Shaping the Internet Age

Internet Policy Institute, December 2000

By Bill Gates
Chairman and Chief Software Architect, Microsoft Corp.

Less than a quarter of a century ago, the Internet was an obscure network of large computers used only by a small community of researchers. At the time, the majority of computers were found in corporate information technology (IT) departments or research laboratories, and hardly anyone imagined that the Internet would play such an important role in our lives as it does today. In fact, the very idea of a “personal computer,” much less millions of them connected by a global network, seemed absurd to all but a handful of enthusiasts.

Today, the Internet is far from obscure–it’s the center of attention for businesses, governments and individuals around the world. It has spawned entirely new industries, transformed existing ones, and become a global cultural phenomenon. But despite its impact, today’s Internet is still roughly where the automobile was during the era of Henry Ford’s Model T. We’ve seen a lot of amazing things so far, but there is much more to come. We are only at the dawn of the Internet Age.

In the years ahead, the Internet will have an even more profound effect on the way we work, live and learn. By enabling instantaneous and seamless communication and commerce around the globe, from almost any device imaginable, this technology will be one of the key cultural and economic forces of the early 21st century.

Why is the Internet such a powerful and compelling technology? First and foremost, from its conception in the academic community (largely as a result of government-sponsored research) to its subsequent development and commercialization by the private sector, the Internet has evolved into a uniquely independent information exchange–one that is able to grow organically, can operate reliably with little centralized management, and is built entirely on common standards.

It is those common standards that helped make the Internet so successful. From TCP/IP (the technological protocol that is the “traffic cop” for Internet data) to HTML and XML (the twin lingua francas of the World Wide Web), common standards have opened up the Internet to anyone who speaks its language. And since the language of the Internet is universal and easily grasped, any business can create products and services that make use of it. That openness has produced amazing technological competitiveness. To thrive on the Internet, every business has to make its products, services and interface more attractive than competitors that are only a few mouse-clicks away.

The “killer application” that transformed the Internet into a global phenomenon was the World Wide Web. Developed in the late 1980s at the European Center for Nuclear Research (CERN) from research by Tim Berners-Lee, the Web was initially created to share data on nuclear physics. By using hyperlinks and graphical “browsing” technology, the Web greatly simplifies the process of searching for, accessing, and sharing information on the Internet, making it much more accessible to a non-technical audience.

As the Web’s popularity surged among students, researchers and other Internet enthusiasts, an entirely new industry emerged to create software and content for the Web. This explosion of creativity made the Web more compelling for users, which encouraged more companies to provide Internet access, which encouraged still more individuals and businesses to get connected to the Internet. As recently as 1994, there were only 500 fairly modest Web sites worldwide; today the Web has close to 3 billion pages. We can expect this growth cycle to continue and even accelerate, thanks to more powerful and cheaper computers, higher-speed Internet access on a wider range of devices, and advanced software that makes it all work together.

Breaking Down Barriers

The main advantage of any new technology is that it amplifies human potential. In the 20th century, electricity, the telephone, the automobile and the airplane all made the world more accessible to more people, transforming our economy and society in the process. The Internet has the same revolutionary impact–individuals and businesses can overcome geographical, cultural and logistical barriers and improve the way they live and work. Because it amplifies our potential in so many ways, it’s possible that the long-term impact of the Internet could equal that of electricity, the automobile and the telephone all rolled together. How?

The Internet makes the world smaller. The ability to communicate and exchange information instantaneously and across vast distances has enabled more individuals and businesses to participate in the economy, regardless of their location. Large companies can connect with employees, suppliers, and partners around the globe, and small businesses can find their customers anywhere in the world. Businesses can hire knowledge workers almost regardless of where they are, greatly expanding employment opportunities for people in the United States, and giving developing nations the ability to become economic powerhouses by providing information technology services to the rest of the world. The Internet, along with other computer technologies, is literally enabling some developing countries to “leapfrog” the industrial revolution and jump straight to the Internet Age.

The Internet brings people closer together. Before the Internet, it was possible to keep in touch with relatives and friends across the country or around the world–but it was also expensive. Today, communicating with a friend in Japan is as easy and cheap as communicating with a friend across town, and families regularly use the Internet to keep in touch with far-flung relatives. Millions of people with shared interests–no matter how obscure–exchange information and build communities through Web sites, email and instant-messaging software. Using innovative accessibility aids, people with disabilities can use the Internet to help overcome barriers that prevent them from leading more productive and fulfilling lives.

The Internet makes the world simpler. For businesses, the Internet breaks down logistical barriers, offering greater flexibility and power in the way they do business. It shrinks time and distance, simplifies complex business processes, and enables more effective communication and collaboration–a giant corporation can now be as nimble as a tiny startup, while a family firm located in a remote rural village now has the world as its marketplace. Combined with advanced productivity software, the Internet enables individual knowledge workers to use their time more efficiently, and to focus on more productive tasks. And it gives consumers the ability to shop smarter, to find the best products at the right prices. In fact, it empowers them in ways that once were available only to large companies, enabling them to join with others to buy products at lower prices, and bid competitively around the world.

