PROGRESS & FREEDOM FOUNDATION SUMMIT
AUGUST 19, 2001
"POLICYMAKING IN AN INTERNET AGE"
© Copyright 2001 Hewlett-Packard Development Company, L.P
All rights reserved. Do not use without written permission from HP.
Good evening, everyone. It is great to be here, in this place, where clear thinking so often emerges from a collection of great minds. In that spirit, I wanted to give us something to collectively deliberate.
Last year, I shared HP's view of an emerging digital Renaissance. I talked about using the technology that is at our disposal to empower individual entrepreneurs, consumers and inventors. I shared a view of fueling, inspiring and connecting the everyday acts of many and in the process, making the benefits of technology accessible to all.
I hypothesized last year, and I still believe today, that we are entering a second and extraordinarily powerful renaissance. A renaissance that has the capacity and promise to eclipse the achievements of the Italian renaissance. One that has the capability not only to drive sustained economic prosperity, but social progress in the United States and beyond our shores as well.
Let me continue last year's conversation where we left off. I'll start tonight's discussion by posing a question: What brought the first renaissance to an end?
In light of the global economic slowdown, I ask this question because I think the answer has much to teach us.
Of course, many factors caused the cessation of the renaissance some economic, some political and some based on the failure of leadership. But if I were to distill it to the deepest root cause, it was fear.
The events that forced the close of the Renaissance era were caused by fear. Fear of the openness created by the birth of humanistic values. Fear of the discoveries, customs and peoples found beyond known borders. Fear of the huge ethical questions raised by the times. Leaders were unable to manage the conflicting forces. And it was ultimately fear that sent mankind into retreat, back to parochial thinking.
As a collective, mankind decided that rather than go forward, it would settle for standing still, or going backward.
As we all know, this kind of fear results from the inability to choose, from the inability to reconcile competing worldviews.
I draw on this parallel, this fact of human nature, some 500 years hence, because we are at an equally critical crossroad in time. And not just because the euphoria of the first wave of Internet has been quelled, or because the dot-com economy has lost its footing, or because the economic flu that's making its way around the world greatly clouds our ability to predict let alone capitalize on the future.
I draw on this parallel, this fact of human nature, because on so many issues, we now have a decision to make:
- To settle for standing still, or worse, retreating; or
- To go forward boldly.
Empowering the World
Today, from where I stand, I must admit that the indications suggest perhaps that we are retreating.
Look at the imbalances between the developed world and the developing world.
While there is evidence that global business and global markets can increase overall wealth in developing countries around the world, there is the voice heard in Seattle, Prague and Genoa that declares global companies have not delivered on that mandate. We have not created a sustainable model of economics that will lift billions on the planet out of poverty. As CEO of a company that does business in 163 countries, I am a firm advocate of the responsibility global companies have and my post has also given me a unique view on where I believe traditional models have fallen short.
It is clear: If we fail to develop a sustainable model of development that fully acknowledges the talents and ideas and ambitions of the 4 billion people on the planet who have no access to Net technology, we will have failed. That's because in this global economy, we're moving from just the trade of goods, components and material goods to an economy that is based on the trade of good thinking, talent, ideas and know-how. You see this in China, you see it in India, you see it in parts of the developing world. If we do not get the balance right the balance between what is local and what is global, between what is an economic benefit and what is a societal benefit, between what is held sacred and what is invented anew we do not gain access to the thinking, talent, ideas and know-how of all the world's people.
Look at education. This country the patron nation of the digital Renaissance still has a hard time educating its students to compete on a world stage. This country still has a hard time teaching its children to find Peru on a world map. This country, the protector of global democracy, still has a hard time imparting the identities and duties of its government officials below the level of President. This country with perhaps the most ambitious and greatest commitment to education for all has yet to deliver the quality of education that it aspires to.
At this very moment in time, like humankind 500 years ago, we can either choose to move forward, or settle for retreating backward.
Look at the state of business in the harsh light of the economy. The great icons of American business are under extraordinary pressure. There's anti-globalization pressure and new competitors. Even the most modern practices seem antiquated in a world that demands agility, adaptability, a capacity to reinvent organizations at an intense pace to take advantage of fundamental shifts in the market. The call for fundamental rethinking and reinvention of our organizations has never been louder. And despite all this, the technology industry the industry that serves as the agent of change for all other industries is mired in what some are characterizing as a depression.
