The fantastic talk that he gave on sustainability. Thank you again for that wonderful tour deforce of sustainability in our future. Allow me to recognize and thank our sponsors for their support and commitment to the counsels work. I want to recognize lockheed martin, our sponsors. And pepsico, snapon. Our chairman sponsors, university san diego. As well as our ben factors and patrons. University of michigan, Marquette University and white cap investment. Without your support we could not do it forum and we thank you very much for that. We have a full day of very exciting talks as well as the release of some of the critical annual policy work on the counsel of competitiveness. And i want to really just frame that in a few over arching facts about the good and the bad of our economy right now. The good news of course is that growth as been very strong. While productivity was flat through most of the year. Its rebounded recently and unemployment is low. In enact lowest since 2000. We know consumers and investors are optimistic and inflation remains tame. Were seeing action on longtime counsel priorities. Such as implementing a territorial tax cyst toom repatriot the off shore earnings of corporations as well as a much more balanced innovation friendly commitment to regulatory reform. The fed just recently raised its expectation for growth this year and next year on the economy expecting us to be about 2. 5 . Not at the level jim clifton says we need to be but nonetheless thats great news and unemployment is expected to continue to drop and we hope to see some gains in wages. But of course we know in competitiveness theres not a Silver Bullet and this is an ecosystem and theres still a myriad set of challenges facing the country as we face a continually increasing growing deficit and insuring the stability of our middle class families and the crown jewel of our Higher Education system does not have an unfortunate impact coming out of the new tax legislation and very poirmntaimy we want to work hard as basically our basic Research Continues to decline. Todays forum were going to really look at the issues that are vital to longterm competitiveness and prosperity. As we release it clairian call. We will hear from jim clifton of gallop with a look in the future. Were very excited we will hear from the ceo on the latest report on expenengsal technologies and advance manufacturing. We will have a discussion with it director of National Science foundation and two of our University President s on the work coming out of our exploring innovations Frontier Initiative that has laid the groundwork for a new commission on innovation frontiers we will release later today. We know of course that energy and manufacturing are inextricably linked and we will continue it work of our Great Steering Committee to look again at deep dives of our economy and bring to the forefront skills and challenges of educating our work force as we discuss manufacturing throughout the day. I think all of you are going to love our luncheon talk about human augmentation and that will be substantive and very entertaining. And then this afternoon were going to have a series of mini ted talks really looking at some of the disruptive frontiers from big data to automation to Cyber Attacks from the future of medicine and bitcoin and block chain and of course the rise of the robots and what that means for american workers. So i want to thank all of you for coming, for participating, supporting the counsel on competitiveness. I want to thank our tremendous leadership, the ceo chairman of deer. The global vice chair of pepsico. As well as all the members of the executive committee and of course the great staff on the counsel of competitiveness. So with that id like the invite the board and executive committee to come to the stage for the formal release of the call for competitiveness. Thank you. Im moderate this panel this morning and welcome. I understood there was a introduction that i was not in charge of. But we will go away from that. I think im the second longest member of the counsel. And i have to tell you almost 30 years i have been here the work on competitiveness probably could not be more important. The kind of challenges that were facing in almost every aspect of our leadership on the global basis are being tried every day. So today we have obviously deborah, we have sam allen. Mike crow from the Arizona State university and met hood from pepsi and i wanted to start with it first category of tax. Since when i woke up this morning that hotel that seems be to on the front of every newspaper and was in my smart phone. And maybe sam, ill start with you. One of the biggest ben factors of the tax reform is Corporate Tax going down to 21 . I guess the question is one, how do you see that as a ceo and chairman of one of our major corporations in the globe and how istality going to help you . And second how do you think it could hurt . In our competitiveness in any way and will it actually create more jobs or more innovation and competitiveness in our country . Well, thats the 100 question right now. Its interesting this week ive been out with our investors all over both coasts. Thats one of the first questions everybody asks and we start out by saying the devil is in the details, however they end up writing it. Its not, maybe from our perspective, our tax rate today is roughly 34 , normally what we pay. About 55 of our earnings come from the u. S. So our effective tax rate will go to 26 27 in total. And people have a tendency to lose sight at most multinational companies. Its not going to go down to 21 because they have earnings coming from other parts of the world. But if what everybody is writing, if it ends up being something similar to that. Thunalsis we done will be very, very positive. And thats even more important than it is for us, quite frankly. If we do well, theyll do well as well. Theres no doubt it will be stimulative. Some people say it will add to gdp 15 to 25 basis points. Other people say 50 plus. Im in the camp that it will add 50 basis points plus but feathered it it wont hapen the first year because there are some other provisions to it that in your first year are negative. From a company standpoint. A company like ours immediately if the tax rate goes down, you got to go in and all your provisions youve got to restate those. Now you got to write them back down to 21 . There are other sides to this that will have an impact. But in my opinion if this does go through, it will be very stimulative, stimulative over a longer period of time and yes it will help with competitiveness. But i think it stimulative part to the economy is even more important than the competitiveness part that it may help a company like ours. I tried to get through the 5 hp pages but they just delivered it yesterday to everyone. But one of the areas that doesnt look so promising, mike, is Higher Education. And the way that the tax reform seem fwes to be looking at some the restrictions. Thoughts from