Endgame with Gita Wirjawan - Paul Burton: Tech Talents, Data Policy, Productivity

Episode Date: September 23, 2022

For the first time of its kind, Paul Burton, the General Manager of IBM Asia Pacific, gives his breadth and depth views on the current issues on technology, big data, artificial intelligence (AI), social media, cloud computing, and the prospect of regional economics. Long-experienced in dealing with business clients in diverse and dynamic regional economies, Paul Burton is now leading the Asia region of the world’s oldest tech company, IBM. The US military veteran focuses on developing various strategies. One of them is to support numerous businesses and government institutions in taking the advantage of cloud-based infrastructures to transform and reform. #Endgame #GitaWirjawan #IBM --------------------------  Pre-Order merchandise resmi Endgame: https://wa.me/628119182045 Berminat menjadi pemimpin visioner berikutnya? Hubungi SGPP Indonesia di: admissions.sgpp.ac.id [e-mail] https://wa.me/628111522504 Playlist episode "Endgame" lainnya: https://endgame.id/season2 https://endgame.id/season1 https://endgame.id/thetake Dengarkan juga di Spotify:  https://open.spotify.com/show/72q1XjiuFViF2tx7IbQ5X5?si=B-l7hi7ET7uYmu6kbyhs7w Kunjungi dan subscribe: https://www.youtube.com/channel/UCu8fHdbHwJ1MFqf7Uz95aFw https://www.youtube.com/c/VisinemaPictures

Two-thirds of GDP in the world are coming from digitally transforming governments and enterprises. So do you really want to be in the one-third? I think data is the blood of the enterprise. Blood travels throughout your body and it takes nutrients to all of your organs. Data is transmitting information throughout the organs of the business or the organs of the ministry. If you and I are in the jungle and there's a tiger, I just need to run faster than you. This is Endgame. Hello,

time, today we're on Paul Burton. Belial is a pinpinan from IBM for all Asia Pacific.

Paul, thank you so much. We're coming on to our show. Thank you. Just a bit of background on yourself. Tell us a little bit about where you grew up and what you studied

and how you got hooked up with IBM. Wow. So, obviously from the United States, I grew up in Los Angeles, California and lived there the first 20 plus years of my life, went to school in Los Angeles. And when I was in school, I actually was an ROTC student at UCLA. And so I graduated.

I did a stint in the Army, which took me to Europe, the Philippines Asia, a few other places. And then when I left the Army, I want to say in 1990, they called me back. and sent me to Southwest Asia. Wow. And then ultimately I left and went back home, and I immediately started working for Hewlett-Packard. Okay. So I've been in the tech industry since 1990, 1992,

1992, and pretty exclusively, actually, in the tech industry. But strangely enough, when I started with Hewlett-Packard, I started in accounting, and then I sort of moved my way around. Accounting, something in common, right? Maybe I share your reviews on accountants, I don't know. But anyway, I, I started in accounting and then financial analysis.

And ultimately, I got into consulting with HP. Okay. Left HP and ended up with IBM in 2000. And spent about 14, 15 years left, did some things on the side that were a little bit more entrepreneurial. And then just recently about seven months, well, in December of last year, here I am. Congratulations. Yeah. Well, so I'm back here in Singapore this time, and I'm enjoying it.

You're a Lakers fan or Clippers? You know, I was a huge Lakers fan in the 80s. I really enjoyed the Shaq and Kobe era. Yeah. And I'm not as enamored with them in the current era. I think they have some work to do. You don't think LeBron is... Well, I mean, he's certainly one of the greatest players of all time.

No doubt about that. He'll probably take over the scoring, all-time scoring leadership, I imagine, this year sometime. So you can't deny him what he's earned, but he's a great player. What do you think is IBM's priority going forward? I think IBM is looking at the industry and they see a tremendous opportunity as clients move away from exclusively on-premise computer infrastructure into a hybrid environment

where you have computer infrastructure on-premise, but you also have a significant cloud presence. And the cloud can be public cloud with one of the hyperscalers. It can be public and private cloud. And of course, it can be multiple clouds. I think the idea is that clients, in order to have the business agility that most clients need and want and require for competitive reasons because you have to move fast these days, speed matters.

And if you want to move fast and be agile, your infrastructure has to move fast. fast and agile. And I always said, if I were ever a CIO, the last thing I'd ever want to tell my CEO is, I'm sorry, but I can't support your business strategy because our infrastructure won't support it. It's not a good strategy as a CIO. So going to the cloud and having a very agile infrastructure where you can scale up, scale down, scale sideways as required to meet whatever you know, your competitive needs are is a good thing. But that brings all sorts of new demands, of course.

Right. So I think IBM sees that and they're creating the tools. Yeah. And the technologies to manage that complexity, because it is complex, to manage that complexity in a way that's possible and that allows, you know, businesses to have that infrastructure that can scale and do what needs to be done without having an army of technologists sitting around doing things manually. So there's a lot of automates.

There's a lot of automation. There's a lot of artificial intelligence. There's a lot of stuff that goes into that. There's a lot of optimism amongst many of us in Southeast Asia with regards to how we could be further empowered by tech. And if I want to put this in the context of how we would have fared in the last 25 to 30 years in Southeast Asia, vis-a-vis what China would have been. would have done, right?

China has grown from a GDP standpoint in the last 25 to 30 years, like 10 times, Southeast Asia, a little over three times in the same period. But there's a lot of us who are feeling more optimistic

about being able to grow a little bit better, if not much better, than how we would have grown in the last 25, 30 years so that we can hopefully not only enjoy the China dividends, but catch up with somebody like China.

