Transcripts For CSPAN2 National Competitiveness Forum - Part 1 20171228

Welcome to the 2017 National Competitiveness forum. I hope all of you that were with us last night had a lovely evening at the University Club for our annual dinner. I know we were all absolutely blown away by the fantastic talk that was given on sustainability. Thank you again for that wonderful poor divorce of the imperative for sustainability in our future. Allow me to recognize and thank our sponsors for their support and commitment for the council of work and i want to recognize the company and Lockheed Martin are premier sponsors and want to recognize our national for pepsico, deloitte, our chairman sponsor asu, university of california san diego as well as the benefactors and patrons a ten tv and Michigan State university, university of action, verizon, Marquette University and whitecap investment. We cannot do that for him and i thank you very much for that. We have a full day, very exciting talks, as well as the relief of some of the critical annual policy work of the council on competitiveness starting with our clarion call for competitiveness that we will release shortly. I want to frame that in a few overarching facts about the good and the bad of our economy right now. The good news is of course that gdp growth over the past two quarters has been very strong while productivity was slapped for most of the year it has rebounded recently and unemployment is low. In fact its the lowest level since 2000. We know that consumers and investors are optimistic and inflation remains [inaudible]. Forcing action on longterm priorities such as reducing the Corporate Tax rate and implementing a territorial tax system to repatriate the offshore earnings of american corporations. The fed has recently raised its expectation for growth issue under this year and next year on the economy expecting us to be about 2. 5 , not at the levels that tim clifton says we need to be at the. 5 but nonetheless that is great news and of course unemployment is expected to continue to drop and we hope to see some gains in wages. Of course, we know in competitiveness that theres not a single bullet and this is an ecosystem and there is still a myriad set of challenges within the country. As face a continually increasing growing deficit and ensuring the stability of our middleclass families and ensuring that the crown jewel of our Higher Education system does not have an unfortunate impact coming out of this new tax legislation and very importantly we want to work very hard at this Us Investment in our r d particularly our basic research continue to decline. At todays forum we are going to look at the issues of vital to longterm competitiveness and prosperity. You will hear from our board on the overall state of our economy in agenda as we release a clarion call. He will hear from jim clifton to look at the future. Very excited that we will hear from the ceo and chairman of deloitte on the latest report of the Council Partnership with deloitte on exponential technologies and advanced manufacturing. We will have a discussion with the director of National Science foundation and two of our university present on the work coming out of the exploring frontiers and initiative that is laying the groundwork for a new commission on innovation frontier will release later today. We know of course that energy and manufacturing are inextricably linked and we will continue the work of art Rate Committee to look at our economy and bring to the forefront the skills and challenges of educating our workforce as we discussed energy and manufacturing throughout the day. I take all of you will love our selection talk by adam corey about human augmentation and that will be substantive and entertaining and this afternoon we will have a series of mini ted talks that look at some of the disruptive frontiers from big data and the Cyber Attacks and the future of medicine and the coin in black chain and the rise of the robot and what that means for american robe workers. I want to thank you all for participating supporting the council on competitiveness and i want to thank our tremendous leadership our chairman and our vice chair in the global vice chair and michael crow as well as all the members of the executive committee and the staff of the competitiveness. With that i would like to invite the executive committee to come to the stage. Thank you. [applause] loca [applause] welcome everybody. Im larry weber and im going to moderate this panel this morning and welcome to the mall. I understood there was an introduction that i was not in charge of but we will go away from that. I think im the secondlongest member of the council and i have to tell you in the 30 years i have been here the work on competitiveness probably cannot be more important. The challenges we are facing in almost every aspect of our leadership on the global basis is being tried it. We obviously have deborah and sam allen and mike crowe from the Arizona State university and matt from pepsi. I want to start with the first category since when i woke up this morning at the hotel it seems to be on the cover or the front of every newspaper and also in my smart phone. Maybe, sam, ill start with you. Maybe one of the biggest benefactors of the tax reform is the Corporate Tax going down to 21 . I guess the question is one how do you see that as a ceo and chairman is one of our major corporations in the globe and how will that help you and second how do you think it could hurt you know in our competitiveness and anyway and will it create more jobs or more innovation and competitiveness in our country . Well that is the hundred dollar question right now. It is interesting this week that ive been out with our investors all over both coasts and thats one of the first questions everyone asks and we start out by saying the devils are in the details however they end up writing it. Its not from our perspective, our tax rate today is roughly 34 normally what we pay in about 55 of our earnings come from the us and if the rate does go down to 21 our effective tax rate will go to 26 or 27 in total. People have a tendency to lose sight and its not going to go down to 21 because the earnings come from the other part of the world but it certainly will what everyone is writing if it ends up being something similar to that and the analysis weve done first and foremost for our customers and our dealers will be very positive. That is even more important than it is for us, quite frankly, because if they do well will do well as well. There is no doubt it will be [inaudible]. I read all things from economists and people say it will add to gdp 15, 25 points and other say 50 basis points plus and im in the camp that it will add 50 basis points plus two gdp but it will be feathered and over probably just it wont happen the first year because there are some other parts provisions to it that in your first year are negative from a company standpoint, company like ours and immediately if the tax rate goes down you got to go in and your provisions for your tax losses you got to restate those and they were at 37 and now you have to write them back down to 21 so there are some sites into this that will have an impact but in my opinion if this does go through it will be very stimulative and it will be stimulative of our longer period of time and yes, it will help with competitiveness. The stimulus part to the economy is