Be Prepared For Sudden
A Guided Tour of the Next 10 Years
David Pearce Snyder
In 1900, American historian Henry Adams, scion of U.S. presidents, was in Paris to cover the world’s fair for the Boston Globe. The highlight of the Paris Exposition, held to celebrate the arrival of the 20th Century, had been the illumination of the bridges across the Seine by electric lights. While Adams marveled at the spectacle, his commentary also reflected his disappointment that electricity had not produced the great benefits that its proponents had promised at the beginning of the electro-mechanical age.
Since the middle of the 19th Century, the inventors of electric power — e.g., Kelvin, Siemens, Edison and others — had been describing the wonders of the all-electric world to come, in which a cornucopia of labor-saving devices would remove the burdens of domestic work from housewives, and clean electricity would clear the air of soot-choked industrial cities by providing factories and railroads with a smoke-free source of power. But by 1900, 43 years after Siemens had perfected the dynamo and 30 years after Edison and Westinghouse had begun selling electricity to local consumers, the most notable achievements of the new technology had been safer theater lighting, and the illumination of a number of public buildings and major thoroughfares.
Similarly, back in the 1950s, the pioneers of the information age — e.g., Weiner, Diebold, Beer, etc. — had promised us paperless offices and cashless commerce. Yet, as we entered the 1990s, 43 years after the first computer had been demonstrated (1946), and 35 years after the sale of the first commercial computing systems (1954), most offices remained awash in paper, and our principal use of the electronic banking system (even today) is to get cash from one of our 275,000 ATMs. As Nobel Laureate economist Robert Solow mournfully observed at the end of the 1980s, "We see computers everywhere today, except in the productivity statistics."
The misgivings expressed by both Adams and Solow were engendered by a single common problem experienced by futurists, called technologic "presbyopia," or far-sightedness. Basically, it is possible for an expert to envision the ultimate capabilities of a newly-invented technology long before that technology can be refined and developed to the point that it actually performs at its full productive potential. In fact, economic historians have concluded that, during the first quarter-century following a new technology’s initial demonstration, the technology remains so primitive, costly, and unreliable that it finds only limited specialty applications in the marketplace, and has no measurable impacts upon a nation’s overall economic performance.
During the second quarter-century of a new technology’s existence, it typically is refined and applied to a growing array of practical marketplace functions. But the technology is still immature during this stage of its development; it is still expensive, unreliable and difficult to use. Most of the extensive — and costly — applications of new technologies during this second stage of adoption typically fail to improve performance. As a result, the second quarter-century of a new technology’s introduction actually causes a nation’s productivity-improvement rates to fall, along with average wages, corporate profits and prosperity in general. For electric power, this "counter-productive" stage of technologic introduction and application lasted from 1880 to 1905. The counter-productive phase of America’s adoption of information technology ran from the early 1970s to the mid-1990s.
The good news, say the economic historians, is that, once a technology has been around for 50 years or so, it generally becomes cheap enough, reliable enough, and useful enough that it can finally produce the results that its proponents had originally envisioned a half-century earlier. Within three years of Henry Adam’s gloomy pronouncements on electric power, for example, every major city between Chicago and Budapest had begun to convert their urban commuter railroads from steam to electricity. By 1905 to 1907, the first power distribution grids were completed in Europe and North America, giving millions of households and businesses access to low-cost electricity for the first time. In the 20 years that followed, electric appliances appeared in millions of homes, while tens of millions of workers got new electro-mechanical tools; productivity soared, the economy expanded, and a rising tide of prosperity "lifted most of the boats."
History shows us that seven-eighths of a new technology’s impacts do not occur until the final quarter-century of its adoption by society. Furthermore, during this high-impact stage of adoption, a newly-mature technology has typically attained such marketplace leverage through its competitive advantages that it coerces the transformation of most existing institutions, and fosters the invention of entirely new ways of doing essentially everything. In short, a newly-matured technology is a revolutionary technology.
Between 1900 and the mid-1920s, the general assimilation of electro-mechanical technologies — including the telephone, automobile, motion picture and radio — not only sustained a quarter-century of soaring productivity and prosperity, it also led to the re-invention of many of our existing institutions, including colleges and universities, healthcare, local government, retailing, etc. — and to the invention of entirely new social technologies, including universal public education, workman’s compensation and unemployment insurance, credit unions, social security, the graduated income tax, public relations, scientific management and the suburbs.
America entered the high-impact, transformational phase of the Information Revolution in the mid-1990s. Our productivity-improvement rate, which had averaged one percent per annum since 1969, doubled in 1992; and since 1996, it has averaged more than three percent per annum. Rising productivity, in turn, has made it possible for employers to raise wages without raising prices, a combination that has sustained the longest period of unbroken economic growth in modern U.S. history.