Do you think that's a possibility or a probability? I think a lot of it has to do of government and government policy. China had some advantages, of course. You know, China is a huge market, billion plus people. And so markets that size attract, you know, folks that want to sell into that market. And so that's one example. The second example is the Chinese government was very calculated. I believe in terms of mercantilist, you might say, but very calculating for sure in terms of

inviting Western companies in, Western technology in, but then requiring things like technology transfers and things of that nature so that their workforce could get skilled up and they could catch up, if you will. And a lot of that was driven by, I shouldn't say a lot of it, but certainly some of it was driven by, you know, historical Chinese attitudes about dependence and vulnerability. Right. So China had some, China had a government that was very

controlling, you know, prescribed specific policies and then drove adherence to those policies. And then they were very attractive from a size perspective. So do those factors or do those conditions present themselves elsewhere? You could look in Indonesia, a fourth most populous

country in the world, I believe. Growing 6% GDP, 5, 6, 7% in that area. 270 plus million people. But if you look at the market, the technology market in Indonesia, it's a small fraction of GDP relative to the U.S. or relative to the United Kingdom or even relative to India or the Philippines if you want to look in this region. And so I would say that if the government in Indonesia wanted to develop quickly in a directed way, it would require some type of government. policy and some type of emphasis on that outcome. But I would say this, the numbers that I'm seeing suggest that two-thirds of GDP in the world

are coming from digitally transforming governments and enterprises. So do you really want to be in the one-third? And so digital infrastructure. It speaks of the upside, potential rate. Yeah. And so the phrase I like to use is, if you and I are in the jungle and there's a tiger, I just need to run faster than you. I think you are, because you're taller than me.

Well, I'm carrying a few more pounds than you are, I think. So maybe I'm not that nimble. I don't know that I can climb trees either. But the point is, is as soon as one country or one business in an industry decides that they're going to digitally transform and develop efficiencies and cost structures that are much lower than the rest of the industry, they're going to pull away. and they're going to have a competitive advantage. But successfully is footprints. And so other companies or nations, as the case may be, are going to want to follow this footprints and catch up.

So all advantages are fleeting, I guess, is what I would say, unless you can somehow regulate access to the technology that gives you the advantage in the first place, which is generally not the case. But I think digital transformation on a national scale is something that many, and it was accelerated by the pandemic, right? Yeah. The countries around ASEAN that I'm familiar with took really discontinuous leaps forward in terms of digital transformation when the pandemic hit.

There were countries that had to develop, distribute tens of millions of dollars of aid electronically. And they'd never done it before. But they had to figure it out and do it inside of two or three months. And so how did they do this but for the application of technology or their exploitation of technology, if you want to do? look at it that way. So I think the pandemic accelerated some things and maybe the genies out of the bottle now. So what we knew conceptually and intellectually beforehand, we had to really run and do it when the pandemic hit. And now we see the fruits of our labor and now it's going to move forward a pace. I think that's what's happening worldwide, actually. The three notable reasons as to why

Southeast Asia would have been lagging behind China. would probably be education, infrastructure, which could include tech infrastructure, and the degree to which each region would have facilitated competition amongst businesses, right? And if you take a look at just within ASEAN, Singapore has been able to basically facilitate the setting up of businesses amounting to about

nine businesses on a per thousand people basis, whereas countries like Indonesia, the Philippines are at 0.3 business on a per thousand people. China is way up there, nine businesses on a per thousand. Almost equivalent to where Singapore is. There's disparity within ASEAN, but on a collective basis, there's disparity between ASEAN and China.

That is a revelation, right? Those three actually are revelations, the degree of infrastructure, education, and the degree to which you facilitate businesses or competition, rather. How do you think that could improve going forward for ASEAN? Well, I think it's sort of the tiger in the jungle scenario. I think China was driven by circumstances that didn't drive Singapore, for example. China was driven, in my mind, largely by national security posture. They believed that they needed technology, infrastructure, capability, modernization, and everything that goes along with that for security reasons, based on their history,

the century of humiliation, if you want to look at it that way. And that drove them. But they had to have a very, very strong central government and bureaucracy, a disciplined, bureaucracy to drive that throughout the country. And then you can look at the interior of the country and realize that it's not ubiquitous within China. Singapore, obviously, is a very small place. Small island, five million people, but very high standard living, very high productivity, very high use of technology. So a little bit easier to manage, so to speak. I think what it comes down to, if you look at the ASEAN governments, and we can go through the region and look at each one of them,

It varies, but it varies based on the quality of governance. And, you know, Australia, modern, very digitally savvy, strong digital infrastructure. But again, it accelerated with the pandemic because they had to. Singapore is same thing. Thailand, less so. Indonesia, less so. Philippines, less so. And then there are other countries that are down there as well.

I think it's leadership, it's courage to move it forward. It's an understanding that if they don't digitize and modernize and create the infrastructure and then create incentives for entrepreneurs or for people to do what I think in many ways comes naturally for them to be entrepreneurial and look to improve not only their situation but the situation of others. But they got to have the incentives from the government and then the freedom to do it. How do you get everybody to see the same tiger in the jungle so that they run as fast? They take the same view. I mean, I understand that there's politics involved, but we've seen some examples or positive examples where certain sectors have actually been able to get better, get more productive, get more digitized without political leadership. intervention. Right? And I'm just trying to be more optimistic about the future here, where as much as we

stay, you know, somewhat shackled or influenced by the political landscape in each one of the 10 countries in ASEAN, there are ways, right, to depoliticize means with which you can actually ramp up productivity. You can ramp up efficiency and all that good stuff. Yeah, you know, I sort of look at this in a big way. I look at it broadly and then I boil down into details. And so I can make a couple broad statements. Close systems always fail.