even more important then the competitiveness part that may help a company like ours. Trying to get to the 500 pages but they just delivered it yesterday to everyone. One of the areas that doesnt look so promising, mike, is Higher Education and the way that the tax form seems to be looking at some of the restrictions. Thoughts from you and your colleagues on that . Well at first tax form is positive and needs to be constructive and if you think about the entire productivity of the country but at the same time what happens is many members of congress have become frustrated with universities for lots of Different Reasons so in my view they are eking out punishment that no doubt, the proposed is now off the table and the taxation of tuition benefit and graduate students taxation of concern endowments and the overall status of the viewing the universities is problematic is all a sign of the fact that i think there are two things going on. One there is concern about the responsiveness of the university to the bigger advancement ages of the United States of the self and some are concerned for not doing what we need to be doing. Others that unfortunately are using tax policies to send signals about basically their view of the culture wars that are going on and you take those two things together it is not well thought out text design is related to helping universities to do with the country needs most witches to contribute to the most majestic Human Capital production that the world has ever seen. Like i talked about last night, as well as knowledge capital, investment and production universities need to start rethinking the way they are communicating what they are doing is protecting what were doing getting to the general population about the impact of what the university is all about working toward or for going to have this continuing ongoing argument for tax policy, student loan policy, regulatory policy, structural policy, they will all be shaped by politicians are unhappy. Right now we need that Business Community to also speak out that the universities should be doing in the tax status of the university being largely tax entities has been a critical success variable in them being able to achieve the levels of success weve achieved. All of a sudden the universities become a tax entity thats a completely different kind of thing and we are moving in the direction we need to be careful about that. I couldnt agree more. You know, last year in the council we did a longterm study on productivity and in a moment id like to ask you to look at where we might be headed in the direction of productivity in the United States and because the conflicts seems a longterm decline and where do you think that will end in what are the sort of lovers need to look at to get productivity being in the right direction . As we talked last year and productivity as you say has been declining since 2008, 2007, for several years excuse me, now, there is some encouraging data and that is the last quarter weve seen for the first time an increase in productivity. However, the question is that a blip or can it be sustained . The reality of it is is that overall the trends as you pointed out have been what is probably doing about their productivity . Look, for doing what all other large corporations are doing. Were looking at the most efficient way of the Point Capital and using our labor force and what isnt generally discussed as much as it should be his with productivity and automation and Everything Else that we are doing it is improving the output of her industries were not replacing those drops with new jobs. And so i think more importantly for my mind and not just productivity is what type of jobs have i touched on this last night are we going to create and invest behind and educate people in order to have a workforce that is engaged in the biggest worry over the next decades to come is this mismatch between the jobs we are creating and the skill set of the workforce that is available. That gap is widening. This is the central issue so productivity in certain sectors are accelerating at the fastest rate ever and the actual people who are working, creating, developing and so forth and then there are people being displaced unable to enter the workplace because the nature of their employment skills is insufficient to be engaged in this is a process that is accelerating and creating part of the political response to the universities themselves because he has not adjusted to look at this problem on a different scale. But if i could just build on one point. As an employer people ask me what keeps you up at night . I will tell you. The average age of an american with the training in science and energetic hearing and mathematics working in any industry in this country is now over the age of 50. For the next decade half of the course, the entire country workforce will anticipate retiring. There is nowhere near enough students that fulfill that pipeline that are coming out of institutions like mine that we can fire and so the time. It is taking to fill a position actually if i look back over the last ten years at pepsico is getting longer and longer. Productivity cannot continue if we cannot fill that workforce and so we have not only a mismatch but we have a diminishing pipeline of talent and in particular, feel to take a long time to train people. You cant train a scientist or engineer or mathematician in any of these fields overnight. Somehow this discussion is going on and its got to take in account what are we going to invest behind institutions i dont train scientists or train engineers or mathematicians. The universities do but i picked them up from there and apply their skills. Weve got a mismatch and sometimes we have to fill it. We used to fill it from the outside of the United States but that is trying for lots of reasons. What will we do . Will carry that thread and ill go to you, debra. The council has been about many things but science and Technology Disruption and computing have been topics of interest and impact productivity, education, everything and we are also seeing in my opinion the recapitalization of the economy where youve got five companies basically four and half trillion dollars, apple, google, facebook and wondering where is our leadership right now in science and technology and where does it need to go and we are seeing all these words like artificial intelligence, machine learning, which, by the way, mit had the lab start in 1981 so, you know, maybe you could give a frame about that and the rest of the panel, sam i know you just bought quite a large ai company and how you see that from a competitive business point of view and in general science and Technical Education and productivity and as we move into the next fiveten years. Thank you, larry. The council was formed 30 years ago and the whole issue surround technological leadership was one of the driving forces for the creation of this organization and we have always made the case that our nation has to invest in the forefront of knowledge creation and deploy the technologies of the future in our companies that can be globally. So we have been very concerned and this is effective in the clarion call with this longterm decline in our federal investment in basic research and research and development as a percentage of gdp it continues to decline in other nations are surpassing us, japan, korea, others as a percentage of gdp but we