Test. Test. Test. Test. Test. Test. Test. Test. Test. Test. Test. Test. Containing cost and increasing productivity is important to boost profits, so it is real critical that stay as one of the most important things that we need to continue to work on. And third is actually workforce productivity. Companies are continuing to move forward toward higher value and more sophisticated products and processes. And so, workforce productivity was the third thing that came on the list of things that are important. The other thing that was very interesting was that tradition developed nations manufacturing, such as the u. S. , germany and japan, ones that have had high labor productivity, they seem to be winning again in the eyes of global executives. So, theres a consistency in the actual part of the world where the constant productivity is actually leading. These nations are back on top on Global Manufacturing competitiveness, and we expect them to remain there through 2020. But with that said, and again, what i heard earlier, we are rapidly evolving. The landscape is changing. And if you want to stay as an employer of choice, you really need to realize that what you did to retain, create talent isnt the same thing thats going to happen in the next ten years. Its a much, much more difficult task. Walls are falling down. Countries are coming together. Globalization. Its a lot more difficult to actually maintain, retain, maintain, and create the talent that we were able to do years ago. And because of that, talent is going to be fierce. So most companies, its going to be really, really difficult to get exactly the talent we need. And building it is going to be key. In just the latest call, i totally agree that the exact phrase was technology to trade skills, theres no issue in which to Council Members are more united than a desired progress on building talented, Diverse Workforces. Weve seen this through our research, and weve seen it in every day. And that concept of talented, traverse workforces, that i think is really, really key. And when we talk about diverse, the concept of diversity to me is diversity of thought as well as diversity of ethnicity and gender. And so, its really a broadbased, different way of thinking, and i think thats going to be the key, in my estimation, to how companies can succeed over the next decade is literally how do you get a Diverse Workforce in diversity of thought. The other thing that were seeing and the research have proved has been the concept of ecosystems are going to be very, very important. And developing everything yourself is probably not going to be the way of the future. We see it here at deloitte. We see it all over in our clients, where it used to be that every organization wants to build everything they need. With the Way Technology is going, you dont need to do that anymore. Theres going to be an incredible amount of partnerships and ecosystems developed, and that is going to be the way of the future. Even in product development, there will be more teaming with Technology Firms and other type of firms. So the Development Ecosystems is key to the next decade. Were in the fourth industrial revolution, and with that, the landscape is changing. So, if you look at technology, the word that we like to use right now is were in Exponential Technology growth. And youll see with the report that were going to talk about a little bit is really around the concept of what got us to where we are today is not going to get us in the future because of technology. Id like to use this analogy a world will not experience 100 years of progress in the 21st century at the rate its going today, it will be like 20,000 years of progress in the next 100 years. And if you actually believe that a lot of people dont believe that, but if you actually do believe that, we think that thats where its going to go over the next decade. Manufacturings not about just making physical product anymore. Swift consumer demand is changing, the marketplace is changing, the nature of the products are changing. So when you put that all together, thats why we call it more of an exponential increase in development. Again, we agree and support many elements of the clarion call, including their fundamental innovationdriven productivity is the foundation for a growing, vibrant economy. So interesting is theres a Company CalledSingularity University, which weve done a lot of work with, along with the council, and i actually took our deloitte board through a day at singularity a few months ago or so to talk about the concept of what i call governing over disruption. And its hard enough to manage disruption. How do you govern over disruption . And ill tell you, spending a day there was really, really interesting, because i left there almost in a very uncomfortable state, because there were so many concepts that were talked about, about what the next ten years could look like, that i left there thinking how are we going to govern over stuff thats going to be hard to even manage . So it left me with a couple sleepless nights as i thought through it, but i said we all have to look at this as not telling us why its not going to work, but assume it is going to be this way. And i think if we do that, thats going to be the key to how success happens. They like to use kind of 60s disruptive, deceptive, digitized, democratized, demonstrate tiesed and dematerialized, and those i think those are catching six ds. And thats kind of the concept of the Exponential Technology and exponential futures look like, and Singularity University does a really, really good job of pushing that forth. So, as we talk about the study that were under way right now, exponential technologies and manufacturing, it really brings together the council, deloitte, and singularity as well as broader manufacturers and technology ecosystems, so take a fresh look at how our Current Technology is actually transforming the future. So if you believe what i said earlier around the fact that ecosystems are going to be