oftentimes when a public hearing comes forth a a lot of people really don't know what's in their area, whether it's groundwater, local geology, native species and the impact. the second item, because i came from michigan and i was visiting a different park, i know there's a best practice in new zealand where -- to prevent invasive species, often they have guests skrab their boots so plant -- don't get communicated, i guess, into new environment. having screening or recommendations when guests enter, i feel that might be a good way to kind of patch any potential hazard or threat to the local ecology.

>> national park service celebrating on tuesday of next week is the official birthday. we appreciate your calls this morning on "the washington journal." remind our viewers to join us tomorrow morning for a special show from richmond, virginia, one year after the shooting of michael brown in ferguson. we'll talk about a closer look of policing and rebuilding the trust between the police and communities of color. we'll be joined by alfred durham, richmond, virginia's, police chief. captain harvey powers will join us, virginia's police training center executive and also joined by the mayor of richmond, dwight jones, all at 7:00 a.m. eastern/4:00 a.m. pacific, tomorrow morning on "the washington journal."

today on c-span3, programs about technology. coming up next, author larry downes, innovation as a result of the digital revolution. then a discussion on the technology on the u.s. economy and workforce. former secretary larry summers is among the speakers. after that a hearing on new technologies to improve the safety and efficiency of the nation's transportation systems. officials from volvo, amazon, bnsf railroad and the port of long beach testify before the senate commerce committee.

>> tonight at 9:30 p.m. on c-span, liberal activists at the annual left forum in new york city. the final day of the event$"m features speak others a number of issues, including politics. here is charles lynchner on why he supports bernie sanders as president. >> the democratic party for me is a set of interest groups and they represent different groups with different interests. some groups that represent the corporations are fighting for things like ttp and they fight,w for imperialism. they do things you and i would disagree with. but other parts of the democratic party are fighting to have more rights for unions and increased wages for low income workers and more rights for people who work so that our families can be better off. and those other parts of the democratic party, in my opinion, shouldn't be con plate with the

other parts. i think it's carl davidson who talks about there being a six-party system in this country, not a two-party system. within that -- within that theory there's four elements in the democratic party. i feel like i'm part of one of those elements and that bernie sanders is the champion of that particular faction and i'm going to do what i can to support him because i'd like to help make that faction victorious over the corporations. >> the left forum also featured a hip-hop artist, clergy, discussing a variety of issues and goals for the movement. you can see the forum tonight at 9:30 p.m. eastern time on c-span. author larry downes says we're in the second generation of disruptive innovation as a result of the digital revolution. soon everything from our home thermostat, dryer, car and door locks will communicate with each other in the sensor revolution.

he joined communications consultant, robin murdoch and author shawn dube rav ak. >> i'm best known as producers of a small trade show in los angeles called the international cs. we're just off our biggest year. almost 50 years of history. 2.2 million square feet, 170,000 of your nearest and0%ñ dearest friends. i'm sure we'll be talking about that today. this is my oprah moment. woven given you all a copy of my new book that just published yesterday, "digital destiny" which looks at how we ended up here and also paints a picture of what the implications are

when everything becomes digital, becomes connected, becomes sensorized. we see a world where that really starts to impact every experience we have. we'll get into that. larry, let me turn it now to you and, perhaps, you can spend a minute, just introduce yourself and robin as well. >> sure. well, thank you. thank you to the churchill club. congratulations on your book. i read it in manuscript and it's going to be a complete success. i think it encaps lates a lot of the same kinds of technologies that i've been doing in looking at the research, that was the basis of our book last year, "big bang destruction" and i think it's more of the same. we certainly talk about ces this year, since the two of us were there. my feet still hurt.

but i think one of the big themes i want to look at, as what we think of as the second disruption saturday of digital revolution. 20 years ago when i first started writing about these trends, you know, the industries that were really affected immediately were the obvious ones. consumer electronics, computing, communications, entertainment and media. the ones that were effectively using those technologies all along as the core of their offering. what we found in the research for "big bang disruption" is that now we're entering a new stage where all the other industries that weren't affected or as transformed the first time around, now it's their turn. a lot of interesting reasons we could talk about, why some industry it's happening slower than others, why some it's happening faster than others, but all the same kind of being amazon, being napsterized, all the same things that happened

the first time around are now starting to happen in industries that had very little impact last time. that's created both, you know, an interesting set of threats, an interesting set of opportunities for incumbent businesses as well as startups, investors and other interested parties. so, those rare the technologiesi think you write about so well in the book. we should sort of hopefully talk about some -- as many of them as we can. >> yeah. robin? >> fantastic. robin murdoch. i lead our global industry that serves our internet and social clients around the world.vñl i've been there for nearly two decades. one of the privileges of working at accenture is i get to work with exciting clients. as i chart my history with accenture, i've been working around digital disruption for the last couple of decades.

