Wikinomics: How Mass Collaboration Changes Everything | Don Tapscott | Talks at Google

Well, thank you all for joining us for another one of our installments in interesting people who have written very interesting books about things that we're all fascinated about. Don is somebody that I have known for more than 10 years and is one of the most perceptive people about the combination of technology and business. And I'm not quite sure how he finds these topics, but he's written a series of books which have chronicled the technology changes and the impact on the world. And I think with Wikonomics, he's finally hit the real home run. It's hit more people have mentioned it to me. Somehow it captures a unique moment in time, perhaps a generational shift, an architectural shift and a business shift. And somehow he's managed to figure it out better than anyone else. It's a delight to have you here, Don.

Thanks very much, Eric.

What I thought we could do is first, let's try to understand why is this happening now, in your book, you talk a little bit about a set of events that happen to arrange themselves. And I don't know whether this is looking backward or whether it just happened because it was time or because the technology already, but it was a series of things. It's not one thing that made this new model possible.

Right. Well, first of all, by the way, I think we did hit the timing on the book, but that hasn't always been true. As you know, my first book I wrote in 1981, and it was about the Internet, and it was a study in bad timing. I think my mother bought most of those. And I wrote a book in the mid-90s about privacy and the Web. And everyone said, what's the issue? And my book, Digital Capital, there was a book that a lot of people like business, we call it pure enlightenment, that came out the month the NASDAQ crashed. So I'm thankful to finally have some good timing on a book. There are a number of factors that are coming together to create what we call in the book a perfect storm. And the big ones are a technology revolution, a demographic revolution, a social revolution, and an economic revolution, and the technology revolution. Google, of course, is at the heart of that. It's the new Web, and this ain't your daddy's Internet. We have the rise of a whole bunch of fact technological changes that are coming together to create something that's fundamentally different than the old Web. The old Web you access through a PC. The new Web, the object of interest is changing. We've gone from mainframe and the enterprise and minicomputer in the department and PC and the end user and mobile phone and the mobile consumer to the object of interest. Now the thing billions of inert objects in our world that become smart communicating devices. My hotel room that I stayed at the door, it's the W Hotel, so it's a new hotel. The door has an IP address, it has a chip in it, it's interconnected. I had a camera stolen from a hotel room in Miami and the door knew about me. It knew who had been in and out of the room. I have a friend in Toronto. Everything in his house that has electrical power has an IP address and all this stuff talks to itself. I have no idea what his fence says to his sprinkler system.

Sounds like somebody Google should hire, by the way.

Actually, he said, I said, why do you care if your fence talks to your sprinkler? And he says, well, if a burglar comes over the fence, the sprinkler is my first line of defense. But so you've got the thing, you've got broadband mobility provided to you by some interesting people like maybe Google, that were sort of unpredicted by most. You've got the rise of geospatiality where you can now browse the physical world. Just like you go into an art gallery and you look around, you'd rent one of those little headsets. You can now do this in the physical world with stuff like you can put digital stickies onto physical things in the world, like a digital sticky on a bad waiter using Socialite. You've got location based services and Tele1 that tracks the speed of all cell phones moving around, which means with calculus and geometry they can calculate the speed of all cars moving along a road. So it's like give me my six routes home and tell me exact number of minutes it'll take me to get home. You've got the rise of the shift from the old web was based on HTML to the new web being based on xml, which is shifting from a platform of presentation. You know, during the dot com period, everybody talked about eyeballs and stickiness and clicks and websites. That's what the web was. It was a platform for the presentation of information. Right now with xml, we've got SOAP and UDDI and the new Lingua Franca for distributed computing. The web becomes a computational platform, which basically means that every time you go on the web and you do something, including you do a Google search or you enter into a blog or you put a picture of your puppy onto Flickr or whatever, you are in a sense programming The Internet. Then we have the rise of true multimedia, which was not what the old web was about. And then finally you have the fact that the old web was separate from real IT that companies ran their businesses on. And now with intelligent networks and services oriented architectures, companies are moving their technology onto the web. So that's the first part.

A lot of people use the marketing term web 2.0. Do you like that term?

I think it's an industry standard, if you like, and I think it's a good term in that this is a binary kind of change. This is not like the web evolved into something new. Each one of those seven things that I just described is a, is a natural change in the capability of the web.

In your analysis of this, is this primarily an age related behavior? In other words, is it young people, is it small companies, is it US companies or Canadian companies?

