Speeches

© Copyright 2000 Hewlett-Packard Development Company, L.P
All rights reserved. Do not use without written permission from HP.

Thank you very much and good morning.

How fitting it is to be speaking in the year 2000 on "Information Technology and its impact on the world economics", for I believe we are entering the Renaissance.

What do I mean by that? All of us of course have been talking about, watching, driving, and participating in the march of Information Technology for decades. We have been a part of its unprecedented power to unleash productivity, to create wealth, to determine new winners and to unseat some old ones. And yet, the true capability of technology is only now beginning to unfold. Technology is now entering its transformational phase. For now technology can truly touch, not just business, but can also touch human lives, in positive and in powerful ways. Technology now has the power to transform I believe everyone and everything.

Now, the term Renaissance of course means a full flowering of capabilities as well as a burst of inventiveness and creativity. As I speak about the transformational power of technology, I want also to speak of the prime virtue in this new information age. That prime virtue is invention and reinvention. The ability to create something new from what already exists, the ability to see an old problem in a new way. And how appropriate to speak of invention and reinvention here in Taiwan.

This year is HP's 30th anniversary in Taiwan. From our tiny start in 1970, we have grown to a US$4.5 billion dollar purchaser and partner in the year 2000, and seen the words "Made in Taiwan" come to mean high quality, world class technology.

The Taiwanese people understand what invention and reinvention are all about. And it is that spirit of invention that now propels President Chen in his "Green Silicon Island" initiative.

So let me begin with a vision of what this new information age looks like. This is an age where people can connect anytime, anywhere to useful e-services of all kinds. Where any application, any process, any problem, any asset, can be turned into a service and delivered over the Net. Where useful e-services are running on always-on infrastructure and are delivered to information appliances that are pervasive, that are personal, that are simple. This is a world where you don't work the Web, the Web works for you. This is a world where technology becomes useful and significant.

We believe this world is characterized by 3 vectors of technology, and power lies at the inner sections of those 3 vectors of tech. Let me talk with you about each vector in turn.

First, e-services:

Any process, any problem, any asset, can and will be turned into a service and delivered over the Web. Let me give you a few examples here in Asia. One of the early examples is the creation of mobile e-services at the New Zealand stock exchange. In March, the exchange implemented Asia's first wireless, WAP-enabled trading system. Customers can now trade their stocks and securities directly using a WAP-phone or a mobile PDA. Investors don't have to go through a broker, so of course transaction costs drop. This initiative is already attracting a whole new breed of investors.

To help with this process of invention, HP is opening 20 mobile e-services bazaars all over the world. These are venues for application developers and communications companies to spearhead the creation of mobile e-services and the technologies required making transactions and interactions possible on a whole new range of devices without wires.

The first Asian mobile e-services bazaar was opened in Singapore 6 months ago, and in the next 6 months, we will open 3 additional centers in Beijing, Tokyo and Bangkok with another coming soon in Bangalore. Two hundred companies have signed up worldwide and over 100 are from Asia.

In Japan, Singapore and Australia, HP has established what we call the "garage" jumpstart program, which offers flexible financing schemes to help Internet companies to build, run, and market their business as services on the Net. Taiwan's Uni-Serve is one of the first companies here to provide applications delivered on line on a pay-per-use basis, or what we call "applications-on-tap".... by providing integrated circuit electronic design applications and offering their services to Taiwan manufacturers. Portals like these will be important for Taiwan's businesses. Because, while Taiwan is now mainly a manufacturing economy, manufacturers here are re-thinking their assets in the new economy... realizing that their assets are no longer just factories and equipment, but also knowledge-knowledge of customers, suppliers, and employees. Remember in e-services any asset can be turned into a service and delivered over the web.

Let me give you another interesting example, which I think speaks to the transformational power of technology to be used now to attack age-old problems. We have a process in the United States called food distribution. It is a process that is broken. It is broken because each day millions and millions and millions of pounds of food go to waste and lots of distribution capacity remains unused, and meanwhile charities lack the food they need to feed people in need. This is a broken process-excess supply and unfulfilled demand. At HP, working with partners turned this process into an e-services, we call this e-services resource link, and through this service, we dynamically locate and broker, excess food, excess distribution capability and charities who have hungry people and put them together. And since we turned that service up in October, 1999, millions and millions of pounds of food have been distributed everyday.

Think about the power of e-services, if it can transform a process of food distribution, think about its power to transform a process like education.

So the first vector of technology is e-services.