it's interesting you mentioned napster. i was working with music majors, all of them, when napster hit them. and, you know, their response or lack thereof. then i've done a little work in the console gaming space. i've worked on all the last three generations of the consoles we know and love today. that's interesting from a digital disruption perspective. unlike the smartphone we throw away every couple years, consoles, you know, the likes of playstation and xbox, they have to last for a much longer period of time. so the product strategy and the digital decisions you're goingá to make around architecting those consoles, how you launch them and how they work through their generations is very different from a lot of the throwaway consumer electronics we've seen today. i've also been lucky enough since 2005 work with the leading cloud providers on their local

clouds. that's interesting because from a capital intensity perspective f you're making decisions that are quite often a decade, or if you're looking although things like network technology and laying fiber across oceans, that's a two-decade investment. you're peering into the digital future and guess where the world is heading. as you look at some of the other areas i've worked around mobile and iot, a much, much more false cycle of development. if you look at the results from ces, amazing development just over the past year around the internet of things. just bringing it full circle, i started my career with ford motor company back in europe in vehicle development, particularly around electronics. i worked in the -- worked with ford back in '95 with virtual reality using silicone graphics and a think called a cyber glove you could put on and you could see your hands. 20 years on, it actually works.

back in the day 20 years ago, it didn't and we couldn't achieve what we wanted to. so, i think it's interesting, as we look at digital disruption and the fast pace that we see that, everything is changing really fast. there are long cycle developments around digital technology that actually underpin a lot of the change we see and disruption we see right now. a lot of the seeds and foundation that allow that disruption to occur are actually sowed over a decade or so. i'm dlided to be with both of you. congratulations on the book. i've only had a day to read it. fascinating read. >> thank you. it's interesting we both -- all three of us, but both of you have talked about timing. it's something i talk about in the book as well. we tend to think of these eureka moments, these a-ha moments where innovation is binary but it's part of this broader

evolutionary path that plays out over years or decades. i think that's definitely what we see with the trends we're talking about today. digitization, connectionization. we started first with devices owned at very high frequency. telephones were the first to become digitized. 98% of households own them, they have three of them. you take something widely owned and start there. we've gone throughout last 15 years all of the core devices we have. we're starting to now spill over into these adjacent spaces, these second order effects, i suppose, if you will. what do those start to look like? we can kind of paint to the end of the story where everything gets impacted. that's an easy jump. what's the sequence of events we see now until the end of digitization, if you will? >> as of a general rule, one of the things we found in our

research about industry transformation is it sort of happens. a famous quote from earnest hemingway, a character asks another character, how did you go bankrupt? the other one says, gradually and suddenly. that's what we found in the industry as we look at, you see a long period of gradual change where incumbents say, all right, this new technology is coming. it may eventually affect our core customers or core products but it's happening in an incremental way, a predictable way and i don't have to worry about it. some day, some event happens or some critical mass is reached, some product. somebody finally gets the right combination of technologies and a business model and they put it together and they let it go and it's facebook. all of a sudden, you know, all the rules are changed. and i think that's the general trend we're seeing. as you talk about in the book,

the price performance and size and power utilization also very important of sensor technology, you know, computing stuff, is getting better all the time. you keep having this more is law type of effect. it now becomes cost effective to start introducing intelligence into more and more things. and my takeaway, from las vegas last week, i said in an article we did for forbes, if there was one overriding message, it was the theme song from the lego moving. instead of everything is awesome, it would be everything is connected. everything you saw was connected to everything else. one of the ones that struck me is the nest thermostat. they have a partner program called works with nest. the list of partners initially seemed completely bizarre. it was the car companies. it was the lock company.

it was -- i'm trying to remember some of the -- other, your fitbit. what do those have to do with the thermostat? oh and the dryer. whirlpool is also part of it. so, your dryer is now talking to your thermostat. what's going on? it's telling you that if you're -- let's say you get in the car and you left, if the car tells that to the thermostat, the car tells the thermostat, nobody is home and we're going to turn down the air conditioner. if you're not home, the dryer is told, they're not home, slow down the cycle or ten minutes before they arrive, turn it back on to get a fresh psych. when you put your key in the smartlock, it says, shawn just walked in, this is the temperature he likes. adjust the settings accordingly. these are connections that initially they seemed quite bizarre, but as you work your way through it, you realize, wow, that makes a lot of sense.

