No matter what vocation we pursue, we all tend to be the product of the velocity of our own experience. In most cases the more experience we gain in a given field, the more comfortable we become with what we perceive to be the facts of the case. Unless we are very careful we develop a tendency to dismiss any new knowledge that is not congruent with our own perceptions. History is full of examples of highly intelligent people who were somehow unwilling, or unable to admit that from time to time, there is, in fact, something new under the sun.

The great science fiction writer, Arthur Clarke, for whom the Clarke Belt is named, described this phenomenon as a failure of nerve. This "occurs," he said, "when even given all the relevant facts the would-be prophet cannot see that they point to an inescapable conclusion." All of you have encountered this attitude during your lifetime. Examples range literally from the sublime to the ridiculous. Despite the clear visual evidence furnished by his telescope, part of the Inquisition on Galileo's proposal reads as follows: "The first proposition, that the sun is the centre and does not revolve about the earth, is foolish, absurd, false in theology, and heretical, because expressly contrary to the Holy Scripture..."

A few hundred years later we still seemed to do no better. The New York Times of December 10, 1903, commenting on the possibility of flight said: "We hope that Professor Langley will not put his substantial greatness as a scientist in further peril by continuing to waste his time, and the money involved, in further airship experiments." Seven days later the Wright brothers lifted off the ground at Kitty Hawk.

Man's capacity to assert what we now know is true and dismiss new discoveries which dispute conventional wisdom is a recurring phenomenon of history. This common mistake has caused troubles for empires, for nations, and for corporations for centuries, the corporate landscape, both here and abroad, is littered with the remains of once great companies that failed to change with the times. Perhaps some of the people who are currently commenting on the impossibility of SDI or Star Wars would do well to keep some of these earlier pronouncements in mind.

Whenever new forms of energy or technology are widely employed in our society, all those people and industries which relied on older forms of energy go through hard times, and, indeed, some do not adjust at all. This is not a modern situation, but rather one that has been repeated throughout history. Despite the enormous impact that new technology has on societies, historians have not generally concentrated on this phenomenon. One could guess that one of the reasons for this omission is what C.P. Snow called the "two cultures." The world of science did not communicate easily with the world of the liberal arts and, indeed, each tended to deprecate the other. Writers of history were more attracted by wars and politics which they believed they understood, than by technology which they did not. In ancient Greece, Plato explained that even then engineers were not held in high regard by the philosophers. "You despise him and his art," he wrote, "and sneeringly call him an engine-maker, and you will not allow your daughter to marry his son or marry your son to his daughter."

While most historians of the Middle Ages have turned their attention to the social, religious and political battles that took place, the fact is that the machine was one of the most important driving forces of the period. It was during the Middle Ages that the machine was made to do what manual labor had previously done. The energy which replaced manual power was sometimes supplied by wind, but the major energy source that drove the mills that ground the corn and fulled the cloth was water power. The old English Doomsday Book recorded a total of 5,624 water mills in England in the eleventh century. As the system developed, mill owners began charging higher and higher prices for the use of their mills. The market worked then, as it does today, and people began to search for alternate sources of power. That search still continues today.

The reason I mention early medieval history in a gathering such as this, is that I would argue that in America today we are in the midst of another massive shift in the source of energy and it, too, is not being greeted with any real enthusiasm by those who have a vested interest in yesterday. The magnitude of this transformation is immense, although not yet very widely appreciated. Peter Drucker put it most succinctly: "For three centuries advance in technology meant--as it does in the mechanical process--more speed, higher temperatures, higher pressures. Since the end of World War II, however, the model of technology has become the biological process, the events inside an organism. And...processes are not organized around energy in the physicist's meaning of the term. They are organized around information."

It is not too far from the truth to say that the concept of society's capital base is in the process of changing once again. The skills of the hunter, which gave way to those of the farmer and the miner, are now moving to those who master information. The shift to an information society impacts the value of raw materials, the importance of geography, and the nature of business and politics. Will a few pounds of common sand in a micro chip or fiber optic cable replace tons of copper with a consequent effect on the mining business? Will the mobility of capital moving across borders with the speed of light impact forever the concept of national sovereignty? These, and many more questions crowd in on us if we have the courage to face them.

Technology will not stand still. Perhaps Arthur Clarke said it best: "Anything that is theoretically possible will be achieved in practice, no matter what the technical difficulties, if it is desired greatly enough."

It was not very long ago that the dreary predictions of the Club of Rome and the concept that small is better were the subject of academic discussions. Our task, we were told, was to divide finite resources, rather than lift our eyes to the possibility of growth. These gloomy estimates went by the name of a zero-sum game, where if one gains another loses, so that the sum of net winnings is zero. This is hardly a new idea, but rather one that seems to occur in history when societies are under strain.

It is undoubtedly true that we are not opening much new land for development, our mineral wealth is still being depleted, and our one-time robust population increases have slowed. These facts reinforce the reality of finite resources, but in spite of such limits, it turns out that our economy is, in fact, growing. We are playing in a positive-sum game. Why didn't these limits produce the stagnation of a zero-sum economy? It can be argued persuasively that the factor principally responsible for this happier state of affairs is technology.

