I have to begin by saying what's perfectly obvious. I'm not an expert on energy. I'm not an expert on electricity except that I use a good bit of it. And live and I also can I tell you the future? I don't believe anybody knows the future. Nobody can quote predict and quote. The best we can do is look at the present in the past and creates a model with which to analyze the information we have and then use those to project some possibilities for the future and then perhaps assign some probabilities to those forecast. All of that sounds far more quantitative and scientific than it really is. It is not possible to put numbers on tomorrow. Nevertheless despite all that difficulty it it seems perfectly clear that we should do the best we can and given the fact that we can't know for sure and I'm not an expert. I'm going to try to sketch for you the context for some fundamental change in the second the context in which your industry will develop in a. Of fundamental change in the United States. As I look at it from the outside electricity is a key part of the US Energy base. But an energy base in any society is not just a matter of quantity. It's not how many BTUs and also as you know better than I am. It's a matter of flexibility and controllability and efficiency and relative costs and so on the energy base of a country. Therefore has a qualitative as well as well. Simply quantitative characters. Have a larger could bigger question seems to me is what is the real meaning of Energy Efficiency? What are the functions how well does an energy system and energy-based serve a larger social system. And unless we answer this question or are planning is likely to misfire. It is not possible to plan effectively by Millie projecting forward past Trends linear extrapolation leads to disaster in a. Of high turbulence and Rapid change. It is not possible to plan by looking merely an economic data or technology. We have to look more deeply at the social and political character the society where partner and where that system is going. All of that therefore means that we need to ask questions about energy in about electricity about the structure Communications the structure of family life the structure politics and culture in the society because the Energy System of the energy base is not an independent subsystem nor is it the single determinant of change in our society a lot of other things going on outside the Energy System outside the energy base that is that are fundamentally altering the structure of our community. It is part of the energy. The energy base is part of a larger social system. Just as the economy itself is part of a larger social system and most of the failures of planning and this is an industry which has known as of other Industries. Most of the failures of planning have resulted from ignoring the powerful social forces at work within the society or looking at to narrow a range of data. Once we begin to ask how does the energy subsystem fit into the larger society into the social system we can begin to anticipate certain kinds of changes that the society and the economy will demand of the managers who are responsible for energy in our society and we can begin to see how electricity fits into the future. In order to do that. I think we need some we need to look backward first. We need some perspective on where we are and a very simple and a historian would probably say and over simplified way, but nevertheless a useful way of looking at where we are is to reach all the way back into history and ask ourselves. What were the basic turning points in human life? 10000 years ago some genius some incredible inventor and Einstein a prehistoric Einstein whose name we will never know probably a woman planted the first seed and launched an Agricultural Revolution that moves slowly across the planet for 10,000 years. It's been estimated that agriculture moved across Europe at the rate of one kilometer a year for nine thousand years today. There are very few pockets of population on the planet who live in pre pre agricultural conditions that move of Agriculture changed us from being Nomads and tribesmen and hunters and Fishers to being peasants and farmers. It changed it created civilization. And I call that the first Great Wave of change in human history. 300 years ago the Industrial Revolution explode in Great Britain and that launched a second fantastic wave of change that moved across the planet now, I'm moving more rapidly and that way the change changed a billion people on the planet because there are billion people today who live in industrial circumstances a billion people on the planet. We're essentially change from being peasants and Farmers to be workers in an industrial Urban civilization. If we look at the two dozen or so industrial countries around the world, we see great differences from one to the other we speak different languages. We have different political ideologies some of them so different between a incinerate ourselves some of those differences nevertheless if we look closely we begin to see that all industrial societies capitalist or communist Asian or North American has certain common characteristics and those characteristics form the structure of industrial society all industrial societies engage in mass production production of millions of identical widgets moving off millions of assembly line. All industrial societies develop systems of mass distribution because if you can't have a system for the mass distribution of products, there's no point in mass production. All industrial societies develop systems of mass media mass communications all industrial societies develop systems of education and mass entertainment and mass political movements and mass and mass that. in all industrial societies in addition applied certain common principles The principal for example of standardization not just the standardization of products but the standardization of very subtle things in the society that we seldom stopped to think about standardization currency with the nation's the standardization of time before the Industrial Revolution. And as late as 1935 in China, you can find to community side-by-side that use different systems were telling one Village might divide the day