Chairman and CEO
The Boeing Company
"Transformation to a Global, Mobile World"
Executives' Club of Chicago
February 17, 2000
Thank you, Leo.
First, I want to start by thanking Kaarina who invited me. This is a great business forum, and it's wonderful to be in Chicago.
You live in a city that has been influenced by land, sea, and air travel. Chicago has always been a strategic hub of transportation, from truck to rail to port to air. It is an important city for Boeing, and I'm happy to be here. And that leads me to what I want to talk about today...how we are transforming into a global, mobile society at amazing speed.
Our civilization has always grown by continuously finding better, more productive methods. As a result, we have raised our standard of living. Chinese Philosopher Lao-Tzu said, "A journey of a thousand miles must begin with a single step." Civilization started with a single step, and it took years and years to go any significant distance. Change was slow in coming. We learned to manage fire, invent the plow, the loom, and pottery while creating the abacus, alphabets, trade, and civil engineering. It literally took thousands and thousands of years.
The next step took a little more than 700 years. Beginning at the start of the second millennium, we saw the Magna Carta, the printing press, factory textile production, public banking. We saw the steam engine, geometry, and calculus. But still at a slow rate, and in one person's lifetime not a big change.
The next step took 200 years. The Industrial Revolution changed civilization completely. Machines took home trades to large-scale factory production through the flying shuttle, the spinning jenny, and the efficient steam engine. Transportation began to change substantially, too. We had the first railroads, improved steamships, cheap movement of goods via canals, and success of the hot air balloon. The telegraph started the step toward long-distance communication. By now, you've figured out that things are speeding up.
The next leap took 50 years. There was the telephone, radio, automobile, airplane, the diesel locomotive, and, right here, the elevated railway, the zipper, the pinball game, and the Hostess Twinkie. The assembly line and mass production began to make us all more mobile, while the battery made us more portable. And, I believe, most critically, we moved from relative independence toward significant interdependence.
The next change was even faster - only 25 years. This period saw the birth of computers, first nuclear chain reaction at the University of Chicago, jet engine, transistor, commercial jet transport, satellites, semiconductors, television, and the laser. Things are starting to really move. People traveled into space, cooked in microwaves, paid with a credit card, and ate at the first McDonald's restaurant in Chicago.
The next revolutionary change occurred in just 15 years. We saw the first heart transplant, first landing on the moon, first personal computer, first supercomputers, first space shuttles, first e-mail. Now down to the last 10 years. We have cell phones, ATMs, CDs, CNN, Mars Explorer, Hubble Telescope, global positioning satellites, high definition television. I would argue that we are seeing significant change on a daily basis, and things are really beginning to change several times in one generation now. It happens over and over in a lifetime, and this means you can't just go to school once but will have to go over and over to keep up.
Today, significant change occurs in a one-year span: the Palm Pilot, day trading, e-commerce, dot.com companies (with market caps that dwarf those of industrial giants), rocket launches from sea, DVDs, and e-everything. Right now a Space Shuttle is mapping the earth with a radar laboratory to collect a trillion pieces of data.
We are operating at Internet speed, and it's not going to stop. As a result, and far more important, productivity has been going up. Our standard of living is going up because people produce more with a given amount of labor. And just a quick trip through history showed how improvements brought us great economic gain with even greater speed.
The Information Revolution is allowing us to radically change the cost of interaction just as the machine changed the cost of making things. For example, today, at Boeing, we can design an airplane in St. Louis, Seattle, and Farnborough, England, and have the pieces fit together and assembled in Palmdale, California. Glass fiber carries the billions of bytes of data from one site to another and allows us to work in many different places.
But in the future, I would contend, this won't be enough - as a lot of us in this room might know. We are constantly on the move and lugging our laptops with us. We want our instant data with us wherever we are - both on and off mobile platforms. We, as mobile computer users, will go from asking each other, "Were you able to get on-line last night?" to assuming that we can plug in anywhere and be connected. That will be true not just in a hotel, or at home, but aboard a Delta flight to Tokyo.
No one knows highly mobile platforms better than Boeing, whether on military or commercial airplanes. We know satellites and space-based communication. The combination of broadband and the knowledge of mobile platforms and satellites looks pretty exciting to us as we go into the global, mobile age.
Just as an example, last year I spent the equivalent of 75 eight-hour days in an airplane, and that does not include going to and from the airplane. Working much the way you do in the office, I can send and receive e-mail, make and (sadly) receive phone calls, check the market, and work on a speech. This particular speech was one I first prepared while flying over the Pacific Ocean and again from Seattle to Chicago.
Being mobile and connected allows me to meet face-to-face with important customers, suppliers, and employees while still being in touch with every aspect of our business. Being mobile and connected allows me to send e-mail directly to 160,000 employees from anywhere all at one time. A few years ago that would have been completely impossible.
In commercial air travel today, you have a few choices. You can read a book or a magazine, or possibly watch one of several movies. But soon, when you can watch a live soccer match, or a basketball game, or answer e-mail, or work on a report, the airplane will begin to look like your home or your office. Time goes faster. Productivity is higher. It will change air travel.
It will also change in air infrastructure. With the GPS, or global positioning satellite system, it will be possible for every airplane to know exactly where it is and exactly where every other airplane in the vicinity is. We can move to a regional or even global air traffic management system. With accurate terrain data bases, produced by the current Space Shuttle mission, we should be able to eradicate or eliminate where over half of all fatal airline accidents occur, in controlled flight into terrain or CFIT.
Just so I don't focus on airplanes, this is not the only place where the interaction costs will change. To cut 15 seconds off a normal 131-second wait, next month a few McDonald's restaurants in California will link with a transportation authority system that bills customers regularly using the same system that automatically collects toll road fees. There are thousands and thousands of similar concepts to moving data.
Time zones are blurring. People are working around the clock, less in the traditional "9-to-5" structure, and more in relationship to "where you are" and "where people whom you need to work with are," even on the other side of the planet. This will alter us and change our relationships.
It took thousands of years to get here ... to make inventions that changed the world. Sometimes we made mistakes, but today we have truly linked the planet. As we look to the future, I think we can work together to grow the global, mobile world. We can use this knowledge to reduce the chance of war. We can use this knowledge to eliminate diseases.
Today, information is being filtered and refined into new knowledge at incredible speed, and it becomes obsolete just as fast. Startling developments, inventions, and innovations in fields that we never contemplated will change how we think, work, and play every bit as much as fire or the wheel or the steam engine did in the past.
I believe we have choices. We can choose how we are going to use this tremendous capability, or wish we could stay in the "good old days" -- days that really weren't so good, but that's how we like to think of them, anyway. What most of us want is progress, but without change. That won't happen. But we do have choices to move ahead and embrace the future or swim against the tide.
We can continue to learn. I believe we can learn from our ancestors, many who had positive attitudes about being open to change for a better life. I believe we can learn from people who relished adventure, who learned new skills, who achieved extraordinary things, who grew the world. People such as Euclid, Gutenberg, Galileo, Newton, Watt, Morse, Bell, Benz, Ford, the Wrights, and my two favorite Bill's -- Bill Boeing, and Bill Gates.
I believe if we listen closely to the words of Darwin, we can learn too. What Darwin said was, "It is not the strongest of the species that survives, nor the most intelligent; it is the one that is most adaptable to change."
Now I look forward to your questions.