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something you might not know about
Canada hi I'm Don Tapscott and before
the break I promised to tell you about
the digital office in the 1970s the
coolest decade of all time the office
was full of strange things like
typewriters dictaphones adding machines
and mimeographs telephones were
connected to a wire so people could only
reach you when you were in the office
God I missed that not now in 1978 the
Canadian company Bell Northern research
wondered what would happen if every desk
had a computer on it connected to a vast
inter Network their incredibly handsome
staff created an office that used crazy
things like email word processing
texting and document management then
being our pitted the computerized
workers against the computerless old
school test group this first ever
controlled experiment proved that the
digital workers were more efficient
Innovative and effective and they had
more fun too and within only 15 years
office workers across the globe were
playing electronic soliter and watching
cat videos to their heart's content and
that's something you might not know
about
[Music]
Canada um I'm I'm delighted to be here
and I really mean that and uh because I
think in this room is the future of many
many hopeful things uh not just for the
global economy but for civilization so
it's my honor uh to be here I wrote a
book in 191 about that 1981 about that
experience and I argued the computers
were becoming Communications tools and
everyone was going to use one um
unfortunately my mother bought most of
the copies of the book it was like a
study and bad timing but uh I finally
did write a book that somebody read and
uh was the digital economy and it was uh
the first bestseller about the
web and in rewriting the 20th
anniversary edition it caused me to
reflect on what's happened in the last
20 years and uh what of the promise of
the digital age has been fulfilled and
what Peril um has emerged and it was a
very sobering experience for me so I'd
like to just kind of take you through
that a little bit and set you up
to understand maybe a bigger picture
about why this particular event is so
important and about the opportunities
that you have not just to build cool
businesses or to change some things but
really to to be part of a a huge
transformation as we move into the
second era of the digital of the digital
age in the book I said um this is an age
of vast opport unity and all kinds of
wonderful things are going to occur and
of course it did but I
also I also said there's a dark side and
I went through eight things that could
happen I can't go through all of them
today but I'll let me just describe a
few of them I talked about dislocation
of Labor markets old Industries and jobs
disappearing I said technology could
contribute to unemployment well there's
a next wave of
uh machine learning and automation
report in the UK said will wipe out 30%
of the UK Workforce in the next 25
years I said it's possible that all the
data from this digital age will be
captured by powerful intermediaries and
forces and that they'll create a new
asset
class perhaps uh being greater than
previous asset classes like land or um
Under The Agrarian economy or physical
plant
and that one upshot of that would be
that we could lose our basic right to
privacy and of course that's happening
today we have what I call data frackers
you know in oil and gas you have
fracking and uh these are companies that
are able to
drive steam into the internet if you
like and to generate all kinds of uh of
of of massive uh data that they control
and own now some of this is kind of cool
it's a company called Data Miner that
goes out onto Twitter and it analyzes
tweets and it spots something a sound of
an explosion it detects 1 two 3 four
pattern detected um the the uh bitstream
goes to U CNN and they're on the case
because they know that an explosion has
occurred before anybody else now a dark
side of that is that this is disrupted
Capital markets because companies using
data Miner can go on and find out that
say home Leo Home Depot had a big uh
security violation and they short the
company because they know 24 hours
before anybody else but the re the
bigger problem is that somehow we all
did a deal with these powerful social
media companies to give away our data
and people a friend of mine named Jeff
Jarvis wrote a book called public parts
and he argues well this is great
transparency is not just for individuals
ual or or corporations it's for
individuals and if we all give away all
our data and we all just open the kimona
the world will be a better place we
won't cheat on our spouses and so on and
I think this is not
only uh foolish it's a dangerous concept
because privacy is the foundation of a
free society and identities need to be
managed responsibly and this is a big
problem uh for us all today in the
digital economy I conjured up this view
of of uh Orwell and Big Brothers
watching you in hindsight I don't think
that was the right analogy it's more
more like France Kafka and the trial you
know where you're charged with something
you don't know who your accuser is you
don't know what the evidence against you
is but all of a sudden you don't get
that dream job or you can't get across
the
border so this is this is a a big
problem thirdly I said it's possible
that we we could have wealth creation
but we wouldn't have prosperity and of
course this is what I said back then
um this is now occurring for the first
time in modern history in the developed
world the 51st percenti is not getting
ahead it's falling behind and everywhere
uh people are talking about the problem
of uh social inequality to the point
that the bestselling management book and
the winner of the financial times
McKenzie Award for best business book
last year was written essentially by a
guy who's a Marxist who argues that
capitalism is totally um broken and is
at the heart of irreversible social
inequality this is not good this is a
big problem how can this
be well I was talking to Tim burner Lee
