 Hello, and welcome to day two of Digital London. I'm joined by today's keynote speaker, Gert Leonhard, who is a futurist and author, runs the Futures Agency and consults with big brands around the world about the future impact of digital. But some of the things that were coming out today in Gert's talk was a move to the network society, a move from ego to ego, ego to ego to those people who weren't fortunate enough to be here to listen to that, just explain that a little bit more. Yeah, I mean basically what we're seeing is that our entire system of economics and of energy and so on was based on systems that had to, you had to invest in to build them, so lots of sound costs, right? And then you would distribute it out to everyone. So that's power plants, but it's also Disney or Universal Music or big TV networks, right? And those were essentially based on a closed system. But now because of the internet for the last 10 years, and now the mobile internet and the social internet, right? Systems are opening up and we can be decentralized, right? So now the importance is in the network rather than the networks, you know, the original network, right? So basically that means that all business models are becoming interconnected. So it's no longer that important necessarily that you own the power plant, right? Because if you have a distributed network of, say, 3 million wind turbines, you can do the same thing, right? So that basically means that the users themselves are becoming more important. And as 5 billion people are connecting to the web, it creates a huge surge of sort of common knowledge, right? But also the concerns of the masses are taken over the concerns of the 1%, right? As we have seen with Occupy. And this is clearly a major trend in business, in energy, in politics and so on, but also in media, yeah. So there's many reasons why the economy, you know, the ego economy can't work here, right? So that shift to eco is seen across the board, right? And I mean, how do businesses react to that? Because I mean, it's one of the premises of this conference. There have been a lot of sessions about the impact of digital on traditional business models, the new social ways of working, everything's new, new, new, innovation has been said a lot, a lot, a lot. As we all need to pay bills at some point or the other, mortgages or whatever it is, where's the money coming from? I mean, and I talk specifically in the media world, and maybe, you know, even in the conferencing world, the knowledge dissemination of the internet is pushing huge deflationary pressures onto people who used to be curators of knowledge or facilitators of age. Yeah, I think that's what, in a digital system, and the internet in a way you could say is a blueprint for society, right? Because not being centralized and having more equal notes, right, levels the playing field, right? So the question is not whether there's money, but the question is the distribution of the money, right? So just like we have distributed knowledge and distributed input, and like we're all contributing to YouTube, right? We're not gonna get rich individually there, right? But the building a network that does have lots of monetary effects, right? So the distribution of the money is different, but the pool in general is much larger. So, and this of course is the issue because who decides on what is okay and what not okay? And currently the people that have all the, you know, 90% of the funds, you know, 40% of Americans, what is the percentage that, there's I think the top 2000 own 40% of the entire American wealth, right? So when they decide what to do, of course we're not gonna get much of it, right? And I think this is just a natural progression that we're seeing that because now we are connected and all these models are turned to crumple. Like for example, I mentioned Netflix, right? Yes. If we have Netflix around the world and it would be bundled or cheap enough, would we have anybody downloading movies for free? I mean, if it was possible to do it legally at an affordable rate, right? Most people wouldn't bother. Yeah. But then you also mentioned the knock-on effect that it would probably be hugely disruptive to a lot of local cable operators and people like that who are just like, hang on a minute. So are there any winners? Are there any obvious winners? And I suppose when I say winners, I'm not talking about, you know, being blockbuster winners, but what are the things that you're seeing where sort of small innovative companies are winning, are trying to do something else? Well, in the last decade, you know, ever since the internet really became interesting. And of course now on the mobile device, right? The winners are clearly those that are networked companies. So the winners are the likes of Skype or Twitter or YouTube or Google or Amazon or eBay or QQ. I mean, there's many, many. All of those companies are using this principle of a networked system, right? And they also use the principle of interdependence, right? So they need the other ones to play ball. In any system that doesn't require the other ones to play ball, it's probably going to self-collapse except for maybe Apple. Yes. There are exceptions to that, right? But clearly the concern is that basically if you look at environmental things or climate change or energy, right? This is not a game of capitalism in the sense of making money, right? It's basically saving our butts in creating a future, right? So they're clearly the issue is one of sunk costs, right? You have money in, you want to get the money back, right? But in many ways, I think the sunk costs are going to have to be written off. This is the reality of what we're facing now is that you