Indeed, the scientist Ralph Landau went further and asserted that "Technology has been the critical factor in the long-term economic growth of modern industrial societies."

Even old, relatively simple technology that we have come to accept, and, indeed, think very little about, can change economic fortunes and start a train of political events that may have immense consequences. Examples abound:

A recent world bank survey reports that when telephones were installed in several Sri Lanka villages, farmers began receiving 85% of the market value for their product which, out of ignorance, they had previously sold for 55% of the Colombo price.

While this is a fairly primitive example, it is illustrative not only of the: value of timely information, but of the way the entire economics of a market can be altered. Today, virtually the entire globe is bound together by an electronic infrastructure that is the means by which information, news and money are moved from place to place in a manner and at a speed that have created what Marshall McLuhan, some years ago, called a "Global Village." This new reality, which can change the price a farmer gets for his produce in a small village in a faraway island nation, can also handle the exchange of financial assets that, in a single day, exceed in amount the gross national product of most of the countries in the world.

Information today, in the words of Leon Martel, "is rapidly replacing energy as society's main transforming resource." To say that information is a transforming resource is true but incomplete. Unlike other kinds of resources, information is not used up, although it can go stale and thus lose its value; or it can remain relevant and be used over and over again. Indeed, it can be argued that it is a resource which, rather than being finite like most forms of energy, is constantly increasing.

Any discussions about how information will add value tomorrow to new products and services has often become diverted and enmeshed in an old argument about the relative value to society of service and manufacturing jobs. Service jobs are scorned by real men on the ground that they are low paid and unskilled. We are, we are told, becoming a nation of pancake flippers. This argument is often made by the very men and women who, in the next breath, will proudly tell you how their new cad/cam machine is helping design their latest product. The hard fact is that the distinction between service and manufacturing is disappearing at a very fast rate, but a lot of us simply have not caught up with it. Every field of human endeavor, from the delivery of health care to the design of the wing of a new airplane, is using the new information technology in ways that are so intermingled with the old mechanical process that it is hard to find the dividing line between the two. The speed of the transformation is nothing short of astounding. It used to take years, sometimes centuries, for knowledge to move across societies or countries or national borders.

Until very recently, however, if we were not personally affected, even major changes in the world often passed almost unnoticed. In past centuries, major innovations that had profound effects on society were known immediately to only a very few people. Even inventions which altered the balance of military and political power were moved across boundaries slowly. It took, for example, about a century and a half from the time artillery appeared in Europe at the battle of Crecy until it became a major factor in warfare. Today, however, changes of all kinds are magnified and brought immediately into our homes through the electronic media. There is no historical precedent for this state of affairs. It simply did not exist in prior years. Reasonable people can differ as to whether this phenomenon is good or bad, but there can be very little argument that in Mike O'Neill's words, "there are no u-turns on the road to the future." The explosion of information about all facets of our society combined with the technical means to distribute it worldwide, assures that there is very little chance that the velocity of change will slow down. Today thousands of scientific journals detail one modern miracle after another and the theft of intellectual property has become a growth industry. The design of the latest chip or rocket is known to the interested community almost instantly and has created a brand new situation under the sun. There are no tracks in the snow to follow because no one has ever passed this way before. All of our social and political systems are being transformed before our eyes and, like all revolutions, this one is affecting organizational principles based on older technology.

Almost from the beginning of time power has been based on information. Someone learned how to use a burning glass to start a fire; someone was able to find out where the enemy troops were; some politician had a pollster who gave notice of what the voter really worried about. Someone knew how to build a castle wall strong enough to withstand a siege, until someone else obtained the knowledge necessary to build a catapult which made the castle wall useless. Timely information has always conferred power both in the commercial and the political marketplace.

As the availability and timeliness of information increases apace, some of the more traditional sources of power tend to decline. Natural resources which used to be national treasures on which political power was built are now relatively less important in today's world. Today's autos are built with only about fifty percent natural resources, while the keystone of today's computer, the silicon chip, is only about two percent natural resource. Fiber optic cable is-rapidly replacing copper in many applications. Knowledge capital is becoming relatively more important than money capital, although both can now move around the global marketplace with enormous speed. Our accounting systems are not keeping pace with the changes taking place in the world.

All of this has, or should have a profound affect on the corporate structure and the way an organization is managed. Most corporations took their management structures from the military model. This command and control structure is familiar the world over. The advent of the assembly line impacted some management structures which had to be adjusted to take advantage of this new arrangement. Alfred D. Chandler put it this way: "As the number of workers required for a given unit of output declined, the number of managers needed to supervise these flows increased. Mass production factories became manager intensive." As machines became linked with material handling devices which assure the automatic flow of materials, management tasks and structures began to change again in response to new situations. Today, management structures are being flattened and sharply reduced by those who understand the impact of new technology on their business. There is no reason to believe this phenomenon has run its course. Indeed the reverse is true. The need for layers of management is reduced everywhere when information becomes available to more and more people at all levels at a faster and faster pace.