still as a country perform about a third of all Global Research but china is on its track to surpass us on that. The investment matters in the investment matters because through the National Science foundation through the department of energy and through the department of defense are universities and National Labs Companies Come together in the Strategic Partnership and thats one of our real core advantages for the rest of the world. Others continue to come and want to understand how we can have that ecosystem that moves so quickly. The companies you mentioned that are the top of the s p they were enabled by huge investments since for two in electronics, in the microprocessor, and all the things that enable the facebooks and googles and amazons to create the value of the house. Looking to the future, which of course is what our chief Technology Officer still, we are really working as a council and the country to focus on how these frontiers come together in multidisciplinary ways. I think we were here when we release our report on next potential technology that this is the greatest time in the world with the digital, innotek, cognitive revolutions all coming together and colliding. I think that these will be the drivers of productivity in our standard of living. Back to our earlier conversation we have to invest in people without the people the drive will be the ones who have the core initial research but other countries in the world will capitalize and create the drops and while for their countries. This is a big challenge and a great opportunity for our country. Sam . I guess ive been on the council long enough [laughter] but i put it in a couple different categories. From our standpoint the next fiveten years, the next five years, some of the innovations are phenomenal and whether it be an artificial intelligence, online learning, whatever you want to call it, there will be tremendous productivity improvements. I agree with everyone that the issue we have today and everyone has today is attracting the human talent and it will only get worse. As a company you will find a way to attract the talent and work on whatever you are working on to drive the value for your company. Free market enterprise will allow that to. The one that you dont do is fund the basic research and that is the concerning part from my perspective. Companies will find a way to get the people they need to do what they are doing basic research that creates a platform upon which all of us build our businesses on that is where the funding to again, the investment is, so that the country itself can stay very, very competitive. You know, you only have so much water in a bucket and you got to say how youre going to divide the water between companies and free market price universities and in basic research. I would be putting a lot of that water in the basic Research Category whether it is a university in other areas like the labs because that is the platform that lets all of us then grow up on it. We will find a way to get what we need but we dont develop that platform and that platform will keep Getting Better and better and as this world now is changing as debra pointed out with digitalization and Everything Else platform weve invested in in the past is no longer the platform you need for the future. That would be the area that i would really think we ought to try to focus on the clarion call talks about that as well. These are very exciting times and i will reinforce what others have said. From our standpoint i can tell you just as an example we have Autonomous Vehicles 20 years ago but they werent costeffective. We will inside of five years have Autonomous Vehicles that are costeffective and the critical beyond the technology in terms of sensors, vision and et cetera is a big difference now in you will also have the ai capability that helps you that vehicle determine that when youre going down the field for example it learns that that is the go i keep going and thats the farmers dog and i stopped. That poor gofer. That difference is. [laughter] i heard that gophers are an endangered species. They will be more and more. [laughter] anyway, that type of change is coming and coming very quickly. Absolutely. I would add that were in this really feared moment of cognitive dissonance of some sort, unemployment for people with College Degrees is under the present even during the recession was never higher than 5 . We hear from Industry Leaders all over the country produce for and better and faster and faster and then we deal with Political Leadership and they say listen, you people are just a bunch of commies over there at the universities and were going to start cutting back and will be you into the ground and somehow get you under control and we are like well, thats really not true and we are told by industry that we need more ideas, more people, better people, faster, more technology, more option in tools and so forth so theres this weird thing going on that the universities are being battered from several directions with demands be made from them. Its creating tension in society that is very, very significant. The universities in the United States and the Research Universities are unique institutions globally. I traveled all over the world and looked at Research Universities and there are very few institutions that meet the lower tier levels of activity in american Research Universities so we have this highperforming entity which can do a lot more but theres this distance going on and even in the industry people are saying that we dont need College Graduates theres too much of an emphasis on this or that and everyone does not need to go to college but everyone does Going Forward we know this that of the net new jobs added in this economy Going Forward 80 of them require beyond a high school diploma. 80 . There is not a general political consensus or policy level consensus of that reality. Weve taken steps at asu where we had 8000 University Students and we have 21020 meters now. 4000 online through some really fantastic online engineering degrees first accredited and 17000 students with us. Unbelievable does diversity et cetera et cetera 8000 employers coming to hire some of people, science meters, off the charts so its not the case that there arent kids from the United States they want to do these things or want to move in these areas. There are many, many. The universities have changed some of what theyre doing have this bigger political discourse problem that somehow the universities are marginal asset to the country and are not, they are essential. That is no longer perceived to be the case. I think we have shifted a bit and we need to work our way into a new understanding of the universities and then theres this [inaudible] thats going on. I come from a white workingclass family but if you look at all my other relatives they are mostly angry at the outcomes of their life and why are they angry . Theyre not prepared to deal with the economy they are confronted so they are angry and so the economy is shifting and they blame the universities for creating this new economy and for creating what they perceived to be elite individual were not part of this core culture that they come from and using their potable statements in the last few years and so this churning in the universities need to figure out how to start mitigating to everyone rather than to some and to communicate to everyone in ways where