What’s Next?

The Internet has already revolutionized the way we live and work, but it is still in its infancy. In the coming years, a combination of cheap and powerful computing devices, fast and convenient Internet access, and software innovations could make the Internet as common and powerful a resource as electricity is today.

Today, most people access the Internet through their home or office PC, but as microprocessors become cheaper and more powerful, Internet access will also be available from a wider range of smart devices, from tablet-sized PCs to smart cellular phones–even familiar household appliances. People will be able to share information seamlessly across devices and interact with them in a more natural way, using speech, handwriting and gestures. Eventually, they will be able to interact with a computer almost as easily as they do with each other.

And all this computing power will be interconnected, as high-speed Internet access becomes available in more areas and in many different ways, both wired and wireless. Advances in communications technologies, along with increasing public demand for Internet access, will eventually ensure that Internet connectivity will be commonplace at home, at work or on the move.

Communication between devices on the Internet will be greatly enhanced by new Internet standards such as XML, which offers a way to separate a Web page’s underlying data from the presentational view of that data. Whereas HTML uses “tags” to define how data is displayed on Web pages, XML uses tags to provide a common way of defining precisely what the underlying data actually is. XML “unlocks” data so that it can be organized, programmed and edited. This makes it easier for that data to be shared across a wider range of PCs, servers, handheld devices, and “smart” phones and appliances. While today’s Internet consists of isolated “islands” of data that are difficult to edit, share and integrate, tomorrow’s Internet will break down those barriers and enable people to access and share the information they need–regardless of whether they’re accessing the Internet from their PC or any other device.

All these advances will soon create a ubiquitous Internet–personal and business information, email, and instant messaging, rich digital media and Web content will be available any time, any place and from any device.

Opportunities and Challenges

Whenever a new technology emerges with the potential to change the way people live and work, it sparks lively debate about its impact on our world and concern over how widely it should be adopted. Some people will view the technology with tremendous optimism, while others will view it as threatening and disruptive. When the telephone was first introduced, many critics thought it would disrupt society, dissolve communities, erode privacy, and encourage selfish, destructive behavior. Others thought the telephone was a liberating and democratizing force that would create new business opportunities and bring society closer together.

The Internet brings many of these arguments back to life. Some optimists view the Internet as humanity’s greatest invention–an invention on the scale of the printing press. They believe the Internet will bring about unprecedented economic and political empowerment, richer communication between people, a cultural renaissance, and a new era of economic prosperity and world peace. At the other extreme, pessimists think the Internet will result in economic and cultural exploitation, the death of privacy, and a decline in values and social standards.

If history is any guide, neither side of these arguments will be proved right. Just as the telephone, electricity, the automobile, and the airplane shaped our world in the 20th century, the Internet will shape the early years of the 21st, and it will have a profound–and overwhelmingly positive–impact on the way we work and live. But it will not change the fundamental aspects of business and society–companies will still need to make a profit, people will still need their social framework, education will still require great teachers.

However, the current debate over how widely we should adopt this technology does raise some serious issues that must be addressed to make the most of the Internet’s vast potential.

Protecting intellectual property. The Internet makes it possible to distribute any kind of digital information, from software to books, music, and video, instantly and at virtually no cost. The software industry has struggled with piracy since the advent of the personal computer, but as recent controversy over file-sharing systems such as Napster and Gnutella demonstrates, piracy is now a serious issue for any individual or business that wants to be compensated for the works they create. And since the Internet knows no borders, piracy is now a serious global problem. Strong legislation such as the Digital Millennium Copyright Act (DMCA), cooperation between nations to ensure strong enforcement of international copyright laws, innovative collaboration between content producers and the technology industry, and standards developed by organizations like the Secure Digital Music Initiative (SDMI) that can prevent or deter piracy have already made an impact on addressing this problem. But as more and more digital media becomes easy to distribute over the Internet, the government and private sector must work together to find appropriate ways to protect the rights of information consumers and producers around the world.

Regulating global commerce. Hal Varian and Michael Armstrong’s contributions to this project detail another major challenge the Internet poses to governments around the world: how can we regulate Internet commerce–or should we do it at all? Because the Internet offers people an easy way to purchase goods and services across state and national borders–generating tremendous economic growth in the process–it makes global commerce even more challenging to tax or regulate effectively. But since the Internet’s economic effects result largely from the “friction-free” commerce it enables, any regulation that gets in the way comes at a price: lost economic growth. As more and more business transactions take place on the Internet, governments and businesses must cooperate to find innovative ways to regulate and derive tax revenue from Internet commerce without interfering with the economic benefits it can provide.

Protecting individual privacy. In the coming years, people will increasingly rely on the Internet to share sensitive information with trusted parties about their finances, medical history, personal habits, and buying preferences. At the same time, many will wish to safeguard this information, and use the Internet anonymously. Although technology has placed individual privacy at risk for decades–most consumers regularly use credit cards and exchange sensitive information with merchants over the telephone–privacy will become a far more pressing issue as the Internet becomes the primary way for people to manage their finances or keep in touch with their physician. The use of personal information by retailers wishing to provide personalized service and advertisers that want to target very specific audiences–some of whom have resorted to gathering information from consumers without notifying them–has greatly increased public concern over the safety of personal information. It has also left many people reluctant to trust the Internet with their data.