into 10 hours another into 16 hours. It was really the Industrial Revolution the second wave of change that introduced Eastern Standard Time or Standard time zones and all Pilots now refer back to Greenwich Meridian Meridian Time Zulu time standardization of time standardization of Lifestyle highlights became less important Regional Publications became less important Regional culture became less important national language is National culture became more important all part of the process of that all part of that wave. Realization that was launched by the Industrial Revolution the Industrial Revolution also produced in all of our industrial societies by the capitalist or communist or wherever geographically us a nice synchronization. People in industrial societies generally live in a certain Rhythm they get up in the morning pretty much at the same time. They have breakfast at the same time. They go to work at the same time. They work at 6 number of hours. They they join the rush hour Home in the evening to eat dinner at the same time watch television at the same hour by and large. What you have is a nice Rhythm pulsing through that Society Peak usage of electricity not to mention all kinds of other processes in the society. This is true. Whether you looking at magnitogorsk or you looking at Marseilles, are you looking at the Minneapolis? I got three in so to speak. Same thing is true for concentration before the Industrial Revolution. As you know, energy was human beings have always used energy, but the energy was disbursed was the energy of sun and wave and when a muscle power an animal power and those will forms of energy that were dispersed over the planet after the Industrial Revolution. We become dependent after that second wave of change or part of that second wave of change. We become dependent upon concentrated deposits of fossil fuels and huge centralized generating facilities, but we didn't just concentrate energy. We also concentrated money. We created an incredible social invention called the limited liability corporation which led to the possibility to concentrate huge quantities of capital for technological development. We also concentrated more importantly population. We took people out of the fields and put them in the cities with concentrated populations are even some concentrated within that kids in schools sick people in hospitals and so far. This happened in all of the second wave or industrial society part of the process of moving from an Agricultural Society to an industrial society knew this stuff it knew how to operate well in this environment what we had created was an industrial Mass Society. The society based heavily on uniformity uniformity of consumer needs uniformity of daily Behavior uniformity of housing uniformity of dress uniformity of political ideas across the society. That was a great that there was a character of mass culture. Now the industry knew how to operate well in this and adapted itself very well and quickly to the requirements of the mass society and those who built this industry understood the basic changes in their society the understood where the society was moving in their time and they did a magnificent job of supplying electricity for a mass Society. The question it seems to me is whether those traditional methods traditional Concepts and structures can serve the America that is emerging today because I would argue that today. We're feeling a third Great Wave of historic change the changes that Ian Ross describe to you are part of a larger pattern of fundamental changes. I'm not really in our technology but in our geopolitics in our resource use in our population in our Energy Systems, of course, but also in our Urban systems are value systems are family systems and all the rest. We are undergoing a. Of phenomenally rapid and profound social change and when I say I don't just mean Americans so are the Japanese so or Western Europe and even in a slower and more rigid and ossified Fashion Show is a Soviet Union and the other industrial countries on the planet. What is happening is it we are now beginning to undergo the buffeting and shocks of a revolution deeper than and moving far more rapidly than the Industrial Revolution itself. We're feeling the impact of a third historic wave of change. What does that do to the structure of mass societies and therefore to the what are the implications for electricity on the Energy System, generally. Well, I spent five years working as in Blue Collar jobs in American Factory smokestack factories in the American Midwest. I worked in the steel foundry for some years. I worked in a year on an automobile assembly-line. I did all kinds of Manuel jobs for half a decade. So I'm I think fairly familiar with what happens in a mass production situation. I've also spent many years traveling around to factories around the world in many parts of the world. And one of the things that that one discovers is that if you go to the advanced factories, if you go to the most to The Cutting Edge Industries you discover that a great many of them really aren't engaged in mass production. Good turning out 38 of this 142 of that 18 of the other a thousand of this 162 of this and is switching back and forth and the runs instead of getting longer are getting shorter and they're able to do that economically because of computer controls and numerical control because in the old days the factories I worked in if you wanted to change the product you have to stop the line. You have to get an expensive team together to reach all the place it took time and took money. Now you change the program or you punch a few buttons. So the cost of variation of diversity in production is going down. And I began to write about this recent writers have discovered what they call flexible production. This has been building up for many years in Future Shock in 1970. I wrote companies are discovering wide variations in consumer wants an adapting their production lines to accommodate them as technology becomes more sophisticated the cost of introducing variation decline. Pre automation technology yield standardization while advanced technology permits diversity the material Goods of the future will be many things, but they will not be