Federico R. LopezI’d like to welcome you all to our 13th Lopez Achievement Awards. The LAA has been running since 2002. Let me just say that for us in the family and top management of the Lopez group, we have used this as an opportunity to show our gratitude to many of you throughout our organizations who continue to exhibit many of the seven values we hold so close to our hearts-­‐-­‐-­‐Pioneering Entrepreneurial Spirit, Business Excellence, Unity, Nationalism, Social Justice, Integrity, Employee Welfare and Wellness. Among the seven, however, one stands out through our past, and without it all of us would not be here together, and that is the Pioneering Entrepreneurial Spirit.

When you think about it, this first value is what allows the other six to gain full expression in the many good things our corporations can do today. So what is it really? What does it mean to have that Pioneering Entrepreneurial Spirit?

We take many services for granted today but I sometimes try to imagine what it was like for Lolo Eñing in 1932 to have started the country’s first airline at a time when there was not a single airport in the country and airplanes weren’t as safe as they are today. Or what it felt like for him and Tito Geny to pull together ABS-­‐CBN in 1957 at time when just a handful of people in the country owned TV sets. Or what it was like to shift the family’s fortunes from the sugar industry in 1961, where it had been for decades, to electric utilities once owned by the Americans at a time when many were doubting the Filipino’s capacity to manage such an enterprise.

Such boldness of spirit ushered in new services that undoubtedly uplifted many Filipino lives during its time. Oftentimes I muse about what it may look like today if that same Pioneering Entrepreneurial Spirit were unleashed on

today’s world.

The business landscape today is vastly different from what it was 50 years ago. The average life of a Fortune 500 company in 1965 was 75 years; today it’s less than 15 and that life span has been getting shorter at an accelerating pace each year. The culprit: technology. Technological progress is moving at an exponential pace, wiping out companies and refreshing both the Fortune 500 and S&P 500 list faster than ever in history. Disruption of longstanding industries has become the norm especially whenever those industries are touched by technology and the digital revolution. Corporate size is no longer an assurance of longevity.

Someone who saw the potential for such advances early on was Intel co-­‐founder Gordon Moore. In 1965, Moore predicted that the computing power per dollar would double every 18 months-­‐-­‐-­‐but he originally predicted this would happen only for the next 10 years. However, it’s been going on for the last 50 years, still accelerating and driving many of the warp speed changes we see all around us. His prediction was later immortalized by the tech industry and now referred to as “Moore’s Law.”

Computing power is one thing; but combine that with the power of networks and interconnectedness that exist in the world today and you have an explosion of sorts that touches everything in our lives at exponential speed.

Ray Kurzweil, the co-­‐founder of Singularity University in Silicon Valley, often illustrates this power of exponential progress with an often-­‐repeated tall tale. He tells a story about 6th century India where a king, who was so grateful to the man who invented chess, decides to offer the inventor a reward of his choosing. The inventor then lays out a chessboard (64 squares) and says, “Well I would like to just request some food for my family,” and he asks for a grain of rice to be placed on the first square. Then he requests the king to constantly double that grain of rice for every next square on the chessboard. The delighted king thinks it’s a modest request and says, “wish granted.” So he puts one grain of rice on the first; two on the second; four on the third; eight on the next, 16 on the next, 32, 64, 128, 256 and he keeps going on and on. By the time he gets to the 32nd square, it amounts to four billion grains of rice, which is equivalent to a harvest of one large field of rice. So the king says, “Well, that’s fine, makes a handsome reward for your family.” But soon after, he begins to take notice because as he approaches the second half of the chessboard, things start getting crazy. And by the 64th square, the grains of rice amount to 18 quintillion grains. That amount of rice dwarfs Mt. Everest and it’s more than all the rice produced in the history of the world. The king realizes he’s been tricked and he can no longer be king if he adheres to the request and so the inventor is beheaded.

Although obviously a tall tale, that story illustrates the power of exponential progress and why it is such an unstoppable force unleashed in the world today.