Well, that's a great segue into the second driver, which is, and most people didn't notice this, it's a demographic revolution. The children of the baby boom, a lot of you are sitting in this room, are the first generation to grow up digital. And you're different. I started studying these kids as a generation, as you know, over a decade ago when I noticed how my own children were effortlessly able to use all this sophisticated technology. At first I thought my children are prodigies. And then I noticed that all the friends.

Every parent thinks their child is a prodigy.

Yeah, the theory that all their friends were prodigies was a bit of a stret. So I started studying them as a generation. The demographics here, if you're born between 46 and 65, you're part of the baby boom, biggest generation ever. Then the birth rate dropped off for a period of 12 years as the boomers delayed having kids, called the baby bust by demographers, sometimes called Gen x. And in 78, the boomers started having kids. And between 78 and 97 inclusive, they created the biggest generation ever. 80 million youngsters in America that are now today between the age of 11 and 29, that's the actual demographic. And around the world, if you go to China or Iran or India, it's like it's massive generation. And to your point, Eric, these kids are different because the defining characteristic of this generation, this is the first generation to be bathed in bits. And the Internet interactive technologies are part of the experience of youth. And time online is not taken away from hanging out with your friends or learning the piano or doing your homework is taken away from TV. The boomers watch 24 hours of television per kid per week. And these kids, they still watch some tv, but they watch it differently. They don't come home and turn on their tv, they turn on their computer and they're in three windows and they're on their cell phone and they're listening to MP3 files and they got three magazines open and they're doing their homework and the TV's going on in the background or in a window. But the important point here is that this changes the way a generation processes information and thinks. Rather than, I don't know, being the passive recipients of somebody else's broadcast video. What they're doing is they're reading, they're searching, they're organizing information, they're collaborating, they're composing their thoughts. Even with video games, they're developing strategies.

In your book you talk about this and you talk about MySpace as a metaphor for this. Is your view that these social networks and the structures that you, do you think that they are specific to an age or do you think that they're now a permanent part of our landscape?

Well, they are being driven by young people, but they are a permanent part of the landscape. You just look at the age growing in MySpace, for example, and that's. Thank you. The third revolution, which is you put a technology revolution with a demographic revolution, you get a social revolution. MySpace is growing at 375,000 new registrants per day. There's a new blog created every second of the day. And congratulations to each of you on having been selected as Time magazine's person of the year. But my view is, and this is very powerful, you know, social networking. I'll tell you a story. On Christmas day, I gave an advanced copy of Bookonomics to my 20 year old son Alex. And he started reading it and he said, hey dad, this is actually a good book, I think in bracket, unlike some of your other books, I think. But my kids still think I don't understand the web. But he says, I think I'm going to create a community on Facebook. So he goes on to Facebook. By the time we're eating turkey that Evening, he's got 120 kids in seven countries, seven regional coordinators, a CIO and a secretary for the committee. He sends out a PDF of the first two chapters. I get five kids writing in, saying I found some problems with your work and they're putting demands on me as a, you know, as someone who the community is supposedly based on. Imagine when I was a kid how long it would have taken to create a community in seven countries. So that's. The social revolution is happening, and that sets us up for the really big one. I mean, Time magazine says you're the person of the Year. To me, that was so 2006 that what's happening now is this is becoming a new mode of production. This is beginning to fundamentally change the way that the companies orchestrate capability to create goods and services, the ways that companies innovate and the ways that, I don't know, they engage with the rest of the world. And so we have these. As you know, we've been doing like $9 million worth of research funded by large companies over the last few years. And we came to the conclusion that companies that can figure out these principles of wikonomics, as we call them, are succeeding, are tending to be successful, and those that don't are tending to fall behind.

What's the best example of a successful one, hopefully excluding Google. And what's a good example of a failure?