of course, these are totally different industries. the car companies and washing machine companies and thermostat companies, google. they don't normally seem like people who would be partners or things that would go together. once you get to that incredibly low price point and you shove a dozen sensors into everything, then suddenly these connections become possible. the idea of industry, you know, this is the car industry, the manufacturing industry, the -- the very idea of industry starts to fall away. you see these very strange bed fellows. >> one of the things that happen in technology is we have these periods where we move from a scarcity and it goes to a surplus. i think of the '60s and '70s where computing power was a scarcity. we used it very sparingly. universities may or may not have had computer access. there might have been a main frame people could cue up for. they would sign up for time on the computer.

and then around '84, we take that scarce resource and it becomes an abundance so we waste it. 1984 apple introduces the macintosh. first computer to use a graphicical user interface. prior to that time we would never have wasted computer time on graphicical user interface. it was a redundant feature. you would use a command window. xerox tried a graphicical interface in '81 but it wasn't expensive and it was very expensive because had you to pay a premium for that computing power. i feel like sensors are there today where it's gone from a scarcity to a surplus. we start to waste it. when we do, it creates these new opportunities or new marketplace. i think about image sensors on phones. we used to take one on the back, now one on the front and

multiple ones. now a second one on front. it changes our behavior. it introduces the selfie. we can argue whether that's a good thing or bad thing. >> word of the year -- two years ago. >> right. and that's empowered because we employed sensors on the front of that mobile device. if you're in an industry, you need to think about what are the deployment of sensors going to do my end user has? >> that's a great example of the dwrad wal and sudden phenomenon. one thing driving the sensorization of everything is sort of an unexpected event, which was the smartphone revolution. we have a billion plus smartphone devices. what's that's done is created this secondary market for all the parts that go into smartphones. if you take a commercial drone, a 3d printer, most of the things -- if you literally take them apart, what you find is most of the pieces in them are smartphone pieces. often the last generation

smartphone pieces, you now buy them cheap on the secondary market because they've been made in such incredible volume. i can get a gyroscope, magnatometer, cameras, displays, the chip sets themselves, they're made in incredible volume just for the smartphone market that it spills over into other industries. suddenly, what might have been years away from a cost-effective moment to start introducing these, now it's happening overnight. i'd say as you look at core technologies, i like to look at it in simplicity terms, device levels, huge examples, at the sensor level. you have the network, the connectivity, you talked about connected devices. arguably connectivity certainly is not moving as fast as we're seeing the devices, advances in devices. then you have the cloud that is just unlocking incredible

creativity. i struck by at a technology level is there are those things happening but i think there are three other thins happening almost as vital. i think the i think the reason we're seeing explosion of creativity and everything ato-k is not only the technology development but also the fact there are kind of open ecosystems for development. if you're a small startup today, you can now conceivably go into the hardware space. you can work with a variety of different players in the supply change, amazon to do your fulfillment. you can get into the hardware space. clearly in the software space, we've seen many years of open source now, so you can stand on the shoulders of giants. the other thing, of course, you mentioned smartphones. you can look at the smartphone or the user and the financial power of that user. with android and ils, just take those two, that's 1 billion customer accounts.

1 billion paying users you as an individual developer f you're willing to sign up and develop for android or ios, you can access. that's unique. that's something that's happened over the last few years. back to your world, shawn, you know, just continual rise. indeed, enterprises expand on consumer electronics. what's fascinating just in that space is not only are we spending more and more on consumer electronics as the expense of other categories products like your tv is catching left. that kind of fueling of spend in these new categories is just phenomenal. and it comes to the point, you know, how many units of the apple watch will be sold? what's your proxy for how many apple watches will be sold? there's such a huge amount of spend that's opening up for

these devices. i fully agree. i think we're in an amazing time of creativity in the digital space. it's almost this cambrian moment where we're seeing the proliferation of so many products as witnessed by ces. the other thing is which one will survive? which ecosystem will survive? to your point, larry, how will they interact? it's a very good question. which services will be the kingmakers and the platforms that everything will congress rate to. an incredible amount of change we'll see. >> the standards, too -- we've been seeing this for the last several years, there is not yet a kind of dominant standard for how these devices will share

data, interact. there are three, four, five competing ones. i wouldn't predict which one is going to win. we also found in the research that it's very typical in sort of an emerging new ecosystem that you will see -- it's a sign of maturity when you see a fight among different possible standard providers and eventually as i say, it gets worked out. until it gets worked out, it's very chaotic. right now, most of the internet of things -- solutions. most are point solutions. this is the smart baby monitor. this is the smart electric grill. this is the smart -- what was my favorite? oh, the smart yoga mat. that was a good one this year. they are aimed at a particular solution for a particular audience. they're not part of some whole but you can see it's kind of groping towards that. we know it will happen but we don't know who is going to make the market. >> i think what we're doing is

