Chapter 01 A technology revolution for all

There are echoes of our current era of technology-driven change in a pair of photographs taken in New York City in the early part of the last century.

The images are of the Flatiron Building viewed from across the intersection of Broadway, Fifth Avenue, and East 23rd Street, and they are strikingly similar except for one important feature.

In the first image, taken in 1905, the primary mode of transportation is equine—horses haul carts laden with freight, horse-drawn carriages convey people, and horse-drawn cabs sit curbside waiting for fares. In the second image, taken 20 years later, not a single horse can be seen. Instead, a long line of automobiles snakes down Broadway, parked cars jam the curbs, and a stretch of pavement in front of the Flatiron Building has been converted to a parking lot.

Comparison of two photographs of the flatiron building in which one has horses and the other has automobiles.

What happened in between was a period of profound transformation and disruption. In 1905, it took more than 100,000 horses to move goods and people through New York City. Tens of thousands of people were employed feeding and cleaning up after them.[1] Thousands more worked as blacksmiths, wheelwrights, saddle-makers, and carriage builders. Nationwide, one quarter of the country’s agricultural output was dedicated to growing crops to feed horses.[2]

Two decades later, a new form of horsepower predominated. The result fueled innovation that gave rise to new industries, generated vast numbers of new jobs, and transformed the economy.

But it was also a 20-year span that saw the end of a generations-old way of life and the dawn of a new kind of society—not just in New York but in cities around the world. During that time, entire categories of work that had provided a good living for people for centuries all but disappeared.

The emerging realities of a society that suddenly moved at the speed of cars rather than the trot of horses meant that new laws had to be enacted, new infrastructures built, and new social norms developed.

Those two images are a good reason to pause for a moment to think seriously about the implications of sweeping, technology-driven change. Today, we stand at the cusp of a new technology revolution that promises to transform how we live, work, communicate, and learn at a pace and scale that may be without precedent in human history.

The potential is so vast that some are already calling it the Fourth Industrial Revolution. The benefits could be enormous. It’s now possible to imagine a not-too-distant future in which poverty has all but been eliminated, diseases that have plagued mankind for millennia have been eradicated, a solution for climate change has been found, and new forms of communication and collaboration have unleashed creativity and innovation on an epic scale.

The cloud makes it possible to find correlations that used to be too small to detect.

But it’s also possible to look at the same technological revolution and wonder if we may be headed toward a darker future in which robots and automation drive millions of people out of the workforce, income inequality becomes an unbridgeable chasm, public safety is constantly under siege, and privacy is undermined by intrusive surveillance and the uncontrolled collection of personal information.

At a moment when change and disruption are a certainty, finding the right answers to questions about how best to realize the opportunities and benefits of the first possible future and avoid the pitfalls and dislocations of the second is increasingly urgent.

Clearly, this is not the first time that breakthrough technologies have been the catalyst for profound changes in how people live and work. By most accounts, humankind has passed through three great industrial revolutions so far.

The First Industrial Revolution came with the invention of steam power and the rise of industrial manufacturing over a 60-year period spanning the last part of the 1700s and first part of the 1800s.

The Second Industrial Revolution grew out of the creation of electric power plants, the internal combustion engine, and the telegraph and telephone in the late 1800s and early 1900s—it’s these technologies that explain the difference between the first picture of New York City and the second.

The Third Industrial Revolution saw the advent of digital information processing and communications in the second half of the 20th century.

Each of these periods encompassed dramatic technology innovation that created great disruption as traditional industries were superseded and old jobs gave way to new occupations. But all of them were accompanied by sweeping economic change that saw living standards improve for millions of people across major parts of the globe.

At the heart of the current transformation lies cloud computing.

By enabling the collection, storage, and analysis of data at unprecedented scale, speed, and depth, the cloud makes it possible to find correlations that used to be too small to detect and discern the inner workings of systems that have been far too complicated to comprehend. And with cloud computing and advanced analytic capabilities as a foundation, we’re seeing rapid advances in artificial intelligence, robotics, genomics, materials sciences, 3-D printing, and much more.

This, coupled with mobile devices that connect us to information and one another at any time and from any location, means that opportunities to reimagine how businesses operate, connect with customers, manage labor, source goods, and organize supply chains are basically endless.

It’s a process that is well underway. Innovative new companies are unleashing cloud-enabled capabilities to disrupt and reinvent a number of consumer-focused industries. Uber, for example, is the world’s biggest taxi service even though it owns no vehicles. And Airbnb, the world’s most valuable lodging company, manages no hotels.