Yeah, well, I talk about Google all the time, of course, but. Well, I'll give you an example. There are lots of good ones. Okay, There's a company called goldcorp. Who here has read the book, by the way? Anybody have a look at it yet? Okay. The CEO was a banker who ended up taking over this company. I know this guy because he's my neighbor, okay? He lives across the street from me. His name's Rob McEwen. And his geologist can't tell him where the gold is or how much gold he's got on his property. He's a very frustrated man. After a few years, he's ready to shut the whole thing down. But he's also a curious guy. And he went to a meeting of YPO young presidents. And the meeting. At the meeting, they had someone talk about this thing called the Linux operating system. And he comes back from this meeting and he says his head is spinning. He wonders if my geologists don't know where the gold is, maybe somebody else does. So he does a radical thing in the mining industry. Your most secret ip, it's kept in high security computer systems, is your geological data. He takes his geological data and he publishes it on the web and holds a contest called the goldcorp Challenge. Half a million dollars prize money to the top three submissions on Is there gold on this property? And if so, where? He gets 77 submissions. They come from around the world. They use techniques he's never heard of. Not just geologists, mathematic computer scientists. He's got chemists giving organic solutions to inorganic problems. He gives out the $500,000 in prize money. And for that investment finds $3.4 billion worth of gold. His market value goes from 90 million to $10 billion. And I can tell you, because he's my neighbor, he's a happy camper, and.

He'S now moved to the most expensive house in the neighborhood.

Well, he just renovated his house now that he's a billionaire. But it's a great story because it underlines these four principles. Peering. Okay, it's not just about my people within the boundaries of my company. It's who are their peers. And they might not even be geologists. They might be a computer science person. He opens up the boundaries of the corporation. Thirdly, he shares his ip. Now, you don't want to share all your ip, obviously, but you need a portfolio of ip, some that you own and some that you share. And he doesn't think global, act local. He acts globally. He views the world as his geology department. And it's a spectacular result.

So let me ask the consequence of that question, which is, so we have this great success story, which you're popularizing. And now in an act of amazing coincidence, every other mining company does exactly the same thing. And they all publish their information and they ask for the same thing and they all offer $500,000 prizes and people begin to submit. Isn't there an issue that if you take this model to its extreme, you have crowding out of ideas. You have too many choices. People get confused. Does it work systematically or is this just a great story that illustrates the point?

Well, the ironic thing about the question is no other gold mine has done this because they can't just. They can't wrap their head around doing something as radical as what he did. If they did, the end result would be as follows. First of all, a lot more gold would be discovered. There'd be a lot more talent out there that gets brought to bear. Maybe it's a retired geologist in Taipei or a grad student in San Francisco or something like that. And I don't really buy the idea that because you harness mass collaboration, you dumb things down or you prevent that uniquely qualified or brilliant mind from coming forward. Au contraire. It's kind of the opposite in some ways, as you find out there, that uniquely qualified mind. Just look at something like the super bowl ads. Any of you vote on the ads for the super bowl, the Doritos ads. Well, you should do this. Go Google Doritos super bowl ad, and you'll see the top five. If you just go to Yahoo or any one of these sites, you'll see the top five ads or on YouTube. And they're ads developed by nobodies because Frito Lay went out to their customers and said, just develop the ad. And they're extraordinary ads. I mean, I could try and. Well, I will. I'll try and describe one to you to make the point. Okay, so these policemen come walking down the hall. They bang down a door, and they say, you're being charged. A bunch of guys in an apartment. You're being charged with illegal possession of Doritos. And so all these guys are running around trying to flush Doritos down the toilet. And one guy's handcuffed and he's trying to eat the Doritos on the couch. And then they go into this room. This one policeman says, we found the motherlode bags of Doritos, and behind them are a bunch of marijuana plants that he doesn't pay attention to. Like, no ad agency is ever going to create an ad like that. But if you're Doritos and who's your demographic that you're going after? I mean, that's an ad that kind of touches home, and there's that. Uniquely qualified to come up with an amazing ad that never would have had a chance. It's like an age of participation.

Again, just to be critical here. So you're describing a vision where there's an awful lot of people whose jobs are threatened or they perceive them as threatened. And you wrote an article in the Wall Street Journal which was very favorable toward YouTube and this new notion of user programmers. And I don't mean programming, I mean television programming. The notion of empowerment of people to recommend things in playlists. Can you take us through your argument, which we obviously liked a lot here at Google, about how this model is going to emerge and also what happens to the people who feel threatened by it.