we're building up the nodes. you're building up the nodes of the network and the nodes five years ago were a couple core device. primarily pcs, mobile phones started to show up, tablets. but we've changed the structure of the network making the mobile phone right now the center of this network so it becomes the hub device for all these devices. they don't have the interface. that's the viewfinder into this digital life. i look back 15 years ago. the -- our digital existence was very separate from our analog difference. we would go online. he we talked about going online or logging online. we viewed those as very distinct identities. we see that blurring with the mobile phone -- to easily toggle

between those two identities, which were once very distinct and now are quickly emerging. look at younger -- >> which may not necessarily be a good thing. >> yeah. i think that's an interesting premise. social norms will start to set in and we're start to apply social norms to what we want to have digitized and what we don't want to have digitized. the question now is not can we digitize it? it's not a technical question anymore. that used to be the focus, the technical solutions. now it's, should we digitize it? if so, how do we connect it? do we direct it connectly over a 3g, 4g network, bluetooth, and what's the use-case scenario? i think that becomes the paramount question. what does that use scenario look like for my experience. >> yeah. and, you know, one of the -- one of the positive side effects of all this entrepreneurship and

innovation is you do get kind of 1,000 flowers blooming and people experiment. it's so easy now, you source the parts over the cloud, you build stuff over them. everything can be done in such a virtual way, you can be in the hardware business even if you're one person. we found great examples, a couple of art teachers making products just for fun. the risk, though, because there is no head to this monster, is, i think, one of the big problems we're already seeing is concern about privacy and security, which is no surprise. you know, a lot of the folks are going into the business of internet of things, smart devices. don't have a lot of history. they may have no history. they may literally be startups. they don't understand concepts like privacy by design. they don't think about encryption. they don't think about, well, what's the risk case here? and not so much even the damage but the bad pr it causes for

everybody when somebody hacks the smart baby monitor and starts talking to somebody else's kid, which is so creepy that people step back and say, maybe there should be some central authority. it's clearly not the way nings happened in the united states, so it doesn't matter if that's what you want or not. it is one of the -- one of the downsides to our open-ended kind of permission list innovation culture. >> it's interesting. you know, you mentioned sort of the data sets that are being built and whether it's controlled. one of the things that we're seeing is there's this silo data being built up by multiple players. i extracted all the data i could from every single digital service that i use. i wanted to see who had what on me. i went to google, to facebook, to fitbit, to all of these

sources and pulled the data and the reality is when you do that, one, there's an unparalleled amount of information being captured. for instance, i learned from google that my average altitude last year was 602 feet. how does google know my average altitude? that's quite a factoid they don't published. i'm interested by the silo data. i suppose what i'm intrigued by, you can look at that as all of the security threats, the trust issue, the privacy. put that to one side, what's the opportunity of that data being connected? where is that going to lead? how will that data be brought together? i think a really nice example of that is in our personal memory space. so, in our photos and our videos and if any of you are like me, you have your photos stored in a

variety of places and video. have you your fitness and data and other data sets. think about that narrative if it was brought together about telling a story about what you did last year, where you were. i know some is shown on facebook. facebook has done some interesting things with their year in review but i'm interested in how does that data set get harnessed, improve our life sets, entertain us, inform us, and maybe in the business -- certainly in the business world, improve business outcomes? i think we're in this interesting period of time where things aren't really talking to each other. we're all using -- all creating this proliferation of data but it's yet to really be harnessed. i think one of the brilliant things, though, it's all sitting in the cloud. so, when technology finally catches up, my 40,000 photos that sit on i cloud or in google, you know, interesting things will happen with those in the future. >> and i think it's when we

start to move to predictive recommendation jibz. right now we do a great job looking in the past. here's all your photos. here's the number of steps you took. here's the movies you watched. but we don't do a great job of predicting a recommendation, especially when it deviates from the historical course. there's to reason today that some of these fitness device, wearable devices, couldn't also look at my calendar, which is digital and say, hey, you're not going to hit your goals today unless you deviate from your course. looking at the photos, you could easily imagine vacation recommendation engines that look at where you've been and suggest places you haven't been or suggest, hey, we see you've done a lot of beach photos. those are some of your favorite photos. and it really then connects with this, i don't know, inner enjoyment we have that we didn't fully recognize. yeah, i thought i liked the beach. i didn't realize how much i like

the beach. these vacation recommendation engines are saying, ishld check out these beaches because of the photos they've been able to cull through. i think one of the big struggles for companies today is, figuring out how much do i tell the customer about themselves? they know a tremendous amount and they're hesitant to be too over the top with how they can tell them. they don't bother to tell you your average altitude because they don't necessarily to want freak you out, but when that becomes a useful data source, a data byte to inform and to predict something that you might be interested in, i think that's where you really start to see it. >> yeah. how you drive usefulness out of it. i've been using the tile app, the little tile which you attach to your keys. and it's tracking my location.

