Boston College Finance Conference 2000

IBM CEO Gerstner Warns Execs On Privacy Issues

By Sean Smith
Chronicle Editor

The business community has every reason to cheer the information technology boom fueling America's economic growth, IBM Corp. Chairman and CEO Louis Gerstner Jr. said at "The New Economy" finance conference, but it must also take the lead in addressing privacy and security issues.

"When a new technological change alters society," said Gerstner, "the industry pioneering it must take responsibility for the changes. If the industry doesn't step up, government will - and that's no good.

"We don't shun government involvement ," he said. " We need government, working side by side with industry and education leaders and citizens." This partnership, he said, must start "with the conviction that market forces and players lead."

Gerstner's talk served as a bridge between the conference's morning and afternoon sessions, which dealt with the impact of the Internet and other technological innovations on the US economy.

IBM Corp. Chairman and CEO Louis Gerstner Jr. during his speech.

The evolution of "e-business" has triggered a transformation of market institutions and functions. Gerstner said indications are that the new "e-markets" may mediate as much as 30 to 40 percent of all transactions within the next five years.

Even the altering of market forces, however, will not "free us from the rules of business and economics," Gerstner added. After the excitement wears off, the business community will once again be faced with classic management issues - "the boring stuff," he joked.

Gerstner said one of the key tasks facing him and his business colleagues will be to provide leadership in formulating public policy for this new territory, especially in regard to privacy and security.

Privacy on the Internet does not simply mean anonymity, he explained, but entails "being able to make a choice about the kind of relationship you want, and what you derive from it."

As electronic access to markets continues to grow, Gerstner said the business community needs a cool head, a steady hand and a dollop of creativity to develop a new policy model.

"The single worst thing we could do is to act rashly, or from past expectations, or out of expedience," he said. "We all must work together - the infotech industry, the commercial sector, educators, government and other players. Only then will the promise of this new economy be truly realized."

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