Where is the beef?
ASSESSING THE IMPACT OF TECHNOLOGICAL
POSSIBILITIES ON TODAY’S WORLD
E-TELCO 21-23. MAY 2000, ICM, MONACO
Risto Linturi, Chairman
R. Linturi Plc.
Distinguished audience,
I visited Monaco first in 1974. Ten years before the mythical Orwellian year I sat on the stairs of the Casino in my jeans, wishing that someday I could afford to enter. Two years ago I attended a UNESCO Inforights Committee meeting here. George Orwell’s electronic “Big Brother” was still an issue. But something had changed; I did visit the Casino and afterwards wished that I had not. But Casino is not any more the place for real gambling. Now the stock market is popular and totalitarian big brothers are weaker than ever.
In a recent book “The Lexus and the Olive Tree”, New York Times foreign columnist Thomas Friedman explains how free movement of money has destroyed power structures. Many an old dinosaur has given way to the electronic heard which as individuals and funds moves money into every promising idea around the world. Presidents, prime ministers, kings and shahs have been turned to American governors who live to serve the market forces. And corporate executives are no longer largest part of those market forces.
Alvin Toffler started his visionary book: “The Third Wave” followingly:
"A new civilization is emerging in our lives and blind men everywhere are trying to suppress it!" But this is not just a question of being blind to change. Very often those in power are afraid that they would lose their positions if things change. However as walls are now falling everyplace, it is very hard to resist this turmoil. If you do not run fast enough you will be conquered. Blind men do not run fast.
And just think about how fast you have to run. Very soon mobile phones will be our wallets and movie tickets. Already now I can handle my bank payments with my mobile, I can answer my doorbell and open my door. Few times, when I have been lost, I have received a map into my phone and soon my phone will be able to tell my friends where I am. The most common question in phone: where are you, will become obsolete. With Bluetooth our mobile phones will double as cordless phones, as general remote controls for anything starting from VCR’s and saunas to viewing inside ones fridge. And think about the sparsely populated Finland. It might save half of the money if streetlights would be turned off when the mobile network did not sense anybody near by. Just about anything can be automated.
Maslow defined basic human needs. Mobile phones must fulfil one or several of these. Otherwise they could not have succeeded so well. Basically we are herd or pack animals. You see it clearly when you study how youngsters use mobile phones to be aware of each other’s movements continuously.
Getting accepted as a member of one’s group is very important to us. Mobile phones make us free; they extend our reach. Identity, recognition, saved time, and empowerments are valuable things.
Think about those cultures where bosses do not give out their mobile phone numbers. It is considered degrading for example in US for a boss to answer his or her mobile phone. But this is stupid from the organizations point of view. There is very little added value from a mobile phone if you merely use it for calling. The real value of mobile phones comes from everybody being available when decisions have to be made and it works if people understand how not to bother you when you would not appreciate it. In Finland it seems to work and subordinates frequently inform and ask for advice in critical situations – often with discreet text messages. Organisational intelligence maximizes when all brains are almost telepathically connected.
I started consulting Helsinki Telephone, current Elisa Communications in 1995. I was asked to figure out what to do with the fixed network when speech would move to mobile networks. In addition I was expected to evangelise the high tech profile of Helsinki Telephone. Times were different, but Elisa had already conducted an extensive, technically successful video on demand project with ADSL.
Generally media considered it very valuable for people to be able to view their favourite movies or news whenever they wanted. It was also commonly believed that content will become very important for operators because bit transfer will become almost free. I wanted to disagree with both arguments. I wanted to create a system where creating and distributing content would be as easy as possible. This is opposite to the wishes of existing strong media houses. I based my opinions on Maslow’s hierarchy of needs. We are willing to pay quite much for the possibility to send one text message because expressing ourselves is important. We are not willing to pay so much for viewing other people’s messages. The operator networks are not very efficient in distributing mass content but they are extremely competitive when distributing heterogeneous content from a massive number of sources. I made my own calculations and found this type of market very lucrative.
Because of the advent of mass production, mass market, and mass media our western civilization resembles old Roman circus where those who had power created entertainment for those who were followers.
We are in crossroads and our future may lead to even more mass entertainment where less and less people contribute in any meaningful way.
The other path leads to an open society where hierarchies are low and communication routes are symmetrical. In this open society everybody is expected to contribute and take part in creating content. In this path, content is created for smaller groups and financed by mutual interest and very seldom financed by advertisements. This path resembles current Internet development. Bear in mind – in this model operator gets most of the money and mass media distribution cannot compete.
I have at home a 1997 model regular home computer. With free software, through Elisa’s commercial DSL-network it shows much better quality picture than my home VCR and without any add-ons.