And this is just the beginning! The Labor Department projects that, at current productivity-improvement rates, average household income in the U.S. will rise from $43,500 per annum to $70,000 per annum by 2020. What’s more, as we pass further into the high-impact 25 years of the Information Revolution, we will once again find ourselves re-inventing our principal institutions and creating new social technologies to make the fullest productive uses of computers and our new information infrastructure — or "info-structure" — the Internet.
The transformation is already underway, and it will only accelerate over the next 10 years, as cashless commerce, ticketless travel, campusless colleges and (yes) paperless — even office-less — offices, all become commonplace. A near-term future that will be dramatically different from our recent past now lies immediately before us.
Just look at the data. It took 38 years for radio to amass an audience of 50 million people. It took television 13 years to reach 50 million people, and it took the Internet just four years. In 1997, the U.S. Commerce Department reported that, for the first time, more e-mail had been sent than were letters through the Post Office. In October 1999, Postmaster General William Henderson testified before Congress that e-mail has now exceeded paper mail by 50 percent. Not only that, but the General Accounting Office has projected that declines in paper mail will make it necessary to raise postage rates dramatically and begin major layoffs by 2003. Over 100 million Americans are on the Internet today, which means the on-line population is now a representative cross-section of our society, and no longer just young white males looking for sex and violence. The population on the Internet now is made up of more women than men; and later this year, more foreigners than Americans will be on-line for the first time. (While African-Americans and Hispanics remain statistically under-represented on the Net, their numbers are growing.)
So, now that 180 million people worldwide are online, the compelling question is: What are they all doing online? Well, we've got good data on that, too. We know that 30 percent of the people online at any given moment are simply sending or receiving e-mail. The other 70 percent say they are "looking for information." Basically most people use the Internet as a sort of universal reference library and Whole Earth Catalogue. Seventy-two percent of Internet users say they use the Web to get information on products or services before they make a purchase; over 30 percent say they use it to communicate with a vendor from whom they have already purchased a good or service, in order to complain, or make suggestions, or ask for parts or service. In this context, many observers expect the Internet to usher in a new era of "interactive consumerism."
To be fair, vendors and consumers have been interacting with one another since the dawn of civilization. (After all, it’s in the nature of their relationship.) But, in the mass markets of a modern global economy, the Internet affords vendors and consumers an unprecedented capacity for two-way communication. Economic models show that markets are more competitive — and fair — when buyers and sellers are timely aware of the full range of offerings in the marketplace. The 1996 Nobel Prize in Economics was awarded to William Vickery and James Mirlees for demonstrating that both individual transactions — and the economy as a whole — are more efficient when both buyers and sellers are "symmetrically informed" about the objects of their sales and purchases.
Of course, it is not at all clear that either the producers or the consumers in most markets are particularly interested in keeping each other "symmetrically informed." Public reaction to personal data gathering and consumer profiling on-line has ranged from "concerned" to outright hostile, and "personal privacy" has once again become one of the top five political issues in the U.S. At the same time, manufacturers and service providers routinely make decisions and engage in practices — ranging from Third World subcontracts and retailer-price allocation formulae to political contributions and genetically engineered foods — that they would prefer not be publicly aired.
Whether or not we are pleased at the prospects of living in a cyber-mated world, current trends suggest that, within 10 years, that’s where we’ll be. Today, 75 percent of nationally-traded consumer products have a 1(800) WATS telephone number printed on them, while about 10 percent display an e-mail/website. But Internet use is doubling every 100 days, and the numbers of e-messages sent each day now exceeds the daily numbers of telephone calls. It is reasonable to assume that, whether or not most retail sales will eventually take place on the Net, within 10 years, most buyer-seller/producer-consumer relationships will be initiated and maintained in cyber-space, and not face-to-face or over the counter. This same process of "cybernetization" is also occurring in the public sector, in the relationships between elected officials and their constituents, as well as between civil servants and the citizen-taxpayers they serve.
While public institutions are often characterized as being slow to adopt new technology, a larger percentage of government agencies have websites than do for-profit organizations. And more government employees, per capita, use e-mail than do the private sector employees. The public sector has been very keen on the Internet as an economical means of communicating with constituencies. (It was, after all, the public sector that conceived of, designed and installed the Internet.)
Politicians, on the other hand, largely ignored the Internet in the 1980s and early 1990s (except for the Far Right). Because the Net was originally associated with the nation’s research universities, politicians (and almost everybody else) did not think of the Internet as a "media for the masses." Once it became clear that a principal capacity of the Internet is to mass-produce relationships, the politicians jumped in. The 1998 elections were the first in which essentially every candidate at every level of governance had a website to raise money, find volunteers, and clarify issues.