The second vector of tech is information appliances. Anything and everything will become intelligent. Anything and everything will become connected. Anything and everything will become person-aware and context-aware. So that it can be intuitive and personal, and simple and easy to use. You may think of information appliances today as a cell phone, or a PDA, or a pager, you should begin to think about information appliances as something intuitive like wrist watch.

If you think it is ironic that HP is talking about information appliances, we introduced the first information appliance in the early 70's, when we introduced the handheld calculator.

And also in the early 70's in our labs, was a watch, and the vision of that watch was that it would be an intelligent connected device. At the end of this year, we will be delivering into the market place, with Swatch, an intelligent connected wristwatch. If you think that's a little strange, we are using this pilot wrist watch today in Switzerland, and when passengers walk through a train, the train knows who they are from the wrist watch and debits the amount of the fare from their bank account through the watch. This is not the world of science fiction, this is a world that is coming today. Think also, I mentioned the handheld calculator, this summer we will be introducing a learning appliance. It looks like a handheld calculator, it is the size and shape and form of a handheld calculator, but it is in fact, a Web enabled device focused on middle school applications. So that if your child is sitting in biology class and is perhaps bored, your teacher can link them to a rainforest in Peru. Or if your child is studying a foreign language, your teacher can link your child to a classroom in a country half way around the world, so that they can converse with their colleagues in the language they are learning.

Today in HP labs we are working on molecular computing and an atomic resolution storage computing that occurs in 8 or 10 molecules storage capability that is atoms thick.

This is a world where everything will be intelligent, everything can and will be connected.

And finally the 3rd vector of technology.

An always-on Internet infrastructure. Think about an infrastructure now that must be reliable enough, secure enough, available enough to handle trillions of e-services and billions of information appliances. This infrastructure must be as available as oxygen, as reliable as the sun and the moon. Now we have built this world in HP, so we know it is not a figment of our imagination, we have built this world in our labs, we have built a world where the infrastructure is always on, always available and where everything is connected, everything is intelligent.

This world, this world of e-services and information appliances and an always-on infrastructure and the power of thinking about that world the intersection, this world is bringing forth torrent of new invention and creativity. As we enter this new world, where everyone and everything is connected, where every asset, every process, every problem, every opportunity can become a service delivered over the Net. We leave behind the old notions of the industrial revolution.

The Industrial Age was symbolized by the machine, and mechanics were the order of the day. But now, the solid ground we once depended on in that mechanistic era is dematerializing. Borders and boundaries of any kind --between countries, between time zones, between companies, ideas and institutions are dissolving. The speed of change is accelerating. This new landscape is no longer a machine, but rather I believe, a biological system. A company is no longer a static set of lines and boxes on an organization chart, or simply rows and columns of numbers and figures. A company is a living system, operating in an ecosystem of other living systems.

Biology, rather than mechanics, is the lens through which the Information Age must be seen...and it is the companies and the governments, that understand best how to compete and create in a world of ecosystems that will be most successful.

Biology, of course suggests permeability, openness to new influences, new ideas, new ways of looking at things, and it suggests adaptability, the ability of willingness to embrace change. And that is, of course, what invention and reinvention are all about. It is why invention and reinvention are the prime virtues of the Information Age.

Because biology, I think, is so relevant to this Renaissance, I will quote Charles Darwin. Because I think his words have much to teach us as we stand on the brink of this new millenium. Darwin said "It is not the strongest of the species who survive, nor the most intelligent, but those who are most adaptive to change."

I use the word "invent" in the broadest terms. For me, it means the creation ... of an idea, a device, a solution, an organization, a work of art. So anybody, anywhere, can be an inventor. And to reinvent ... means taking an invention that was created to meet a past need ... and recreating it so that it meets a need in the present ... and in the future.

These processes of invention and reinvention are never finished, in the new landscape. Just as evolution never stops, neither can invention. And this is an economy and a marketplace that has demanded inventive thinking like no other time in history. Never have we been so compelled to prepare solutions for future problems ... because the future is now rushing at us with such speed.

When I say "inventive thinking," I mean:

• Turning problems upside-down, and looking at them from new angles, I mean
• Taking the initiative to create the future -- rather than just respond to it, and
• Accepting radical ideas when approaching a problem.

I believe this is a necessary behavior for any person or any organization that wants to be a player in the Internet economy. Change can be difficult, but as Darwin teaches, change is necessary for survival.

And so, every company, every institution, needs to rethink how they reach and keep customers, how they make money, how they differentiate and compete in a world where transactions and interactions can happen anywhere, any time, and all the time.