about this and he said it's true we have
this wonderful peer-to-peer
technology you may remember people like
me saying yeah the old media is
centralized it's one way it's it's
controlled by powerful forces and
everybody out there is a passive
recipient the New Media is distributed
it's interactive it's one to one it's
many to many it has this awesome
neutrality it will be what we want it to
be well says Tim this beautiful
distributed platform for the
communication of
information not value information got
laid on top of a society that's anything
but and now we have asymmetrical benefit
so the rich are getting richer and we've
now got the these uh uh uh uh powerful
data frackers that end up owning our
data but also creating wealth but not
Prosperity uh just another one I said I
think many governments are slow to
compreh may be slow to comprehend the
shift and that uh basically occurred
that have governments changed
fundamentally in the last 20 years
I mean sure they're delivering Services
electronically but the Deep structure
and architecture of government is still
pretty much the
same so there have been some initial
stuff government is a platform
government's releasing raw data and
creating a platform whereby the private
sector Civil Society other government
agencies can self-organize to create
public value but it's been very limited
and when it comes to democracy I argued
you know we can move to a second era
democracy with the internet where the
first era we had representative
institutions but there was a weak public
mandate and citizens were in Earth we
could create a second era based on
stronger representation more
transparency so the big money doesn't
control the Democratic process and with
a culture of public deliberation and and
active uh citizen Citizenship is that
what's
happened well
um hard
hardly if anything governments have used
technology in a totally cynical way to
reinforce existing power structures and
we now have nothing less than a crisis
of legitimacy of our Democratic
institutions and this is worrisome so
you see the guy in the middle there I'm
sad to say that's the former mayor of
Toronto where I live um Rob Ford now the
the problem with Rob Ford was not just
that he was
a crackhead criminal
um who was also racist sexist homophobic
and hung out with the with the low lives
of of the city the problem is a lot of
young people said yeah he's a total
idiot and City Hall is full of crap and
I'm not even going to vote and if young
people turn away from democracy this is
a big problem this is a Davos a couple
of years ago and I was on a uh panel on
citizen engagement and I was you know I
was saying we have to fix this look at
the US Congress 92% of the American
population wants to see background
checks for firearms but Congress can't
do anything about that um and I said if
we don't fix this there you know more
and more young people are agreeing with
the bumper sticker don't vote it only
encourages them and uh we're going to
have a a social explosion that'll make
the 1960s look like kids stuff well I
get stopped by a guy in the panel who
created a vas you know a AV a a z uh
it's a little network with 34 million
young people who want to change the
world and he says holda Don I don't get
your point why is it a crisis if all
around the world a new generation of
young people think that our fossilized
institutions of democracy are
bankrupt and I'm like you know Bob Dylan
there's something going on here and you
don't know what what it is this is a big
problem and the internet has has not
contributed to solving this problem it's
made it worse because politicians have
basically used this technology to help
them entrench power and many countries
move towards a surveillance Society
these are protests in the world going
back to my first book in
81 um 20 years ago there were 6,000
protests last year there were 260,000 so
we're in the we're moving into social
explosion territory here as we told
young people you work hard you stay out
of trouble you be a good kid you
graduate you can have a prosperous
life well I'm not I'm not going to say
my generation lied but I don't think we
got it right so the stakes here are very
very high now this is Obama we had great
hope for him I learned about this when
somebody said check out my Barack
obama.com your book economics is one
down from the homepage and he's saying
yeah we believe in the economics and I'm
asking you to believe not just in my
ability to bring about real change in
Washington I'm asking you to believe in
yours and I looked at this thing and it
was like well my first reaction was I am
the
man um but not so fast on because it
turns out I'm not the man there was a a
economics Community there's also a
single moms for daycare community and a
young firef fighter firefighters
Community created a platform where by
35,000 communities self-organized that
brought him to power so the next
election I went to them and I said cool
what are you going to do now with my
Barack obama.com they said we're killing
it I said why it's an opportunity to
engage all these said we don't need that
we got Big Data we can Target swing
voters in all the states um the all the
swing States and uh they went from yes
we can to we know you and then in the F
yeah it worked they got elected in the
next election the midterm election youth
voting was the lowest in 70 years some
people say maybe
ever
so we have a burning platform for change
now uh enter into um the next era of the
internet I think we're getting another
kick at the can and it started um you
know with Bitcoin and I confess to be uh
a late
a late awakened awakener on this was
just a little over you know two and a
half years ago I started thinking whoa
could this be the real deal could this
be this thing that we've been looking
for and of course the underlying
technology of Bitcoin enables
peer-to-peer exchange not just of
information but of value that doesn't
mean that we this dream of a true
peer-to-peer society and a Prosperity
can be created but we're getting another
kick at the can and that's why what