have to make a switch because the sunk costs can't be recouped in the way that you had imagined. And do you think there are some sort of comments on Twitter about how the sort of value cycles need to change? And it's always, I suppose, it's probably a criticism most futurists face, you know? You're outlining the future, but what are the things that companies should be looking at here and now? When you're in the thick of that change, and it's probably similar to the Industrial Revolution, everybody who doesn't really know what happened kind of paints it as this great nirvana of innovation and everything, what they forget about, that there were huge riots from the cotton manufacturers by the Industrial Revolution. There were two revolutions in that entire period. It was a huge social change. Are we there again? Well, as Jeremy Rifkin points out, we are in a third Industrial Revolution and this is not about industry at all, right? It's about data and it's about the environment. Those are the two big topics. I mean, sustainability becomes the number one topic for a lot of companies, not just in the sense of sustaining like delivery chains or procurement or materials, but also in terms of the business model. I mean, how is a company like Unilever or Procter and Gambler so, how are they going to accelerate growth or innovate when they're already a company that it's worth, I don't know, 250 billion or so, right? To grow 10% a year is like, you know, so they have to take on stuff on the outside, they have to open up, they have to do away with some of those assumptions, right? They have to decentralize, they have to let others in a lot more, right? Creating, you know, this is a challenge, right? Do you not also think that companies need to become more comfortable with saying, not chasing growth, but chasing sustainability? I'm convinced in five years we'll have people saying, you know, at the stock market, reports saying that essentially, you know, we're not pursuing growth because it can't be done in this way and they'll be rewarded for it. I mean, today, if you mention the word climate change, in America, you get kicked off the stage, that's one thing. The other thing is if you mention when you're reporting your earnings, if you're saying you're not going to grow, you may as well just forget it, right? In five years it's going to be exact opposite, right? If you're always pushing growth and profit, people are going to say, you know what, this guy is probably not sustainable and then your stock will go down. And that as well needs a bit of a change in the way media reports stuff as well done there because they love the headline or saying, oh, X, Y and Z, I'm not going to mention any brands just in case I do things to them. Well, this is a question of worldview and mindset, right? As long as we all privately believe that we want to grow, we want to get richer every year and accumulate money and so on, right? I think that's still going to be a goal for clearly for a lot of people, but there's a second goal that says we have to sustain something together so that we can actually have something to grow together, right? Because how can I possibly grow when my neighbor is dying and starving? I mean, there's 40 million starving people in Brazil. So how are they going to solve that problem while they're all busy buying mobile phones and watching YouTube on their iPhones, right? Exactly. I mean, that can't possibly be a solution to this huge disparity, right? And the more disparity we have, the more trouble we have, for example, crime or terrorism or, you know, these are things that we have to solve together. Is this move to digital, this wave of digital, which is causing the disruption? Do you think it's the answer to something better or is it actually that disruptive that it may not be better, that we need a bit more control over this? You know, a little bit like, I'm not saying I'm condoning it in its entirety, but in China, there's a managed devolution of power and everything rather than this anarchic DNA that is in the capitalist world. Well, you know, Marshall McLoom said in 1971 is that the global village is not a place of peace harmony quiet, but a place of considerable chaos and discussion, right? And concerns with each other, right? And so what it comes down to in the end, I think that trust, in a way, is a version of control, right? I mean, when somebody trusts you and you trust them back, there is a component of control in that, right? Clearly, in a society of five billion connected people, there have to be mechanisms of control and supervision and regulation. But at the same time, you know, I think that will sort of play itself out as we're doing it because we have to take more responsibility. The problem is that, for example, on Facebook, is not that Facebook is evil, they may actually in some ways be evil, sometimes, right? But that's beside the point, is that we haven't learned what to do, right? We're just foolishly going into all kinds of things, right? We have to take our own response. It's like a nuclear bomb, you know? We can make power, maybe, or we can make war, right? So on Facebook, we have the same thing. We have to be more responsible. Yeah. On that note, I hope we've given some food for thought and some flavor of some of the great topics coming out today. There's quite a lot of discussion on data today and open data initiatives. We had a few announcements about that earlier on today by Francis Maud over in Digital Birmingham, who are doing some really exciting things with that. And those case studies will be available via our websites. We're just uploading them as we speak. So we'll be back here live on air shortly and thank you for watching.