The Future According To Bill Gates -- The Technowizard Envisions A Paperless Society, Where Even Your Money Will Be On A Pc

This is the first of three exclusive excerpts from "The Road Ahead," the new book by Microsoft chairman Bill Gates.

For more than 500 years, the bulk of human knowledge and information has been stored as paper documents. Paper will be with us indefinitely, but its importance as a means of finding, preserving, and distributing information is already diminishing. . . .

On the information highway, rich electronic documents will be able to do things no piece of paper can. The highway's powerful database technology will allow them to be indexed and retrieved using interactive exploration. It will be extremely cheap and easy to distribute them. In short, these new digital documents will replace many printed paper ones because they will be able to help us in new ways.

But not for quite some time. The paper-based book, magazine, or newspaper still has a lot of advantages over its digital counterpart. To read a digital document you need an information appliance such as a personal computer. . . . For at least a decade it won't be as convenient to read a long, sequential document on a computer screen as on paper. The first digital documents to achieve widespread use will do so by offering new functionality rather than simply duplicating the older medium. . . .

The "e-book" is coming

Ultimately, incremental improvements in computer and screen technology will give us a lightweight, universal electronic book, or "e-book," which will approximate today's paper book. Inside a case roughly the same size and weight as today's hardcover or paperback book. You'll have a display that can show high-resolution text, pictures, and video. You'll be able to flip pages with your finger or use voice commands to search for the passages you want. Any documents on the network will be accessible from such a device.

The real point of electronic documents is not simply that we will read them on hardware devices. Going from paper book to e-book is just the final stage of a process already well under way. The exciting aspect of digital documentation is the redefinition of the document itself.

This will cause dramatic repercussions. We will have to rethink not only what is meant by the term "document," but also by "author," "publisher," "office," "classroom," and "textbook." . . .

By the end of the decade a cant percentage of documents, even in offices, won't even be fully printable on paper. They will be like a movie or a song is today. You will still be able to print a two-dimensional view of its content, but it will be like reading a musical score instead of experiencing an audio recording. . . .

More information in less space

Those using digital documents are already discovering how much simpler it is to search and navigate through them quickly, because their content can be restructured so easily. . . .

The organizational structure of a reservation book at a restaurant is by date and time, a 9 p.m. reservation is written farther down the page than an 8 p.m. reservation. Saturday-night dinner reservations follow those for Saturday lunch. But if, for whatever reason, someone wants to extract information in another way, the simple chronology is useless. . . .

A restaurant can use a paper-based reservation book because the total number of reservations isn't large. An airline reservation system is not a book but a database containing an enormous quantity of information - flights, air fares, bookings, seat assignments, and billing information - for hundreds of flights a day worldwide. . . .

If the information in the (American Airlines') SABRE system were copied into a hypothetical paper reservation book, it would require more than 2 billion pages. . . .

When I was young I loved my family's 1960 World Book Encyclopedia. Its heavy bound volumes contained just text and pictures. They showed what Edison's phonograph looked like, but didn't let me listen to its scratchy sound. The encyclopedia had photographs of a fuzzy caterpillar changing into a butterfly, but there was no video to bring the transformation to life. . . . I wasn't aware of those drawbacks then. . . .

Among all the types of paper documents, narrative fiction is one of the few that will not benefit from electronic organization.

Almost every reference book has an index, but novels don't because there is no need to be able to look something up in a novel. Novels are linear. Likewise, we'll continue to watch most movies from start to finish.

This isn't a technological judgment - it is an artistic one: Their linearity is intrinsic to the storytelling process. New forms of interactive fiction are being invented that take advantage of the electronic world, but linear novels and movies will still be popular. . . .

Goodbye wallet clutter

What do you carry on your person now? Probably at least keys, identification, money, and a watch. Quite possibly you also carry credit cards, a checkbook, traveler's checks, an address book, an appointment book, a notepad, reading material, a camera, a pocket tape recorder, a cellular phone, a pager, concert tickets, a map, a compass, a calculator, an electronic entry card, photographs, and perhaps a loud whistle to summon help.

You'll be able to keep all these and more in another information appliance we call the wallet PC. It will be about the same size as a wallet, which means you'll be able to carry it in your pocket or purse. It will display messages and schedules and also let you read or send electronic mail and faxes, monitor weather and stock reports, and play both simple and sophisticated games. At a meeting you might take notes, check your appointments, browse information if you're bored, or choose from among thousands of easy-to-call-up photos of your kids.

Rather than holding paper currency, the new wallet will store digital money that can't be forged. Today when you hand someone a dollar bill, check, gift certificate, or other negotiable instrument, the transfer of paper represents a transfer of funds. But money does not have to be expressed on paper. Credit card charges and wired funds are exchanges of digital financial information. Tomorrow the wallet PC will make it easy for anyone to spend and accept digital funds. Your wallet will link into a store's computer to allow money to be transferred without any physical exchange at a cash register. Digital cash will be used in interpersonal transactions, too. If your son needs money, you might digitally slip five bucks from your wallet PC to his.

When wallet PCs are ubiquitous, we can eliminate the bottlenecks that now plague airport terminals, theaters, and other locations where people queue to show identification or a ticket. As you pass through an airport gate, for example, your wallet PC will connect to the airport's computers and verify that you have paid for a ticket. You won't need a key or magnetic card key to get through doors either. Your wallet PC will identify you to the computer controlling the lock.

As cash and credit cards begin to disappear, criminals may target the wallet PC, so there will have to be safeguards to prevent a wallet PC from being used in the same manner as a stolen charge card. The wallet PC will store the "keys" you'll use to identify yourself. You will be able to invalidate your keys easily, and they will be changed regularly. . . .

The next Swiss Army knife

The wallet PC will connect you to the information highway while you travel a real highway and tell you where you are. Its built-in speaker will be able to dictate directions to let you know that a freeway exit is coming up or that the next intersection has frequent accidents. It will monitor digital traffic reports and warn you that you'd better leave for an airport early, or suggest an alternate route. The wallet PC's color maps will overlay your location with whatever kinds of information you desire - road and weather conditions, campgrounds, scenic spots, even fast-food outlets. You might ask, "Where's the nearest Chinese restaurant that is still open?" and the information requested will be transmitted to the wallet by wireless network. Off the roads, on a hike in the woods, it will be your compass and as useful as your Swiss Army knife.

In fact, I think of the wallet PC as the new Swiss Army knife. Some wallet PCs will be simple and elegant and offer only the essentials, such as a small screen, a microphone, a secure way to transact business with digital money, and the capability to read or otherwise use basic information. Others will bristle with all kinds of gadgets, including cameras, scanners that will be able to read printed text or handwriting, and receivers with the global-positioning capability. Most will have a panic button for you to press if you need emergency help. Some models will include thermometers, barometers, altimeters, and heart-rate sensors.

Prices will vary accordingly, but generally wallet PCs will be priced about the way cameras are today. Simple, single-purpose "smart cards" for digital currency will cost about what a disposable camera does now, whereas, like an elaborate camera, a really sophisticated wallet PC might cost $1,000 or more, but it will outperform the most exotic computer of just a decade ago.

Tomorrow: Bill Gates leads a tour of his high-tech house

From "The Road Ahead," by Bill Gates with Nathan Myhrvold and Peter Rinearson. Copyright 1995 by William H. Gates III. Reprinted by arrangement with Viking, a division of Penguin Books USA Inc.