Because they don't take input from the environment. They don't adapt. They don't evolve. So they always fail. It's just a question of time. Yeah. And so comparison is an incredibly important thing. Another big broad statement.

Can you think of a country or the leadership of a country? It doesn't matter what the form of government is, just think of the leadership of a country. And can you think of a country or its leadership or its system of government that has survived absent either support of the people or acquiescence of the people? Once resistance becomes ubiquitous, the government generally falls. It's just a matter of time. And so the reason I say it that way is I think comparison is an incredibly strong force. And what I mean by that is when you have citizens broadly in a

country, to any country. And they start to compare their lot in life to the lot in life of others who they perceive as doing better. Are they going to be happy or sad? And to the extent that they're not happy, I think that boils over at some point. And it's going to get a movie. And politicians at the end of the day want one thing, and that's to stay in power. So the only way that they can do that is they have to adapt and evolve, which means they have to evolve the governance of the country. And so that's an optimistic view, because what it means is, because what it means is that governments are ultimately going to be responsible to their people as a matter of self-interest for the government itself. And what's necessary is that the system is not closed off so that they can get the information, the people can get the information and transmit that to the government and the government can then come up with proper policies. So I'm optimistic that if the system is open, it will evolve.

It's just a question of how fast. I agree. And if the system is closed, then it requires the government to have a tremendous amount of repressive capacity to keep it closed. And that's a situation

that we really only see in very, very few places. And it remains to be seen how long that can go on. It's not that easy, you know, in many countries around the world to get everybody

or to get enough people to be as open-minded as those that you might be seeing in some other countries. Right? it's not easy. And I'm also saying some sort of an irony or a paradox where there's quite a number of democracies around the world

that have been supposed to democratize talent, but they've not been able to democratize talent. They've been selecting talent a lot more based on loyalty or patronage as opposed to meritocracy. Whereas on the other hand, an autocracy like China, I think it has been pretty good at selecting talent based on meritocracy. They've been able to democratize talent better than many democracies around the world. Isn't that paradoxical?

Well, I think, so talent is a big issue. And I look at Internet usage as an example. And Indonesia, for example, is a very high percentage of folks on the Internet. But they look at TikTok and Instagram. I'm sure they look at more than that. But I guess my point is, and this gets back to this idea of comparison, is once you see what's going on elsewhere, it's human nature to compare that to whatever your current circumstances are. And I think at the end of the day, if you have access to information and information is free, so to speak, which much of it is on the Internet these days, you know, social movements happen quite naturally. Yeah.

And people bind together. They associate. And so I think ultimately, unless there's some type of artificial intervention, I think people will, you know, will point the way out. And I think the government will get there. It just takes a little bit of time. Yeah. But at the same time, this is another paradox that I'm seeing where, and I've been raising this, you know, a few times in a password. We're seeing tremendous degree of democratization of information.

Right? You can see lots of stuff. Back in the old days, some or many countries, they only have one channel. I mean, one TV station. Now they got thousands to access information through. While then, there's still not a whole lot of democratization of ideas. If any ideas are actually getting polarized.

You get to choose either. left or right at the expense of the center or centrality. That I think to me is a mockery, where we have tremendous degree of information by way of this massive infrastructure, you know, from a technological standpoint, right, so that people could look at thousands of channels for information gathering purposes,

but they end up polarized at two ends. Information overload. Yeah, but there's got to be way, to make sure that it translates to a true democratization of ideas, right? So you get a full spectrum of ideas. Why do I have to just go left or right? Why can I go straight? Well, you know, I think that's in many cases.

What you see in the U.S. right now is you see a tremendous... The media is polarized. Right. And we can argue which way they're polarized. I guess it depends on who you talk to, right? You know, some would say, you know, this way, some would say that way. But there's so much information out there. So I guess my point is, is so information is meant to be free.

So let it be free and let people decide. But it requires that people engage with the information in sort of an analytical and discerning way. And when you have, you know, media, whether it be newspapers, talk shows, podcasts, whatever, pointing things out and driving, you know, there's confirmation bias, right? People are disposed for whatever reason to believe something, and when they have something that confirms their bias, they roll with it. And then if there's a high volume of that, then you can see them being pushed to one side of the spectrum or another.

I get that, but there's an element where the design was to cause virality, which would have unintended consequences, right? The social media platforms are not editorialized, whereas if you read a newspaper with a circulation of no more than 400,000 readers, it's got a chief editor. I think we've got to have good theory to start with. And what I mean by good theory is we've got to have a belief, hopefully supported by empirical evidence,

on the way the world works or the way this thing works. And then we start off with good theory, and then hopefully we find empirical evidence to support the theory. We test hypotheses. I think this gets back to the scientific method without going too deep there. I think if all we're ever doing is observing events and then saying it supports my narrative, I think you've got to go deeper than that.

You've got to say, why does the world work this way? Why is this situation keep recurring? And at the end of the day, you've got to have some type of theory that explains it, and then hypotheses that support it. And I think we're skipping those steps. I think what we've done is social sciences become cheap instead of rigorous. It's become easy instead of analytical and disciplined. And I think when we get back to basics, we start rigorously testing theories with hypothesis,

supported by data, supported ultimately by observation. about the way the world really works. I mean, we were talking briefly about the Higgs boson, and I'm not a physicist, by the way. So I'm sure I'll get something wrong. But that was rigorously proved with mathematics, long before it was able to be observed with the large hydrant collider.