I do not believe in video on demand. Very soon we will have black boxes, which record everything to their hard disks. Then you can watch any program that comes from any satellite, any time you wish and you can even skip all commercials. In US the TV-companies are just now trying to get this type of devices declared illegal. They claim it would destroy their businesses. I hope it does.
I believe that someone wants to put a camera in front of her goldfish bowl. There might be more than ten people who like it better than what comes from the TV. Someone else might send an email to all members of the MG club to say that he will change his carburettor at six pm. Anyone who wants to see and learn can look through his garage camera linked to his home page and listen to his explanations.
There are so many who would say that producing good quality TV-programs is difficult. It is really difficult if you want to get enough people interested in something that actually does not interest them to really get the advertisers interested. It is not so difficult to get grandparents interested in kids birthday parties or fans of a specific dog breed to get interested in their specific dog show. And finally - is it really more valuable to view a program than participate in creating it? GSM is great business with one person talking and one other listening. This is not a question of quality; it is a question of people interacting. Life is not a spectator sport; life is participatory.
However since 1995 I have been disappointed at how many blind men there are. Naturally many understand and support, but one operator, and dozens of journalists are unable by themselves to change the world. Cisco among others has been unable to supply good symmetrical networks with efficient open multicast. They believe more in the hierarchical mass media model because that is what most operators wish for. Lately there have been many advances but still progress is slower than I anticipated. And in US, media and operators seem to merge, falling even further from openness.
I will now show you Helsinki or rather a virtual model of Helsinki. This has been another important part of Helsinki Arena 2000-project. The modelling project is running late because final financing decisions were delayed until the beginning of 99, but by the end of this year we will have 50 square kilometres ready.
I originated this idea also in 1995 and since then the tools have been under construction so that the model would be alive with things that interest the user and so that it could be used in computer networks and mobile phones to assist personal navigation both in the physical and virtual reality.
In this model you can go to any door, push the doorbell and it will connect a regular telephone call to the phone in the respective physical location. I managed even to patent this feature. Point to a location to make a phone call there. I was afraid that it could not be patented but it could. It may happen that the patent office will be the biggest single thing slowing progress in the future. If it were true that gasoline companies hold most of the patents to electrical cars then the slow development of them would make sense - at least from the gasoline companies’ viewpoint.
But I strayed from my virtual city. There are various technologies to get the co-ordinates of a bus or a pizza-taxi and even any package delivery status in real time to be displayed in this model. If I wanted a taxi, I would just jump higher, look for the closest free taxi and click with my mouse. Then I would see how it starts turning to my direction and just when it is about to reach my door I would step out to the rain - and if it got lost I could double-click it and get a direct call.
In Arcus Software, which is the company doing this modelling; there are plans to model all Finland. Mobile phones with satellite positioning devices have been announced for this summer’s delivery. Mobile operators have announced services for them, which guarantees us that we get many things moving in our virtual reality and we can give very good service to users, as they will easily supply us their position. It will be easier than ever to move around in the physical realm.
And remember that this model is not just 3D-visualisation. We can deliver the same information verbally and with 2D façade pictures or on flat maps when necessary. The essential thing is that we have all this information available when needed.
Virtual reality technologies will enable us to see what we wish whether based on physical reality or not. We may get rid of traffic signs because they can all be viewed virtually from future mobile phones and electronic windshields. A technician can see in his augmented reality glasses where he is supposed to put his hands next. All this online information and expertise makes us well equipped to handle our surroundings.
There is a very big conceptual change coming with xDSL, GPRS and other forms of communication that allow for always on-type connections. Many existing devices can be replaced by application services used from various Internet terminals. Many parts of the service industry will also be restructured when Internet enabled devices automatically call for information, updates, replacements or other nearby assistance.
Currently one of the fastest changing businesses is construction industry. Building automation is affecting how homes, offices and factories are built and all of them need extensive communications systems to automate use and maintenance both locally and remotely. Soon I will not be the only person turning my lights on or off with my mobile phone.
But let us think about wider issues. One major aspect of the network is decreasing transaction cost. Internet is often referred to as a global village. It is easy to find new business acquaintances and start co-operating. This fast paced networked business model seems to be extremely efficient but it requires a similar model of non-hierarchical trust that existed before the industrial revolution. If you are a bully I will easily find it out from others in Internet. If you are a good guy I can trust you and do business with you without long contractual negotiations. It seems that a good mechanism for rumours helps businesses to network, but wrongly understood concept of privacy decreases feeling of trust needed for societal productivity.