the way of the future, if you think about it as being a Partnership Among lots of different organizations, thats kind of the way of thinking about it, so thats what were doing right now in our study. Our objective is to focus on how Global Manufacturing companies can best tap into the transformational shift to evolve to grow, and actually, to thrive. Help manufacturing executives assess and utilize kind of the most promising future technologies and capture value. So, the study is under way right now. And we are doing this internally at deloitte. So i always believe in you need to see it yourself before you could talk to others about it. Weve been using things like Robotic Process Automation and analytics for a while now to develop and change some of the Core Services that we actually provide to our clients. And i actually believe, if you believe that, weve seen amazing change and success in that over the last couple of years. So, what are we seeing so far . The preliminary survey has shown that it requires thoughtful, engaged, and brave leadership. I think a lot of people engage in this conversation and hear it, but it actually is going to take resources from each manufacturer to actually believe this and invest in it. So taking resources and actually putting them on the journey here, not just talking the talk, but walking it. Know what problem youre trying to solve, too. Theres a lot of hype around advanced technologies. Know which ones actually make the mark for you directly. So its not just everything you hear out there. Theres Amazing Stories you read every day, you see in the news, you Read Research on, but everything is not going to be, you know, effective. Theres overwhelming technologies. How many days do you just get a new request for a new app to come on your phone . And so, some of the things are going to make sense, some of the things are not going to make sense. Our big belief in entrusting small teams to innovate on the edge. Youve heard that term before, innovate on the edge. It really is almost protect a group of people to actually innovate and not worry as much as the direct, immediate p l for that particular product. If you allow innovation on the edge and then bring it in, weve seen that as one of the ways in which companies are going to actually be much, much more successful. I think this one makes sense. Its actually very hard to do in an economic period where youre trying to manage earnings, but it is something that we see coming out of the survey. Then operate outside of the traditional walls. Keep your thinking broad. Dont say, why, say why not sometimes. I think thats another thing thats coming out is this concept of looking at it with almost a different paradigm. And lastly, just raise the National Dialogue on this to be an enabler. Were hearing it a lot. I think the more people talk about it, i think the more everyone is going to see that this is the wave of the future. So i think as each of us go back to our daytoday jobs kind of remembering that how we operate or how we operated to get to this point, we may have to operate a little bit differently in the next decade. So, with that, i thank you for being here and i really appreciate it. Thank you. [ applause ] for almost a decade, the United States has seen an unprecedented surge in both nonrenewable and Renewable Energy sources, turning what was once an economic and National Security weakness into a strength. To discuss whether we have leveraged this opportunity for u. S. Manufacturing at the federal, state, and local levels to maximum effect, please welcome mr. Sam allen, chairman and chief executive officer deere and company and chair of the council on competitiveness. The honorable rebecca blank, President University of wisconsinmadis wisconsinmadison, dr. Walter copan, understudy standards and technology, u. S. Department of commerce, and director National Institute of standards and technology, mr. Steve stevanovich, founder and ceo sgs holdings and member of board of governors Argon National laboratory, and mr. Bill bates, chief of Staff Council on competitiveness. Great, welcome. Thank you, thank you, mike, for that presentation. I know there were some slides that were supposed to go along with that, and i apologize for some technical difficulties that prevented that. But well see if maybe those are something we can share with folks after the session today. So were going to talk a little manufacturing for the next 2025 minutes or so. And weve touched on a lot of the topics that i think were going to get to in this session, but i think looking through it specifically through this lens of manufacturing is an important step to take, particularly as this has been something the council has been so focused on over the last, really, decade of work. You know, back in 2009, the council issued a report that concluded that energy is everything. Its the lifeblood of the u. S. Economy. Three years later, we issued another report specifically on manufacturing. While we were doing that report, the entire landscape of the Energy Situation in the United States changed, and we went from discussing Energy Scarcity and security to talking about lowcost energy abundance, and even independence. This was due largely to the proliferation of the fracking movement, and it was something that we wanted to explore as an organization, the implications that would have across various sectors of our economy. So over the last couple of years, weve looked at the Aerospace Sector energy, advanced materials, biosciences, agriculture to try and really understand whats happening out there. And the question that has always sort of pervaded our work has been are we leveraging this tremendous opportunity that we have with lowcost, abundant energy, to capitalize on americas manufacturing capacity . So, i have a terrific panel with me here today to try and get at that question, looking at some specifics within that scope. What id like to do, maybe, is start with you, becky, because weve talked a lot about talent