With experiments with nothing. Yeah. So we came up with this theory that it should exist. We came up with mathematical logic and equations that said, yes, it makes sense. It should exist. Now, the only thing that's left is can we observe? it. And we had to come up with all this new technology and all this new stuff in order to

ultimately observe it and then in all the pieces fit together. But that was a rigorous analytical proof. That was the scientific method and action. And if we can't do that in some shape, form or fashion, with some of the social phenomena that we're seeing... Toast. Then we're not being toast. It's not constructive. Let's put it that way. Yeah, I agree. But, okay, what do you think of data? I mean, a lot of people have been saying it's the new oil, it's a new water.

How essential is data. I have a little bit different take on that. So I heard the new oil and all of that. Yeah, the new water. Yeah, yeah. And those are interesting, but it's actually... The ultimate resource. I think data is the blood of the enterprise.

Okay. And what I mean by that is, blood travels throughout your body and it takes nutrients to all of your organs. Okay. Okay. And so, and it carries oxygen to your lungs, I believe. So hopefully I won't get myself in trouble with the medical aspects of this. But, and so I think that's the right metaphor, because if you're looking at a corporation or even a business, a government enterprise, a ministry, yeah. Data is transmitting information throughout the organization.

the organs of the business or the organs of the ministry. And if the data doesn't flow ubiquitously and easily, then you're starving certain organs or certain parts of the body from the oxygen and the nutrients it needs. And then, of course, the body doesn't function. And so I think we need to look at data that way. Data is incredibly important because it carries all these things throughout the body, but then you've got to leverage it.

And you leverage it in a variety of ways. So the way I look at it is, you know, a corporation, a bit of the stick with the corporation for the moment, is nothing more than the summation of business processes. Sure. They take inputs. They produce outputs. Hopefully someone buys the output and then the whole thing keeps going. Okay. Well, what do I do with that? So the inputs and all the way to the outputs, that's the flow of information.

That's the flow of data. So if I can take, and those are processes that do all this. So if I can automate those processes and have that data flow without manual intervention, I'm creating a tremendous amount of efficiency in the business itself. And as the data flows, we'll call it telemetry at this point, is carrying all this information with it. And I can inspect that information analytically and make decisions to tune the operation of the enterprise. And so the significance is all of this starts with the blood, which is the data. Right.

No blood flow, no data flow. Everything else stops. You're back to pushing paper and pencils and ledgers and abacuses and all that kind of stuff. So processes, data, and then automating those things is really what digital transformation is doing. But then the question is, how do I do this at scale? Yeah. How do I do it at scale, whether I'm talking about an enterprise or a government. And as soon as we start doing it at scale, we've got to start using,

and how do I do it at scale and how do I do it in a way that's agile so it can be, it can transform on demand, so to speak. And all of a sudden, that gets me all the way to the cloud because cloud allows me to instantiate infrastructure, compute infrastructure, and scale it with a few keystrokes. I mean, you imagine 20 years ago, when you're setting up an information infrastructure

in your business, you ordered a bunch of servers. They took six, eight, 12 weeks to arrive. You then had an army of consultants to come in and plug them in and install them and make them talk to each other and get the networks up and run and get the databases running, all this kind of stuff. It took forever. That's not agile. Now all of a sudden you can go and log on to the web and you literally with a few lines of code, you instanti all of that stuff straight away. Where do you draw the line, though, in terms of being able to properly define, the sovereignty of data.

I mean, you're using the analogy of the blood that runs through your body, right? And it's just your body. It doesn't go to another body. Your blood doesn't go to another body. But we live in a world or an era where that blood of yours actually leaves your body, right? Country to country, company to company, place to place,

or what? Where do you draw the line? Where do you draw the line on who owns your DNA? Yeah. How do you do that? Well, that's the big issue, right? I mean, who owns your DNA? Because it becomes a debate, right?

Within many countries and amongst many countries. Yeah. You've got the GDPR model in Europe, where it seems to be pretty risk-averse in terms of protecting your data. Indonesia seems to be moving in that direction. Some other countries are not. And that actually boils down to how you define data sovereignty.

It gets down to the rights of the individual. If I'm surfing the web using a particular browser... You're exposed. You know. Yeah. See, that's a troubling thought, right? These platforms know about you better than you know about yourself. How do we improve humanity so that we can actually know as good as well as these platforms know about myself?

And there was a famous Law Review article in the U.S. written, I want to say in the 1890s, I wish I could remember the name of it, but it was a seminal article on privacy. And this, keep in mind, this was written in like the 1890s, Harvard Law Review article. And I believe what they said in that article was the right to privacy is the right to be forgotten. Okay. Or the right to be anonymous. And if you don't have the right to be forgotten or to be anonymous, then do you really have privacy? And so if I'm out there interacting with modernity, I'm on the web, my cell phone's doing its thing, I'm sending emails, I'm doing all the things that we do every day that we don't even think about. and I'm metadata from my habits as being collected

or my data is being collected in terms of my surfing history or whatever. How do I get all that back? Because if I can't get it back, then I'm not sovereign. And if I can't get it back, then I've given up something of myself that I didn't explicitly say I want to give up. So I guess my point is, as an individual, as an individual, is that something I have a right to control? Yeah.

And if I do have a right to control it, I can't just say I want to control it. I need the government to support me in that right. Yeah. Because they have the police power, right? Yeah. And so I think those are the debates that are going to go on. And by the way, if you look at around this upper level, so what does data sovereignty mean in Australia versus Indonesia versus the Philippines versus Singapore versus India? You know?