As we undertake the reinventing of HP, we remember that an undisputed, market-leading company is like a healthy system, it is in fact a living system, and there are four major components that must work together in harmony. The four components are:

• Strategy
• Structure and Processes
• Rewards and Metrics
• Culture and Behavior

First is Strategy: the mind that our business what are we going to do? What are we not going to do? Why do we do it? For what purpose do we strive? Next is structure & processes. How we get our work done? Structures have to be tightly aligned to deliver on strategy. Processes are what hold organizations together. And those processes must be integrated, streamlined and working at world-class efficiency so we can deliver quickly and cost-effectively.

Rewards and Metrics are what we value, what we motivate, what we encourage, what gets measured in an organization, what gets rewarded, isn't in fact gets done. In any organization that wants to lead, you need rewards and metrics that encourage and support the behaviors that are required to win in this new ecosystem.

And last, but by no means least, is Culture and Behavior.

Who are we? What do we believe? What are our values?

In HP, we talk about preserving the best, and reinventing the rest. And what we preserve is our value, the things we most deeply believe in. Values like trust, respect, integrity, collaboration and contribution to our customer as well as to the community, in which we live and work.

And our behaviors the things that create our mindset and our attitudes we call our "Rules of Garage". And those rules begin with simple statement.... Believe you can change the world and end with believes together we can do anything.

Now in this new era, we are company of living systems defined by their strategies, their structures and processes, the reward and metrics, and their culture and behavior. I believe as well a new kind of leadership is required.

If invention and creativity are prime virtues of this new age, then the leadership is not about controlling decision-making. Leadership isn't about setting boundaries. Of strategies, what do we choose to do? What do we choose not to do? Abstructuring processes, how do we get our work done? Of rewards and matrices, what do we value? What do we encourage? And culture and behavior, what do we believe? And then within those boundaries, the role of leadership is to set people free, to empower them, to create and invent.

This new age requires the reinvention also of government and of the relationship between government and industry. New leadership and new collaboration are required. Because together the institution of government and industry and face some dounting challenges as well as some wonderful opportunities.

Together, government and industry must collaborate, in new ways around:

• Trade
• Consumer trust
• Education

Why do I pick up these three? Because they are also public feeling issues that touch us all. These are also policy issues that can help accelerate the Renaissance, or if handle poorly, can retard it progress and limit its promise.

So, we must reinvent the world trading system and I am extremely pleased that we are making good progress in this regard.

Japan, the U.S., Europe and other countries has wrapped up their negotiations with Taiwan and China. And it is likely that these two economies will be admitted into the World Trade Organization this fall.

As you know, just a few weeks ago, the U.S. House of Representatives passed a bill to grant "Permanent Normal Trade Relations" status to China... and thereby ensuring full U.S. participation in trade with both China and Taiwan. We hope that the U.S. Senate will pass the same legislation very shortly. Both of these actions are historic and will have an enormous impact on how the world's IT and Internet economies develop and expand.

I believe that Taiwan's and China's entry into the WTO... will enable a faster, broader and deeper expansion of new economy and e-services benefits to the world's people... and all for the common good. I personally and HP as an institution have been front and center in the Washington debate about trade and stable relations with China, Taiwan and the region. WTO entry and continued stability in the region... promise enormous benefits to us all.

Beyond the economic benefits to countries, I also believe that fully connecting Taiwan and China to the world trading ecosystem ... does much to equip workers here and on the mainland with skills and opportunities to participate in the global market economy.

Open trade for electronic commerce and information technology is clearly critical for the healthy growth of e-services and for information age. But we must also address a host of other potential policy barriers that can restrict the healthy growth of e-commerce. We need to work hard to achieve greater public policy compatibility across our globe's many borders. And one of the most critical challenges we face ... is how to help fully realize the possibilities of the new landscape ... by building consumer trust in this virtual world.

Inspiring trust of course depends on a broad range of ethical business practices. It's the ongoing commitment to our customers... that leads to business success. If customer trust us, they will vote, they vote with their money. And it is why public policy compatibility is crucial.

The borderless nature of this technology calls for increasingly compatible public policies. Policies that will coordinate -- not conflict -- between states, regions, and countries.

The big questions are ...How will we as business and government leaders ... protect consumers and promote trust ... in the on-line world of this New Economy? How should we address issues of online privacy? How should we resolve consumer disputes in Internet transactions? How should we protect individuals and our businesses against cyber-terrorism?