Look at the telecom industry specifically. The telecom industry finds itself in worse shape today than it was before the Telecommunications Act of 1996. And while there is reason to be concerned about the tenuous ground beneath some major telecom giants, the bigger concern is about the far deeper ripple effect they have on the overall health of the economy. As is the focus on much of this summit, we are at a critical juncture with the key issues that will affect the health of this industry, and all our industries, going forward.
The Hegel Equation
The other evening, I attended an event in celebration of the 20th anniversary of the IBM PC. And as part of that event, as is usually the case with such gatherings, there was a squadron of journalists. One young journalist asked me, "Who is your most influential business author?"
I looked down at his pad of paper at the responses that he had scribbled down from the other CEOs he had already talked with that night. As you might expect, I saw Tom Peters, Peter Drucker, Gary Hamel and Michael Porter's names down there.
I paused and said, "Hegel." To which the reporter shot me a quizzical look evidently Hegel has fallen off
the New York Times business-book list.
I expounded, "Hegel, you know, the process of thesis, antithesis and synthesis. I use it every day."
He dutifully scribbled down Hegel and moved on.
The Hegelian dialectic is about one point of view pitted against its countervailing opposite. And from that contradiction and conflict arises a true synthesis that unifies these different views into a cohesive and often unexpected understanding.
It demands holistic thinking. It demands a clear definition of the problem and then a vision of the desired end-state. And it requires finding connections between polar opposites.
And in the networked age, in the digital era, power and value lies in the connections. It's exactly the process of thesis, antithesis and synthesis the search for new and different connections where exponential power and value can be found.
Let's test this theory a bit.
In education, the polarizing debate is about vouchers versus public schools. "It's about teaching to the test" versus "teaching that nourishes hearts and souls." It's about squeezing history and music and philosophy out of the curricula in order to make room for math and science and reading in the quest for test scores and future funding.
Let me tackle just one dimension of the debate: The private versus public school debate free access for all versus a free-market voucher-driven system. The thesis on the table is: Keep the system the way it is a vast system of public schools, some with strong performance, but many that are able to achieve only the lowest common denominator. The antithesis: Let competition reign, give all students vouchers, and let the strongest schools prosper and the weakest ones perish.
If we could invoke Hegel, he'd help us find a synthesis: Perhaps a view that decisively bolsters the public schools system we have, but at the same time fosters more innovation and leadership through charter public schools. And to further fuel innovation, he might suggest a voucher program for the areas, or neighborhoods, or student populations most in need. In this case, the synthesis we hope, would be far more than just a compromise it allows us to build on the best of what we have, but instills new responsibility and accountability to the system as well.
It is in that same way that we might find synthesis of the debate between the thesis that says the primary purpose of
education is to teach the fundamentals: reading, writing, job skills, technological literacy. And the antithesis: Schools
are about providing food for the soul the literature, arts, music, language education that emphasizes seeing
connections and gaining perspective. The fact is: We must have leaders who are both technically skilled and holistic
in their approach, fiercely analytical and humanistic, smart business people and passionate advocates of corporate citizenship. Our challenge as policymakers is to dispel the myth of "either/or" and find an elegant way to get to "and."
The same goes, of course, in our own companies as well. In rapidly changing times, the debate is all around
"holding onto what is old" versus "embracing what is new." In the not-so-recent past, it was about
"dot-com up-starts" versus "the old guard, the old economy."
In reinventing the 60-year icon called HP, we're learning a lot about the importance of holistic thinking. The thesis being: HP needs to reinvent itself in a bold way to play in an Internet Age. The antithesis being: HP, the gray lady of Silicon Valley should remain an immovable icon like the Statue of Liberty. It becomes the job of leaders within HP, not just the folks with "VP" in their title, but everyone who believes they are an advocate of HP, to find an intelligent synthesis the way to "preserve the best, and reinvent the rest." The way to change the strategy, process, metrics and rewards, and most of all, the culture in a way that's more than just a combination of old and new. A way to derive greater value from the whole versus the sum of the parts. It sounds straightforward, but the challenges are tremendous, far-reaching and inter-connected. They span the largest decisions what businesses we should be in, how we manage our supply chain, how we're fundamentally organized, how the critical economics of the business work down to the smallest decisions and symbols.