So when you, when a business puts their data in. in the cloud, a cloud, doesn't matter which one. Does the government have the right for national security purposes to go in there? And what is national security? Where does that line get drawn beyond which they cannot go? And by the way, when a business e-commerce puts my shopping habits in a database. They know how many calories you're consuming. Too many, I'm sure.

They know how many more you're going to be eating. too many, I'm sure. That's kind of scary, no? Yeah. Yeah, it is. And do you sense that there is going to be a revisionism with regards to the definition of sovereignty in a good way, as opposed to a not so good way, as to justify what needs to happen going forward? Well, I think if bad actors are going to grab data.

through a breach. I think data sovereignty is a big issue, but there's bigger implications. Depending on the laws and how things are restricted, you're affecting the ability of the nation to connect to globalization itself and to share data and to be part of a system. But the reality is, the guys that are supposed to be regulating this all over the world

are moving at a much more linear. linear rate as compared to the private sector which has been much more exponential those who care about how the two

ought to coexist we'll do something about it so that this guy gets to be a bit more if not much more exponential in their understanding comprehension of what needs to happen

but imagine those places where they can't be bothered with becoming any more exponential than ever. So I think the ability to think the long game is key, right, for any side so that they could start getting each other to better understand of what's happening and what needs to happen going forward. Yeah. There needs to be some general consensus among governments about what's fair game with respect to data

and the transfer of data between nations. states. And then whatever that turns out to be, the citizens of the particular state need to be happy with that. And that's a really complex and a really big problem. And in many cases, governments don't want to talk about it because they don't necessarily want national security decisions that they're making, you know, out there in public view. And so it's a big problem. It's a big problem. I mean, you suggested that, you know, it's the people's choice. right to use their handphones and start clicking on your e-commerce or whatever you could you could use the argument that you know it's been democratized you you get to choose to use it

or you get to choose not to use it but that just seems like a cheap excuse right well for nothing to be done but if you choose not to use it yeah isn't your ability to participate in a meaningful way in society itself reduced that's true yeah so i'm in this very moderate society with all these great things. And if I can't participate in them, then am I truly free at that point? So in some sense, there is no choice. You have to participate. Okay. You know, I try to limit my mobile phone usage to no more than two hours a day. And I'm just... Are you tracking your screen time? Well, on a weekly basis, it pops up, right? It tells you your average screen time.

is like one hour or 45 minutes or something you know it never goes about two hours but when i see people around me my family members you know they look at their mobiles for nine to 10 hours yeah that's a long time and that's representative yeah of not just everybody in indonesia but many people around the world yeah right i want to i want to ask you about artificial intelligence okay what's what's the role of official intelligence in places like Southeast Asia or Indonesia? I don't know that I would make a distinction between the role in Southeast Asian, Indonesia, versus other places, first of all.

So the way I look at it and the way I think about this is I think demographics drives a lot. And Indonesia, I'll just tell you, and you probably know, has a very, very healthy demographic, a lot of young people. The Philippines, very healthy demographic. Singapore not so much, China not so much. We could go on and on. But the point I'm on is artificial, if Japan would be a great example of very poor demographic, they're depopulating, their population is going down, right?

And so I guess my point is, is we've got this very modern society that's becoming increasingly modern with technology and all these things, and we're producing fewer and fewer young people to come up, right? which means fewer and fewer young people paying taxes to support the older people that are coming out of that are. So you get that whole problem. Well, but here's the point.

What if those young people don't have the skills to keep all this technology and all this automation and all these modern things that we've done up and running? And so the answer is, not the answer, but an answer, a contributing answer, is what if we have artificial intelligence that is, reflexive and self-aware and can look at business processes and keep them going. Now, I'm not talking about anything like a general intelligence or anything like that. Those are big words for bigger thinking people. I'm just simply saying what if business processes can adapt based on artificial intelligence, machine learning, things like that, that are able to make decisions and learn in real time and therefore keep things moving.

So what does artificial intelligence offer us the ability to do? It offers us a partial solution to what I think just about everyone, especially in Southeast Asia, would describe us a skills gap. But it's dependent on the blood flow in the corporation data. If blood's not flowing through the organs of the corporation, then there is no artificial intelligence, the brain, being powered by that blood flow in the oxygen. and the nutrients, all of that, and the body fails.

And so artificial intelligence is not going away. It's getting better. It consumes a lot of data, and it has certain requirements, data, and the infrastructure to feed all that data. And I think it's only going to get better, and it's only going to get stronger. I don't know how a modern enterprise exists going forward without. And by the way, all the data, you can go look at all the analytics. reports and it's all out there. This battle, this question has been answered. The battle is over.

It's just a question of implementing it. And so artificial intelligence is pervasive and it's getting into every business and every business process. And so we talked about the web a little bit, or not the web, the cloud a little bit earlier in this idea that clients are moving infrastructure to the cloud so they can have an agile infrastructure that can expand quickly on demand. Agile. Well, the idea is, if you think about all the applications that exist out there that drive businesses, all of them, and you think about the idea of, I've got to take those applications and re-architect them, port them, migrate them to a cloud-based environment, you're not just going to lift and shift. You're going to re-architect and port that thing and infuse intelligence into it. And that's the business opportunity going forward for many of these tech companies because it's easily a multi-trillion dollar market when you think about all of the applications that are out there that have to go and get lifted up and then infusing them with artificial intelligence in a responsible way. Ethical AI, as you describe it or is being talked about.

So that's what I see as the opportunity. The cloud is here. That battle has been won. That decision has been made. But now we've got to move the infrastructure. and to move the infrastructure, we got to report, rewrite, re-architect, all these applications, move it. And if we're going to go to all that trouble, we're going to infuse it with AI so that it's smart. Because we see the skills gap and we see the demographic challenges going forward that are only going to get worse.