Yeah, okay. Well, that particular article was just about the whole Viacom thing. And I said, look, this isn't rocket science. If you're Viacom, you don't infuriate your customers. That's point number one. Point number two is Google's become. And YouTube is a new distribution channel for media. Who knows where it's going to go, but you're not going to beat it. Okay? You need to find a way to work with it and somehow cooperate. So do a deal. Because what's going on here is a huge disruption in media. And the big problem is, I'll just answer this on two sides, that leaders of old paradigms have great difficulty embracing the New. Okay, I'm allowed to say this word paradigm shift because I actually wrote the book a long time ago, which is how I first. And that was over 15 years ago. But the point is that a paradigm shift causes dislocation. It causes confusion and uncertainty and vested interests fight against change. So, you know, you've all heard the analogy about buggy whips. I mean, it's true. Like the buggy whip industry, you had to. It was a limited industry when something else began to happen. But over and over again I see these industries like the music industry. I have an article in yesterday's Mercury News about this on why music should become a service not a good. And nobody will, quote, steal music. I don't think downloading is. It's proper to call that stealing. But nobody will steal music. You'll never want to take possession of the song if for $7 or $5 a month or something, you can have access to any recorded music ever and any kind of service around it, like give me Mick Jagger's favorite folk songs or what does Eric Schmidt listen to when he's driving in the country? I don't know if you'd put that up, but just an endless array of services. Then you pool all the money together. You use actuarial economics, divvy it up. The value of the whole record industry would go up the record because it didn't have a bloated distribution channel. It would return to profitability. They wouldn't have to make big bets as they do now. You can only bet on a home run hitter. You can't bet on somebody who's a good bunter or single.

Do you in fact agree with the long tail arguments that there's a very large long tail in all of these markets?

Yeah, I think Chris Anderson's got a very good point there. But there's a long tail. But there's also, you know, there's still mass markets as well.

So your argument, the fundamental wickedomics argument, is that mass markets are affected by the same phenomena that the long tailors have been arguing about for a long time.

Yes.

Right. That the mass market is in fact restructured by this combination, as you call it, a perfect storm of technology, new users and the demographics that you described.

That's absolutely right. And we're talking here about mainstream parts of the economy. By the way, people say this is a bubble. And if you look at tech stocks, they're actually not inflated at all. What's inflated is stocks of companies like Goldcorp and Boeing and Procter and Gamble that all understand the sort of principles of economics. But, but the thing on people being threatened, the flip side of that is that in whole sectors of the economy, this can be done in a way that doesn't, that is not threatening. So I'll give you an example. Procter And Gamble, the CEO there, a guy named A.G. lafley, he's a brilliant guy. He says several years ago, by the end of this year 2007, half of our innovations should come from outside the company. And why is he doing that? They need to be an innovation engine and it's not rocket science. He's got 9,000 chemists inside the company and a million five he can get to outside. So if you're looking for a molecule that'll take red wine off a shirt, what are the chances it'll be with the 9,000 versus the million five that are out there in what we call ideagoras open markets for innovation. So sure enough, he finds a chemist on the innocentive network and they come up with Tide to go. And P and G has 22 brands of over a billion dollars. Now the point to your question is that, well, gee, wouldn't those 9,000 be really threatened by something like this? Well, first of all, P and G's employment is not going down. Overall, they're keeping 9,000 scientists because they need that, that core. But they've aligned the interest of the 9,000 with the company as a whole. If the company innovates well, the 9,000 benefit. And rather than nij nih not invented here syndrome, excuse me, they have this thing that they call pfe, proudly found elsewhere. So if you come up with that molecule, it doesn't matter if you invented it or if you found it with a million five, you still benefit. So this is what wikonomics is to me. It's the sort of. It's the theory and practice of harnessing the power of mass collaboration. It means figuring out people's interests, compensation, systems alignment, where you share ip, where you open it up, where you try and peer produce something, where you try and keep it within the boundaries of the company and so on.

What I'd like to do is ask people to start thinking of questions they might want to ask on. And let me ask one sort of final, I think, top of mind question, which is as a student of Google and having spent a fair amount of time studying us, and you know the company pretty well, to what degree are we not fully exploiting the wikinomics model? Where are our weaknesses? What would you do even more of.

Or less of yeah, well, that could be a long conversation. I mean, Google, of course, is the progenitor of a lot of these ideas. I use the term, and it's not pejorative to describe you as a digital conglomerate. Maybe I can find something a little more friendly. But what is Google? You call yourself a technology company, but in a sense you're an ad agency because you sell ads. And you say you're not really a software company, but you keep providing these services that are part of the new paradigm in software. Did you know that apparently you're the fourth largest maker of hardware servers? Did you hear that? You don't sell them, but you make so many servers for yourself that you're.

Now I've lost count.