my aware this small startup has all of my information? yes, i am. and it's also while i was at a concert and forgot where i parked my car and it guided me back to where my car is. i'm happy to have that tradeoff of them knowing my location when events like that happen that are, you know, remarkable when they occur. >> so, you're both talking about this use of the big data for sort of personal enlightenment. then there's also the collective enlightenme enlightenment. i was hearing a story, in fact, this morning on the radio about genetic testing 2013 and me and you take a swab of your saliva and they don't decode the whole thing but some interesting parts of your dna. they've already in a very short time built up a pretty substantial database of individual dna samples. they're now with permission of their members they set a dataset of 5,000 sets of this information to pfizer to use in research on future lupus

treatments and lupus drugs. so putting all the information about you is valuable. it's even more -- when you put subsetting information about a lot of people, abstract it and then use that for something completely different than what it may have originally been collected for. . of course, again, as soon as you talk about either of those issues, the creepy factor -- what, they are sending data to drug companies? that's that sounds awful. one, they have permission. two, it's for research. three, it may improve health outcomes. you have to start making these tradeoffs, as you were saying. sometimes they're implicit and sometimes they're explicit. but we have to make a lot more of them as this data -- as these datasets start to become connected or connect iblg. we see these possibilities and we realize, okay, the good news is "x," the bad news is "y".

>> it's interesting. it's an incremental set of jumps around our personal data. one of the things i find amazing over the -- the last couple of years, three years or so, there's been lots of talk about when we were going to use the cloud as our golden copy for data. it's been talked about in the internet space, technology space for years. if any of you bought a new iphone, when you bought your new iphone, had you your old phone, you wiped your old iphone and then you$ñbzx connected your ne ichl iphone to icloud downloaded your photos. in that one case, all of your personal data was in the cloud and your golden copy was in the cloud and your phone became secondary to your golden copy sitting in the cloud. i think that's happened.

you know, that flip from stuff being storied locally and all of your personal memories being storied locally to now the golden company being in the cloud is something that's happened to us. most people don't really realize that that massive shift occurred. i think there are incremental jumps that are happening. and, you know, i think back to one of the earlier comments. each one of those might not seem that big, but, my god, it takes you so far. in the golden globes, richard li linkletter won for "boyhood" this amazing film where he shot it for three days every day for the last 12 years. one thing he did -- there's a great interview in "the economist" with richard, and he made sure in every shot they did, each shoot they did each year, they included some technology of the day in the shot so you could see the advance that it occurred. because he was insightful enough to really understand that, you

know, of all the things that we're going to change over the 12 years of filming that film, one of the things that would really impress upon people was the change in technology. and indeed, that's what you see every 12 years, the technology being used in each one of those years of the movies was remarkable. so, i think it's that -- you know, those incremental jumps -- >> phones get smaller and smarl, then bigger and bigger, smaller and smaller. >> it's fascinating how our preferences change in a very short space of time. you'll know this, shawn. you're much more qualified to talk about this than i am. but just that change in smartphones. we went from all having small smartphones and thinking that was the norm to within two years small smartphones feel weird. if you have an iphone 6 plus and you're holding the iphone 5, you think it's a toy device. so, i think change can happen. behavioral change can happen very fast. that's why i'm quite bullish on the apple watch and wearables generally because i think we'll

all shift to fairly rapidly. >> and i think that's the experiment that's taking place now. again, it's no longer this technological question about if, but it's a -- is it technologically meaningful? when i look at something like the apple watch or really any, quote/unquote, smart watch, what we're look at is does the internet make sense on the wrist? if so, what are the use case scenarios. one apple is painting is payments. payments make sense on the wrist. we're going to empower payments on the wrist. but at the fundamental level, that's the question we're asking everywhere. does the internet make sense in a yogarx!wr mat? does the internet make sense in your vehicle? does the internet make sense here, there? that's the question i think we're going to be asking for the next three to five years. then you start to say, does data elsewhere make the internet in that yoga mat a better experience? and then you start to tie those data streams together. so, if i can take some