But this is just the beginning. According to a recent World Economic Forum survey, 75 percent or more of information and communications technology sector executives believe that within 10 years, we’ll have robotic pharmacists, automobiles manufactured using 3-D printing, and transplants of 3-D-printed livers. They also believe that 10 percent of cars on the road will be driverless and 10 percent of people will be wearing clothes connected to the internet.[3]

Meanwhile, in their 2015 book “No Ordinary Disruption,” McKinsey & Company directors Richard Dobbs, James Manyika, and Jonathan Woetzel estimate that change today is happening 10 times faster and at 300 times the scale of the First Industrial Revolution, which they say works out to 3,000 times the impact.[4]

So is this, in fact, the dawn of the Fourth Industrial Revolution? It’s possible. But what we ultimately call the current period of transformation will matter far less than the steps we take now to ensure that the opportunities it creates are equally available to all, and the inevitable disruptions are more than balanced by clear and tangible benefits that bring greater opportunity, prosperity, health, and convenience to billions of people around the world.

Although Nigeria is the world’s fifth largest exporter of oil, its internal energy infrastructure is deeply inadequate to meet the needs of a country of more than 180 million people. Across Nigeria, many citizens have electricity for just a few hours a day; two-thirds of the country’s elementary schools have no access to electricity at all. But in the Nigerian state of Lagos, a system that uses solar panels, high-tech batteries, and intelligent software that is remotely managed over the cloud is providing clean, renewable, reliable power to 172 rural schools that aren’t connected to the public energy grid.[5]

Nigerian students using a tablet computer with Microsoft software.

The system generates enough electricity to power lights, computers, and everything else students need while they are at school, with enough left over to charge the headlamps they bring every day so they can study at home in the dark.

And in the United States, two Microsoft scientists and a Columbia University graduate student published a study in The Journal of Oncology Practice explaining how, by analyzing very large numbers of queries on Microsoft’s search engine, Bing, they were able to identify people who have pancreatic cancer, even before they had been diagnosed with the disease.[6]

So is this, in fact, the dawn of the Fourth Industrial Revolution?

Pancreatic cancer has extremely low survival rates—just 3 percent of pancreatic cancer patients live longer than five years.[7] Their research indicates that this kind of early detection might double that rate.

They still have a long way to go before their research makes its way into common medical practice, and increasing cancer survival rates from 3 percent to between 5 percent and 7 percent is clearly not the same thing as finding a cure for cancer. But it offers a small preview of how the ability to look at large amounts of data through the right technology-assisted lens can uncover potentially lifesaving information that was previously impossible to detect.

And the solar power system that is allowing thousands of school children in the state of Lagos to get a decent education may not be the answer to the much larger issue of how to create a nationwide energy infrastructure adequate to meet the needs of Africa’s most populous nation. But it, too, hints at the potential of a new generation of technology innovations that will begin to address some of the world’s most pressing problems, including how to provide a plentiful supply of affordable renewable energy to people living in remote locations.

Related technological capabilities are already having a significant positive impact at a much broader scale. One significant barrier to financial security and full participation in the global economy for many people around the world is the lack of access to basic financial services such as a bank account and affordable credit.

This makes so many things that we take for granted in affluent nations—like the ability to save money in a safe and secure way or to take out a loan to pay for a child’s education—impossible for the 2 billion people on the planet who still don’t have a bank account.[8]

But this is changing. Now, anyone with a mobile phone can open an account and transact with people safely and securely, whether they are nearby or on the other side of the globe. According to the World Bank, between 2011 and 2014, more than 700 million people opened an account for the first time,[9] and it’s conceivable that soon, every adult on the planet who wants one will have a bank account.

As transformative as it would be to achieve this goal, it’s just the beginning of what the cloud can enable when it comes to financial services. For example, the ability to collect massive amounts of data is opening the door to new ways of establishing credit worthiness for people who have lived their lives outside the traditional financial system. Data and information such as how and when people pay their utility and mobile phone bills can be used to generate a credit rating that can enable people in poor communities with no previous banking history to take out loans to start businesses.

If you work in the technology industry, it’s easy to look at all of the ways that technology companies, entrepreneurs, researchers, governments, health organizations, nonprofits, artists and musicians, doctors, and teachers—just to name a few—are using the cloud to do amazing things and feel confident that we are headed toward a better, brighter future. Not everyone shares this view.

A study by Chapman University found that technology ranks second among the things people are most concerned about, with cyberterrorism, corporate tracking of personal information, government tracking of personal information, and identity theft all earning spots in the top 10. The survey also found that nearly one person in three worries about losing their job to a robot and one in four is worried about whether to trust artificial intelligence.[10]

We have a responsibility to ensure that the benefits of the cloud are equitably shared.