Private industry and many in government currently favor self-regulatory tools and privacy-enhancing technologies as the best way to protect privacy. Today, several independent organizations enforce commonly accepted “fair information practices” that ensure honesty and accountability among companies that gather and use personal information. But as Ellen Alderman and Caroline Kennedy’s contribution to this project explains, it is still unclear whether this approach is fully effective. Nonetheless, protecting individual privacy is a major barrier that must be overcome–as soon as possible–in order to keep the Internet moving forward.

Keeping the Internet secure. Security has always been a major issue for businesses and governments that rely on information technology, and it always will be. Much the same is true for individual security–long before the Internet, people were happily handing their credit cards to restaurant waiters they had never met before, and that too is unlikely to change. But as our economy increasingly depends on the Internet, security is of even greater concern. Widely publicized incidents of Web site hacking, credit card fraud and identity theft have given the Internet a largely unjustified “Wild West” reputation. In order to keep the Internet a safe place to do business, software companies have a responsibility to work together to ensure that their products always offer the highest levels of security. And the judicial system and the law enforcement community must keep pace with technological advancements and enforce criminal laws effectively and thoroughly.

Protecting our children. The Internet can revolutionize education, giving children the opportunity to indulge their intellectual curiosity and explore their world. But while it helps them to learn about dinosaurs or world history, it can also expose them to obscene, violent or inappropriate content. And since the Internet is an unregulated global medium, it is hard to “censor” in any traditional way. The private sector has already made great strides in giving parents and teachers more control over what children can see and do on the Internet, through filtering software that blocks access to objectionable Web sites; industry standards such as the still-evolving Platform for Internet Content Selection (PICS) that enable helpful rating systems; and Internet Service Providers (ISPs) that voluntarily regulate the activities of their customers. Government has also played a part, encouraging the growth of the market for child-safety tools, and increasing law enforcement’s role in policing and prosecuting online predators. So far, the issue of protecting children on the Internet has served as an excellent example of how governments and the private sector can work together to tackle problems on the Internet.

Bridging the “digital divide.” The Internet can empower and enrich the lives of disadvantaged people around the world–but only if they have access to it. Robert Knowling and Ernest Wilson’s contributions to this project clearly show that the digital divide is a global problem. In the United States, where a large percentage of the population has access to the Internet, it¹s easy to forget that most of the world has never made a phone call, much less browsed the Web.

In the 1930s, the United States government helped bridge the “electrical divide” by forming the Rural Electrification Administration, which brought power to rural areas that could benefit most from electrification. Similarly, “universal service” programs have helped some remote areas and disadvantaged communities have access to inexpensive telephone service. These efforts have been largely successful in the United States, but on a worldwide scale there’s still plenty of work to be done before the Internet can make a real difference. It’s important to remember that much of the world is still without adequate electrical power, telephone service, or even quality healthcare and education‹bridging the digital divide is but one of the many ways we can improve the quality of life worldwide. However, the benefits of widespread access to the Internet and communications technology are clear enough that governments now need to decide whether a similar principle should be applied to ensure that nobody is left behind in the Internet Age.

What is government’s role? The Internet is a constantly changing global network that knows no borders, presenting a unique problem for governments that need to address the many challenges it presents. In the coming years, governments will have the opportunity to develop thoughtful and innovative approaches to policies that protect their citizens while nurturing the openness, flexibility, and economic opportunities that make the Internet such a compelling technology.

The light hand of government regulation has created an environment that has encouraged the Internet to flourish, and enabled companies to bring their innovations to consumers at breathtaking speed. Over the next few years, governments worldwide will find it rewarding to pursue policies that speed the building of the infrastructure that will make it possible to bring the benefits of the Internet to more people. This includes finding ways to speed the implementation of broadband technologies, deregulate where necessary to stimulate competition, resist the temptation to enact new regulations, and redouble our efforts to protect content on the Internet by strengthening and enforcing intellectual-property rights.

The Internet gives people the opportunity to put their knowledge to work and take advantage of greater opportunities to lead productive and fulfilling lives. It is the gateway to vast amounts of knowledge, art and culture. It provides equal access to information and communications, allowing the formation of rich communities and forging real connections between people. It breaks down barriers between (and within) nations, opening up economies and democratizing societies. And as cheap computing power becomes more pervasive, the Internet can bring all these benefits to more and more people around the world.

Ensuring that the Internet can have the broadest and most positive impact on the greatest possible number of people will be a tremendous challenge for our political and business leaders. There are some key issues that need to be overcome to realize the Internet’s full potential, but although they are challenging, they are not entirely new and definitely not insurmountable.

And it’s clear that these are challenges worth facing–like the printing press, the telephone, electricity or the automobile, the Internet is a revolutionary technology that is transforming our world.

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