they can see the future Economic Opportunities for themselves by enhanced learning opportunities. In our case, we decided to move forward and find ways to educate across the entire spectrum and in addition to those that come and live with us for four or five or six years and have an enhanced learning experience. Id like your thoughts on this conversation but also id like to add, mike had said the responsibility of the University System about innovation, science, technology, editing and learning and what is the responsibility of corporations to innovation into science and technology in learning. I know pepsi spends a lot of money on research but i just want to add that to after you address the general i will reiterate what has already been said but i have no doubt in my mind that the creation of knowledge within the academic institutions of this country is second to none as long as we keep nurturing it. I would like to broaden that not to just the universities but the entire ecosystem that the us is created since world war ii essentially and over the last six or seven decades is second to none. What is visible while you said the googles and the facebook they are a technically byproduct of that engine and they are commercial base of that engine and told that leads to your second question which in my mind ive always when i teach this essay there is invention and innovation. Innovation doesnt happen without invention but invention is a by default innovation. It is the application. Innovation in my mind and relevant to your question is the ability to solve societies and individual problems. You Leverage Technology and elaborate inventions often several inventions to bring them together. I think it will what industry does well is the ability to configure an aggregate several disparity inventions and come up with a method to solve a solution whether its an Autonomous Vehicle or a new way of processing food, new agriculture. We are communicating and accessing information and those are all innovation but the core of them is the aggregation that is what the industry is responsible he is. Can understand Consumer Insights we look at consumer problems and say how do we now bring these in the most efficient way possible. We optimize and optimize and optimize until a new scurve comes because someone has created a completely new way of doing things in the earlier adopter pick it up and say forget this, this is the new way. The us has done that better than any other society on the planet. Two. Everybody has access and the good thing is everybody has access to an increase in knowledge, information, to increased capability, productivity down to the poor farmer in africa. Now, how do we connect all of this in a favorable manner sowe can actually now increase productivity. This can be leveraged in a positive way but we have to create the matrix first. Thats the challenge and if we figure that out, business and entrepreneurs will figure out how to workwithin that matrix. Id like to have a quick candy before i set up the lightning round. Final questions, but deborah and sam, i couldntlet the conversation go without a comment about trade. And the current administrations view, i can only say looks likehyper protectionism to me. That said, where does trade play in our competitiveness in the next few years . From my perspective this is the most poignant part of whats going on now in the administration and you know, the problem we have is for so long, we will talk about the disadvantages of trade and they will politicize it and use it as a point and all of a sudden that same group will come back later and say free trade is good and a lot of people in the general public dont know what to believe. The reality is free trade is great for this country to get its great for the world. Yes, there are people that guess get dislocated as a result of that and we have to figure out ways to prop it up but in terms of helping the globe prosper, theres nothing that can befree trade in that respect. Where we are going right now, some people say that nafta, its a negotiation and that is not going to spiral out but the risk is there that it will. You are seeing that now even in europe from president macron in france, they are trying to set up barriers within the eu to protect their slice of the pie and when everybody does that, it brings this Global Economy down. It makes it less prosperous. It does not open it up to bringing those up in other areas of the world so this is an area where you know, its amazing to me that people that we have people that believe that exceptionalism is going to help the globe and as i indicated, this is an area that im very, very personally out of touch with the direction certain people are trying to take this. And somehow weve got to get it, get the public educated again about the benefits that everyone has received as a result of global fleet free trade and how that has further turbocharged the Global Economy which has been good for everybody. So i guess enough said. Its a very alarming area right now but were living with it and hopefully calm her hands will prevail in the long run. Any thoughts to add deborah . I would add the successive American Companies in the global marketplace was cord to the creation of competitiveness and we know one of the data points, two thirds of all revenue produced by us firms is outside the country so these are our markets. These are our customers and we have to be engaged not just in selling what we make and produce what also in a leadership role in terms of helping set the environment for trade and the impact it has on raising the standard of living of people around the world. Having said that, theres no question that in some of the multilateral trade agreements as well as some of the bilateral, there are provisions that could be improved that would be in the benefit of all. For instance, intellectual property protection. Continues to be a huge issue. I serve on this commission on success of American Intellectual property and if china implemented their existing ip laws on the books, our economy would be about 1. 4 trillion more. Thats a impact but that doesnt mean we should turn our back on trade as we try to improve some of these things and of course another area thats very important is the whole digitization of information and im very concerned that in the eu with their provisions on privacy now and data, how is that going to impact the technological frontiers we are talking about. The bottom line is the us has been a leader and supporter and really, the evangelist for trade for many years with a huge impact on our economy and standard of living and we cant give that up and it would be a very important part of our work Going Forward. Thank you debra. And the rest of the panel, ifyou have. If you were forced to boil down to what youre most optimistic about. Right now. In the country from a competitive point of view, and what your most on excited about, that you see as a big risk, what comes to mind . Top in mind from my optimism point of view is despite everything weve said, you have tremendous a vibrant ecosystem. Huge startups and in fact, what ive seen changing the last several years is the traditional silo of privatesector startup gigs, academia and academic research, those barriers and silos are starting to break down. So is getting more and more seamless in the partnerships. I know my Team Assigned about 50 partnerships from the last decade