You're a media company, in a sense, you're a retail company because you sell stuff and you have a payment system. So that kind of takes you into financial services. And I mean, you have opportunities to participate in all kinds of different markets. And what I say to the rest of the world is this is the power of the new web and of a company that understands how to exploit the new web to build a successful business model. And that what you need to do is figure out that Google is not necessarily a competitor of yours. They're more likely a partner if you can figure out how to hook up with them. Like Viacom should figure out how Google can be a partner rather than thinking that they're somehow going to, I don't know, create a challenge or move in some other direction. So how could you embrace these ideas of wiconomics? Little better. Well, you've got this challenge of Jimmy Wills and a search engine that's targeted right at the heart of what is Google and its algorithms and what you do. Maybe there are ways that you could open that up more to mass collaboration.

So an example would be using the principles that you outlined, trying to be more open with respect to how our algorithms work and to get more people to help us build a business, better product or service. And that would be an example similar to your gold mine example.

Right. And you know, transparency, my view, and as you know, because you're on the COVID of my last book about this topic, transparency is not about Sarbanes Oxley or the SEC or avoiding the perp walk or any of that. This is a powerful new force for growth and people want to find out. They're scrutinizing you like never before. You're being held to higher standards and you're going to be naked. And so if you're going to be Naked? Well, fitness is no longer an option. I mean, that's the first thing. If you're going to be naked, you better be buff. And that means that you need to have good value, but you also need to have values. And one of these values is itself openness and candor.

What's interesting, by the way, is that your transparency book, almost no one implemented your book when it first came out and it's taken three or four years and people have finally now adopted essentially all the principles that were in that book.

You know, and that's a painful thing for me to hear because at the time the book didn't sell very well. I mean, Wiconomics sold more in the first three weeks than that book sold in three years.

But the transparency argument turned out to be the fundamental corporate argument that you made. And now everyone is following it.

I just did an interview for a cover story on Wired about radical transparency and it was. Where were you guys four years ago?

Do we have some comments or questions from the audience who would like to get started? Do you mind using the mic so we can get it on tape? Yes, please. Come on, don't be shy.

Just a quick question on the impact of Wikonomics on competition and differentiating products and brand when wiki has an open source component to it that depending on IP can impact your ability to compete.

Okay, well, and that's a great question. There is a view that all of this is bad and that when you put things in the comments you undermine the legitimate right of companies to make a profit and you can understand, and therefore you undermine capitalism. And so you can understand that point of view when you consider that Linux hurt Microsoft, MP3, hurt the record labels, Wikipedia put the final nail in the coffin for Britannica. What our research shows though is that, au contraire, that this is just a new mode of production that's emerging and if you figure out how to relate to it and you think differently about ip, that you can benefit from it. So there are many examples in the book of that. IBM and Linux would be a great one. IBM said we're not going to fight Linux because they were the biggest provider of operating systems in the world. They said enterprise operating systems. They said, we're going to embrace this. They give hundreds of millions of dollars to Linux in terms of code and effort. They save a billion dollars a year developing and maintaining a enterprise operating system and they've lifted the tide if you like. So their boat at least has been raised and they've created a multi billion dollar business on top of Linux. So this is not something that hurts companies. It only hurts you if you think in terms of the old principles and the old framework of business.

Do you see any, or I guess what impact do you see as more collaborative media content creation and creative creation and then also potentially in the future, sort of molecular manufacturing or just becoming easier to manufacture products? What is the impact of Wikonomics on.

That in terms of media products?

I think both media and also just manufacturing in general.