over the last couple panels here, but now i wanted to look at it really specifically thinking of the manufacturing space. And over and over again, in each of these sessions, whether it was agriculture or biosciences or aerospace, it comes up that were not ready, were not finding the talent we need. And weve heard some of the discussion today about the need for diversity, expanding the pool. But first of all, are you seeing this as well in your sphere, and are we doing the right things about it, looking at the manufacturing opportunity . So, we have absolutely growing demand for engineers for computer scientists, for people in a broad number of areas. Wisconsin is a heavily manufacturing state, and i regularly hear from employers saying, you know, we wish you could turn out more. We need more. I should note that, of course, this is a very diverse pipeline. It goes from everything from twoyear people trained very seriously in Technical Skills through bas in engineering to ph. Ds with very advanced Research Abilities in biotech, so theres not a one size fits all answer on this. And if youre going to grow the internal pipeline, as i think michael crow noted earlier, its a long process, right, particularly at the higher end. So a couple of things. First of all, and i know the council has talked about this at times in the past, it will take time to expand the pipeline inside the United States, and the only alternative to that is buying talent from abroad. So im not going to say anything more about it, but an intelligent skillsbased immigration policy ought to be number one on the list, right . Because thats the only shortterm solution to some of the shortages that firms are experiencing. That or theyre going to move out of the United States, and you know, the lowercost energy, of course, is a reason to stay here, if you can get the talent together. Let me talk about building the pipeline internally. One thing i say i think is on all of us. Weve got to make manufacturing and the science, the technology that goes into it a little bit more sexy out there in the public conversation. I hear regularly from talking to people in the Business Schools or Engineering Schools, and they dont see what they think of as oldline, old manufacturing is very attractive. Well, everyone in this room knows theres not much of that left in the United States. Most of it is really exciting, hightech manufacturing, and that is the edge of where u. S. Manufacturing is going to grow and remain. But students dont understand that, and their parents dont understand that, and they get very little exposure to the manufacturing sector, unless their parents have worked in it or theyve been in a town where its present. So, we have a lot of students coming in who when you say, gosh, you ought to think about careers in science and engineering that could lead into some great jobs in manufacturing, and they look at you and say why would i want to do that . And thats a Marketing Media campaign, in part, and i know there are a number of companies when you look at the adds who are trying to do that. But i think at some fundamental level, we have to do more of that, just to attract more people to be thinking in junior high and high school, this is actually a pretty exciting thing to do, all right . Now, having said that, once they get to college, there are a number of things we need to be doing, and one of the most important of that is the information that you give to freshmen and sophomores when theyre choosing majors. I think we do a pretty good job of that in our professional schools, if youre in engineering or if youre in business. But most schools, and that includes us in the past, have done a pretty lousy job of that for the majority of students who are in liberal arts degrees and looking around not sure what their majors going to be. They have no idea what they can do with a major in mathematics or what they can do with a major in physics or a major in social sciences or communications that can lead them into some really interesting jobs. So we are trying very hard to push careerrelated information, bring in alumni, bring in local companies from wisconsin in freshman and sophomore years of college to try to get people there. Finally, you know, two other last comments. I regularly talk to manufacturers about the fact that they need to come in and advertise themselves on campus early. They cant just show whup when people are graduating. Oshkosh truck, a Great Company in orb gosh, wisconsin. Most of my students dont know about them or why they should work for them. They wont know that at the end of their senior year. That company has to be in some of the departments and schools at wisconsin early, getting their name out, sponsoring competitions, doing internships, and thats on the companies. Finally, the last comment, and a number of others have made it. If we want to keep this Talent Pipeline going, weve got to have the sort of federal dollars, particularly for the highend, hightalented researchers. A vast majority of federal dollars are spent in training students and in paying students to be part of research projects, and thats how they learn, and thats how they end up being the inventors and the innovators that were going to need to keep hightech manufacturing in this country. And as others have said and as your document here says in front of you, weve got to keep the dollars in basic science that are just so crucial, not just for invention but also for the Talent Pipeline as well. Great, great. Sam, are you seeing challenges in hiring up and down the skill spectrum from the ph. Ds to the entry level . Are you just having trouble finding people all up and down . Yes, very much so. Weve had for quite some time at the highskilled level that were talking about. For us, more than anything, itd be embedded software engineers. But we certainly have found it in a number of different areas there. But now, as weve ramped back up production, us and our supply base, the number one thing thats limiting us