Cyber security truly brings home the reality of this new and borderless economy. With each "cyber attack," which can strike from any part of the world ... trust and confidence in the online world is shaken.

HP is participating in an industry-wide coalition to address this issue. The coalition is developing a voluntary mechanism to share cyber-security information among IT companies ... establishing a communication system to alert companies to attacks and identifying solutions to those attacks.

As for privacy... while industry self-regulation may not be the complete solution, I believe the private sector has done a good job of responding to privacy concerns during the seminal growth of e-commerce. Still, I know we can and must do better.

In fact, Hewlett-Packard is making an offer that we hope will encourage many more companies to join HP ... as a member of the U. S. Better Business Bureau "Privacy Seal" program.

Beginning this month through September, HP will pay other companies' application fees and up to $5,000 for each company's first year of membership to join the BBBOnLine Privacy Seal program. We are also offering limited, free consultation from HP's Privacy Manager to help each company get started.

In fact, the BBB program has been singled out by the European Commission as the kind of program that gives them confidence that an American 'safe harbor' will meet European adequacy standards for privacy.

Here in Taiwan, as an example what we are doing in Asia. HP is a founding member of SOSA - Secure Online Shopping Association here. In fact, the chairman is sitting here. Ho-ming Huang is the chairman of SOSA.

But of course beyond these industrial lead efforts, to truly earn the trust of consumers, we can't stop there. We also need to expand self-regulatory efforts all around the world. Because consumers need to have confidence that when they do business across national borders, that there will be a redress system if anything goes wrong with the transaction.

It would be difficult -- and probably not cost-effective -- for the court system to resolve consumer complaints when the business is based in another country.

That's why we have been working with the Better Business Bureau, trade associations, consumer groups and countries around the world, to develop a system of 3rd party mediation to help resolve trans-border consumer complaints.

In both the privacy and dispute settlement areas, I'm personally working with some 60+ CEO colleagues from around the world in the Global Business Dialogue on Electronic Commerce. Our goal is to develop a worldwide industry consensus on minimum requirements for effective privacy and ADR systems.

But aside from our self-regulatory efforts, new government policies to regulate the new landscape will also take shape. We in business recognize that government has an important role to play in all of these issues and particularly perhaps in protecting consumers. As these policies are invented, we only ask that the policy process be one of communication and collaboration - between business, government, and consumers.

Now as we are entering the Renaissance information age, technology is capable of bridging great distances, but it can also create a great divide. And this is why, I believe, at the heart of everything is "Education". And because technology now is moving so quickly, education is the single most important priority that I believe, government and this industry must address together.

Education is the only way to bridge the digital divide, and create a world that we at HP call e-inclusion. A word that technology and opportunity are accessible and available to all.

But because of the pace of change, if we do not collaborate between government and industry all around the world in new inventive ways, we will loss the generation, the children will lose the whole country as they try enter into this information age and share in its promise. This must become an urgent priority.

Hewlett-Packard has over the last two decades, devoted a billion dollars to education and communities around the world. And promoting e-inclusion will continue to become at the heart of what we do when we mean contribution to the community which we even work.

Promoting e-inclusion requires urgent commitment and powerful collaboration and truly inventive solutions.

I have talked about a vision for the Renaissance of the Information Age. I have spoken of the need for invention and reinvention of companies, of policies, of ecosystems between governments and industry around the key issues of trade, consumer trust, education and e-inclusion.

I am an optimist. And I do believe we are entering a Renaissance of creativity and invention, a world where technology can be used to not only create wealth but to transform lives and build bridges. And yet, we can fail to achieve the promise of this Renaissance. We can fail if we forget that in the end this is all about people. Technology is only as valuable as the use to which it is put.

60 years ago, Bill Hewlett and Dave Packard talked about inventing the useful and the significant. By useful, they meant it truly makes a difference in people's lives. By significant, they mean it touches many lives.

Today at Hewlett-Packard we are inspired to Invent for the common good.

I believe all of us can now invent at a level Bill and Dave never imagined. And we can impact the world for the better beyond what they ever dreamed. We can do well and do good.

But only, if we ground what we are thinking and inventing and doing in people. We must keep our vision of technology and our economic theories and policies focused on people. It is too easy to let the wave of invention and transformations obscure where both come from, and who both should serve.

And so as we enter the Renaissance of the Information Age, as we apply the power of technology to both New Age problems like cyber-terrorism and age-old problems like exclusion and ignorance. Let us not forget that the prime virtue of this New World, invention, is all about people.

Thank you very much.

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