Well, this gets really interesting. Okay. You look at something like the Chinese motorcycle industry, which is. I didn't just talk about this, did I? Sorry. I've been talking about these things so much. Here's an industry and we're talking about manufacturing now, where you got hundreds and hundreds of companies and they each make a part. I don't want to over glamorize this because they're knocking off parts of Japanese motorcycles, but you make a distributor and you do ignition and you do assembly and you do distribution, and he does marketing. And they meet on the web and in tea houses and put these things together. This is now the largest motorcycle industry in the world. But there's no oem, there's no Yamaha or Harley pulling all the strings together. So if you can create a motorcycle that way, could you do a car? Get ready for the $2,000 Chinese car. So what do you do about that? How do you relate to that? If you're a manufacturing company and. And the answer is you can do it. And one of the great stories in the book is we tried to figure out if we're really going to convince people that this works. We've got to come up with a really hard product to make. And so we thought, what's the hardest thing, the most difficult product in the world? And the hardest one I could think of is a new generation jumbo jet. This is one complicated piece of equipment. Equipment, okay. Boeing says we need to mass collaborate this thing. We can't do it the old way. The old way was you create a spec and it's got 30,000 pages. And it's about hierarchy, right? As opposed to peering. You put that spec out to your supply chain and they bid on it. Then you beat them down and stuff, but they're suppliers to you. Then you get all the stuff together in your plant and you assemble it over a period of two or three months. Boeing says, you people are not our suppliers. You make important parts of the plane like the engine and the fuselage and the electronics and the entertainment systems, the interiors. You're really peers and we want to co innovate this aircraft on the web with you. Rather than a spec, we're going to create a 20 page document saying what we're trying to accomplish with this aircraft and then we're going to come together in this global it's mind boggling ecosystem and put this thing together. The result, that is such a great product and it has so strong backorders that it's proven that mass collaboration works for the hardest thing you can think of. Airbus, its competitor used the old approach. Some people say Airbus will never come to market with its competitive. This is not like this is a better way of doing things. Things, this may be the only way of doing things in the future. So this is a big change in the economy and in production.

Thank you.

Thanks.

I have two questions. First one is besides fear and inertia, what are the biggest impediments to this change from happening? And the second one is what are the roles of government have to play.

In the wikonomics change? Well, great questions. The big impediment is that your success in the old paradigm becomes your inertia in the new one. And it's an amazing thing to figure out. Like Google started out in the new paradigm pretty much. But it's an amazing thing to look at how you can get a company like Boeing that can figure it out and an Airbus that can't or a P and G that can figure it out and some of their competitors can't. Where do you find the leadership for a change like this within a company? And from our research the results are surprising. Leadership can come from anywhere. It can come from a CEO, it can come from an IT manager, it comes from head of marketing. We documented a story of a secretary who was a key person in the transformation of a division of Citi Group. And she had what it took to be a leader. She just kind of willed it. And I think the reason is that. And it goes back to a guy named Peter Senge figured this out 20 years ago. He said the person at the top can't learn for the organization as a whole anymore no matter how smart they are because things are just getting too complicated. Which is why if you can create an organization that can learn and Google is as good an example as any, if the organization can learn faster than its competitors, that's what really counts. It's not how smart your leader is because the old Lee Iacocca model of the leader, General Patton, great visionary, down to the rest, that ain't going to happen anymore. Now the ISHAAN government is a fascinating model and we're actually, we're just launching a whole big syndicated research program and Wiconomics as applied to government. And there are two big issues here. One is how you use these principles to change the way that government conducts its business and creates value. And just like we have business webs in the private sector, well, hello, the old vertically integrated corporation grew up at the same time as the, the old command and control industrial age government. We can now move towards network models of governance and government whereby you're essentially making a fundamental change in the division of labor in society about who creates value for citizens. But the even more interesting issue on this is what does all this mean to democracy? And we have a broadcast model of democracy that may have been appropriate for the TV watching boomers, but is not appropriate for young people today. And that's why young people are not engaged. It's like, I don't want to be broadcast to give me engagement. And I'll just stereotype it for you and give you an example of where this could go. Hi, I'm a politician, listen to this 30 second negative ad where I attack my opponent around an issue that you could care less about. And then you go vote for me and, and I'm going to broadcast to you for four years and then you get to do it all over again. Well, you wonder why young people are not involved.

That, by the way, is the best and most cogent criticism I have ever heard of politics in America. From a Canadian.