information here and influence this decision over here, this experience, and that, to me, is the ultimate test for all of these things. something happens in the physical world. we digitize is. we connect it. we sensorize it. and that's kind of the easy part now. the real question is, do we close that feedback loop and do we get something to then change back in the physical world, in this analog state? so if it's a fitness device, now digitized, the level of fitness, the level of activity, the steps, does it cause me to eat differently? to sleep differently? to do different things? to change my behavior? because if it doesn't, that's where things really start to unwind. and i think that's some of what will set in. we go, the use case scenario there isn't that rich, so i'm going to keep my analog whatever. you know, my analog yoga mat. because knowing i have payments on my wrist really didn't influence it. >> so, it's interesting, but

with technology prices collapsing so fast, do you actually even need to make the decision about whether you digitize or not? i mean, is it really a question offing, everything's going to be digital and it's a question of whether it's on or off? like the yoga mat example. are we going to get to the point where these sensors -- we're already getting to that point, where they're so inexpensive. you know, maybe they can draw power from, you know, your motion. it's just going to be implicit in certain products over a certain value. >> so, i think, yes, but i think the big -- the bigger question is, does it provide a meaningful experience for the end user? if it doesn't really provide a meaningful use case scenario, then it really doesn't matter whether it's digital connected, sensorized. it doesn't really change what's happening. so, i think you already see that in some states of the world. if you look at the way we greet each other. we still do that in a very analog way because it's a ee

efficient way. digitization hasn't really impacted that yet. and so just because digital can be, doesn't mean it will be. >> but to me the secondary effects can be and often are more dramatic from an economic standpoint than the questions you're asking. is this valuable for me? more importantly, if you look at the whole range now of health and fitness-related iot devices and all the different types of biometrics being tracked and you start to imagine a world as you do in your book, if you put all those things together and you way, okay, it tells you a bunch of stuff about yourself and changes your behavior and your nutrition and exercise and so on. i'm not even that interested in that. i'm interest more interested in, what affect does that have on the health care industry? you know, we have -- we have, you know, in sort of certain civ we have 100-plus years of a model of where there's sort of a

professional class of doctors and health care professionals. they're the only ones who have that secret information and the ability to tell you your pulse and your blood pressure and glucose level and oxygen level. and that, in some ways, is how the health care industry for better and often worse has been structured. well, now suddenly, as an axe dental consequence of all this cheap technology, you can imagine a world in which every patient has that information about themselves. and they're collecting it. they're analyzing it. they're getting feedback. they're changing their behavior as a result of that. how does that affect the health care industry and it's #t@ mod both delivery and training of professionals and so on? those are -- those are sort of what i think of as those second order effects from an industry standpoint that can be much more devastating and largely because they were unintended or unplanned. the ones that can really catch the incumbents by surprise in

sort of an exciting way depending on which equation you're look at. >> at the very minimum it changes the dialogue that we have with these professional services. ultimately i think it changes the experience we have. so, we already see that taking place. if you look at the digitization of entertainment, you know, one thing that the digitization of music did, was that it allowed us to break apart the album easily. so, you saw the explosion of single-track experiences. and that continued on with streaming services and other elements. so, that entire music experience is fundamentally different than it was prior to digitization. and you can -- >> and now it's happening with video. >> it's happening with video. it's happened with books. you even see the breakdown in books where amazon has kindle single. it's something that fits into a smaller space. when you look at the digitization, this connection, sensorization in other spaces, it has the ability to really influence the experience we have. we talk about auto ton mouse vehicles at ces. when your vehicle is autonomous,

you don't need a steering wheel, you could put beds, couches, a hot tub, you could do -- it's a fundamentally different experience because of those building blocks. so, you can change everything. and i think if you're an experience industry, you need to think about how that experience changes once it becomes connected and digitized and sensorized. >> especially when it's coming from left field. when it's coming from people like google or the smartphone manufacturers or all these other devices that have no intention of disrupting you. you're just their collateral damage. >> i have to ask. you're obviously more connected with washington. but regulation, you mentioned -- we mentioned health, driving, we've, you know -- mentioning drones. as you look at all of those, regulation plays a massive part in the ability for businesses. maybe not for consumers but for businesses to be able to do some

of the novel use cases. how do you see that playing out? >> this is also a big part of shawn's work as well. but i think that is when i mentioned before that some industries are affected in a different pace than others. one of the big determine of how digitization and technology transforms an industry is the degree to which it's already protected in some ways. existing business -- health care is a good example. in some ways protected from transformation by, you know, vast regulatory space. so, in some ways, you know, they complain about it, but now it becomes in some ways their protection from change and a weapon. so, you see this, of course, very publicly in how the taxi cab companies are responding to things like uber, how the hotel industry is responding to things like airbnb. they say, we have to live in