between these institutions who are traditionally over there and now there are emerging. So you are seeing this conductivity. Despite Everything Else and i think that is going to be a great engine and im already seeing. I happened to sit on the board of some of those startups and just the pace at which things are moving, thats whats exciting. These and the ideation and account activity between our institutions. I think what is scary is what i just said which i said earlier which is if we cannot continue to get the pipeline and nurture the investment is going to take to generate this new ideation and keep that pipeline coming, we will lose the lead. And as we take the lead, its not bad that others should be playing. The more the better but that doesnt mean we should concede our leadership position and forgo all the investment weve done. For me, i most optimistic about the millennials. I live in a community of 100,000 learners deeply immersed with us, unbelievable energy, creativity, unbelievable desire for some sort of meaning. Theyre openminded, their adaptive, they are highspeed and we draw energy from them. For those of you that read these negative things in the media about millennials, these people must not live with them. They live with us, 15,000 of them live on our campus. And i most optimistic about what they represent. Their desire for successful outcomes, their desire for successful country. Its really quite overpowering and it makes me worry a little bit less about the future than some of the common everyday rhetoric. The thing i worry the most about, ive been hearing more from full song the Technology Side that were going to build all these Autonomous Vehicles, always systems, all these people are going to be forced out of work and what we need is a solution like universal income. Thats one of the stupidest things ive ever heard everyone ever talk about. We need to basically assume there will be a group of people who will no longer be employable. Going to have to tax all of those technologies to be able to find money for them to be able to live off them. If we do that within 20 years or less there will be pitchforks and tar and feather the doors of everyone that built theserobots wanting to take them down. Why did you ruin our lives . Why is this not about your job only, its about your purpose. Its about what youre doing, every human being is going to need to have an opportunity so were going to have to move away from the idea of a universal income and move to the idea of a universal learner. Thats something we havent conceptualized yet. How are we going to have everyone universally have access to learning through their life that they can adjust to the new way the economy and our society works. I havent decided if alexa is making me more stupid or smart. The alexis in my office are fun to talk to go. I ordered paper towels for the first time and it worked. Sam, what are you optimistic about and what are you not so optimistic . You can, its just still stupid. Ill be a little more nearterm with my thoughts. We looked to 18 for the first time in a number of years. Almost every country around the globe is forecasting positive gdp growth. And all of these things is if youre seeing gdp growth everywhere, that creates a sense of optimism. That fuels the number of these engines and there is a rising time. And so im very, there is a chance here for the first time thats probably the 08, 09 crisis that you could give back to a level of optimism about economic growth, about the world which is good for everybody, good for all of us. And that, i get to travel a lot everywhere. And youre seeing it. And the economies that have been had negative gdp growth the last few years, its amazing the change in Public Perception almostovernight. Almost a four year forecasting that it will get better so thats why im very optimistic about this. And on the flipside of that, the biggest thing that could track from that is some type of conflict. And the risk of conflict today is higher than in many years. And that would be and there doesnt appear to be the recognition that there should be of that that risk is higher and what do we do to mitigate that risk and bring it down again. So those are the two that i would say why im most optimistic and my biggest concern this weighs a little less onyour opinion and more on the clariion call. Thank you, well the clariion call has been our country great, i dont know if youve all had a chance to look at the grade. You dont have an aide this year on anything. You have a number of. Asu would allow us to graduate with those grades. But if you look whether its talents, weve got a d and taxing meaning something is going to happen, we hope. See, technology ac. Research a d. Regulation ab and infrastructure add. From the councils perspective,building on what everyone said , we have to do everything we can to keep this growth going but at the same time we have to work very hard across the spectrum of competitiveness so how are the top, one of the things we will talk about later this morning that come out of our work on exploring innovation frontiers is how do we bring the new demographic to our country into theinnovation space. Here in the cusp of this world of abundance through all this capability and yet a very large percentage of our nation is not participating. Thats what worries me tremendously and its something were going to put a lot of attention on. And if we could get our tax and regulatory needs and conditions in a good place, lets build on that so that we have a much more robust and inclusive standard of living. For our citizens and thats really what we are all about. Last question. We had it interesting youre speaking of grades. We had an interesting year in every respect, but one area that is close to me is media and how the media is represented in the things that are happening. And i wonder from our panel what grade you would give the media the last 12 months. And in covering what seems to be one of the most interesting moments in american history. Opera . I would give them a d. And the reason is i think that its not completely, but most cases, the leaders of our media are not expecting and larry, you should comment on this because you are a leader in media. They are really in a disruptive state and the country is no longer accepting elites to tell them what they need to think and do and that they really have to recognize that. And it sort of get with the program in the sense of not putting their personalviews into reporting the news. Sam . What ever grade, it wouldnt be a great grade. But i put it into categories. I dont know that, its an opportunity lost. Its not so much what theyve done, its what they could have done if theyd done it a little differently than they had viewed it. Whether its a d or ab i dont know but to me, there was an opportunity here, at least mainstream media, an opportunity that they could have taken a Higher Ground and helped than of also being part of this aggression. And that part, they certainly missed their opportunity. So first, we operate a large Journalism School call the Walter Cronkite school of journalism. Its a massive enterprise of 1500 students so i communicate my concerns about the unbelievably poor intellectual basis on which most broadcast journalisms is advancing at the moment and what are we going to do about this . The notion of facts, the notion of fair reporting, the notion of reporting whats going