And I'm a Canadian, so I can talk about this stuff. Well, we got this, you know, it's the same problem. The model of democracy has really remained unchanged. So seven years ago, another study in bad timing, we did a five million dollar research project on the transformation of democracy in the digital age. And we had 20 companies or countries actually that were signed up for this, but it was just too early. But I'll give you an example of where this could go from that. We came up with these 18 themes of digital democracy. One of them was called Digital Brainstorm. And I worked with the Clinton White House and with the President. It was right at the end of his term and he was going to do a brainstorm. It never happened because he ran out of gas because he got all involved in the Mid east situation. But it was going to go like this. He was going to come on TV on Monday morning and say we're going to have a discussion in America over the next five days. And the topic that I've chosen, and it was the One he chose is the digital divide. How do we close the digital divide? You know, the world of haves and have nots and technology. And he says it's going to be on the Internet. For those who ironically don't have access to the Web, we found a bunch of ways where that can occur. We'll break it down by state. There'll be a private sector group talking about giving technology to employees and a lawmakers group talking about tax credits and a teacher's group talking about technology in the schools and so on. At the end of the week, I don't know what's going to happen. We might take a straw vote on some things, but one thing I know for sure, this is the president speaking, is that we're going to have a real conversation. And I'm going to learn from you and you're going to learn from me. I'm going to follow this every day because we've hired thousands of students to bring all the best ideas up to me. And we're going to catalyze initiatives all across the country and we're going to take our first baby step towards a new model of democracy that we'll call citizen engagement. And it never happened, but now nothing so powerful. You know, as an idea time has come again. I'm now working with the Canadian government. We're going to do this. We're going to have a discussion in Canada in the fall. It's called Canada Jam. And you know, IBM can have a discussion with 300,000 employees and the technology exists. It's, you know, one order of magnitude to have 3 million and a conversation over a week with 3 million people would be in a country to say, pick a topic. How do we solve global climate change?

We are in fact, seeing some motion in the US and it's a funny reaction because it's not the kind of hopeful view. It's more of a defensive one. All of the politicians that I've met with are now we well aware of citizen journalism and YouTube because gaffes and so forth are being used negatively. We've not yet seen in the US the political leadership that you're describing in Canada. And I hope it will happen.

Well, it may happen around the election campaign because candidates have a big interest in engaging people. But it's just sitting there for us to do. And Lord knows we need more ideas and we sure need citizen engagement.

So why don't we go ahead and have our next question? Go ahead.

I have two questions. The first one is, do you know of any cases where People have taken these ideas too far, not knowing what to keep secret, being too open and what went wrong.

There are all kinds of good question, all of kinds, all kinds of examples of people who were flippant or who had not considered all the unintended consequences of a new paradigm or a new modus operandi for the corporation and for that matter for government. I mean, you have a discussion in a country, there can be unintended consequences of that that you need to think through. You're going to have saboteurs, will try and wreck the conversation, for example. So you need to build in bozo filters and other things that enable you to have a real conversation. But this is wikonomics. I mean, it's the theory and practice harnessing mass collaboration, figuring out what's the right thing to do, where you draw the boundaries. Having said that, I think companies need to default. The default position on all this was secrecy being closed inside the boundaries of our company, not acting global, being a multinational, not behaving as a global corporation. Increasingly you're going to have to default on the other side. Now you have to be careful. But if in doubt, you may want to experiment with being more open, with sharing, with engaging, with reaching out. Because the biggest problems are from the previous question. It's this legacy culture and legacy sort of modus operandi that exists within companies where it's, well, we've always done it this way. We're threatened and that's the biggest problem. It's not that people go too far with this stuff. It's that they're not moving quickly enough.

My second question is about the phenomenal success these days of Apple Computer. Do you think, are there any, you know, how. In what ways have they embraced this? In many ways they're very proprietary with their technology, certainly. And do you think the point will come where they have to make these changes as well?

I look at Apple and I just see it. It causes me cognitive dissonance. You know, it's like a giant oxymoron. On the one hand, they do something so well and their business, web, I mean, they have great design because they understand what's important to keep within the boundaries or tightly around the company. But they have this giant ecosystem globally that manufactures this stuff and does a super job on it. However, and I've been a Mac user since 1984. Full disclosure here. Apple continues to stick with a lot of old thinking on a lot of topics. I mean, something like Podzilla comes along, these kids, one of the norms of the Net generation is they want to customize everything. I never got to customize the Mickey Mouse club when I was a kid, okay? These kids can change their world. And if the auto industry had understood this, it wouldn't have missed a $7 billion tuner market where kids want to change their cars. So Podzilla comes up. People want to change what, an ipod? You embrace that. You engage people, you co innovate, you turn them into prosumers. Okay? Another idea that we've had for a long time that's just starting to make sense now, but is your consumers can become producers. That's the big story of Second Life to me, is not that you have this amazing wacky environment where Linden Bucks is pegged to the US Dollars and floating currency. Here's a company, Linden Labs, where 99% of its product is created by its customers. In some ways, Google's product is created by its customers in the sense that it's their use that creates the algorithms that underlie Google's search engine. So I just wish Apple had opened up now. This is not the first time I've said that. And we did our first big syndicator research project in the 80s. Apple was a member. And it's on the record that we went in the final executive briefing, we said, you know what, you should open up the Mac operating system so that it'll run on any computer. If they'd done that, Apple would be Microsoft. Microsoft never would have become the dominant operating system company. It would be Apple today. So. But there's something in that culture that is. It's Ying and it's Yang. Now, having said that, the company's doing pretty well, so there's no burning platform for change right now. We'll see what happens. Thanks.