this highly$'kmy regulated worl doesn't make sense but that's not the conversation we want to have. the conversation we want to have is you have to stop those people from working -- they don't have to play by those rules. they can deliver things at a lower cost because they don't have the cost of regulation. and the regulation becomes the bludgeon with which to slow or change the pace of disruption often for worse, you know, sometimes for better, but in many cases it really becomes the gating factor, what we refer to in our book as the bullet time, the matrix, you know, where they can use it to slow down what would otherwise be a much faster disruption. shawn, i know you and cea have a lot offing thoughts about this, too, because we worked very slowsly together on some of these issues. >> yeah, definitely. it is setting up a series of hurdles that inhibit the spread of technology. so, let's now open the conversation more broadly to

q&a. there may or may not be microphones around. >> yeah, there are. >> there are two microphones around so feel free to join our conversation here. one comment up here that i see. why don't you just -- one back there. >> thank you. you guys are talking a great deal about consumer electronics. understand given last week what you do. is this change going to be driven by consumer toys or by industrial applications like water grids? >> i'm sorry, what was it? >> water grids. >> so, i think it's both. i think they're happening at same time. again, it's the question of, where does the internet make the most sense?

i think we're at this period where we're moving into the next phase of the internet. the example i like to give is, in 1995 the home page for the internet is something like a yahoo! that is putting additional information on a single page. you go there. the metrics were using to measure success is how long are people staying on that single page? then with the explosion of websites, we moved to something like a search engine like a google. and then with a further explosion of internet properties, we start to move to something like a readit, a cure ate -- curated experience. we go to 50 billion objects, we're moving to the next phase of the internet where we're really redefining the home page. so what's happening on the enterprise side and on the consumer side are both moving in that same direction, but the fundamental question is, does the internet make sense in water grids, as your example, or in

locomotives or in engines. that's the enterprise size. ge calls that the industrial internet. cisco calls it the internet of everything. ultimately -- and i think in 15 years, i think we'll just call it the internet. we don't talk about the mobile web very much anymore. it's just the internet. i think the same thing will happen with the internet of things. in 15, 20 years, it will just be the internet. >> i think both is happening but i think there has been a fundamental shift toward consumers taking the lead. i remember when i first started looking at disruptive technology many years ago. the model we always had was, it starts in the military applications. it moves to business applications. finally, to the consumer. particularly for computing because it was so expensive. now it's clearly the other direction. and that's something that's just spreading. consumers, you know, because of social media in particular, they can experiment and they can communicate about new stuff much more effectively than

enterprises can. so, they do so. and they become sort of the lab rats for moving the other way. >> i think just the barriers to -- everyone has access to the same technologies, but the reality is the barriers to get something in a consumer's hand, a consumer using it, are far lower than getting into an enterprise or getting into a military application. so, i think invariably consumers or end users are, you know, where things hit first. and then -- and i think also, you know, you mentioned regulation. regulation slows down a lot of commercial applications of certain technologies. so, i think we're just going to continue to see it consumer-led initially. and then used by the enterprise. your example is a good one. naturally, big infrastructure, it takes a while to deploy technology to lots of enterprise applications. so, you know, i think consumer leads. and also the buzz is

consumer-led. let's be honest. >> next question. >> way in the back there's a mike. >> impm. larry, this is for you. when we're speak about a macro environment with the information and digital, what and who is going to lead the way in this? >> so i think we have most of the core technologies in place, the cloud, the high-speed networks. we now, you know, we now all talk about 4g. i was at a conference late last year on 5g networks, which will be coming in the next decade. and they're even crazier than the last. those are sort of the key building blocks, obviously, and then the sort of standardized data. who's going to lead? that's a much more interesting question. you can sort of make the case, i think, economically that it could be the providers, it could be the network, you know, engineers could be sort of ericksons or could be the verizons, or it could be the information experts that the

googles and so on. i think all of those are plausible and probably some combination thereof. >> and i think what ends up happening in this world of exploding opportunity, exploding data, exploding technological devices and innovation is that we go through these periods of chaos, and then we try to organize it and then we have this chaos period and then we try to organize it. and you can see that if you just look simply at the web where google tried to organize it and then as it explodes, we start to move to other things that try to curate it. and so you have this constant cycle of explosions of information and then cure ration that tries to apply order to that explosion. and so i think you want to look at whichever companies are trying to create order.

and that order, that order might look like aggregation, might look like insights and cure ration. but look at the companies that are trying to apply order to the chaos that's unfolding. >> i think it's also, about network effects, as well. who is going to create the network effect that drives the most value? and locks up, locks up certain ecosystems? >> yeah, and that's why there's been so much focus on platforms. platform businesses today are trying to create that order to the chaos. next question. >> what new business models do you see emerging? just take, for example, a couple of things that -- ge doesn't sell jet engines anymore, right? they're basically renting the rotation of the rotors. or if you take uber and the driverless car, you build a whole new industry. you don't need to own a car anymore. right? assets become services. so do you see emerging now as new business models that are going to result from that? that's question number one.