uniform. In the third wave in 1980. I wrote a chapter which I entitled Beyond mass production calling attention to this change which I regard as revolutionary in the economy. I pointed out that was some writers have recently discovered in cold flexible production is actually a return to an earlier system of economic production, but now based on high technology method before the Industrial Revolution all products were custom-tailored or made in very short run. We didn't have the Mass Production Technologies. Now we go back to Custom Tailoring and short-run production, but using the most Advanced Technologies imaginable. What we're looking at in effect is Custom Tailoring on a high-technology basis. It is the reinstatement. I wrote have a system of production that flourished before the Industrial Revolution, but now built on the basis of the most advanced and sophisticated technology. What we're beginning to do is to di Massa fi mass production. In my latest book previews and premises. I explained that while we used to think of mass production as the most advanced production system in the world. It is now increasingly a backward or outmoded form of production. We grow up in a world in which Karl Marx said to us that mass production is the most advanced form of production Henry Ford told us that mass production was the most advanced form of production. I would now like to suggest that we are at a turning point. And now we see forms of production that are more advanced than mass production and that has enormous implications that are political better social it is a historic. Turnabout. I'm not suggesting the elimination of mass production or The Disappearance of all the industries based on mass production, but they will no longer form the backbone of the economy and especially and especially important factor if we begin to look outside the production system. Because an energy system design for mass production will no longer fit the needs of an economy that moves rapidly toward domestify production of goods and services and to understand how deeply that process is embedded. You have to go outside production. Let's look for a moment at distribution in R Us talked a little bit about computers in the home. There's a company which many of you may know of call Compu card company card is studying home shopping. If you look at what's happening to distribution in the United States, if you talk to your marketing people who meet with other marketing people, what are the keywords for the past decade has been Market segmentation. What we're doing is instead of treating the market as uniform as mass what we're doing is breaking it into segments and treating a segment differently. We're giving them what they need what they want and what they want is different from the other segments that however is only the first state if you look at the used today at the incredibly the explosive growth of direct mail advertising Direct Mail Marketing in the United States, Within the last year 85% of the population Ford product either by telephone or by mail and copy card reports that they sold fifty thousand different product through the system in two years, Alabama. So they'll be offering and selling two hundred thousand different types of products through the system and we're clearly moving toward a pattern of distribution in which the Shopper in fact the description of the system as you sit at home you decide you want to an electric mixer. Okay, you tell me you punch in or you talk to your complete computer and say what are the characteristics of that machine you want you want to be so big you want to do such and such a job. You want to be such a Colour give it the specs punch it in. Now you see pictures of them. You can manipulate those pictures of them. You can punch in and get a consumers report on what are the best ones what are the experiences of them? You can punch in who are all the manufacturers offering that product. What's the price? What's the price of each of those products? You can engage in an electronic auction. Bit for the lowest possible price now that's a system of distribution, which is extremely individualize. It has enormous implications for all the intermediate stages of distribution. The wholesalers the job is all the rest and what it does is bring is a consumer in more direct contact with a producer and leaves it connects up Custom Sales and custom production. It means that instead of running ten thousand of these get gizmos on the assembly line. I'm going to wait for a specific order from from a specific customer who has specific requirements. Now let's go outside come outside distribution. Look for a moment at the at the communication system. The second wave of History the Industrial Revolution brought you the mass media What's Happening Now audiences for the three major networks going down cable television coming in multiple channels television sets that offer you a hundred channels of options and we're only at the beginning. We're going to get direct broadcast satellite low-power radio cellular radio low-power television and a host of other communication Technologies, which offer us a finer grain information system in which is possible to Custom Tailor messages to small groups and individuals. In fact, the I tend to think that technology You could have foreshadowed what is happening in electronics today by looking at what happened to the magazine publishing industry a few years ago when from the big circulation magazines, they died many of them and people said Americans want to read but what they wanted read our special interest magazines. So now you have an increasingly refined array of special markets for hot rodders and scuba divers and retired people and every conceivable religious and ethnic group and your desks are piled high with specialized Publications on down to newsletters and Data Systems designed for smaller and smaller groups carrying smaller and smaller smaller and smaller interest groups. What is happening is we are dimassa fi the communication system in parallel with a demassification of the distribution system and the domestication the production system. Now, look at Family Life in America, we hear a great many moans and groans about the death of the family American