having such
rapid improvements, those are the ultra competitive
sectors of the economy. And I wish I was in an industry
where somebody’s future was guaranteed. But if you take any
industry, and you say, what leader of an
industry might be displaced in the next 10 years? You would pick the leaders
of the technology business. They are the most at risk. They are surfing the wave. If they miss a technology,
if they don’t listen well to their customers, if they
don’t hire smart people, they are gone. Whereas, in many
other businesses, you have brand assets,
manufacturing assets, distribution assets, that
are great protection. And that’s why the
technology business people– they run scared. Certainly, we do, in
terms of thinking, boy, will we be the one
to do a new product? So I think the
toughest parts of this relate to the network and
pricing of the network, because there, it’s
more economical to only have one person build a lot
of very high-speed elements in the network. And yet, having the right
touch of regulation, where you can
encourage innovation and yet, you know what the
pricing model should be, that’s still as yet
to be figured out. DERTOUZOS: I do not have
this fear of bigness, corporate bigness, because the
technology helps the individual as much or more than it
helps the large company. Let me explain. In the industrial
age, you could not build a car or any other major
product in your living room or in your study. But in this information
age, you can certainly sell your information work
or your information product or services from your home. So I think what this does,
it gives a capability to a lot of individual
people to sell products, services, information,
as well as to freely exchange it. And I think it counteracts
some of the fears that you have about size. The other thing it does– and
it was raised here in this forum one or two years ahead
by Lord [INAUDIBLE]—- and it was the capability
of this new technology to make the millions
of voiceless people up to now become heard. So I think we have some
positive things ahead of us to look forward to. Let’s have another question. AUDIENCE: Mr. Gates,
Alexei [INAUDIBLE],, Russian Public
Television– you were pretty critical of people
who are spending hours before a television screen. But there were some
reports in the press that your company,
together with NBC, is investing a few
billion dollars into a global television
broadcasting system. Is it the right
information, first? If it is, how will it affect
the nature of the television, and what is the difference from
today’s satellite broadcasting television? GATES: No, there’s no– I mean, NBC, together
with Microsoft, has done a news service
and an internet site. But certainly, there
is no investments of billions of
dollars or anything related to a satellite
infrastructure there. It’s just one of the
many new services that you’ll find
on the internet, and there’s some very, very
healthy competition there. DERTOUZOS: Ladies
and gentlemen, we have some new high-level
guests with us, and we have been asked
to finish this session, to close it now, so that we may
hear from our high-level guest. So I would like to thank
Bill and the audience for a very exciting and
informative session. Thank you. [APPLAUSE]

Danny Hutson

6 thoughts on “Bill Gates, Mike Dertouzos – World Economic Forum 1997

  1. I am writing a report on Industry 4.0 and plan to pursue a career to its full implementation… And Mike had the ideas of interconnected machines in 97! Wow.

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