you and your colleagues on that . First, tax reform is positive. It needs to be constructive and think about the if had tire productivity of the country. But that same time many members of congress have become frustrated with universities for a lot of Different Reasons and so in my view theyre eking out punishments. No joke. The proposed now off the table but the taxation of tuition benefits to graduate students, a taxation of certain endowments which is still on the table, the change in the overall stattase of universities themselves. Basically viewing universities as problematic is all a sign of the fact that i think theres two things going on. One, theres concern about the responsiveness of the universities to the bigger advancement issues of the United States itself and for are some trat concerned that were fought doing what we need to be doing. Theyre using tax policy to send signals, basically their view of the culture wars that there going on. And so you take those two things together and its not well thought out tax design related to helping the universities do what the country needs most which is to contribute to the most fantastic Human Capital production that world has ever seen. Like i talked about last night as well as knowledge capital. Universities need to start rethinking what were doing, communicating to the general population about what the impact of the universities are all about and working towards. Were going to have this continuing ongoing argument where student loan policy, regulatory policy, governance policy are all going to be shaped by politicians. Many of whom are unhappy. Right now what we need is Business Community and other communities to also speak out to what they think the university should be doing. And largely not taxed entities as been a critical success variable in them being able to achieve the levels of success weve been able to achieve. If all it sudden they become just another taxed entity, thats a completely different kind of thing. We need be careful about that. Couldnt agree more. You know last year the counsel did a study on productivity. And id like the ask you to look at where we might be headed in the direction of productivity in the United States because the counsel had started seeing a longterm decline and where do you think that will end and what are the sort of levers we need to look at to get really productivity back moving in the right direction . Look, as we talked last year and as weve written productivity as been declining since 2008, 2007 for several years. Now there is some inhadcouraging data and that is the last quarter so were starting to see for the first time anproductivi. However, the question is that a blip or sustained . And the reality of it is that overall the trend, as you pointed out has been very, very either depressed or negative. Whats pepsi doing about their productivity . Were doing what all other large corporations. Were looking at the most efficient way dof deploying our capitol. What isnt generally discussed as much as it should be is with prodd productivity in automation, it is improving it output of our industries. But were not replacing those jobs. With new jobs. And so i think more important for my mind and not just productivity is what type of jobs and i touched on this last night, are we going to create and invest behind and educate people in order to have a work force that is engaged . And it biggest worry over the next decades to come is this mix match between the jobs were creatinging and the skillset of a work force that rr available. That gap is widening. This is the central issue. So productivity is accelerating at the fastest rate ever. The actual people who are working, creating, developing and so forth and then there are people displaced unable to reif hadter the work force because of the nature of their employment skills is insufficient to be engaged. Its creating part of the political response because we havent adjusted also to look at this problem on a different scale. If i can build on that point. As an employer people ask me what keeps you up at night . Im one of the hats i wear is chief technology officer. The average age of an american with a training in science and engineering and mathematics in any industry in this country is now oench the age of 50. So in the next decade half of the if tire countrys work force is going to anticipate retiring. Theres nowhere near enough students that are going to fill that pipeline coming out of inhad stugzs like mikes that were going to be able to hire and so the time periods taking to fill a position if i look back at my last 10 years its getting longer and longer and longer. Productivity cant continue if we cant fill that work force. So we have not only a mismatch but a diminishing pipeline of talent and particularly infields that take a long time to train people in. You cant train a scientist or engineer in any of these fields overnight. So somehow this discussion thats going on has got to take into account what are we going to invest behind the institutions. I dont train scientists, engineers, mathematicians. I actually pick them up from there and apply their skills. We got mismatch and somehow were going to have to fill it. We used to fill it from outside the United States. That pipeline is filling for a lots of reasons. Ill go to you deborah. It counsel has been about many things but science and technology disruption, computing have been topics of deep interest and impact productivity, education, everything. Were also seeing, in my opinion, the recapitalization of the economy where youve got five companies basically worth 4 1 2 trillion. Apple, google, facebook. And wondering, you know, where is our leadership right now in science and technology and where does it need to go . And were seeing all these words like artificial intelligence, machine learning. Which, by the way mit the ai lab started in 1981. But maybe you could frame a little about that and it rest of the panel sam, i know you guys just bought quite a large a. I. Company. And how you see that from a competitiveness point of view and in general science, technology, education, prodd k productivity and disrupgds in the next five to 10 years. When had the counsel was for it was one of the driving forces for the creation of this organization. And we have always made the case that our nation has to if vest in the forefront of new knowledge creation and deploy the technology of the future to our companies that can compete globally. So weve been very concerned and this is reflected in the clarion call with the longterm investment in basic research and research and development as a percentage of gdp. Other nations are surpassing us, japan, others. We still, as a country, perform about 1 3 of all Global Research but china is on a track very soon to surpass us on that. So the investment matters and it matters because through the National Science foundation, through it department of if had aerj, through it department of defense our universities and