family is not dead people still want love. They want the decent relationship they care for their kids and song what is happy. Is that we've gone from a mass society in which essentially there was only one legitimate form of family. Everybody was supposed to fit into a family in which father went to work mother stayed home and he had one point eight children. That was the model and that was the model that we saw on the back covers of Life magazine. It was the cover. It was a family that was picture by Norman Rockwell and Saturday evening post. We saw it on television. It's the model with a white picket fence around the house What's happen today? A small minority of Americans live in that type of family. And an inn in addition to that is we have to Career couples. We have childless couples. We have single parents. We have a wide variety of family types some working better than others lots of pain in the transition no doubt about but what we're seeing is a diversification of family structure a d massification of the family structure in parallel with a demassification of these technological and economic functions in the society in the communication system. And I'll take it a step further. Take a look at American politics. When's the last time you saw a mass consensus about anything in this Society? We removed from Nashville to go parties and mass consensus to single issue groups to Grassroots politics to decentralize politics in parallel with what's happening elsewhere in the social structure and finally just take a look at War II way the Industrial Revolution brought the industrialization of warfare. It brought mass destruction and Generals will tell you that if you wanted to take if you wanted to bomb a building you sent a fleet of bombers. They drop Ten Thousand Palms my carpet bomb the whole region to get one target. Now one except that delivers custom-tailored destruction. What it is is the demassification of Destruction in parallel with a demassification of production. I would argue that for that every sit every level of the society some fundamental change is taking place and it's a change in the direction of increase differentiation a doctor of biologists might refer to it as cellular differentiation. We're becoming a more complex society and I believe furthermore just as an aside that it is not increasing complexity of structure which accounts for much of the reason for the information revolution and the information age when you have more complex Parts when you have more diversity within the system you've got more information has to be exchanged between the components to maintain a certain level of equilibrium in the system. And as a result when the society began to be cut the master plan to come more complex the paperwork piled up and up and up and up and people began to plead for machines that would be able to handle the paperwork and pretty soon began to get word processor in computer and all the rest in response to his social need as well as two technological Ingenuity and creativity. In short I believe what's happening. Is that a historic turning point? We're living through a historic Turning Point as we move from a mass industrial society to a d Mastiffs. I'd social and political and economic structure of a new kind. I call it a third wave Society doesn't matter what you call it. It's different and the question then is what is this have to do with energy. What does it have to do with the electricity business? I believe it raises key questions among them the new relationship between the home and the society as a whole again the Industrial Revolution did damage to the traditional home in agricultural societies typically not everywhere. But typically the family was a large household several Generations all living together working together in the field and in the home a production unit. Then came the Industrial Revolution and in every industrialized and Country family size Decline and you began to move toward that standard model nuclear family. I described earlier they were good powerful economic and technological reasons for that transition to the nuclear family. What is happening now? I believe it was along with that as a family became smaller. What happened with a certain basic functions of the family was stripped away from the family take the function of education kids have always been educated, but they used to be educated in the home. Then came the Industrial Revolution and it took work out of the home and put in a factory over there and it took education out of the home and put in the school over there and it took care of the ill out of the home and put in the hospital over there and the home was stripped of many of the functions that it had performed in the past. Now what are the interesting things that happen is that there's a change in the relationship of the home to the other institutions of the society. I wrote in the third wave. I talked about the emergence of people working at home. I call it the electronic Cottage there been many misunderstandings about what I wrote. I believe that into that fundamental accounting and economic forces are going to place a greater and greater incentive on the movement of certain jobs into the home. That if we really did our accounting and we worry about productivity in American Life tremendously anxiety by squeezing the workforce a little bit harder will be introducing a smarter machine. What are the in fact the most Anti productive thing we do in the entire Society is to ship millions of workers back and forth across the landscape every day if you stop and think about that and if the accounting systems revealed the reality instead of obscuring the reality, which is of course with many accounting systems were designed to do in the first place. If accounting systems reveal the reality, you would find that carry that there is an economic drag that the commuting system places in economic drag on the system. We are paying for an entire invisible infrastructure that is devoted to the Computing function the separation of work-from-home. We pay not only companies that have centralized work forces that provide parking lots cafeterias locker rooms all kinds of cost built in there. But an even larger cost to maintain an infrastructure