This pervasive undercurrent of fear is entirely understandable. Murderous acts of terrorism and hate—in Paris, Brussels, San Bernardino, and Orlando—were facilitated to one degree or another by technology. Thanks to Edward Snowden, we know that the U.S. government collects vast amounts of personal information. So do many companies, but it is difficult to know what they collect or how they use it.

And, as the income inequality gap widens, there are very real concerns about who will benefit. According to a report from McKinsey Global Institute, titled “Poorer Than Their Parents,” about two-thirds of households in 25 advanced economies around the world saw their income stagnate or decline between 2005 and 2014—that translates to more than 500 million people. In contrast, from 1993 to 2005, 98 percent saw their incomes increase.[11]

The fact is that many people will lose their jobs in the coming years to robots, cars that drive themselves, and computer-enabled automation. The World Economic Forum’s “Future of Jobs Report” suggests that there is a better than 90 percent probability of significant job loss due to automation in occupations including telemarketing, tax preparation, administrative support, real estate brokerage, farm labor, and restaurant service, to name just a few.[12]

Now, at a time when wide-ranging, technology-driven transformation once again appears to be inevitable, we have an opportunity—and a responsibility—to acknowledge the uncertainty that people face and ask what it will take to move forward in a way to ensure that the benefits of the cloud are universally accessible and equitably shared.

We face many challenging questions in pursuing this objective. In a world where millions of people in poor communities haven’t yet actually experienced the benefits of the Second Industrial Revolution—or even the First—how can we make sure that no one is left behind as this new industrial revolution takes hold?

For the cloud to change people’s lives for the better, we must focus on trust, responsibility, and inclusion.

What steps can we take to address income inequality? How can we help people acquire the skills and knowledge they will need in this rapidly emerging new world? How do we preserve privacy and free expression while protecting public safety?

At Microsoft, we believe that for this to truly be the beginning of a period that fundamentally changes people’s lives for the better, we must start by focusing on three key principles: trust, responsibility, and inclusion.

The best way to build trust is through a framework that recognizes the imperative to keep people safe and that embraces the critical importance of protecting the right to privacy. Striking the right balance is fundamentally a matter of the rule of law.

We know, for example, that trust in the cloud is undermined when governments act outside the law to seize personal information in the name of public safety. And it is equally undermined by technology companies that use their customers’ personal information to maximize profit without being transparent about when and where that information is used.

We also believe it is the responsibility of technology companies that stand to profit the most from technology innovation to help protect people from exploitation and fraud. It is up to the companies that build and operate datacenters to be responsible stewards of the environment by focusing on energy efficiency and exploring how we can play a role in expanding the availability of clean energy.

All of us—governments, the technology industry, and concerned citizens—share a responsibility for promoting human rights by striking the right balance between public safety and freedom of expression. Just as important, we must embrace our obligation to build a cloud that is profoundly and fundamentally inclusive. At a time of growing tension over income inequality, it is essential that disruption and dislocation are balanced by shared growth and opportunity.

This challenge can best be addressed through public- and private-sector initiatives that make access to the cloud universal, regardless of gender, abilities, location, or income, and through programs designed to ensure that everyone has the knowledge and the skills needed to thrive in a cloud-based world.

A current picture of the Flatiron Building taken from the same vantage point as the 1905 and 1925 images would bear a striking similarity and some interesting differences. Many of the same buildings still exist, but there are more trees, more people, and a lot more traffic—cars, cabs, delivery vehicles, buses, each one with a driver, and many with passengers.

Given all of the changes that are underway, it’s impossible to say what an image of that intersection captured 20 years in the future will show, although it’s probably safe to assume that the Flatiron Building will still dominate. One other thing seems likely. In 2036, many—maybe most—of the vehicles flowing up and down Broadway and Fifth Avenue and across East 23rd Street will be driverless. Like the shift from horses to motor vehicles, it’s a change that will have huge consequences. It will almost certainly mean fewer accidents, more efficient use of roads, less traffic, and reduced air pollution and carbon emissions.

The decisions we make now will determine the answer to these questions for generations to come.

It will also mean that thousands of people who once made a living driving cabs, town cars, limousines, buses, and delivery vehicles will have lost their jobs.

Will the process of job destruction and job creation that has historically resulted in new opportunities for an increasing number of people be repeated over the next two decades? Will we be a more prosperous society overall? And will that prosperity be shared more equitably, not just in New York or in the United States but across the world?

The decisions we make today will determine the answer to all of these questions for generations to come.