National Labs and companies actually come together in these strategic partnerships. Thats one of our real core advantages. And others continue to come and really want to understand how we can have that ecosystem that moves so quickly. Those companies you mentioned at it top of the s p, they were enabled by huge investments in the things that enabled the facebooks and googles and amazons to create the value that they have. Looking to the future, which of course is what our group of chief Technology Officers do. We are really working hard at the counsel and in the country to really focus on how all these science and Technology Frontiers come together in multidisciplinary ways and i think well hear when we release our report that this is the greatest time in the world with the digital, the bio tech, the nano tech and the cognitive revolutions all coming together and colliding. And i think these are really going to be it drivers of productivity in our standard of living. But we have to invest in the people. Without the people that drive this we will be it ones who do a lot of the core initial research but other countries in the world will create the jobs and the wealth for their countries. So this is a big challenge and a great opportunity for our country. Sam. Some thoughts . I guess ive been on the counsel long enough im aligned with deborah. But i put it in a couple different categories. From our standpoint next five to 10 years next five years some of the innovations that there going toing come in are just phenomenal. And whether it be in artificial intelligence, augmented learning, whatever you want to call it, that whole area, digatization, theres going to be tremendous productivity improvements. I agree with everyone that it issue we have today everybody has today is attracting the human talent and its just going to get worse. But as a company youll find a way to attract the talent to work on whatever it is youre working on that drives value for your company. Free market enterprise will allow that to happen. You dont fund the basic research and that arer the concerning part of my perspective. Companies will find a way to get the people they need to do what theyre doing. But the basic research that creates the platform upon which all of us build our businesses on, thats where the funding needs to again be invested in so that the country itself can stay very, very competitive. And if you had you only have so much water in a bucket and if you have to say how youre going to divide the water up between companies and free market enterprise, universities and basic research i would be putting a lot of that water in the basic Research Category whether it is at universities or in other areas like the labs. Because thats the platform that lets all of us in grow upon it. And well find a way to get what we need but we dont develop that platform and that platform you keep got to get better and better. With digatization and everything else. The platform that weve invested in the past is no longer the platform we need for the future. That would be the area that i would really, really think we ought to try to really focus on. Clarion talks about that as well. But these are very, very exciting times. Ive reinforced what others have said. And i from our standpoint i can tell you just as an example we had Autonomous Vehicles 20 years ago but they werent Cost Effective. We will, inside of five years we will have Autonomous Vehicles that are Cost Effective and the critical neighbor beyond technology, senlsers, vision, etc. The big difference issia will also have the a. I. Capability that epihad helps y that vehicle determine when youre going down a field, for us for example, thats a goefer i keep going. Thats the farmers dog. I stop. The poor gopher. That difference i heard gophers are an if had dangered species. They will be more and more. But anyway that type of change is coming and its coming very, very quickly. The minnesota gopher. So i think what i would add is were in this really weird moment of cognitive disinnocence of some sort. Unemployment with College Degrees is 3 . We hear from Industry Leaders all over it country produce more and better more and better faster, faster, faster. And then we deal with Political Leadership and they say listen youre just a bunch of comys over there at the universities and so were going to start cutting back your funding. Were going to beat you into the ground and get you under control. And were like thats not true and were told by industry we need more ideas, better people, faster, more technology. So theres this weird thing going on. So the universities are being battered with demands being made of them. So its creating tension in society thats very, very significant. The universities in the United States it Research Universities are unique institutions globally. Ive travelled all over the world. For are very few that reach the lower tier level of an American Research university. So we have this high performing iftity that can do a lot more but theres this intellectual rejection. Well, we dont need so many college graduates. Theres too much of an emphasis on this or that. And no, not Everyone Needs to go to college. But 80 of them require beyond a high school diploma. 80 . Theres not a general political consensus or policy level consensus of that reality. Weve taken some steps at asu. We had 8,000 engineering students in 2008. We have 21 inhad engineering no. 4,000 through really fantastic online inhad junearing degrees and 17,000 students with us. 8,000 employers coming to help hire some of those people. Science majors off the chartsz. And so its not the case there arent kids from the United States that want to do these things or move in these areas. There are. Universities have to change some of the things theyre doing but we have this bigger political discourse problem that tear rar marginal asset. Theyre not. Theyre a central asset. And thats no longer perceived to be the case. I think weve shifted a little bit and we need to work our way into a new understanding of the universities. I come from a White Working Class family that is if you look at all my other relatives theyre mostly angry at it outcome of their lives. Because theyre not prepared to deal with the economy theyre confronting. They blame it university for some extent for creatinging this economy and what they perceive to be elite individuals not part of this core culture they come from and youve seen some of their political statements. The universities need to figure out how to start communicating to everyone rather than to some and in ways where they can see future Economic Opportunities for themselves by enhanced learning opportunities. So in our case weve decided to move forward and find ways to educate across the entire spectrum of our society in addition to the kids that come and live with us for four, five, or six years to have an enhanced learning experience. I 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, learning. What is the