on on different sides of a really complex issue. The notion of Holding People responsible. The notion ofnot pursuing just how many people can i get to advertise on my news show and im running on a 24 hour cycle to jack up my ratings. The fundamental issues we are facing in this era of technological enhancement and all kinds of other things going on. Were at a moment where im getting a poor grade because the industry is able to adjust and learn and keep track of their responsibilities. We are sort of lost at the moment so i probably give it a warning to the student. You are falling below a c. You are moving into the d range. Im going to give you an incomplete because you are not working hard enough. You need to do some fundamental changes in the way you think of them going to read your paper again because its not very good right now. I have for the sake of time i want to repeat i agree with what we said. I think the media in general is actually contributing to the divisiveness of our society. Not just the politicians. I can read the same on the same issues, different parts of our society are now exceeding their information from various segregated parts of the media. They are not crossing over. And that is harder and harder and so if you are a certain segment of society, geography, whatever. Theres a certain part of the media and they played to that whats happening as a consequence of what weve said is not only personal information , sometimes sort of inaccurate information but extremely biased to the targeted audience they want. And that is now resulting in this channel for this part of society, this channel for this part of society and we recognize that. Thats what worries me the worst because its become accepted. As i travel around the world, on the same issue i can be in europe listening to the bbc, then come to the us. You think i was hearing a different story. Even the facts dont add up. Surely that isnt all by accident. That worries me. I can talk about this topic all day. I only add my optimism is the forces appear to validation and there is a way that a lot of mainstream journalism and news will be in a higher validated way. I encourage everyone to read the clariion call please. We dont put these out just for the fun of it so everybodyplease spend some time with it. I want to thank our panel. Sam and debra, for your great thoughts today. Andeverybody have a great day, thanks. [applause] ladies and gentlemen, they provide us with insights from gala Global Analytics into major trends that shape us and global economies in 2018 and beyond. These welcome after jim within, chairman and ceo of gala. [applause] deborah, thank you for all you do. Sam, you mentioned something at dinner last night. Im talking to my wife about larry with the panel you are doing. Its so hard to find information you can trust. And you mentioned how michael, you mentioned Walter Cronkite. You wonder if trust in media died somewhere with walter or maybe somewhere all the way in tim russert. But larry, if you were to ask the American Public what their page would be in media, its an f. They give it the lowest trust have since gallup started measuring this decades ago. Im just saying that because what a Great Organization where its one place you can go, one of the few us places you can go. I read the new york times, we all know about that. You can read the wall street journal but every line i read, i go to the are trying to put it off. Earlier in my life i never did that but one of the reasons my firm takes so much pride in being part of this organization, all the data and having sort of a nonspecial interest High Integrity look at what this is doing but thank you or all of that. Im going to cover some material here. That i havent covered before and im not real good at it. Thats a hell of an opening. Theres a big question that comes up about why do we keep getting surprised with big changes in the world . Lets just do aspirin. How come nobody saw that coming . I heard jim clapper Say Something and i really regardless of what everybody said, i admire him. But he said, he referred to it as being kicked in the stomach. President obama said we spent 100 billion year in intelligence and nobody can see the era spring coming . We dont have any answers at all. And were going to propose something to you before i show you slides and then maybe we will we will have some questions. What we do is we just keep working Economic Data. We work Economic Data over and over again. Gdp is pretty much single metric that we used for human allotment. We say, how are things going in egypt, how are things going in bahrain. Lets look at gdp. Even use gdp per capita, use that one. And we just work it over and over again. Thats why economics works and economics is a real important metric for intelligence. We start working on this 12 years ago. We said what is it we need to know . I did a lot of the initial stakeholder reviews myself and every time i was with some kind of world leader id say if you could ask the whole world one question, all 5 billion adults, so you could do your job better, you would say changes that change the world, what would you ask them . They were sort of the best leaders at the time. They always came back with something simple. They didnt have anything that would blow me out of my chair. They said i wish i knew what they wanted out of life. I also wish i knew how they were doing. Because economics doesnt give you any of those. Weve got a pretty good breakthrough and we said what do you want out of life . 5 billion adults, 3 billion of those people if you said whats the gold ring, they said i wish i had a good job. Its hardly even written down what is a good job . If you said im going to try to get michael the very highest level of driving i can. Doesnt matter if he lives in argentina or whatever. Lets say 22, 25 years old, somewhere in there. You go to work on developing as an individual. Right now, we dont have metrics for that. You say i dont know what to do to him. Heres what we found. It starts with him having a good job but its changing a little bit because when baby boomers were his age, we just wanted to have a family. Theres been an enormous sociological shift. He says he just needs work. A client of ours, we have partnerships and Everything Else but a lot of it is informal so if hes selling flowers in traffic, weve got as employed. Hes still suffering. You only have three categories, think of suffering, struggling and thriving. You want to get him to thriving. Theres one level above that thats having a fulltime job. Are you hours a week with a paycheck for an organization. If you can get three people 3 billion people there it changes the world. The problem with that, most of them are lowpaying jobs. So now if you want to go up one more, this is the new massive hierarchy. Get him a job that gives him a living wage so he can have a family. Totally different. Is there anything about that, living wage. You ask him if he has a boss that cares about his development. To work and talk about what he could become. This sounds pretty soft but you just said it, you say can we take him even higher . You take it one step higher as a 25yearold and talk to him about what his purpose is in his life. And then hes very different. Good question would be how many people in the world are at that level, thriving and feeling really good and how many are at suffering . Cant you tell that my gdp . We are going to