Thank you. And let Jeff have the last question.

Okay. Don, thank you for coming to Google and I really enjoyed your book. I think, as Eric said, it really captures the times right now, and everybody should read it. I just had one question, is that here at Google, we rely on the university system for. For talent and new ideas and fundamental research, and we're finding we need more of that. And the question is, how can universities thrive and be more productive in sort of a wikinomics future? And what is the future for the university?

Well, that's a heck of a question. And you know, I gave my little. Here's what democracy is. Here's what education is. I'm a Prof. I have knowledge. You're a student. You're an empty vessel. You don't get ready. Here it comes. And your goal is to take it into short term, active working memory and through practice and repetition, to build deeper cognitive structures so you can recall it to me when I test you. Drill and kill, you know, sage on the stage. The lecture is the process whereby the notes of a lecture go to the notes of a student without passing through the brains of either. You know, if someone was frozen 100 years ago in San Francisco and they opened, they were unfrozen today, and they looked around, they saw a pilot and a jumbo jet or a doctor in an operating theater, or someone, an engineer designing a bridge, they'd think, wow, has the world ever changed? And technology has been at the heart of this huge change. If they go to the local lecture hall in the university, they'd breathe a sigh of relief. They'd say, well, this is something I recognize. This has been around for millennia. This makes no sense. What we're talking about here is one of the two big issues, which is pedagogy. The model of pedagogy needs to change, by the way, for a generation that has not grown up being broadcast to, that's grown up interacting. So rather than a teacher focused, one way, one size fits all model learning, we can move to a student focused, interactive, highly customized model where you change the role of the Prof. In the learning experience. Now, again, this has been around for a long time. 1976, I did my master's degree. I took a grad course in statistics on a computer. It was a DEC PDP 1170 and it was all interactive. The Prof. Was there. It was a statistics course. He was there to help structure a learning experience experience for me. There were no lectures. Let's face it, the statistics lecture by definition is a bust, right? There's no one size fits all. Everyone's either bored or else they don't get it. So I got an A. Most kids got an A because on a standard set of tests, they got a B minus two years earlier because it's a better model of learning. And I was giving a talk few years ago to a bunch of university presidents and I went through this whole thing with them and I came back and sat down at the table and I said, what do you think? And they said, well, we buy it. And I said, why is this taking so long? And one guy says, well, we don't have money for technology to transform. The another says, I think it's teaching traditions that go back centuries. Another says, I think the problem is the faculty average age 57 years old, they're tenured and they're sort of teaching in this post Gutenberg style. And at the table was this guy named Jeffrey Banister, who's the president of Butler University little liberal arts school. And he says, post Gutenberg, I don't think so. Not at our school. At our university, it's pre Gutenberg. He says, you got profs working from handwritten notes. It's students are all writing it down. The guy's writing on the block. He says the assumption of the printing press is not even a fundamental part of the learning paradigm. And he says, wait till these kids who are surfing the web hit the university. Sparks are going to fly. And of course they are. I won't answer the second half of that, but the second half is even of more interest to Google, I would think, which is that it's not just about pedagogies. It's where does content come from. And if you can have user generated media on YouTube, you can have the world or people create an encyclopedia 12 times bigger than Britannica, where the quality is just as good. You can create any content through mass collaboration. So it's actually in California, they have a program that they're beginning. They want to wiki all school texts. This will save $400 million a year. And you're going to get a better text because somewhere out there in Sacramento is a grade nine teacher that really knows how to get through to kids on what is a cosine. And so you just harness the collective genius of the world to create the content. So that really starts to change the overall picture of what is a university and ultimately what's its relationship to other institutions in society and also how secondary schools work. Well, the same thing, of course.

Absolutely. My view of both Don and also the book is on the record, so let me just read it to you. Wikonomics heralds the greatest change in collaboration today. Thanks to the Internet, masses of people outside the boundaries of traditional hierarchies can innovate to produce content goods and services. In order to understand the opportunities this presents for companies, read this book. So that's my view and I, I encourage all of you to do so. Thank you very, very much for coming.

Thanks, that's great.

Thanks.

Wise work.