responsibility of corporations to innovation and to science and technology and learning . Ib know pepsi spends a lot of money on research. But i just want to add that to after youve addressed the general question. I wont reiterate whats already been said. Ive no doubt in my mind that the creation of knowledge within the academic inhstitutions in this country is second to none as long as we keep nurturing it. And id like the broaden that out not just to the university but the if had tire ecosystem that u. S. Has created since world war ii essentially over the last six seven decades is second to none and while whats visible is the googles and the facebooks. They are technically a by product of that engine. Theyre a commercial face of that engine and so that leads to your second question which in my mind with i teach this theres invention and innovation. If ovation doesnt happen without invention. Its the application. Innovation in my mind and relevant to your question is the ability to solve societys, an individuals problems and you Leverage Technology and you leverage inventions, often several inventions to bring them together. In principal what industry does well is the ability to configure several inventions and come up with a method to solve solution. Whether its an Autonomous Vehicle or a new way of processing food, agriculture. New way of communicating, accessing information. But the core of them is thing arogation of those. And thats what industrys responsibility is. We can understand consumer inhad sites. We look at consumer problems and we say how do we now bring these in the most efficient way possible . Thats what industry does very well. We optimize and optimize until a new scurve comes because somebody as created a completely new way of doing things and the early doctors pick it up and say forget it. This is the new way. The u. S. Has done that better than any other society on the planet. There may be a bigger online mark lt system in the world than amazon but the internet was invented in this ecosystem. Others layer on that until we redefine those rules. My concern do we have alignment between our policy strategy and the demands . Were actually living in a world where were going to see democ ruatization of technology and what used to be the domain of the elite has now become the through this accessibility, everybody has access. Now the good thing is everybody has access increasing knowledge, to information, to this capability, to connectivity right down to the poor farmer in africa. Now how do we connect all of this in a favorable manner so we can actually increase productivity coming back here . We have to create the matrix for it. Business and entrepreneur will figure out how to work in that. Id like to have a quick tachgant before i set up the lightning round final questions. But deborah and sam, i couldnt let our conversation go without a little comment about trade and the Current Administration view of what i can only say looks like hyperprotectionism to me. That said where does trade play into our competitive fness in t next few years . Well, tis is probably, from my perspective this is probably the most disappointing part of whats going on right now in the administration. And the problem we have is for so long certain parts will talk about it disadvantages of free trade and they will pliticize it and use it from that standpoint and are the sudden the same group will come back and say free trade is good. A lot of people in the general public dont know what to believe as a result. The reality is free trade is great for this country. Its great for the globe. Yes, for are people that get dislocated as a result of that and yes, we have to figure out ways to prop it up. But in terms of helping the globe prosper, theres nothing that can beat free trade in that respect. Where were going right now some people say were rescinding f t nafta that its not going to spiral out and cause protectionism but the risk is there that it will and youre seeing that now even in europe. President macron in france. All the sudden theyre trying to set up barriers even 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 doesnt 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 we have people that believe that protectionism is going to help the globe. As ive indicated this is an area that im very, very, personally very, very out of touch with it direction certain people are trying to take this. And somehow weve got to get the public educated again about the benefits everyone as received as a result of global free trade and how that as has further turbo charged the Global Economy, which is good for everybody. I guess enough said. Its a very its an alarming area right now and hopefully calmer heads will prevail in the long run. I would add that the success of American Companies in the Global Market place was core to counsel on competitiveness and we know, just one of the data points. 2 3 of all revenue produced by u. S. Firms is outside it country. So these are our markets, our customers and we have to be engaged not just in selling what we make and produce but in terms of helping set the environment for trade for trade and the impact it as on raising the standard of living for people around it world. Having said that theres no question in some of it multilateral trading agreements as well as bilateral, there are provisions that could be improved in the benefit of all. For instance intellectual property protection. That continues to be a huge issue. I serve on this commission on the theft of entelectual property. If china implemented their existing ip laws on the books our economy would be 1. 4 trillion more. Thats a huge 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 digitalization of information and im concerned in the eu with their provisions on privacy and data. How is that going to impact the technological frontiers were talking about . So the bottom line is the u. S. Has been a leader, a supporter and really the evangelist for trade with a huge impact on our economy and standard of living and we cant give that up and it will be a very important part of our work going forward. Thank you, deborah. If you had youre forced to boil down to what youre most optimistic about right now in the country from competitive point of view and what youre most unexcited about that you see as a big risk . What comes right to mind . Top of mind from an optimism point of view we have a vibrant ecosysteminnovative start ups and what ive seen changing is the traditional silo of private sector, start up and big, academia and sort of the academic research. Those barriers and sort of silos are starting to break down. So its getting more and more seamless and the partnerships. I know my Team Assigned about 50 partnerships in the last decade. Between these institutions that were traditionally over there verses us and now theyre merging. So youre seeing this connectivity despite thing else. And im already seeing. I happen to sit on the board of some of those start ups and