My wristwatch is more powerful than the first mainframe computer I worked on as a young man; the seat of my new car has more processing power than the lunar lander which put a man on the moon. We now have incredible computation capability - and this capability doubles every year. Within the next decade computers that are a thousand times more powerful are a racing certainty because the bits are already on the bench. Twenty years from now, computers will be a million times more powerful. But another ten years after that, they will probably be very different. Many will be 'humanised' because inside the chips - inside the hardware or the software - we will see uncertainty and new qualities.

My industry, telecommunications, is distinctly uncomfortable. Every year we can double the amount of information on an optical fibre and it is not enough. The more you get the more you want, and it comes at a constant or falling price. Every time we quadruple the number of bits (the basic units of information that make up a byte) on optical fibre - and that takes just two years - the cost of a bit drops by a factor of three, and will continue to do so.

It took the UK 70 years to industrialise. The Americans did it in 45, the Japanese did it in 25 and the Chinese are doing it in 10. The information age came and went and we are now hurtling into the experience age. No wonder we feel as if we are being bowled over. No one has any idea of the holistic nature of the world; we can get only an incomplete view. A few hundred years ago, I could have been an eminent zoologist, mathematician and engineer at the same time. Today? You might get a technologist who knows a little bit about optical fibres or software or radio systems, but that is it. Relatively speaking, they know nothing. So we assemble huge teams of highly-specialised people, glue them together and then sit on top and try to see what is happening. It is so inadequate - it just cannot cope with the amount of input. But this is the way we are becoming.

At BT we have downsized by 50% - more than 120,000 people have left. We have reorganised, challenged, changed the culture, experimented - and survived so far. I have only two layers of management for the best part of 1,000 people and a $60 million budget. And it is absolutely frantic; it takes an inordinate amount of energy. A large organisation has to be dragged, screaming and kicking, into the twenty-first century. It is difficult, but it can be done.

What we have is a world that is making this transition - a multi-media world. A world that was dominated by 'atoms' (where growth was organic and incremental) is gradually becoming dominated by 'bits' (where growth is digital and thus exponential).

On future time
I purposely put my laboratory five to ten years ahead of the rest so that we could subject ourselves to the delights and terrors of the new technology. The way I have done it is simple: I refuse to respond to anything on paper from anyone in BT. As soon as paper arrives in my office it is shredded, or sent back. If someone from outside writes to me, what they send is scanned in and we get rid of the paper. The reason is that I dictated that to get change in the laboratory I would respond to everything within 12 hours, 24 hours a day, 365 days a year, irrespective of whether I was at work or I was on vacation. Whatever I am doing I will always be back within 12 hours. I am honouring that promise to better than 99.9% - and the 0.1% is down to long flights, network failures or just sheer human failure. It is possible, but it changes your life. You have a different view.

I only make half a phone call per day. Most of my communication is on screen because being on the move makes it difficult to communicate with people by phone. If you are running a multi-national organisation then time zones kill the telephone. There are only about two hours a day, for example, when you can communicate with people in California.

Strange days
In the language of chaos theory, coffee has now become a 'strange attractor'. Why? A thousand people are in a conference; no one is making a phone call until 10.15 when the session breaks for coffee. Everyone goes outside and in the space of two minutes 100 people are trying to make mobile phone calls and the system falls over. Another strange attractor is the M25. On the motorway people are making phone calls, but not too many. There is one accident and within two minutes a thousand people are trying to phone home.

Strange attractor number three is Liverpool Street station. No one is making any phone calls until the train is cancelled. Instantly 40 or 50 people pull out their mobiles and the system falls over. We have a world where people want to communicate when they want and these strange attractors come along. You can go to a web site and no one is there. Then 50 people come and go away; 20 people come and go away; 100 people come and go away. No one knows where they come from or where they go. 'Swarming' is a natural consequence of freedom of action, speed of access and total communication.

Hundreds of thousands of people have now got all kinds of technology embedded inside them - pacemakers, respiratory stimulators, pain relief modules, cochlea implants. In the UK we have had a programme of putting cola machines in garage forecourts online. When the sun shines and people start drinking fizzy drinks, the machine calculates when it is going to run out, rings up the depot and a man comes and fills it up. The same happens with chocolate bar machines and food dispensers of all kinds; they make a prediction and the logistics chain is all honed up. Yet you can be walking down the street with a pacemaker which knows you are going to die in ten minutes but never makes a phone call. Sometimes we fail to get our priorities right.

