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2002 Speeches
Phil Condit portrait

Phil Condit

Chairman and CEO

The Boeing Company

"Working Together to Create the Future"

Economic Club of Chicago

Chicago, Illinois

April 18, 2002

Thank you. It's great to be here. I am delighted to be a new director and hope members of the Economic Club of Chicago find the Chihuly exhibit at the Garfield Park Conservatory as beautiful and powerful as I do.

Tonight I want to talk about a few things that could have an impact on the city of Chicago as it adapts to meet future demands. First, I want to start with a fundamental premise: economic growth follows infrastructure. If this premise is correct - and I believe that it is - it leads to a critical conclusion: if a city or a region is to have a strong, vibrant economy, it needs a strong, integrated infrastructure. That means reliable, interdependent, efficient transportation and communication systems.

Now let me wander through the premise and look more closely at the premise that economic growth follows infrastructure. The great cities of the world grew up around access to transportation and, therefore, trade. Early in the history of the world's great cities, you didn't have to build a transportation system - it was there in the nearby rivers and oceans. So cities like Rome, Florence, London, Paris, and Shanghai grew up on rivers that led to the sea. New York, Hong Kong, Singapore, San Francisco, and Sydney clearly grew up around harbors. That old expression, "all roads lead to Rome," showed that infrastructure and economic growth were closely linked. Chicago grew up around the confluence of a lake and a river as commerce moved through the Great Lakes to the Mississippi and the Gulf of Mexico.

There was a brief period in the history of the United States where some cities grew up around railroad transportation. Dallas/Fort Worth and Chicago are great examples. Railroads made Chicago a hub - a central switching point - connecting the East and the West, and this became a vital infrastructure for movement of people and goods.

As Mike mentioned earlier, air travel had its roots here in Chicago when passenger air service started here with the first Boeing Air Transport flight from Chicago to San Francisco on July 2, 1927. What a lot of people don't know is the flight originated in San Francisco the day before and carried just a few mailbags to Chicago. Jane Eads, a Chicago Herald Examiner reporter, was the first passenger to use the service. Her "quick and comfortable" trip took 22 1/2 hours in a two-passenger cabin about the size of a freezer. She introduced a curious public to what it was like to fly with stories written in longhand (sometimes by flashlight, as the cabin's overhead light wasn't working) and filed with her editor through the advanced technology of Western Union.

Today air transportation is absolutely essential to all cities. So if cities are to have vibrant economic growth, air, sea, and land transportation systems, then equally important is a communications structure. However,to be truly efficient, these infrastructures of transportation and communication must operate not as separate modes but as an integrated set. Today, I believe, they must work together, and this is a huge challenge.

Now let me give you an example. The goods in a container on a ship are no more valuable after three days at sea than they were when they left. In fact, they are slightly less valuable because "time is money." Similarly, valuable time and money are lost when a doctor, a lawyer, an airline executive, or a reporter stand in long check-in or at security lines or sit idly in an airport waiting area. The concept of "time is money," is not a tough concept to comprehend when you think of the confluence of the Ryan, Eisenhower, Stevenson, and Kennedy expressways.

Transporting people and goods will always involve some non-value-added time, but I happen to think that technology offers many interesting opportunities. Technology can help to optimize the routing of goods in order to minimize transit time. Technology can allow the passenger in the waiting area to do some productive work. If we work together collectively, we can make a significant difference. By integrating systems for the ease of the passenger or movement of products, people can be more productive and goods can be delivered quickly and safely. We need to use technology and work at taking the non-value-added steps out of our transportation and communication processes.

I believe that Chicago, or any city, needs to think seriously about developing an efficient, integrated infrastructure to greatly enhance the opportunity for economic success. We can work together for common purpose and use technology to streamline and integrate processes for greater efficiency. And that sets the stage for the future because technology can make and is making us more connected, more mobile, and more efficient. But many of our old models don't fit our 21st century needs. And that leads me to the picture for the future. Let me share a few examples: not real today, but potential examples.

The first example is a container ship that is crossing the Pacific Ocean, a ship that is guided precisely by GPS. With the aid of satellite weather data, the ship minimizes its transit time. When the ship arrives at its destination port and is unloaded, both the shippers and customers use a communications system that produces an automatic status report as each container is offloaded onto a train or truck. The trucks, carrying goods destined for another city, move away from the port on a dedicated right-of-way highway that leads to the interstate system. Trains leave the port on tracks that have no grade crossings, minimizing disruption to surface traffic. That kind of dedicated routing speeds travel and reduces congestion on surface streets and crowded urban freeways. Trucks that are making local deliveries guided by GPS also optimize their trip with real-time congestion data. The combination of communications technologies and infrastructure design can dramatically speed the flow of goods, reduce the time, and reduce the impact on the city.