So many things we used to believe were impossible can now be achieved; and they’re all becoming real simultaneously and at breakneck speed because of the compounding effect of technological advances being built one on top of another. This is what it will feel like living in an age many today are calling the “second half of the chessboard.”

Many thought it impossible for computers to ever have the nuanced thinking to play games like Chess and Jeopardy but in 1997 an IBM computer named Deep Blue defeated grandmaster Gary Kasparov; and in 2011 another one named Watson defeated two of the world’s best Jeopardy champions on US National TV. Other nuanced activities like driving a car had too many variables for any computer to simultaneously consider but by the end of this year or next we could have self-­‐driving cars rolling out on the streets from Google.

Today, the iPhone in your pocket has the computing power equivalent to a military grade computer that occupied space a quarter the size of this studio in the 1970’s.

Robotic sewing machines are already capable of doing complex patterns that only humans could do before.

The first FAA–approved drone delivery of medicines was done in rural Virginia last July.

Soon, a combination of 3D printers and robotics could localize manufacturing all over the world closer to where those goods are consumed that it’s estimated to reduce shipping and transport traffic by more than 40% worldwide.

Ultimately, we will see computers with Artificial Intelligence that will equal, if not surpass that of humans. There’s a term that they use for this called Technological Singularity and tech watchers are betting this could happen by 2045 or even as early as 2029. When that happens, it will change the world in ways we have never seen. Many of us in this room will still be alive to see that day.

How could all this affect our businesses? In countless, dizzying and non-­‐linear ways.

In the field of power and energy, it’s fascinating to follow the adventure of the Solar Impulse team of Andre Borschberg and Bertrand Piccard as they push the limits, doing what many believed was impossible-­‐-­‐-­‐flying around the world purely on solar power, without a single drop of fossil fuel. Just last July 3rd they broke yet another psychological barrier, flying nonstop for five days and five nights from Japan to Hawaii. That meant simultaneously flying and charging by day and flying solely by battery at night, praying they had enough battery charge to last them till sunrise. What the five-­‐day leg symbolized was that perpetual flight is possible merely by bringing together the best technology and every possible source of energy efficiency that’s already out there today. Their main limitation was that of human endurance and the ability to fly solo for this inordinate length of time.

The Solar Impulse’s symbolic victories will have a profound impact on our lives because they’re giving us early glimmers of hope that a world without fossil fuels is possible and will come someday. Our power and energy businesses have to be ready for that.

On the media side we can’t ignore the paradox that despite 73% of Filipinos not having bank accounts and only 3% having credit cards, the Philippines has the fastest growing internet population in the world (531% in the last 5 years). Today, 44% of Filipinos are active internet users, with ¾ of them accessing the net via their smartphones. Smartphone penetration has risen dramatically from only 15% in the beginning of last year and may reach 40 or 50% by the end of this year; reportedly faster than Indonesia and Vietnam combined. The Filipino internet user spends on average only 2.8 hours watching TV but more than 6.3 hours on the internet. That’s again one of the highest in the world! (I’m not sure if that’s because of our country’s slow internet speeds but I hope it’s because they’re just watching more ABS-­‐CBN shows on iWantv on the net).

The Philippines, with one of the youngest populations in the world (median age 23), is about to experience a perfect storm from all these and it will immeasurably change life as we know it. Gabby and I had lunch the other day with the head of one of the country’s top Telco’s and he admits it’s no longer a world he easily understands. It can be scary. This is why I believe it’s even more compelling for us to collaborate, combine our group’s strengths and capabilities, and create businesses that serve customers in ways even they have yet to imagine.

If you think too much like I do, at times the view of the future can seem petrifying, overwhelming, and even intimidating to say the least. However, take that same view and place it in front of someone with a pioneering entrepreneurial spirit who’s determined to uplift lives into the future like Lolo Eñing was in the 1930’s, and he or she will see nothing but a world of opportunity. So whatever it is you do for the Lopez group today, let me leave you with the thoughts of the French author Antoine de Saint Exupery in his final book Wisdom of the Sands when he says: “As for the future, our task is not so much to foresee it, but to enable it.”