Chaos reigns
Chaos will override any kind of hierarchical system. Not by accident do you see businesses cutting out layers and layers of management, and electronic networks stripping out layers and becoming low and flat. It is the only way to cope with things that are moving very quickly. Sony Corporation brings out a new product every two days and the products have a 90-day lifetime. BT brings out a new product every week. We have no idea how long it is going to last or whether it is going to be successful. That is the problem - and it is counter-intuitive to what we have been doing a for a long while. We love badges of rank and yet we have to strip those out. Doing it in companies turns around the whole way you work.

It also means that this is the single, most important formula for the 21st century if you are a manager: 'the mean time between decisions is much greater than the mean time between surprises'. While your company or organisation is considering what to do, the competition comes along and takes away the business from under your nose. It is no accident that retail stores are becoming banks, because it is easy. There is no money anymore, only bits. You go along to the bank to get some money and they charge you £2.50 for the joy of multiplying two numbers together in an Excel spreadsheet - it is called the currency exchange. I can do that much cheaper.

The military practise war a lot and occasionally have a real one; we are at war all the time and we never practise. When we get into a world that is chaotic, we have to have 'war-gaming'. We have keep practising because in the real world just pulling a virtual lever can be like the butterfly's wings. It will create chaos and total collapse.

New interfaces
Many organisations will be compelled to change the way they interface with people. In companies such as Silicon Graphics or Dell Computers, the bulk of their trading is now done over the internet. Whole businesses are now founded by working straight off the screen. It is a major engineering problem because what we would like to be able to do is not have you hit an answering machine or listening to music while waiting for a human being. We want you online straight away doing what you want.

For most operations, companies and institutions about 5% of the people they deal with bring in about 30% of the income; 20% of customers are related to about another 30%; and 75% of the customers are real 'nickel and dimers'. On the other side, you have 5% of your people looking after the big revenue accounts and everyone else running around after the nickel and dimers. What you would like to do is suck up to the customer - and that is where the future of customer relationships lies. If a user spends £100 million a year with my company, in the morning I expect to see four BT people doing the garden, two cleaning the car and one taking the dog for a walk. If a user only spends £3 with my company, I do not expect to throw a lot of people at them.

In the US there is a telephone company which has overcome this problem very simply. When you dial up, it recognises the number. If you are a big-spending customer, you get straight through to a human being. If you are a 'nickel and dime' customer, you are handed off repeatedly. The objective is to get you so annoyed you will leave the company and join the opposition.

It is an interesting philosophy, though one I find unacceptable. In my vision of the future everyone will dial in and talk to a computer. If you are a big-spender and you need to do something with a lot of money involved, you will move on to people rapidly. If you are just ringing up for directory enquiries or want to know what your phone bill is, you can talk to a computer. That is the way technology will take us. Perversely, while the technology gets us as customers to do more work, it is more satisfying because we do not have to wait and listen to music.

Information waterfall
I often feel as if I am lying under a waterfall with my mouth open. Torrents of data pouring down that I cannot possibly cope with. I am trying to distil out of that data information, and out of that information gain knowledge to make decisions.

How can we get systems that will learn about us, heed what we do, take decisions for us, help us and evolve with us in a way that is useful? Because systems that learn about us are going to be valuable, I started a programme on artificial life. Hence I am now recruiting entomologists, geneticists and biochemists. We have had some remarkable results, discovering things that even the biologists did not know.

Ten years from now we will come to a grinding halt if we have not got true intelligence in machines. There are now four words in the English language for which there is no definition but a desperate need to understand: complexity, scalability, intelligence and life. Those are the functions we are desperately trying to conquer. The swarming behaviours we see in nature are exactly what we are seeing on the internet. The telephone network of old had a peak-traffic to mean-traffic ratio of 3:4; on the internet the peak to mean ratio is more than 1,000:1. Our structured hierarchical system cannot cope.

The only way we are going to win is for organisations to come together to find solutions to problems. There are no companies now that have all the skill, no establishments of education with all the capability and no governments with all the wisdom. But we have to find a means of bringing together all the skilled people across the planet to crack these problems.

CREDIT
Professor Peter Cochrane is head of the applied research & technology department at BT Laboratories, which includes all BT corporate programmes and advanced development. Areas of research include radio, mobile, visual and speech systems, artificial life, artificial intelligence and virtual reality. The department has 660 staff and a budget of £45 million.