just the pace at which things are moving, thats exciting. The speed and the number and the idiation and the connectivity between our institutions. I think what is scary is what i just said, which i said earlier. If we cannot continue to get the pipeline and nurture the investment its going to take to generate this new idiation and keep that pipeline coming, we will lose it lead from it. And as we take the lead and its not bad others should be playing. Absolutely it more the merrier. Thats not to say we should concede our leadership position and forgo all the investment weve done. Thats the part i worry about. Im most optimistic about the millennials. I live in the community of 100,000 learners deeply immersed with us. Unbelievable energy, creativity, desire for to have their lives have some sort of meaning. Theyre open minded, adaptive, high speed. We draw energy from them and for those of you that read negative things in the media about millenni millennials, these people must not live with them. 15,000 of them actually live on our campus with us. Most optimistic about what they represent. Their desire for successful outcomes. Their desire for a successful country. Its really quite over powering and it makes me worry a little bit less about the future than some of the common every day rhetoric. The thing i worry the most about ive been hearing more and more from elite folks on the Technology Side that were going to build all these Autonomous Vehicles and systems and all these people are going to be forced out of work and what we need is a solution like universal income. That is one of the stupidest things ive ever heard anyone talk about. We need assume there will be a group of people no longer employable and were going to have to tlaks these technologies to find money for them to live off. If we do that within 20 years or less there will be pitch fork and tar and feather at the doors of everybody who built these robots. Life is not about your job only. Its about your purpose. Its about what youre doing, your contribution. Every human being is going to need to have an opportunity. So we have to move away from the idea of a universal income and to the idea of a universal learner and thats something we havent conceptualized yet. How are we go having to everyone universally have access to learning so they can adjust to the new way it it economy and our society works. I havent decided if alexa was making me more stupid or smarter. The alexas in my house are fun to deal with. I ordered paper towels for the first time and it worked. Sam, what are you optimistic about and what are you not so optimistic about . I guess i wont say universal income. You can. Its still stupid. Yes, it is. Ill be a little more near term with my thoughts on that. As we look to 18 for the first time in a number, a number of years almost every country around the globe is forecasting positive gdp growth and all of these things, if the globe if youre seeing gdp growth everywhere, that creates a sense of optimism that fuels a number of these engines. And there is a rising tide for everyone. And so im very there is a chance here for the First Time Since probably the 08 09 crisis that you could get back to a level of optimism of Economic Growth throughout it world which is good for all of us in the u. S. But everywhere. And i get to travel a lot everywhere and your seeing it. Economies that have negative gdp growth, its amazing that it change in Public Perception almost overnight when all the sudden now youre forecasting that things are going to get better. So thats why im very better. Thats what im very optimistic about. On the flip side of that the thing that could detract is some type of conflict. The risk of conflict today is higher than its been in many many years. That would be the and there doesnt appear to be the recognition that there should be that that rbis is higher an what do we do to that risk is higher and what do we do to mitigate that risk and bring it down again. Those are the two i would say why im most optimistic and my biggest concern. Maybe base yours a little less on your opinion and more on what the clarion call presents. Thank you. Well, the clarion call has given our country grades. I dont know if youve had a chance to look at the grades. We dont have an a on anything. Asu would allow us to graduate with those grades. If you look under talent, we have a d and tax, b, meaning something good is going happen, we hope. Trade is c, technology is c. Research a d, regulation a b and infrastructure a d. I think from the councils perspective building on what everyone said we have to do everything we can to keep this Growth Engine going but at the same time we have to work very hard across the spectrum of competitiveness. Talent at the top, one of this things that we will talk about this morning thats come out of our work, how do we bring the new demographics of our country into the innovation space. Were on the cusp of abundance through all this capability yet a very large percentage of our nation is not participating. Thats what worries me tremendously and something we will put a lot of attention on at the council. If we could get our tax and regulatory and enabling conditions in a good place, lets build on that so we have a much more robust and inclusive standard of living for our citizens. Thats really what were all about. Last question. Weve had an interesting year, speaking of grades. Weve had an interesting year in everything. But one area close to me is media, how the media has represented the things that are happening and i wonder from our panel what grade you would give the media the last 12 months in covering what seems to be one of the most interesting moments in American History . Debra . I would give them a d. The reason is i think that not completely, but in most cases the leaders of our media are not accepting larry, you should comment on this because youre a leader in media, that they are really in a disruptive state. The countrys no longer accepting elites to tell them what they need to think and do and that they really have to recognize that and sort of get with the program in the sense of not putting their personal views into reporting the news. Sam. Whatever grade, it wouldnt be a great grade, but, you know, id put it in two categories. I dont know that its an opportunity lost maybe. Its not so much what theyve done, its what they could have done if theyd viewed it a little differently than they have viewed it. So, you know, whether its a d or c, i dont know, but, to me, there was an opportunity here, at least mainstream media, an opportunity that could have taken a Higher Ground and helped build instead of also being a part of the destruction. That part, they certainly missed their opportunity. Mike. So, first, we operate a very large Journalism School called the Walter Cronkite school of journalism, massive 1500 students. I communicate my concerns about the unbelievably poor intellectual basis on which most broadcast journalism in particular