The economic value is just too good to be true. To insult and resist. I mean, you know, I mean, you know, I've read many of these reports, one of which basically, illustrates the delta that's going to come from AI is just going to be about $100 trillion in the next 10 years. Yeah, it's a big number. Much bigger than some of the other big disruptions, right? Be it genomics, data storage, blockchain.

Yeah, so there's a really famous, I don't know how famous it is, but it's a fairly well-known graph that just, it really impresses me every time I think about it because it's really profound. you really got to think about it. Let's rewind 22,022 years ago. Yeah. Have I got that right? Yeah, 22 years ago.

I want to make sure I got my dates right to zero. Yeah. Okay. Now, if you look at the standard of living, the wealth of the average person, the human condition at year zero, and now start moving forward. And the y-axis is standard of living, wealth, human condition. How do you want to describe that? And the X-axis is time. start at year zero, the line is flat until when, somewhere around 1800.

What happens in 1800? Steam engine. So now the line starts to arc up just a teeny bit, very gradual. But it stays pretty much right there until 20th century. Yeah, 1950s when transportation went to the next level with intercontinental air and obviously the shipping and all of that. But then something happened in the 1960s. or 70s and the dates are not exact. We started putting computers and data centers

for corporations and it had data processing. And that created a level of efficiency. The slope of the line arped up a little bit more. And it stayed that way until the 1990s. What happened in the 90s? The World Wide Web. So the line arped up a little bit more. And then we get to

the 2010, 2020, in that area recently, analytics. And now the line arcs up a little bit more, which means it's steeper, which means people's standard of living is increasing at a faster pace. But what's next on the horizon? Artificial intelligence causes the line to arc up even more. And then what goes beyond that? Quantum computing. And so what you see is a line that goes like this for 1,800 years, and then it slightly, and then boom. For 4.6 billion years. Yeah. Well, but then in the last 20 years, it's gone vertical. I'm hyper.

A little bit of hyperbole there, but not much. It goes vertical. And the standard of living, how many people have been lifted out of poverty in the last 50 years? In the billions. More than in the previous 1800 years or 2,000 years, a long time. And that's because of technology. And so the reason I like that curve so much, and Jeff Sachs wrote a book, and he has a slightly different version of this graph. But the same concept.

Every change in the human condition has been punctuated by a change in technology. Yeah. Technology, transportation, communications, and computing, artificial intelligence, quantum. And it's made a big difference for people everywhere, given by the evidence by the fact that how many people have been lifted out of poverty, lots, millions, billions, and what's going to happen going forward? No, I don't deny. Lots of good things have been happening in the last few decades, by way of technological innovations, right? But one inescapable fact is the fact that we still have not been able to resolve

inequality. Inequality. Right. Yeah. That's a sad part of the narrative, right? And I'm always hopeful that technology will provide the answer, right? For purposes of bringing about more equality. I mean, it's kind of said that, you know, we've gotten so much more inclusion, technologically, socially, economically, you name it, right? But it hasn't translated into the kind of equality that one would have hoped for. Genie ratios are rising in many countries around the world. Right.

That, I think, will be a pretty perennial issue, you know. And I'm not sure if that's going to be. going to get resolved, especially as you aptly suggested that these technological innovations, particularly by way of autonomy and automation, would translate into the dislocation and displacement of so many members of humanity. And what are you going to do about that? The social unintended consequences are not to be underestimated. I think it's a fairly natural thing for people that are successful to try to lock in their success. And so you go out there, you create a company and you make a billion dollars or some

big number. Right. I guess a billion is not all that big anymore, right? I think we're going to see a trillionaire in the next decade. But anyway, and there's a tremendous desire, and it comes fairly naturally to lock in whatever you've done to protect what you have. Right. And so when people build these big businesses, they want to lock it in.

Yeah. And when people, and when, so the average is over. I'm okay with locking yourself in, right? Yeah. But it doesn't mean that you can't do stuff with those that are still at the bottom. Yeah. Right? The system needs to work as to basically lift more and more hundreds of millions, if not billions.

Yeah. out of the trap that they've been in or they're going to be in. But someone needs to make a decision as to how they're going to be lifted under what conditions they're going to be lifted and how high or how far they're going to be lifted. I think it goes back to the earlier point of how we can better democratize talent. Human capital is just the answer to so many things. I think what we're going to see with technology,

and what I'm seeing with technology is as we automate processes, and we take labor out of the equation, all that labor is going to be freed up for a higher valued purpose. And the question is, what is that purpose and are they skilled for it? And we can point out examples probably in multiple countries where manufacturing has left a particular city or place. And all of the blue-collar jobs, the manufacturing jobs that were there, those people are now displaced.

And are they skilled to move on to the white collar jobs, the technical jobs, the technology jobs? And the answer in many cases is no. So how do we deal with that? And that is a quintessential government problem. That's a matter of government policy. Someone needs to make a decision about that. And then, of course, it needs to be paid for through taxes, et cetera. And so there's so many variables that go into that.

You can look at the average tax extraction rate for an OECD country. 30%. I would have said 33.5, but okay. I'll go with 30%. What's Indonesia? Less than 10%. What does that mean? What does that translate to?

It doesn't mean badly, necessarily. There are other countries that have a much lower tax ratio than the typical OECD countries and are thriving very well. Singapore is below 20%. Yes, it is. But they've been able to galvanize the private sector, right, to create jobs to... Yeah, but what's, but Singapore has a per capita income of 50K or better? No, I think 60 something thousand now.