is getting a talent for our manufacturing operations, and were having a real, real hard time getting people to come back into these jobs. So, it is definitely a challenging factor right now. Absolutely. Steve, maybe i can turn to you. Another issue that has come up repeatedly in our meetings across all these sectors of the economy has been the ability of startups, entrepreneurs, even small and midsized businesses to get access to capital, to be able to get the idea out of the lab, to get the Small Business scaled up to a midsized business. Whats your perspective on how is this looking right now . How is the Capital Market as far as potential for manufacturing . Well, im actually optimistic for a number of reasons. One of them, for example, is the fact that historically, Silicon Valley has seated informationtechnologycompanies. Com, but if you look at the last several years, theyve been looking towards other sectors, such as manufacturing, for example, the aircraft sector, which is one that i follow closely. Just in the last several years, Silicon Valley firms have funded 22 Aircraft Companies to the tune of 350 million. And a lot of that stems from Silicon Valley companies, such as say uber, with uber elevate, google, going into those sectors, and thus, the Silicon Valley funds sort of follow them. And so, i think if this trend continues, its going to be like a force multiplier to manufacturing. The other thing also is because of the last couple decades of investment by Silicon Valley into infotech, one of the things that you see thats very interesting is that sort of the social media and internet infrastructure has made it much easier for companies, Small Company startups, to actually access and find investors, through social media sites such as linkedin, for example. They can reach out directly to an investor or someone who can introduce them to an investor, someone who can help them place their product. Crowdfunding, for example, where you can say i want to manufacture this and ill give you a discounted price if you put down a deposit that i can use to manufacture the product. So, thats interesting. Another thing thats also happened is there has been a proliferation of sort of seed infrastructure. I already mentioned crowdfunding, but for example, accelerators, theyre everywhere now. My university, university of chicago, for example, now has the largest accelerator in the midwest, and theyve invited National Labs to join, so Argonne National lab, firmu lab is part of it, even other universities, such as university of illinois with their Engineering School has become part of it. And whats interesting here is that even, for example, the military has gotten into the game. Theyve opened up offices in places like Silicon Valley, the Army Research lab just opened an office at the university of chicago accelerator, and then even large fortune 500 companies more and more are setting up venture arms where they did not have those before. So for example, in the energy space, you saudi aramco investors. So you can invest in saudi arabia or china or so forth. And the final point thats interesting to me is over the last three years now in a row, Venture Capital funds have raised over 50 billion each year. And the reason thats important is that size makes it easier for Institutional Investors to actually now start to participate more, and thats going to add a lot more fuel and growth as well, so im pretty optimistic as far as how easy it is to access capital. So, the comment deborah made earlier about the focus on the app economy and the quick, shortterm gain, youre optimistic that there is the money there for the longerterm, actual productmaking thing, entrepreneur . Thats correct. Even things such as crowdfunding enables smaller investors to participate, so it broadens the Investor Base in that way as well. You still have to sell someone on your product to get an investment, but i think its easier to find those investors now. Got you. Walt, representing the entire federal government up here on the panel. [ laughter ] whats your perspective on the role that nist obviously, which youre the director of, controls, but the federal role in enabling advanced manufacturing and really trying to create the right environment and the rules of the road that are going to really accelerate this area . Thanks. And thank you. Its great to be back with the council, and thank you for the work that you do and your advocacy for the role of government in driving innovation and driving manufacturing advance. The u. S. Is doing well, but theres so much more to be done. As has been mentioned by other speakers, the competitive dynamic of our world has shifted dramatically. And so, whether we look at the advanced manufacturing institutes now through manufacturing usa. This was the only area in the previous several clarion calls that actually got an a grade. So, thats a wonderful thing. Nist, of course, as i think some of you know, is the lead on the advanced manufacturing initiatives for the nation and has a role to really coordinate the publicprivate engagement, the engagement with leading industry, the engagement with the entrepreneurial community, with academia, and driving workforce develop maement, and thats an ongoing theme. So these manufacturing institutes, the leverage of the manufacturing extension partnerships has had a tremendous focus on bringing capabilities from publicly funded research into direct use, into prototyping, access to user facilities. So, through our federal complex, its a great leverage that we provide for the nation. I was pleased to preside over the 50th anniversary celebration of the National Center for neutron research, which has been used in advanced materials optimization and studying biological systems in particular to optimize biological drug manufacturing and systems control. So, we really see ourselves at nist as a convener within the federal government to bring all of the federal sector together with stakeholders in the public side as well as in