is advancing at the moment, like, what are we going to do about this . The notion of a fact, of fair reporting, notion of reporting whats going on, on different sides of a complex issue and Holding People responsible and not just how many people can i get to advertise my new show as im running it on a 24 hour news cycle to do Everything Possible to jack up ratings, these are fundamental issues were facing with technological enhancement going on. Im giving a poor grade because the student, the industry isnt able to adjust and learn and keep track of their responsibility. So were sort of lost at the moment. Id probably give it a warning to the student. Youre falling below a c, youre moving into the d range, im going to give you an incomplete because youre not working hard enough. You need to go back and do fundamental changes in the way you think. I will read your paper again because its not very good right now. Forsake of time i wont repeat. I think the media in general has contributed divisiveness of our society. Not just the politics. I can read on the same issue different parts of our society are now receiving their information from very egg gaited pargaited very segregated parts of the media and theyre not crossing over. That has gotten harder and harder. If youre a certain segment of society by faith or geography, they play to that. Sometimes thought of inaccurate information but extremely biased to the targeted audience they want and thats now resulting this channel is for this part of society and this channel is for this part of society, and we sort of recognize it now. Thats what worries me the worst. Its sort of become accepted. As i travel around the world on the same issue, i can be in europe listening to the bbc to a european channel and the u. S. , youd think i was hearing a different story. Even the facts dont add up. Surely that isnt all by accident. That worries me. I could talk about this topic all day. Ill only add my optimism is this is going to force us to a period of validation. There is a way a lot of the mainstream journalism and news will be in a higher validated way. I encourage everyone to read clarion call, please. We dont put these out just for the fun of it. Everybody, please spend some time with it. I want to thank our panel. Mahmoud, mike, sam and debra, for your great thoughts today. Everybody have a good day here . Thank you. Ladies and gentlemen, to provide us with insights from Gallup Global analytics that will shape the Global Economy and beyond, please welcome mr. Jim clifton, ceo gallup. Debra, thank you for all that you do. Sam, you mentioned something at dinner last night. I talked to my wife about it ties in, larry with the panel you were just doing. Its so hard to find information you can trust. Michael, you mentioned Walter Cronkite, you wonder if trust in media died with walter and tim russert, you wonder if some died, too, if you were to ask the American Public what their grade would be on the media, its an f. They give it the lowest trust since it was measured decades ago. Im just saying that. What a Great Organization where its one place you can do, one of the few last places you can go. If i read the new york times, we all know about that, read the wall street journal, now even the financial times, i read, i go, what kind of angle are they trying to put on this . Earlier in my life i never did that. One of the reasons why my firm take business so much pride being part of the organization and data and having an integrity look going, whats this for . Thank you for all of that. I will cover some material i havent covered before and im not real good at it. Now, thats a hell of an opening, isnt it . Theres been a question that comes up, why do we keep getting surprised with changes in the world. Like arab spring, nobody saw that coming. I heard jim clapper say something, regardless whatever problems people have in this town i admire him, i think hes a great american. He referred to it as being kicked in the stomach when president obama said to him, we spend 100 billion a year with intelligence and nobody could see the arab spring coming . We dont have any answers at all. I want to propose something to you before i show you some slides, and maybe well maybe youll 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 the single metric we use for human development. Say, hey, how are things going in egypt and bahrain, lets look at gdp. We just use that one. Then we just work it over and over again. Thats why economics works and economics is a real important metric to us until it doesnt. We start working on this 12 years ago we said, what is it we need to know . I did a lot of initial stakeholders myself, every time i was with a world leader i would say to him, if you could ask the whole world one question, all 5 billion adults, so you could do your job better, make changes that would 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 to blow me out of my chair. Theyd say, i wish i knew what they wanted. I wish i knew what they wanted out of a life and i also wish i knew how they were doing because economics doesnt give you any of those. We got a pretty good break through. If they said what do you want out of a life, 3 billion of those people, if you said whats the great global answer . I wish i had a good job. Thats hardly even written down. What is a good job . If you said, i will try to get michael to the very highest level of thriving i possibly can, doesnt matter if he lives in argentina or not, if you really want to photowork, say 22, 25 years old, 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. Its changing a little bit because when baby boomers were his age, we just wanted to have a family. Its an enormous sociological shift. Oacd says he just needs work. A client of ours, we have partnerships and everything else. But if hes selling flowers in traffic we counts him as employed. Hes still suffering. You want to have three category, think of suffering, struggling and thriving. What you want to do is you want to get him to thriving. Theres one level above that. Having a full time job, 30 hours a week with a paycheck for an organization, if you can get him there, get 3 billion people there it changes the world. The problem with that, though, most of them are low paying jobs. So now if you want to go up one more, this is the hierarchy, give him a living wage he can actually have a family. Totally different. Is there anything above that, a livi living wage . If he has a boss that cares about his development. Talk about to him what he cares about. This sounds pretty soft. I go to the next step and you just said it, can you take him any higher . Yes. One step higher as a 25yearold, talk about his purpose in his job and his life and then hes very different. A good question would be how many people in the world are at that level, thriving, feeling really good and how many are at suffering . Cant you tell that by gdp . Were going to look. We built consistent sampling frames across 120 countries