of Highways and streets and police and all the rest of them all of that a much of that made Essential by the need to bring workers. Concentra locations where they can handle the physical Goods now we're moving in with society in which most workers never get near the physical goods and indeed much of the work can be done and is increasingly being done at home. There are in the United States 700,000 home operated businesses 350,000 of those are run by Wyndham. They do 40 1.5 billion winner through 41.5 billion dollars worth of business a year and that little island within the economy has developed without the support of Technology now give it telecommunications and computers and video. I believe that's going to explode and I believe that there's a certain in name it to you about getting it getting leaving the house with a picture of the morning driving an hour to go to an office where part of the day has been picking up a telephone much of that can infect be done at home. So I believe that we're going to see a ship the certain work function not everybody but a significant slice of the population will I believe be working at home? When I first wrote this it was regarded as Visionary or utopian or slightly nutty but recent reports in the business week and elsewhere talked about the possibility that by 1990 15 million American jobs to be done at home. I believe he'll be strong economic incentive to do that and the patterns will be extremely varied two days in the office three days at home for one person. Somebody else two weeks in the office two weeks at home. What's happening is a gravitational shift in the funk function of the home not take a look at that little apples sitting on the kitchen counter and tell me that that is not the most one of the most powerful Educational Tools ever invented and what I believe we're going to see is a shift of some educational functions back into the home. And I just received last week a letter. I'd like to read to you the paragraph from this unsolicited letter comes from the Cleveland Clinic dear. Mr. Topper by Doctor Who's the other intensive care operations? My main reason writing to you at the present time is that we've noticed a trend in our institution towards the development of Home Care treatment programs, which include the care of patients with respiratory failure chronic infections requiring intravenous antibiotics and long-term hyperalimentation requiring the administration of intravenous nutrition. What's happening. Is it so expensive to keep anybody in a hospital we're developing Technologies and systems for taking care of people in the home that is again, just like the change in production going back to something that existed before the Industrial Revolution. I would suggest that if you begin to put all these things together you get a picture of a society that is quite different from the mass industrial society that all of us grew up in and that all of us became familiar with Your industry came into being with the second wave of change. It didn't exist before the Industrial Revolution. It is still weak and underdeveloped in the nun industrial first-wave nations of the world. It is not only a product but a key element in the second wave of his historical changed and the question now is whether this industry can continue in its present form to serve a society that has radically restructuring itself and taking on another shape. The question is can you survive the third wave of change you adapted to the needs of the past but biologists know that the organism most perfectly adapted to its environment to a psychological Niche is also may also be the most vulnerable to break down and disaster. The question is no longer how to merely expand the old electricity system design for that matter how to design a truly new system gear to the newly emerging needs of a d Mastiffs. I'd Society You face. It seems to me altogether new questions. What are the implications of a change in the role of a home in American Life? What are the implications of the electronic Cottage that you again? Refer to the trip that to the substitution of communications for transportation to assert to a certain degree that has big energy implications for the society it change it also will change Urban and community structure and if a great deal of work is done at home what happens to your distinction between residential commercial and Industrial purposes and what what are the other implicated people can live at a distance from the work? How old is redistribute population? Will people move out of your service area? And what about the nature of peak hours in the society when people are increasingly desynchronize no longer part of that mass synchronization, but now deem a certified with flexible schedules with with asynchronous functions on their little home computers with video sets video tape recorders that make it possible for them to watch their favorite program any hour they want to rather than when the network sends it what's happening is that the rhythm of the society is also be Mastiff. I'm becoming more individualized becoming more personalized radically changing from the past. What does that mean for your clothes? What does all this mean for the modernization of existing plants on the scale of new plants? Do you build for Mass Society? If you do you build one way if you begin building for D Mastiffs, I'd Society you begin building another way you continue to emphasize giant nuclear reactors Fordham a certified Society or do you sell sell a few cells to neighborhoods are apartment houses what new balance is needed between concentrated energy generation and Scatter generation What new technologies fuels and Designs can be used to move to a more massive fight system. How do you use that moved also to reduce pollution and ecologically difficulties? I don't pretend to have the answers to those questions, although of course, I have some opinions, but these are only a few of what I regard as really profound questions that your industry has to ask himself. If it's going to survive the transition from a second wave economy and Society to a third wave economy and Society if you want to support the transition from a mass Society to ADI Mass with I'd America. Thank you.