look. We built consistent standpoint frames across 160 countries. We found some questions. And you try this yourself. On 0 to 10, with zero being the worst possible life you can have and 10 being the best possible life you could have, where are you today . If you are a seven or better, that tells you something. So sam is a 795. He has a better life but you cant quite tell yes, hes thriving because if i say to sam wheres your life going to be in five years and he says its going to be a four, hes not writing. It was actually danny conaway, a Nobel Prize Winner figure this out he was the one who helped with this piece in. Im a five. Usage and is not doing well. Im so sorry. But then you say jim, where will you be in five years. I say i like the intent and i graduated, im going to do this and i got a degree from the Journalism School, im going to get there, now im back to thriving. Youve got to be in a place where you can get a good look at the screen. People say how could it be, is this like that . Thats what we use you guys, right there. Its the first question, how can we not see breakfast. Thats a nearperfect linear increase in gdp. So that lead up i did was thriving to thats the brexit vote. Everything is fine. Why in the world did people vote that way . The problem with that line is it judges what people are making and spending. Its just a transaction of life. All those stakeholders that made the remark, i like to know how theyre feeling. They like to ask all 5 Million People how are you doing. How is your life going . Are you leading a life is worth living and doesnt have meaning or anything else. Thats the thriving in england. Can you tell there . I think its the biggest drop weve ever seen. Thriving in england right before brexit, 15 points. It was absolutely seeable. Just as clear as across the perry. Thats a lesson for leaders, were missing a piece of data. Its not either or of those but when you light up the transactions of life, you also have to ask how are they doing . Lets try another one. There you go. Heres the air and spring. Sorry im not more familiar. Look at that. Thats not blended, thats the gdp growth right there. I know tunisia is not coming up but this is how wrong we are as leaders. The World Economic forum tunisia marks for being as perfectly managed and their trend line is exactly this. Theres the uprising. It was started by that guy, the food cart vendor in tunisia who set himself on fire. It wasnt up to america, it was just i want to work. And we took his heart away. Look at this one, isnt it amazing . Look where thriving is. Down a few percent. If you try to predict it, you just watched the transactions of life, you cant see it because you cant see how well we are developing as humans and the accumulation of all of us as individuals but if you ask him, lets see what this one is. Okay. Heres ukraine, theres the made on revolution right there. There the gdp is a little, you guys, this is unbelievable. And what you really want is its not as much the location of the statistic. Thats why you got to watch out for statistics when you look at location. You see some kind of thing, you dont have any idea what you have until you see the direction and speed. You can be a lets see, whats in russia . They just expect to have worse lives. Suffering is very russian. I thought that would be funnier than it was. But in england or the United States, what youre watching for is who is tanking. Here we go. Weve got that slow climb, theres your gdp. Theres the us president ial election. How many times you get asked what happened, dont you do this all the time. Heres one answer. Thats odd. There we go. United states does pretty darn well. See where we are with thriving, on the question of where you have optimism. We stay pretty pumped up here. Until we dont. Can you imagine, lets just call it a 10 point drop, and you imagine if Something Like gdp dropped 10 points . We dont have emphasis on emotional condition. In a society, we dont have mass to it. Sometime will be in my lifetime, sometime gala will put these things out and people will do when they see them. This means war is coming. It means massive changes coming. Or in the case of the United States, virtually nobody. Ive got a couple friends who say i told you so but it was based on nothing. I cant even comments. It should be wrong for a good reason. Now thats interesting, that was funnier than i wanted it to be. So you might ask sam, somebodys selling a lot of tractors and construction equipment. How are things going in china. Look at that. Okay. Okay. One of the things youve got to think about china is who president g, world leadership and, hes got 80 percent of his population thats not doing real well. Theres a hell of a long way to go. And theres that open optimism that we have and im not giving the american picture but im thinking of the difference there for whats probably our biggest competitor. Theres a long way to go. Okay, here we go. Here are the russians. So they are just really flat. I know this is going to say, i just get a kick out of this. What do you think that spike is . These guys are going along with it. They dont have pride in anything except their president. Highest Approval Ratings in the world, there like 80 percent. Who said that . Yes. Yes, he wins. Michael wins a ride on the bus. Charge it to the council. But you know, theres other data on this. When the city wins the super bowl, it actually goes up and it makes a difference. Boiling that trend downward though. If youre going tostart wondering about , they dont often go into the street in a meaningful way but what a consistent trend down. Oh, anybody been to el salvador in the last decade . Its awful. Theyve got to pick you up in armored cars and you have two things in front of you. Its machine guns and all that. Watch this. We put this in here because you can turn around societies. Youve got to work on the right thing but if you were to redo maslows hierarchy, the most important one is security. So you have to be in a state of mind to say, its the most torturous of all is to be afraid. Weve taken a deep look into this. Theyre doing a reallygood job of blocking the place down. America is helping it , too. Theres hope for virtually all countries. Things are a little rocky but notice the percent. I think its about nine or 10, i can see it but its a good drop for whats probably the second or third most advanced country in the world. Oh, this one. Thats probably the most troubling of all. Something is really wrong in india. Down to about two percent. The thriving, of everything we found in the last few years id say thats probably a simple macro behavioral economics finding. It is probably the most serious one. Heres the example of thats about half my time and im just going to stop. Do you have any comments or questions . [applause] jim . [inaudible] excellent presentation and it revealed a whole lot. I want to ask a question about manufacturing because we are in this colossal supercycle of innovation. Thank you very much. Somewhere in this colossal supercycle of innovation right now with companies and we see its incredibly exciting and i go back to my hotel room and see my corian tv and Everything Else is made somewhere else in the United States and i was wondering with all your research and things you do, im incredibly concerned that the us is competitive in innovation and ideation and invention but in manufacturing, especially in these things