It seems that there was not enough positive feedback for trust and honour in our western industrial society. For that reason we shifted towards hedonistic values and selfish behaviour patterns. All ill deeds were handled according to the hierarchical organisational routes and absolute privacy was considered everyman’s right. This suited the industrial society and mass marketing but it does not match the needs of our networked era. It is questionable whether honour has any meaning if you cannot lose it in the eyes of your fellow beings. Government is not our mother.
Many power structures may fall in spite of all regulations supporting them. It is easy to realize that there was a communist system in Eastern Europe and it fell down. It is more difficult to realize that we also have a system and it is not called free market. A state is a power structure, which is financed by collecting taxes from exchanges inside the state boarders. Future bit realm will be important but it will not know any physical state boarders. It is outside all current states in most practical aspects. Just imagine how easy it would be to search for remote work in Internet.
If I found some job waiting for me in Internet I could work for a few hours and then if everything were okay I would receive payment for what I managed to accomplish. I would not necessarily have any idea on where my employer is located and they would not know who I was or what was my nationality. If I spent the just earned bit-money in Internet then no outsider knew that anything at all had happened.
There are strong signs indicating that states are losing their capability to independently finance their operation or enforce their decisions. Simultaneously as the boarders are becoming meaningless there have to be rules that are enforceable globally. This will lead to weakening of states and creation of a world bank, a world police and other international regulatory bodies getting more and more power.
It seems that we are drifting towards a world state. In the meantime bit realm will resemble a strange mixture of Wild West and feudal age structures with virtual Disney-worlds in every corner. In this Wild West criminals enjoy great freedom because the “big brother” metaphor requires Internet to support complete anonymity for everybody. Similar requirements in the real world would mean “no licence plates”, “no numbers in money” and “no finger prints”. This non-tractability leads to spy agencies requiring authority to listen in to everything. It seems that we get a big brother because we are so much afraid of one. This trend is especially strong again in US because the corporations abuse users information in such a way, which is illegal in EU. But we may also get one because operators are reluctant to search solutions.
Internet task force has informed that forthcoming versions of Ipv6 would include mechanisms for tracing messages to individual machines. This might mean licence plates and this should mean full support for strong encryption and a worldwide legislation to ban corporations and governments from collecting extensive user information into their databases without users approval. This would create a balance where networks would be safe and everybody would equally get information on others - no big brother but small brothers peeking from every possible hole. Just as in small villages, where doors could be kept unlocked.
This would give me the right to know if it was the American NSA who just supplied me with their spy-virus or mafia who sent me a blackmail letter. This would also help to solve the copyright issues to operators' best interest by allowing finding out, who is responsible for spreading unauthorised material? There would be trust.
Trust is not enough by itself. Copies are cheaper than ever. But good ideas have a free market. This makes organisational creativity and empathy and speed the most essential success factors. If you only copy what others do and if you don’t understand what others value, if you cannot put your act together faster than others, then you are not worth much. If you are fast enough, you win because in our new economy, things become more valuable the more they spread; this is the law of increasing return.
New possibilities must be taken into serious consideration when they are just possibilities. Nokia made their great success by being the first company to believe in GSM and they also sensed that their customers wanted to have individualized phones. It is funny to notice that Toffler had written about this concept in 1981, but Nokia was the first major company to view their customers as Toffler recommended.
Many of our visions for the future are not radical enough. Currently many people think that cars will be equipped with Internet. Radical would be to believe that cars will get off ground because of computerization and communications. We just ordered one Skycar from Moller International for 2004 delivery. I have also been very interested in Aerovironment who has created Helios, a flying wing that will stay six months in 20 kilometres using solar panels and accumulators. Teleoperators should take this seriously. That kind of device is considerably cheaper than communications satellites but combines the benefits of very low orbit satellites and geostationary ones. They will soon offer 20 Gigabits local broadband capacity each. Nasa is backing the development and a consortium of Taiwanese operators has ordered one test system.
Many of these developments open new markets. Bits become cheaper but we will learn to use more of them and the total value of bit transfer will continue to grow if we learn to run fast enough. Protective approaches, which do not aim towards customers’ benefit and open competition, are destined to collapse. I have recently read some thirty business plans. Investors seem to be quite willing to give five million dollar valuations to five-month-old start-ups with nothing else but a good business plan. How can you keep good people in-house if there is a free market? Microsoft just announced worlds biggest option plan to avoid mass exit.
I wish you a pleasant journey – sea is getting rough, but a good operator can do miracles for the benefit of the whole society. Much of the added value belongs to those who provide the services. Remember Maslow and our basic needs. Hunger and thirst are among them and happily they cannot yet be satisfied virtually. I was supposed to tell you where the beef is. Perhaps it waits for us in the dinner table. I wont keep you longer. Many thanks for your patience.