you're doing is so uh
important this is not just about
creating some cool businesses to me this
is dealing with a world that's too
unprosperous it's too unjust it's too
unsustainable and it's too conflicted
and we now have an opportunity to do
something about that well the economists
blessed their hearts uh got involved
with the cover story last last
week I'm not sure they totally nailed it
but uh it was it's we're moving the the
uh ball forward here and of course um
I'm hopeful the ball will seriously get
moved forward in April when this book
comes out by the way uh if you want to
get this book pre-order it the very best
way to do it is in massive
volume Christmas is coming soon no but
just really confused things um along
with a publisher they've changed the
name of the book so a week from now it
won't be this on Amazon it'll be called
blockchain
Revolution um which you know what the
heck trust protocol is kind of cool I
thought it was a riff off the the god
protocol from Nick zabo's article of uh
a very long ago but uh it will be called
blockchain
Revolution now of course there's a huge
battle it's shaping up right will the
financial services industry it's this
rube gold bergian industry that you tap
something in Starbucks and then this
these bits flow through seven computer
systems some of them being
1970s mainframes and finally like two or
three days later the thing gets settled
there's an obvious opportunity in
R3 you know it's a coalition of 22 Banks
they want to use this not to disrupt
financial services but to eliminate all
of that so we're all look looking at a
at the same Ledger and there is no
settlement the transaction occurs and
it's done the settlement is zero you
know milliseconds as opposed to um as
opposed to three days and these are all
the things that the bank Banks do now we
went through and dissected all of these
in the book each of these is a is a
whole story talking about both the
opportunity to disintermediate
traditional Financial Services
institutions because that's what they do
they move money they store money they
they uh exchange for exchange money they
account for value and so on but also how
the industry could use this to transform
itself so let me uh try and pull this
together how long do I have by the way
I'm
sorry
okay what does all this mean
well I think this guy holds the key to
everything Ronald CO's Nobel pre
prizewinning economists and um 80 years
ago he wrote a this he never wrote about
the internet and he died
before you guys really came on the scene
but 80 years ago he wrote a Nobel
prizewinning paper where he asked a
deceptively simple question he said why
does the firm exist if Adam Smith is
right the open Market's the best
mechanism to determine how goods and
information and money and people are
allocated in an economy why don't why
aren't we all independ and contractors
why do we have firms and he said the
answer is and he won a Nobel Prize for
saying this the answer is transaction
cost and he defined that broadly the
cost of search he said 80 years ago the
cost of finding all the right
information in an open economy the right
people to do something totally
prohibitive so we bring it inside the
boundaries of a corporation or we have
stuff like filing cabinets to get
information or charts to find people and
the big industrialists understood this
so Henry Ford had within the boundaries
of the Ford Motor Company a power plant
steel mill Shipping Company Glass
Factory why because the cost of
transactions in an open market were
greater than the cost of doing things
inside the boundaries of Ford so back um
back in the day 1990 we started calling
this saying that the boundaries of
corporations are becoming more porous
and then with um the internet ver some
vertically integrated companies began to
bundle into Network Cisco figured this
out and a network business model it's a
15-year-old diagram of the Cisco
business
ecosystem Cisco figured this out and u a
a network business model conferred
competitive Advantage because the tonic
of the market got brought to bear on all
these different parts of the of the
organization
now with um the internet initially
moving from a platform for the
presentation of of content with HTML to
becoming more a computational platform
with you know XML soap and uddi and all
this sort of lingua franka for
distributed computing now with
blockchain Technologies the opportunity
exists to drop those transaction costs
so much that we can actually start to
envisage uh radical new models of how we
orchestrate capability in society to
innovate to create goods and
services um and to engage with the rest
of the world so everyone's thinking well
a big solution to the problem of social
inequality is redistribution of wealth
well we're probably going to have to do
some of that but what if we had a
different approach which was not
redistribution it was
distribution what if we started enabling
millions and tens of millions and maybe
hundreds of millions of people around
the world to participate in the creation
of companies they might only have $10 to
contribute but they end up being owners
of a highly distributed and networked
type uh Enterprise well this is uh this
is pretty exciting and it holds the key
to a lot of problems so uh I don't have
time to tell that too bad it's a great
story
um so the old is Uber I love the dis the
disruptive economy you know I love it
somebody I was at a thing yesterday and
somebody said Uber is a sharing economy
company and I'm like what Uber is a $45
billion Corporation that's a service
aggregator and I get my view of sharing
uh from
preschoolers you ask a three-year-old if
I give you one of my cookies is that
sharing i k yeah that's sharing if I
give you a cookie but you have to give
me some money is that sharing no that's
mean
so what is blockchain Uber call it super
uber or subber as we said in the book
what does that look like well I'm sure
you all know we uh actually with some uh
help from Joan the consensus folks we
detailed this quite a bit in the book
and how does this actually work and how
