Promises and Perils in Global Connectedness: Google's Schmidt

The next 5 billion people who get connected to the Internet will experience a better quality of life because of it, Eric Schmidt, executive chairman of Google, told CNBC this week. But, he added, the advance will also "empower some evil people."

"But terrorists will make [digital] mistakes," he said in a "Squawk Box" interview. "And it'll be possible to track them down."

The New Digital Age, Eric Schmidt & Jared Cohen

As co-author of the recently released book "The New Digital Age," Schmidt explored the promise and the pitfalls of a completely connected world.

In the CNBC interview, he cited the Boston Marathon bombing investigation, which yielded quick results by broadcasting and sharing photos of the suspects. Authorities also said the carjacking victim in the suspects' violence spree left his cell phone on, which allowed law enforcement to track the vehicle.

(Read More: Tsarnaev Social Posts Should Have Been Flagged: Expert)

Jared Cohen, founder and director of Google Ideas and Schmidt's co-author, told CNBC, "It's going to be difficult for criminals and terrorists to operate off the grid. When individuals involved in criminal activity are using technology, the room for error goes up."

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Globalization and Money

"In the spread of all this globalization, you're [also] going to have much more efficient money flows," Schmidt said. "In every case, they're going to be trackable. ... You can track corruption and the other things that bedevil the third world."

Addressing the emergence of alternative currencies, he called digital money bitcoin a "technological tour de force" but questioned its ultimate legality.

(Read More: What Is Bitcoin?)

In "The New Digital Age," Schmidt and Cohen wrote that "the real challenge will be a combination of virtual currency with anonymous networks that hide the physical location of services."


Future of Mobile Devices

"The biggest thing that will happen from Google and other companies is that the device you carry, you'll become even more dependent upon," Schmidt predicted. "It can remember things ... and make suggestions that are 'aha moments.'"

He said he hopes that the much-anticipated, wearable Google Glass will be among the devices people use. "[But] most of it will be phones and tablets."

Online Privacy

"Privacy and security [are] essentially the ultimate shared responsibility between companies, government and the people who are actually using the tools," Cohen said. "More connectivity doesn't remove the importance of human judgment."

(Watch: Hacking America in the CNBC Digital Workshop)

He predicted that parents are going to have to educate their children about online privacy and security perhaps years before having "the talk" about the birds and bees.

Rise of the Machines?

"It'll be a long time before the machines take over the world," Schmidt said. "The core problem in society is not that the machines are taking over the world, but rather, automated machines are taking over some low-skilled jobs."

"The answer to that, of course, is education," he added.

By CNBC's Matthew J. Belvedere; Follow him on Twitter @Matt_SquawkCNBC