In the case of globalization, perhaps Hegel also has something to teach us. Today, the issue is framed as
if it's about "globalization" versus "greater good." It's about "big business" versus "local people." One thesis on the table: The developing world must be held accountable to pay its debts. The anti-thesis on the table: Debt relief, full debt relief, is the only hope these countries have. But the synthesis tells us there may be another path: Any amount a country is willing to invest in education, or infrastructure, or any of the other engines of progress, that amount should be counted as credit against their debts.
And it's how Hegel would also have us looked at the debate about "profits" versus "social value." The thesis is: Global business is the only means for lifting the developing world out of poverty. The antithesis: As heard in the voices in Genoa, and Seattle, and Prague Put a stop to globalization as we know it. The synthesis, the one we hope that we're embracing at HP, is to cut a different path to value. We do not embrace the view that global companies are inherently flawed nor the countervailing argument that the pursuit of profits justifies the means.
In actions spurred by our world e-inclusion strategy, as just one example, we're building sustainable solutions for developing countries solutions that draw on local cultures, local talent, local resources, local ambitions to build solutions. Solutions that have a social cause AND are driven by a profit engine. It's not fundamentally about giving people PCs, or obsessing on the technology. Our efforts are focused first on people and solving a very local, very personal, very intimate way.
Perhaps it's a bit over-the-top, at a dinner like this one, to bring such heavy topics to the table. And to bring such heavy topics to the debate about technology that you'll be having at this summit. But I think the debate you will have here is best framed by these kinds of topics.
Because, in a true Hegelian sense, we have gathered in this place to in fact get rid of "Or's" and find more "Ands." We're here to find a policy for broadband, and technology, and telecom that is a true synthesis. Not a compromise, or a cop out, but an enlightened view.
The Future of Broadband
Broadband is undeniably one thread of continuity that will be woven through education as the access to learning,
in the reinvention of business, as the enabler of new commerce on the global stage as the platform over which
information flows, and knowledge can be shared. It is by no means the only technology force for solving these issues,
but it is an essential one.
And so let's talk about the responsibility each of us bears in coming to this summit specifically to address the choices we now face in broadband:
Broadband is still not getting to consumers. Only 9 percent of Americans who use the net at home have access via
broadband. And that is hardly enough to fulfill the promise of the digital Renaissance we've been talking about. As
policy makers, how can we ensure that broadband becomes a far-reaching enabler? How can we ensure that we achieve not
only universal access, but that we achieve it quickly? After all, a recent report quoted in the Financial Times estimates that a rapid completion of the broadband build out peaking in 2007 would add $400 billion a year to the U.S. economy's growth. But a slower build-out, peaking just four years later, will amount to more than $500 billion in lost invention, lost sales, and lost job creation. That's $500 billion that is simply not injected into the economy. Time is clearly of the essence.
Regulatory policy takes an adversarial stance: An either/or approach. The debate is dominated by a thesis and antithesis, without any attempt to reach a synthesis. We are forced to choose between competition and rollout, between regional Baby Bells and AT&T. Our views echo back to 70, or even 90 years ago, from oil trusts and railroad companies. The design point of policy, the value to optimize, the proxies of value placed in the model of the end state are all designed to prohibit the creation of monopolies and to protect the consumer. But in a digital economy, that approach is creating territorial fiefdoms that fundamentally fail to capitalize on the borderless nature of the Internet. In the process, consumers and their interests are not being served. Can policymaking create an industry that is far more effective, and simultaneously far less regulated, than railroads and telephone companies have been in the past?
Business behavior regarding broadband has been narrow, at best. Trying to preserve territorial concessions and fiefs based on copper wire, while customers are not being served. We know that the issues in getting carriage across "the last mile" are significant but I also know that a failure to see partnership among competing businesses as an alternative will, at current course and speed, ultimately eliminate the possibility of robust long-term gain for all. Can our policy-making be built on the twin pillars of lively competition AND rapid rollout?
The government's role, in my view, is not to be an adversary to business but a partner. I think we have a good model to look to: The build out of the first phase of the Internet. The Net was born at DARPA as an R&D effort in the Pentagon, then migrated to the halls of academia, and finally made it into the commercial world. What a great example of government involvement in just the right measure, at exactly the right time. In a bold experiment to govern a totally new medium, government evolved its role as regulator and, instead, adopted its role as advisor and partner. And, for at least a period of time, resisted the need to set limiting taxation policies or controls on content.