an we found some questions. You try this yourself. On a zero10, zero being the worst possible life you could have an 10 being the best possible life you could have, where are you today . If youre a 7 or better, that tells you something. So, if sam is a 7 and im a 5, hes having a better life. You cant quite tell yet whos thriving. If i say to sam where is your life going to be in five years, he says its going to be a 4. Hes not thriving. It was actually, danny, the Nobel Prize Winner that figured this out. He was the one that helped put this piece in. Im a 5. Jim is not doing very well. He said, jim, where will you be in five years . I will be a 10 because i just graduated and i will do this, i got a degree from the Journalism School at i will kill it. Now, im back to thriving. You got to be in a place where you can get a good look at a screen. People said, how could it be does this thing light up . Thats what you use. We will deal with that first question, how come we couldnt see brexit . I can see it right here, i guess. Thats near perfect linear increase in gdp. So that little leadup i did with thriving to suffering, thats the brexit vote. Everythings fine. Now, you can see why everybody in the whole world missed it. But the problem with that line is all it shows you is what people are making and spending. Its just the transactions of life. All those stakeholders that made the remark, id like to know how theyre feeling, what theyd like to do is ask all 5 billion people, how are you doing . How is your life going . Are you leading a life worth living . Does it have meaning or anything else . Thats the thriving in england. See the tail there . I think its the biggest drop weve ever seen. Thriving in england right before brexit dropped 15 points. It was absolutely seeable as clear as a storm coming across a prairie. Whats a lesson for leaders . Were missing a piece of data. You dont either or those. But when you line up the transactions of life you also have to ask how are they doing . Thats how were doing. Lets try another one. There you go. Heres the arab spring coming. Im sorry im not more familiar. Look at that thats not blended. Thats actually the gdp growth right there. So i dont have i know tunisia is not coming up here. This is how wrong we are as leaders. The World Economic forum gave geneva an award for being perfectly managed. Theres the trimline. Theres the uprising. Remember, it was started by the food cart vendor in tunisia set himself on fire. Remember, it wasnt death to america, it was, i just want to work. They took his cart away. Look at this one. Isnt that amazing . Look where thriving, down at 8 . If youre trying to predict it and you just watch the transactions of life, you cant see it because you cant see how well were developing as humans, or the total cum of all of us as individuals. But if you ask them, what a tell. Lets see what this one is. Okay. Heres ukraine. Theres the revolution right there. Their gdp is a little you guys, this is unbelievable. What you really watch for is its not as much the location, the statistic, the direction and speed. Thats why you have to watch out for statistics, you look at location when you do a spot poll or some kind of thing. You dont have any idea what you have until you see the direction and speed of it. You can be russian they just expect to have a worst life. Suffering is part of being a russian. I thought that would be funnier than it was. In england or the United States, youre up here, what youre watching for is whos tanking. Here we go. Look at this one. We have that slow climb. Theres your gdp. Theres the u. S. President ial election. How many times do you get asked, what happened . Dont yall 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. That would be one, larry, on the question of where do you have optimism. This country, we stay pretty pumped up here, until we dont. Can you imagine lets call it a 10 point drop. Can you imagine Something Like gdp dropped 10 points. We dont have an emphasis. We dont really have an emphasis of an emotional condition of a society. We dont have good math to it. Sometime, it wont be in my lifetime they put this out people will go nuts when they see them because it means war is coming or massive changes. In the United States of america, i had a couple of friends that said, i told you trump would win. I know but it was based on nothing, i cant comment. You should be wrong for a good reason, like i am. [ laughter ] now, thats interesting that was funnier than i wanted it to be. So, you might ask, sam, somebody is selling a lot of tractors and construction equipment, how are things going in china . Look at that. Okay. Okay. But one of the things you have to think about china, who president xi talks about world leadership and hes got 80 of his population thats not doing real well. Theres a hell of a long way to go. Imagine the kind of hope and optimism im not giving an american picture think of the difference between whats probably our biggest competitor, theres a long way to go. Here we go. Here are the russians, the russia thing. So theyre just really flat. I know what this will say. I get a kick out of this. What do you think that spike is . They dont have any pride in anything except their president. He has the highest Approval Ratings in the world, like 80 . Who said that . Yeah. No . Yes. Michael wins a ride on the duck bus. Well charge it to the council. But, you know, theres other data on this. When a city wins a super bowl, it actually goes up, it makes a difference. Look at that trend downward. If you were going to start wondering about the russians dont often go onto the streets in a meaningful way. What a consistent trend down. Anybody been in el salvador in the last decade . Its awful. They have to pick you up in armored cars and then you have two things in front of you with machine guns and all that . Watch this one. We put this in here because you can turn around awful societies. You have to work on the right thing. If you were to redo the hierarchy, the most important one is security. So you have to be in a state of mind to say its the most tortuous of all is to be afraid. Weve taken a deep look into this. Theyre doing a really good job of locking the place down. Americas helping them, too. So you can theres hope for virtually all countries. Things are a little rocky there. Notice the percent, i think its 9 or 10, i cant quite see it. Its a very big drop for whats probably a 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 2 the thriving is of everything we found in the last few years, id say thats probably a simple top line macrobehavioral economics finding, that would probably be the most serious one. Thats about half my time. Im just going to stop. Do you have any comments or questions . [ applause ] jim. Excellent presentation. It reveals a whole lot. I wanted to ask you a question about manufacturing, because were in this colossal super cycle of innovation. Sure. Thank you very much. Were in this colossal super cycle