Management layers which were set up for the purpose of reporting rather than to do something, have become redundant and are beginning to disappear from the corporate organizational charts of well-run companies. Some of these layers are being replaced by informal networks which can and do exchange information. As organizations flatten, it becomes all the more important to have a well-articulated set of common goals for the business and a set of values that are well understood. This function requires leadership which may sometimes be different from what we have thought of in the past as management. Making this transition is often difficult for people brought up in a so-called management culture, but is essential that we do so if we want our companies to survive in a tough competitive world.

It is now possible for us to access about three thousand data bases in this country. This is a national resource that is without parallel in the world, and when we think of American competitiveness, this asset should not be overlooked.

The good news for the Western world is that this is the kind of development that free societies not only tolerate, but encourage. The sharing of vast data bases -- something totalitarian governments cannot tolerate -- will give us a huge competitive advantage in the years ahead. One of our leadership tasks for tomorrow will be to design communication protocols and access to data bases which are important to our business. It is in this area where the use of artificial intelligence may have its strongest impact in the near term. Anything that enhances the value of a company's data and makes it more available to executives who lack computer skills cannot help but improve the performance of the company. AI may be the key to tying together not only your MIS but also relating your company data to outside information about the marketplace.

If management is to take advantage of the new technology, data has to be turned into useful information. The object of the game is to enable the person who needs the information to get access to it in a way, and in a time frame, that is useful. While we are all aware of the explosion of information, not every company has yet thought through who needs what information, in what time frame, for what purposes. If this is to be done, corporations may have to develop formal information strategies just as they have developed business strategies. Since the successful companies are market driven, timely access to market information must not only be put in place, but also linked to internal management information systems. The market data should furnish not only the basis to analyze the size and nature of the market but also what competitors are doing, can do, or are likely to do. Sorting out the useful from the dross will also require new techniques and new training for personnel.

To further complicate matters, technology is redefining not only products, but also delivery systems. It may not be enough to make yesterday's products better and more cheaply. We will have to find and fill new market needs and deliver those products in new ways at less cost. The first phase of wringing more manufacturing productivity from the system is well advanced, and if your comptrollers are smiling at your cost savings -- so are your competitors' comptrollers. Your profits may not increase unless you improve your relative position, and that means employing information technology not only to take out hard costs, but to generate "soft" savings through new management techniques and structures.

Like all change, these developments will be uncomfortable, but all industries will have to adapt to new realities or go the way of the buggy makers. The real gains in the years just ahead will go to companies that understand the revolution being driven by today's technology. This understanding will dictate which industries create the necessary new products and services to prosper. It will spawn many new industries, and it will determine which old industries die.

To say that information is merely another management tool is to state only a half-truth. It is a management tool, but it is and will become a great deal more. The information revolution is changing not only how we do our work, but the nature of the work we do. Our current electronic computers have provided us with a kind of hydraulics of the mind that have freed us from intellectual drudgery in the same manner that the bulldozer freed us from backbreaking work with a shovel. But even as new parallel architecture is being developed and smaller and smaller chips of greater and greater power come out of the laboratories into the marketplace, the promise of optical computers grows brighter. This development will solve some problems, but create others. How many optical engineers should our schools be producing as opposed to training electrical engineers? Today some are dismissing optical computers in much the same way as the best and the brightest dismissed space flight until October 4, 1957, when we all woke up to learn the Soviet Union had successfully launched Sputnik.

Great technological revolutions which occur in history from time to time have always made the ruling classes nervous, because they sensed--correctly--that somehow their power was being undermined. When a man's wealth was expressed by the amount of land he owned, the sovereign, no matter how bad his economic or political policies, did not have to worry about the flight of capital. You literally could not move the farm.

The introduction of money made capital mobile and, inevitably, sovereigns reacted by inventing exchange controls. The onrushing age of information technology gives a whole new dimension to every government's worry about loss of control of men and money. These fears are well-founded because each new age of technology has affected old power structures and changed the political landscape.

As the political landscape alters all of business is affected directly or indirectly. We may now be entering an era that, in a sense, reverses the concept of a fixed work place and mobile workers. When waterpower gave way to steam and later fossil fuels, enormous energy could be concentrated at single sites where huge factories could be located. Workers were attracted off the farms -- and they moved by the millions -- to the huge industrial plants. Today information is becoming an even more valuable and pervasive resource, but simultaneously it is becoming easier and faster to distribute widely. It is too early to say that the age of the fixed work place is over, but in thinking about the future of our business, we, at least, must take this possibility into consideration.

Since no one can predict the future with any accuracy, we have to structure our corporations to permit the entrepreneurial spirit to flourish, and we have to open our minds to the possibility that what we know now may be wrong. Many years ago Alfred North Whitehead put it this way: "The rate of progress is such that an individual will be called on to face novel situations which find no parallel in the past. The fixed person for fixed duties, who in older societies was such a godsend, in the future will be a public danger."

If we don't want to become a "public danger," we have to foster a climate of innovation, the willingness to take risks, and a clear understanding that the information age really is different from the industrial society we have all known.