I believe that there is an even more exciting possibility for air commerce. I expect that every person in this room has flown many times; some since September 11th and your ground segment has increased over your air segment. Imagine if you could ride to the airport via rapid rail and check in using a fully electronic system - using your "smart card," with its stored reservation, in front of a sensor. After you key in the number of bags that you are checking, electronic bag claims attach to your bags for further processing. You have an "opt-in" system that positively identifies you and avoids the problems of a mandatory national identification card. I say it's an opt-in system because I have yet to find a frequent flier who would not pay to eliminate standing in a security line or moving quickly through the system for convenience.

During the brief wait until boarding, you use your laptop and its wireless modem to watch the first inning of the Chicago Cubs-St. Louis Cardinals game and send a few e-mails to friends and family. You board the plane - obviously, in this scenario, a new Boeing Sonic Cruiser. After takeoff, you pull out your laptop again and check the ballgame scores and your e-mails, using broadband wireless access provided by Connexion by Boeing.

The trip continues, and you pay some bills, balance your bank account online, check on the stock market, and watch the end of the ball games - all in real time. The flight, guided by GPS in a new air traffic management system, is strategic and not tactical because it provides the flight crew with guidance electronically and allows flights with greater safety and security and higher capacity in the system.

As expected, arrival is on time and your bags are waiting on the carousel when you reach it. You load them on a cart nearby and head down the escalator to the train station, and your cart has a rubber tread on the bottom to allow you to go up and down the escalator. Once on the high-speed "city-link" train, you quickly check your wireless laptop for the market closing prices, then exit the train and walk to your hotel. Upon arrival, all your e-mail is done, all your bills are paid, and your checking account is balanced. You are up-to-date on the news, you know the Cubs won but the White Sox lost to the Mariners, and you are ready to go for a walk outside on the pleasant city streets before dinner.

Almost all of this is possible with technology available today. Now we are going to have to have the courage to do it. But with determination by cities and governments, it is very possible. Easy access to airports by auto, light rail, and high-speed rail is an important part of that integrated system. The incorporation of technology into passenger and baggage handling and security will take investment, but that investment payoff will be great. Here is why I think this all works, and I believe this is the key: people migrate to systems that are convenient, economic, and reliable. Systems that have these attributes will help to create vibrant and growing economies.

I believe being mobile and connected also is changing the way we work and play. It certainly has changed the way I work. Being mobile and connected, for example, allows me to communicate better; in fact, a number of the tools I have talked about tonight I use on a regular basis. They allow me to meet more often with customers and with government and industry leaders worldwide, to see suppliers in person, and to visit employees wherever they work. Being mobile and connected allows me to answer e-mails, work on reports, look at data, and prepare and print a speech on a flight and deliver it an hour later. It has clearly changed the way I work. Being mobile and connected allows me to send e-mail directly to almost 160,000 Boeing employees from anywhere, at any time.

We are moving into a civilization that is linked by mobility and bandwidth and will be linked by infrastructure systems. We are moving from a world marked by relative independence to one with real interdependence.

So I hope you believe my premise that economic growth follows infrastructure. If you believe that, then you must conclude that to have a strong, interdependent economy and growth in a rapidly changing world, we need cities with a strong, integrated infrastructure. Cities will need good highway systems, good rail systems, and good airport systems - systems that are integrated and efficient and ones that are advantageous. Cities will need good communication systems that maintain high reliability - systems that are "always on."

I believe we can succeed in meeting the challenges of congestion, of moving large volumes of freight and large numbers of passengers safely and securely, and eliminating bottlenecks. I believe we can meet the challenges of digital security and privacy and take the non-value-added steps out of our processes. I believe the infrastructure foundation must come first, and it will take courage and leadership to do that.

We have a great opportunity today to integrate land, air, and sea transportation to be efficient and reliable. We have a great opportunity to build communication systems that are more reliable and always operating. We also have a great opportunity to work together and implement a common vision to shape the future with solid thinking and good sense.

It takes people, the best ideas, and the willingness to think differently. It means that we must be willing to look at models that are different, models that work, and models that work in different places, and to imagine new models of infrastructure and new ways to integrate. There is, and will continue to be, resistance to change, but we have choices. We can lead, move ahead, and embrace the future, or try to hold back the inevitable advance of the tide.

Now let me close with the words of Charles Darwin...words that I use frequently and that I believe are very important. He said, "It is not the strongest of the species that survives nor the most intelligent; it is the one that is most adaptable to change."

So I believe if we are willing to change, we can make this economy one of the most exciting in the world. Thank you very much.