question number two is, aren't you guys a little bit afraid of what the ultimate solution could be? because talked about singularity or if you watch these tv shows, you know, like "person of interest" where there's a master computer that basically directs you to do certain things and you have google kind of doing that already. aren't you worried that at some

juncture we are not the cog -- we're not the director, we're a cog in some big thing. >> so go back to the first question. what's the real business models? >> so i think you -- i think you hit on a piece of it. which is this idea that capital becomes more productive. so one of the things that we've seen over a long period of time is that we replace labor with capital or we infuse labor with capital. we give our workers pcs. we give them heavy machinery, and the next stage of that is that we give them sensors and sensor data. and that's one way that we'll make them more productive. so i look at areas where we'll have large pools of labor and areas that are highly labor intensive. and you're already starting to see the infusion of capital into their experiences. so i look at like leisure and entertainment, hotels that have crews that go around and clean the rooms. today, they'll ring the doorbell, they'll wait. they'll ring the doorbell again. they'll wait.

they'll knock. then they'll eventually open the door and inevitably somebody's still in there and shut the door and move on to the next one. you're starting to see hotels use infrared doorbells so they can tell there's somebody in the room and they become more efficient. you look at uber, air bnb. this is taking capital that was being underutilized and deploying it in a more useful, more productive way. so i think anywhere we have capital that's being underutilized or anywhere we have large labor pool that isn't using a lot of capital are areas that will be disrupted in the next ten years. or if you have -- >> well, i like the second question. and i don't have any, any science or any sort of empirical evidence for this. but i've always been very optimistic about the likely impact of future technologies. and the way i try to think about it is there's sort of two possible outcomes. and if you put this in star trek terms, you have either, you know, the united federation of planets where everybody cooperates and everybody has the ability to achieve their own personal enlightenment and their own sort of personal best, or you have the board, where everybody is nobody. that it's just one giant collective. and some ways, these are two very different futures that come from the same set of technologies.

i've just -- i'm always imagined it would be more like the federation and less like -- >> just on that big question. i think you could look at the negative and, you know, all the fear. but i think there are so many exciting problems that need solving. there's so many, so many big ticket problems to get solved that will be solved over the next few years. the idea thatter our kids will speak to their children and speak about a time when 30,000 people got killed on the roads. that's, you know, there are so many of these really big ticket. >> and i look at the way we toggle between the physical real world and the digital world. and today that's the mobile bridge. it becomes more pervasive and more seamless, it becomes less intrusive. it'll become a much more natural intuitive experience. i look at the way we talk with computers today. you go back in time, use things like punch cards. things we didn't even understand if you just looked at it, but that computers understood. and over time, we've moved them along this continuum to where it's a much more natural that's, you know, there are so many of these really big ticket. >> and i look at the way we toggle between the physical real world and the digital world. and today that's the mobile bridge.

it becomes more pervasive and more seamless, it becomes less intrusive. it'll become a much more natural intuitive experience. i look at the way we talk with computers today. you go back in time, use things like punch cards. things we didn't even understand if you just looked at it, but that computers understood. and over time, we've moved them along this continuum to where it's a much more natural conversation. similar to what we might have with another person. >> i have a point to make. i was at ces last week. what's the ability to get past to really make use of these things? 20 years ago, we used to laugh our parents had a vcr blinking 12:00 all the time, right? today, we have over half the returns of best buy and amazon, the product works, consumer

turned it in again. we've got a problem from early adapters to mass market for these consumer products no matter how sophisticated they are, they can't buy, they don't know what to buy, don't know how to use them. how do we get past that adoption curve with a proliferation of all the devices? >> so i think we're moving into an environment where we have what i referred to as fragments in innovation. we've focused thus far on the products that are widely owned, 80, 90% of households. but very few products are actually owned by 80% or 90% of households.

only 64% of households actually own their home. and so, i think we're going to start to move into niche markets where the saturation is 40%, 50%, 30%. so we'll start to identify these, you know, i think the idea is you start with really well-defined discreet problems. and you offer a solution to that and then you start to, over time, pull those together. to create this much more wholistic experience. so you look at what's happening with driverless cars, we're getting there by solving these very well-defined discreet problems. parallel parking, okay, so you get parallel parking assist. falling asleep while you're driving, lane assist. approaching a vehicle while you have cruise control engaged. adaptive cruise control. all of a sudden, each one of those starts to look like a very discreet autonomous experience. you put them all together, you end one the full autonomous driverless car experience. i think that's what happens. wh