Can our policymaking for broadband take a similar approach?
I am advocating a collaborative, hands-on role between the technology industry, the telecommunications industry, the administration, Congress, and the FCC. Can government streamline and rationalize state and local licensing and franchising procedures for communications services? Can government focus on the appropriation of spectrum and release the underutilized band in a way that will spur further innovation? Can we deal with the tougher issues that will protect consumers rather than focusing so much energy on preventing monopolies?
So, can we instead focus on issues of privacy and security, both of which are more meaningful to consumers? Not to mention that if we do not resolve them, if we do not build consumer confidence in the trustworthiness of our systems, doesn't all of our discussion about the deployment of broadband become a moot point? At HP, we truly believe this is a lynchpin of the whole works. We know this from our consumer business. We know this from our enterprise business, which helps other companies deal with the tough issues. We know this as the operator of a shopping site that's one of the most successful in our industry. Which is why we're already on the forefront of policy issues around device technology, information standards, encryption, and so forth. We have chosen to often live by a higher standard not abide just by a minimum standard in the way we treat our employees and our customers' precious information and data. I could go on and on here about the leadership we are trying to bring to this issue, but you'll have a chance later in the summit to hear from one of my colleagues at HP on this topic.
Finally, I would conjecture that businesses in my industry have not done as much as we are capable. We need to provide more leadership in identifying and expediting solutions for broadband deployment. Today, I propose that my industry take a larger role through an IT coalition. Our objective is to create an effective coalition of IT companies to promote solutions that are good for business, good for customers, and good for the rapid rollout of broadband technology over all.
With this large yet by no means comprehensive list of challenges, what approach can we take to get to a much more enlightened synthesis? How can we get to a viable solution?
I believe we must answer three fundamental questions about the future of broadband and the role of the telecom industry:
I think we've made some headway on the first question. What is at stake here, what is worth fighting for here? It is broadband as a solution for some much larger problems: education, reinvention of our companies, global competitiveness, our ability to unleash the talents of four billion more people on the planet and the rekindling of the engines of growth in this country. Those are the things that form the end state it's not fundamentally about the bit and bytes of technology, but rather, what technology will be able to do for people.
- What is the true desired end point what is worthy of our ambitions and our efforts?
- What is the full value to be created? Not just economic value, but social value as well. What is the total equation, the full framework, by which we must measure our efforts and make tradeoffs?
- And how do we make the solution sustainable?
I think we've touched on some of the foundations of thought for the second question: We have talked about ensuring that the model of success is based on the full value, not just economic value to companies, but usefulness to consumers. Not just dollars on the bottom line, but social value imbued in the system. I don't profess that we've found the full equation by which we should measure our success, but I think there is enough here to start a conversation.
As for the third question, that is the hardest work of this summit what do we have as our models?
We have the model of government temporarily suspending its regulatory role, on content and taxation, for example, and becoming a partner and advisor in building the Internet.
In the creation of the Internet in the first place, we have the model of competing companies and organizations also partnering, to marshal the huge resources and skills necessary to roll out the best solution.
Today we look through our screens into a broadband future that could disperse health, wealth, and knowledge on significant scale to literally every corner of this world. We have the technological means to do it. We have a population that, once they are educated about its promise and its likelihood, will demand it. And we have an opportunity to do our best to include everybody in this global economy, not just those who are lucky enough to live in mature markets.
Will we let old habits and old laws keep that screen half-dark?
If you take one thing away from my remarks this evening I hope it's this: By finding a thesis and examining its antithesis, we are able to get to synthesis. In a networked world, in an interconnected economy, in a world where technology and people and organizations intersect at odd angles, holistic thinking is, I believe, the ultimate path to enlightened policy.
I'd like to close this evening by bringing us back full circle to the Renaissance and to a quote from a great Renaissance thinker Leonardo DaVinci.
In the face of huge challenges economic, historic, political, social on this issue of broadband, so much is at stake. Remember what suspended the first renaissance: Fear of the openness created by the birth of renaissance thinking. Fear of the huge ethical and moral questions raised by the times. Leaders were unable to connect the various and conflicting forces of the times. And it was ultimately fear that confounded mankind into a state of inaction, back to parochialism.
In looking fear in the eye, we have two choices:
I know you will make the right choice.
- To settle for retreat.
- Or to use today's the obstacles to motivate our stern resolve and go forward.
Thank you very much.
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