Okay, so even higher. Yeah. And so what that tells me when they have that level of productivity, because that's really what that means, is productivity. You don't get that level of productivity without a certain education and skill level. And when you have that education and skill level in a modern economy with very low unemployment, you actually don't need a high tax rate. Right.

Because you don't need to extract and give back. But in a developing country, I would argue, you would need a high extraction rate because you got to skill the bottom and lift them up. And there's a period of time where that needs to happen. The United States, the tax rate was, I'm dating myself, but over 70% up until Reagan. Yeah. Well, let me guess which, you know, ideological orientation. You might be surprised. Okay.

Okay. I might guess wrong then. You sound like a Republican then. Well, I'm a right-minded independent. There you go. There you go. I wasn't wrong. But going back to productivity, I've been gangbusting on this in classrooms where, you know, the marginal productivity on a PPP-adjusted basis for Singapore is about $170,000. Indonesia is at about 24,000. Most countries in Southeast Asia are below 50,000.

Some are 60, 70,000. So at the end of the day, we got to do whatever it takes, right, to ramp up from 24,000 to hopefully $171,000. And that requires not just willpower, but I think it requires technological support. There is a better chance today onward than what we might have experienced in the last few decades.

Right? I think so. And productivity is going to answer. You know, concerns about dislocation, concerns about displacement, concerns about disruptions, concerns about inflation, concerns about recession,

concerns about whatever negatives are out there. Right? But it's a long game. you're not going to be able to move the needle from 24,000 to 100,000 overnight. It's going to take decades, if not years. I think things happen faster these days than you might expect. And so I don't have a specific time frame for you. But I think with concerted effort and consistent policy over the long term,

you can't change policy all the time. I think it happens faster than you think. But you've got to have infrastructure. physical infrastructure and digital infrastructure. I can actually point to a number of sectors in Southeast Asia where there's been meaningful ramp up in productivity. The aviation industry. In the days when there were no LCCs or low-cost carrier,

things were slightly more inefficient. but then the LCCs came about it brought about competitive spirits right and these LCCs have been able to prove that they could do things

a lot better a lot faster a lot more whatever effectively by orders of magnitude just in the last 10 15 years ever since we saw the emergence of some of these names that I'm not going to have to mention

that I think is a good example where we can actually achieve the delta in a relatively short period of time. Because competition. Correct. The second is finance, right? Financial services, where we've seen these technological financial service companies that have been able to deliver products, goods and services at a much more efficient rate than the pre-existing conventional wisdom.

So I think you're right. We might be able to achieve this. faster. I'm just hopeful that these could be replicated in so many of the other sectors. I think they can. Yeah. I think they can.

I think you know, and now I'm going to reinforce your stereotype that's developing of me, right? I'm going to say without burn some government regulation maybe we can get some things done. But at the same time, I would be the first to admit that in some cases, government regulations

is absolutely necessary. So it depends on what we're talking about. And I do believe that government has a significant role to play, depending on where the country is in its life cycle. Yeah. His life cycle of development. You know, underdeveloped countries with large populations, it's tough and poor infrastructures.

It's a very difficult task. And so we could look at China. But China, as I said earlier, you know, they had a lot of... Stop down. Yeah, it's top down. But at some point, that becomes, you get the flip side of that problem, where now, you know, maybe a little bit more freedom and liberty might go a long way in terms of helping the system adapt. Rid things break, flexible things survive. Yeah.

I think moving the needle on productivity up requires many things, but the two things that I think are super essential. one is technology. The other one is money. Right. And that basically dovetails into the degree to which you can actually attract FDI. And if we take a look at Southeast Asia, sorry, bore you with ASEAN all the time, but I know you cover Asia Pacific,

but ASEAN has a varying degree of FDII magnetism. Right? Countries like Thailand, the Philippines, and Indonesia are doing about $100 worth of FD on a per capita per year basis. Singapore does about $18,000 to $19,000. Right there it tells you why Singapore is so much more marginally productive, right? What is it about Singapore that attracts all that FDI? Well, I think you've covered it.

They've shown to the world that they've been able to be open-minded about themselves. If they needed a talent and if they didn't have it, they would get it from somewhere else. They would welcome that particular talent. They would welcome anybody from Indonesia, Africa, Russia, Middle East, or wherever. They would be welcoming of that talent. That's the kind of open-mindedness. And then they deliver it on governance, right? One of the things, so I've been back in the region full-time in Singapore

and traveling around since January, January 4th, to be precise. And one of the things that I've brought with me, which I intend to do, and I intend to do it soon, is to attack the skills gap in ASEAN, Southeast Asia. And what I mean by that is this concept of a hybrid cloud and AI academy. And so my core belief, or my fundamental belief is, first of all, I really do believe that changes in the human condition of always discontinuous changes in the human condition. have always been punctuated by technology. And given where we're at now, the technology that will continue to punctuate and change the arc of that curve will be things like quantum computing, artificial intelligence, data. Yeah.

And the technology, the supporting and complementary technologies around that. And that's data point number one. Data point number two is two-thirds of the world GDP is now derivative of digital transformation. So the skills that we need, we, anyone, Southeast Asia needs going forward to take, excuse me, to take the GDP and arc it upward is technology, hybrid cloud, AI, data. And the question is, where are we going to put it? Because there's choices. And so I'm actively looking as we move around the region. Let me guess.

Where? Where can we put this academy and we can attract. tech want to be technologists to come and learn skills of the future so that they can contribute back to their country and the skilled the skill pool of pop the population of skilled resources to achieve that growth and so I'm very passionate about that particular initiative we'll see how it unfolds but skills is number one got to have especially with technology. That's just the way the world is.