do transactions flow and what kind of
Technology enables this to occur but
it's it's not a $45 billion Corporation
it's a distributed app this is all about
the cre creators of value
receiving the value that they create um
I was with imagin uh Heap at um at her
it's actually her her son Scouts one one
year birthday party a couple of nights
ago in a barn somewhere outside of
London and um and I mean the musicians
have been getting screwed for years
originally with the labels they got a
small piece of the value and then the
internet made it worse because it
brought brought these new intermediaries
in like apple and Spotify that took more
of the value and the poor musicians are
at the end of the food chain getting
this poultry little piece well what if
we had a music industry that was kind of
like a distributed app and you post your
music up there and you got uh specifying
the rights you want to listen to it for
free cool um no problem you want to you
want to remix it well here's a smart
contract that governs that you want to
put it into a movie you got a smart
contract here and every time it plays
you get a little uh uh royalty stream
this holds the possibility for a 21st
Century Music Industry where finally
musicians can make a living um creating
their music how exciting is that old
Airbnb the new is B
Airbnb blockchain Airbnb it's a
distributed app and yeah well how about
Airbnb covers Insurance okay you know
for less than 1% of the total cost we
can build an insurance and marketing and
all the rest and rather than Airbnb
taking you know 15 or 20% off the top oh
and if you're International losing
another 8% through foreign exchange uh
stuff anytime Western Union gets
involved bad things are going to happen
so um well now that we're on that uh how
about anal
Domingo
um that's a great story in the book
Filipino nanny who uh
used to get on a bus for two hours every
month to go pay her remittances Western
Union to take roughly 10% of her $200
and it takes three to six days to get
there um now U using Abra it happens in
a millisecond and um and it costs her
like half a percent so this is pretty
cool how about do you know that 70% of
land in the world if you own a little
piece of land somewhere and you have a
piece of paper that's uh
threatened because you can have a little
piece of paper saying I own this little
house in Honduras and some dictator
comes in and says no you don't Central
computer system says my friends own
it well so using uh
factum uh now we're putting land
Registries on the blockchain good luck
dictator if any of you by the way are
tyrants or dictators I would seriously
recommend some career planning on that
um you know the old surveillance Society
the
new that's a weird
picture is that my body um anyway the
weird is a um or the new is a you know
distributed Avatar right now there's the
virtual you you know there's the ver the
virtual Joe and but but Joe doesn't own
that it's owned by these big data
frackers what if you owned the virtual U
it was your identity in a black box and
it went around and it disclosed just
whatever whatever whatever um it needed
to do a transaction and you pay for
something and and there's no data trail
that you paid for it plus you not only
get to protect your privacy you get to
collect this data Maybe you decide you
want to monetize
it so I wanted to end just with a
thought about you and how this uh
meeting I think uh fits in we have a lot
of problems in the world and um this is
a pollution flows in the world you think
pollution is a local problem it's not
most of these problems are not getting
better so why is that
um are they just too hard to solve maybe
our models
wrong what's our model anyone here of
Breton Woods 1944 the winners of the
world war 44 countries got together and
they created the world bank and the IMF
a year later a bigger group created the
UN a year later the UNESCO and then the
G the WTO and the G8 and the G20 Global
institutions based on nation
states well there's a new model emerging
and U about a year ago I finished a a
big study $4 million study on this new
model was sponsored by all of these
companies and we said the new model is
called multi-stakeholder
networks and they've got individual
companies Civil Society governments
they're addressing a global problem they
used technology but they're not
controlled by States so it turns out
there are 10 types of these networks and
the one that's more most relevant to
today it's called a governance Network
there are now things on governance on
planet Earth that are governed by an
ecosystem not by States so the internet
itself has standards as part of that
governance Network the ITF uh the W3 uh
Consortium has operation ational
networks that just do stuff I can't
delivers domain names it's got policy
networks like the internet governance
form there are advocacy networks like
the Electronic Frontier
Foundation what we need today is a
governance network not Big G government
a self-organizing set of governance
networks around blockchain Technologies
I think in this room you're uh creating
a platform
but you're also an operational delivery
Network and that you're not just
advocating or talking about it or
developing policy you're actually
building stuff and so that's where you
fit into the big picture now we have a
lot of work to do and right now it's the
wild west out there when it comes to
blockchain Technologies and but we're
starting to get better processes deal
with stuff like block size and and uh
and and so on but we have a long way to
go so if I could
just do we have that was there oh too
bad I had a centilating video there at
the end um but I think I'm out of time
anyway aren't I yeah okay uh it was
about something called the murmuration
go on to the Google and ask the Google
and it will tell you but it's about
starlings over the Moors of uh England
and it's about self-organization and
about creating ecosystem it's a great
natural analogy for the opportunity that
you have so thank you and uh God
[Applause]
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