As with producers and consumers, officeholders can use the Internet to reach out to their constituents, and constituents can use the Internet to reach right back: to praise or complain, to raise questions or make suggestions, and to mobilize support or opposition with respect to any policy, legislation or any individual politician. There is one website out there, www.e-thepeople.com, that facilitates the ability of people who are dissatisfied with government programs or services to go in and complain. All you have to do is log in and state your problem or complaint, and the website will offer you contact information for appropriate elected representatives and agency officials at all levels of government, plus local media representatives. The website also helps you compose e-mails to send to individual officials or representatives.
There are no websites quite like that for the private sector (yet), but it’s surely just a matter of time. (It would be a natural feature for the Consumers Union website.) The real threat posed to institutions from unhappy customers and constituents (and disgruntled employees) on the Internet won’t be automated letter writing websites, but the awesome power of mass communication that the Net offers to an individual. In particular, any consumer or taxpayer who believes that their health or safety, financial well-being, or civil rights have been compromised by the actions of an institution, will be able to seek out and mobilize similarly aggrieved parties. One angry buyer of a Packard-Bell computer, convinced she had been sold a computer with outdated parts, set up a Web page attacking the manufacturer, and inviting similarly-disgruntled customers to e-mail her. The more than 1,000 replies she received were subsequently transmitted to a lawyer to form the basis of a class-action lawsuit.
A 1998 survey found that there were over 8,000 "gripe-sites" on line, largely targeted at the world’s major producers of mass-market consumer goods and services. While many have been created by unhappy customers, others attack corporate ethics, labor practices, environmental behavior, etc. Using off-the-shelf software, attack sites are often higher quality than the actual corporate sites. By frequently citing their victim’s name on their Web page and imbedding the name in the website’s "meta-tag," protesters assure that their page will be pulled up by any of the major search engines that consumers are likely to use in order to find the company’s actual website.
The information highway (I-way) is not only a two-way street, it is also a two-edged sword. Unlike the Industrial era mass media — newspapers and magazines, radio and television — which are all "one-way streets" over which corporate and government information flows to the public in the form of advertising, press releases and planted stories, the I-way permits consumers and constituents to generate information flows — to each other, to regulators, to the media and back to business and government institutions. What’s more, so long as the so-called "attack sites" report only actual customer experience, libel laws do not apply to such Internet activities. The "McSpotlight" anti-McDonalds attack site continues to draw a million hits a month in 22 nations around the world in spite of years of legal action by the fast-food king to shut it down.
Mounting editorial, political, and academic concern has been expressed in recent months about the growing threat to individual privacy posed by the corporate collection and sale of personal data — especially data derived from monitoring the activities of unsuspecting individuals while they are on-line. While current privacy concerns are valid and serious, they are likely to be resolved by a combination of new electronic security technologies and the adoption of a European-model privacy protection statute, which simply treats all personal information as personal property, subject to protection by law like any other property. This approach to privacy protection, first adopted by the Swedes in 1973, is straight-forward in application and enforcement, and has a good track record in most European countries.
While the protection of privacy in cyberspace is a serious-but-manageable problem, the increased capacity of single individuals on the Internet to mount sophisticated, Hollywood-quality mass media campaigns attacking the products and/or behavior of any large institution represents an increase in personal power unprecedented in human history. As Sun Microsystems co-founder, Bill Joy, reflected in his recent disquieting speculation ("Why the Future Doesn’t Need Us," WIRED, April 2000), with nuclear weapons or bio-chemical warfare, we worried about "rogue states"; in the wired world, we must worry about "rogue individuals."
Within less than 10 years, the capacity to be a "rogue individual" will be more or less universal. The notion of a "rogue individual" in cyberspace immediately evokes the image of a computer hacker: an on-line Unibomber seeding the Internet with a self-replicating "denial-of-service" virus. (Mr. Joy’s WIRED essay dwells on this very vision.) But for consumer affairs professionals, the really provocative innovation of the next decade will be wireless internet, and the Personal Digital Appliance (PDA).
By 2005, most people won’t leave home without their PDA, a combination cell phone/pager/Net terminal/digital video camera. Whether or not all of our public spaces are eventually going to be subject to television monitoring (a separate, hotly-debated issue for the decade ahead), we can be certain that most people will be able to record and report essentially everything and anything that they encounter in the course of daily life — at the mall, on the road, in the classroom, aboard the plane or cruise ship, etc. (In fact, media experts believe that real-world footage of actual events, captured by eyewitnesses, will become the principal content of WebNet newscasts, which are, in turn, expected to supplant the broadcast network news programming within five years.)
We are about to enter a world in which every customer or client, every employee, every passer-by or trespasser will also be a potential investigative reporter, who is only a click or two away from being an on-line tabloid publisher. This is consumer empowerment beyond the dreams of Ralph Nader and Sid Wolfe. The work of consumer affairs professionals in the next 10 years will become much more high tech and high profile, which will offer considerably greater opportunity for consumer affairs to add value and improve overall performance.
It will also be a lot more unpredictable.
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