Skills is number one, a favorable investment climate for FDI. And we sort of touched on that in a way with Singapore. Is number two. I mean, those things have absolutely got to exist. And so we'll see what happens there. But I'm very optimistic.

Very noble. I'm very optimistic about it. And it's something I'm very much interested in, actually. I'm a wannabe geek. Do you see, Do you see a future where humanity is going to be able to upload their consciousness? Oh, like the movie? Yeah.

With, who was it that? I forget. Johnny Depp or Keanu Reeves? Yeah. Yeah. One of them. Keanu Reeves, I think. Yeah.

Was it? Okay. Not any time, Sud. Okay. I don't see. I mean, that's an interesting idea. And then you got to ask, would you want to do that? So.

I'm scared as it is with. the data points of myself being, you know, looked at by platforms that have figured out about me much better than I can about myself. Yeah. Right? Much less, you know, my unconsciousness being uploaded up to these, you know, platforms up there. Yeah. Well, you know, I have, there's, we talked a little bit about this.

There's this thought experiment that I'm sort of fond of with this concept of homo-economic. And the idea that there's this mythical man that has unlimited cognitive ability, perfect information has it all, and can compute it in real time. Therefore, they always come up with the right answer optimally in real time. That was always mythical and it was a thought experiment. But if you think about it, now with cloud computing and the ability to linearly scale compute and access to all the information that's on the World Wide Web, which is pretty much everything, or could be everything, if we wanted it to be.

And then the analytics and the AI and the machine learning, aren't those two coming together? And if they are, what does that mean for us? Because if we have that type of cognitive ability at our fingertips to optimize decisions and we have AI that we like and trust and is ethical, what does that mean for the human condition? And how do we make that available ubiquitously?

to me that's an exciting prospect sounds very utopian it is but shouldn't we set a goal yeah and then move towards that goal we may never get there but the closer we get the better off we all are yeah kind of scary too because you lose sight of the emotional intelligence right you can you can kick hands on your cognitive intelligence and perfect it to wherever you want it to be. But if you lose sight of the emotional intelligence, and that I think what's made humanity very spicy and interesting. That's what makes humanity humanity.

Yeah. But if I can offload all the analytical tasks and focus on the creative tasks... You can code it in such a way that all your emotional intelligence gets formulated? No, how about if I offload the analytical capability, which leaves all the emotional stuff for me to work on. That would be interesting. Yeah. Would have a lot of poets.

My wife might be happier. Oh, man. All right. Paul, any last remarks about Asia Pacific on anything? I think Asia Pacific's place to be. I was going to ask you about the decoupling between the U.S. and China. That might be off. In terms of the coupling or decoupling, it would certainly be a good thing that the U.S. and China could figure out how to get along.

Absolutely. It would be good for Southeast Asia. Yeah, I'd be a fan, actually, of that outcome of the two countries figuring out a way to get along. But it requires both of them to give something up and to find a way to compromise on some key topics. There's just too much economic interdependence. Yeah, I think so. buy and on to each other. I mean, you know, a total trade of, what, seven to eight hundred billion U.S.

That involves hundreds and millions of people on both sides of the Pacific. Yeah. Yeah. I don't think it's that easy to just disregard that. No. I mean, yes, domestic politics tends to skew the thinking about foreign politics or foreign policies. But, yeah. What's the size of China's domestic?

consumption as a percent of GDP. 55% to 60% now. It's larger than much larger than what it would have been 10 to 20 years ago. Yeah. Because they've been consciously trying to domesticate their economy. Yeah. So that is the product, I think, of a conscious effort. Yeah.

But why would they do that? What's Germany's? Less than that. What's Germany's exports or imports and exports as a percentage of, GDP are very high. Much, much bigger than the domestic. So you look at countries that are exposed to, we'll call it, globalization, and there's been a conscious, I believe, a conscious effort of China to reduce.

Yeah. Now, part of that's because their economy is just getting so much bigger. But I think there's been a conscious policy to reduce their exposure to globalization. Yeah. Which, I think, says a lot. We'll see exactly what it says over time. Yeah. But it's a pretty significant factor.

Any last remarks? I'm actually optimistic. Good. I'm actually very optimistic for Southeast Asia. Yeah, I think so. By way of some of the disruptions we've seen in the last 10 years and how they're actually going to be replicated. In so many other sectors, this is a $3.2, $3.3 trillion economy with around $700 million people. We've got scale.

We've got demographics. we've got agricultural capabilities, energy capabilities, and I think we've got open-mindedness, relatively speaking. So I look at AP and I look at India down through New Zealand. I take out China because they have some specific policies right now that cause them to be a bit of an outliner. I see 2.6 billion people with an economy that should grow three points faster than the U.S. and of course faster than Europe and of course Japan.

And a very healthy demographic, relatively speaking. Yeah. And so I think the demographics, the embracing of technology, increasingly good governance broadly across the region. Of course, we can find outliers, but generally speaking, the tide is rising. I think the prospects for Asia Pacific are really strong. And I would look for really positive things to be happening here.

I think the 20, I think the 2020s are the decade for Asia Pacific. I believe that. The next, I guess, eight years. Sounds like you're going to be around for much longer. Well, we'll see. We'll see how things go. But I'm not booking plans or tickets for anywhere else right now. But I'm positive about Asia Pacific for a variety of reasons, few of which I just mentioned.

Thank you, sir. Thank you so much for coming on to our show. Thanks for having me. and you know, that's Auburn, the pinpinan from IBM for Asia Pacific. Thank you. This is endgame.

Thank you.