like what you would call maybe the science manufacturing with all these things were talking about in ai and the technology and so forth, for instance where i am in arkansas, we created 100 million Nano Institute of engineering and we lost five companies, one of which is mine and the other four have already moved to china. All four. Im the only one left. Along were they there . They were there three or four years and got snapped up in china and its everywhere i go pretty much. Ukraine, russia, wherever. We are constantly, we have russia, china running capital and theres nothing in the us in terms of government were like that. Not that we want to be a state statesponsored company but it looks like in manufacturing, the us what we talked about three or four years ago its getting worse. We are creating all the ideas. We have these incredible universities like doctor rose with incredible innovation on the practitioner side with professors or wherever or where its commercialization or whether its being able to put it in the hands of entrepreneurs and capitalize, the us is just when you look at whats happening in china in terms of whats being billed and other companies, im worried the us is losing, continuing to lose its and especially in the science manufacturing. Not just ordinary everyday stuff where were bending up steel and putting out products with motors and stuff but deep science, its going to make a difference thats going to create the next generation of gdp. You have any concerns with that . I have a concern jim, thats a little deeper than that. And that is that millennials dont Start Companies at all. You almost have to start there. You get all the innovation and i say the same thing over and over again but innovation doesnt have any value on its own until a customer is standing next to it. Americans are quite clear on that. But when we get the invention and then you get an entrepreneur or builder next to it, you get some investors, thats kind of the moment of conception. Nothing is more important to america than that moment. Weve got to get those. But then you just try to hold the thing as long as you can. Thats my theory. Two or three years isnt very long but if we can inventthem and start them and maybe they go out to the rest of the world and obviously sam , there is no other side to it and free trade. Americans have to have free trade because we have to punch so far about their our weight class, theres only three or 4 billion of us. We have to kick the world in trade or we can have this great stuff and everything that we have. Unless we do that. I dont think we can ever give up. Weve got to Start Companies. Nano tech is a good idea, i dont know whats going to happen if the noncombustion engine. There must be things we can do in healthcare and distaste and Everything Else. But the future might be that the cycles are getting shorter and shorter and then we spin them off for us to invent more and start more companies is a good future for us, thats one thing. If this was poker, and we were playing china, but had their holding compared to ours is horribleyou want these cards, not those. I dont know why you dont read much about it anymore but that one boy decision they made, man is that coming in right now. The problem with the one boy, you cant fix that. You cant go back. They even tried to bust girls in from indonesia. Good luck. Youve got 100 million of them, you cant even do that. They totally destroyed their environment. Every single river, every single lake, thats such a massive project and the bubble, i dont know what to think about that. Who knows. We have our own growing debt but the last one, this is kind of my own opinion. The corruption in mine is still so bad. And its very difficult to build a great economy in the presence of that kind of corruption. Its a lot of places so weve got to make sure we have our premises right on what conception is to create a great economy. If we do, i dont think we should worry. That could be our new business model. What were you going to say . Can you hold your questionsfor one second . I think they cant hear back here. Thank you, this is sort of off kim but the research you presented, could you do that by category . Could you then know if in industries not driving at some point its either going to be disrupted or disappear . Not with that particular not with that particular methodology. That would only be for a society. I have to think about it more and we are down to six minutes. But im going to give you and i dont know. But ill think about it. Theres got to be some way, sandy . Jen, awesome data. Obviously you chose global trends. The world is losing confidence. Either in themselves or in society at large. Hugely dangerous for society as a whole, what are they looking for . What potentially are the common reasons for this drop in confidence and driving and what are the potential remedies in our society to get out of it. The most, what youre looking for is a statement that describes the most events. Im going to make a statement that describes, its like somebody says are you sure smoking kills you because i have an aunt that lived the 95 and shes a chain smoker. We will, good luck with that theory. Im going to tell you what describes the most events. Its that if sam and i are both, we are both 20yearolds in cosgrove, both of us areout of work. Lets start with that. Because we are not in good shape. Especially in the middle east. You know this stuff but if we dont have work we cant get married. Thats out. That means you cant have a family. You also cant have sex. You got all those kind of things. Everything is working against you. Your life is crashing. Then the young males get really bad ideas when they are out of work. They dont have young males out of work, young females just want to run in and fix a country. You better run in and fix the young males. That describes most events so you say are you, one of you going to get a job and he goes yeah, im fine. Hand says im going to get a good job and im being trained. Michaels training me and hes going to hire me. These actually completely fixed because you know what, you just found hope. He has hope. Thats what takes it. And you say to jim, what about you. Are you going to be able to get a job. Im 20. Totally screwed right now but hes not. We look the same and of course all of economics access to the same thing. You cant say no. Jim, i say i think i never will. Because the question that youre asking with that common thing i told you about is you think the best part, ask yourself or your friends or anybody. You think the best part of your life isahead or behind you. Thats the net of the question we asked. So when i at least 20 years old and i say what were asking is you think the best part of your life is ahead of you, he just said ahead of him. Hes got hope and hes fine but me at 20, i say im never going to get hired, ive got nothing. 20 the best part of my life is behind me, not ahead of me. And you can fix any society. Thank you very much. [applause] good morning everyone. Its great to be back with the council again. So i only have half a voice im afraid. I left the other half in stockholm a couple days ago. I was very privileged to get to attend the nobel prize ceremony with the National Science foundation as supported with the three physicists that won the prize for the discovery of gravitational waves. For 40 years. And i think thats a good place to start. [applause]