of innovation and come to these meetings and its incredibly exciting and i go back to my hotel room and i have a chinese tv or korean tv everything made somewhere else except the United States. Im wondering in all your research and everything you do, im incredibly concerned the u. S. Is incredibly competitive in eidation and in innovation but what leads to deep science manufacturing, ai and technology and so forth, for instance where i am in arkansas, at the university of arkansas we created a 100 million Nano Institute of engineering and launched five companies, one of which is mine. The other four have already moved to china, all four. Im the only one left. How long were they there . There about two or three years. They got snapped up, taken to china. I see this everywhere i go pretty much, if its not china, ukraine, russia, whatever. We have russia and china wanting to invest money and call tapitat in the u. S. , not that we want to be a state sponsored company. It looks like manufacturing we talked about three or four years ago its getting worse. Were creating all these ideas, we have incredible universities like dr. Crows that puts out innovations, on the practitioner side or tech transfer commercialization or being able to put it in the hands of entrepreneurs and capitalize it, the u. S. , when you look at whats happening in china right now in terms of whats being built and manufacturing and in other countries, im really worried the u. S. Is continuing to lose its edge especially in deep science manufacturing, that counts, not everyday stuff bending steel and putting out products with motors in them the deep science manufacturing that will make a difference and create the next generation with gdp, do you have any concerns with that . I have a concern, jim, thats a little deeper than that, that is that millennials dont Start Companies at all. You almost have to start there. You get all the innovation, innovation doesnt have any value on its own until a customer is standing next to it. Americans arent quite clear on that. When we get the invention and get an entrepreneur building next to it and get some investors, thats kind of the moment of conception. Nothing is more important in america, in my opinion, than that moment. We have to get those. Then, you just try to hold the thing as long as you can. Has the my theory. I was two or three years isnt very long, but if we can invent them and start them and maybe they go out to the rest of the world, obviously, sam, theres no other side to it than that we free trade americans have to have free trade because we have to punch so far above our weight class only 3 million of us and we have to kick the worlds whole what in great trade or we cant have these wonderful universities we have unless we do that. I dont think we can ever give up. We have to Start Companies, nanotech is a good idea, i dont know what will happen with a noncombustion engine or space but the cycles might get shorter and shorter and we spin them off. For us to invent more companies is a good future tore us. If this was poker and we were playing china, you guys, the hand theyre holding compared to ours is horrible. You want these cards not those. You dont read much about it anymore but that one boyd decision that they made, man, is that thing coming in right now. The problem with the one boyd, you cant fix that. You cant go back. They even tried to bus girls in from indonesia. Good luck, you have to bus in 100 million of them. You cant even do that. Theyve totally destroyed their environment and every single river and lake. Thats such a massive project. The bubble, i dont know what to think about that. Who knows what that we have our own growing debt and all that, but the last one, my own opinion, the corruption in china is still so bad. Its very difficult to build a great economy in the presence of that kind of corruption. Go ask russia or a lot of places. We have to make sure we have our premises right what con sechice is to create a good economy. We have to be confident. I dont think we should be worried if they go over, that could be our new business model. Similar to jim could you hold your questions for one second. She will come run because i think they cant hear back here. Thank you. This is sort of off jim, but the research you presented, could you do that by category . Could you then know if an industry is not thriving and at some point its either going to be disrupted or disappear . Not with that particular not with that particular methodology, no, that would only be for society. Id have to think about it. Id have to think about it more and were down to six minutes. I will give you an i dont know. But ill think about it. There has to be some way. Sandy. Jim, awesome data. So obviously you chose global trends, right . Globally the world is losing confidence either in themselves or 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 thriving and what are the potential remedies to get our society out of this . No pressure. Okay. The most simple what youre looking for is a statement that describes the most events. I will make a statement that describes it. Kind of like somebody says, are you sure smoking kills you . I have an aunt that lived to 95 and she was a chain smoker. Good luck with that theory. I will tell you what describes most events. Its that if sam and i are both were both 20 yearolds in cairo, both of us are out of work, start with that. Because we are not in good shape. Remember, especially in the middle east, you know this stuff, 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, everythings working against you, your life is crashing. Men, young males get really bad ideas when theyre out of work. Its better to have young males out of work than young females, so if you want to run in and fix a country, better to fix the young males describing the most events. What do you do . Say, are you two guys, either one of you going to get a job . He goes, yeah, im fine. Sam says, i will get a good job, im being trained. Michael is training me and will hire me and i will do this kind of thing. Hes actually completely fixed because you know what, you just found hope. He has hope. Thats what fixes it. You say to jim, what about you . Are you going to be able to get a job. Remember, im 20, totally screwed right now. Hes not but we look the same and economics have us in the same thing, unemployed but you cant see hope. Jim, what about you . I say, i think i never will. The question youre really asking with that economy thing just ask your friends or anybody, do you think the best part of your life is ahead of you or behind you . Thats the nap of the question with ask twice. When hes 20 years old what were really asking, do you think the best part of your life is in front of you or ahead of you . He said ahead of him. Hes a fine with hope. Me, im never going to get hired, i got nothing. At 20 i think the best part of my life is not ahead of me. You fix that, you can fix any society. Thank you very much. [ applause ]