corporate america, as well as within academia. I believe that we see ourselves as the Nations Laboratory for industry. And so, addressing all market vertica verticals. Ive had some, i think, great conversations with folks within the hightech sector who have basically said that without the metrology to guide the creation of the internet infrastructure that we have today and looking to the future of 5g and wireless and other standards, this nation would have been a decade behind the rest of europe, for example, in the development of those capabilities. And so, ive had folks from corning and internell and hewlettpackard come up to me and say thank you for the work youve done in the federal sector to help drive u. S. Innovation, manufacturing, and technology transfer. Deborah mentioned a little bit earlier in her comments that tech transfer is one of the many tools that we have access to. Its enabled so much innovation in this country. But as a representative of the federal Laboratory System and from the department of commerce, weve also identified opportunities to enhance this for the nation. I would challenge the council to engage as we kick off a National Initiative under nist authorities for the buy dole acts and the National Infrastructure construct, it will be important for us to visit where we are today and how we can move forward in an increasingly connected world who have copied the buy dole act. They have copied the National Manufacturing institutes that we have. We just had a meeting with a major delegation from china who said specifically they come to benchmark nist to see how they can replicate that in asia. So we have, i think, an opportunity for challenging u. S. Competitiveness as a network, and i look forward to engaging with all of you on that. Thank you very much. If there were two issues that came up in every single one of the sector discussions that weve held over the last two years, they would be talent, which weve talked about, and the other one would be the implication of the internet of things to the manufacturing process. And it came up in two ways. One was the tremendous potential efficiencies of knowing the amount of energy, the amount of water that youre using in the process. And the other was the down side, the potential for Cyber Attacks and manipulation by outside entities of these new sensors. Id just be curious, and i know were what stands between everyone and lunch, but this issue cuts across industry, academia, government. So id just open it up to the panel for any thoughts on how do we capitalize on the good side of that and minimize the bad . If i can just kick that off. As some of you may know, nist was asked, because of our leadership in the National Cybersecurity framework, as well as in systems interoperability, to take a look at the internet of things on behalf of congress. This is a huge up side, and Risk Management through the driving of the framework and testing interoperability and vulnerabilities of systems in an open, transparent, but also industrysensitive way is critical. For example, we have as our National Cybersecurity center of excellence a test bed for the smart grid and for advanced Manufacturing Systems to be able to have the leaders of industry technologies to be able to Work Together but then also to privately understand what their systems are doing, how do they Work Together and what are the vulnerabilities that they experience. So, we really see that this is an area thats going to need toplevel leadership in this nation to drive the awareness, and then also the creation of a new workforce in addition to new standards to enable our country to take advantage and harness the opportunities around the internet of things. And i would just say that theres you know, we spend a lot of time with our students talking about things like facebook posts that are going to come back and haunt them and they have to be careful about how they use certain current media. And i think the growth of the internet of things is going to create an enormous need for universities, for everyone who works with younger people coming into the workforce to be aware of how all of the devices with which they live can be used in ways that can harm them and can harm their families or places where they work. And increasingly, i know at different points of the university, were Training Staff about all sorts of issues of how you are careful with regard to cybersecurity. I know a lot of other companies are doing that as well. The internet of things takes this to a whole other level, right . And most of our staff, and certainly our students, are completely unaware of the risks that will be run. Did you have a thought on that . I would just echo what already has been said. You know, our view, were in the process with the internet of things of connecting every part of our value stream, from the customer back through the dealers, back through our factories, all the way back through the supply base and second tier and third level. Tremendous upside opportunity with it. And as was indicated by others, our number one threat we see everywhere, is cyber, and its a risk you have to manage. Youre not going to get away from it, so youd better dedicate resources to it. Youd better stay on top of it. Stay vigilant, because its here. And the only way youre going to mitigate it is to stay on top of watching it. Absolutely. The only quick comment that i was going to add is that i think that the same Blockchain Technology thats driving, you know, bitcoin to tulip, bubble levels, is also going to be a big part of that solution. Fantastic. Well, interestingly, or importantly, two topics, cyber, bitcoin, cashless economy, are on this afternoons agenda. So, it sounds like were talking about the right things. Let me thank the panel. This has been a terrific discussion. I really appreciate it. Can i ask for a round of applause, please . [ applause ] more now from the council on competitiveness with a look at the latest developments in aerospace technology, robotics,