More now from the National Competitiveness forum with the focus on Public Private partnerships and manufacturing. This is an hour and a half. 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 ceremonies because the National Science association supported the 3 physicists that won the prize for Gravitational Waves for 40 years. I think thats a good place to start. [ applause ] its good for all of us to appreciate just what a high risk high reward investment is all about. So that was a progress of technology and super duper engineering challenges that had to be overcome. A lot of people, as you might guess, came and went. It involved multidisciplinary teams of people who did the numerical relativity using Super Computers so we actually knew when the first gravitational wave was detected, what the source was, that it was two colliding black holes that were in a close binary system and the most recent gravitational wave detection because there have been several, two neutron stars merging. It was a very long tale. Of course, there are many in selfdirectors and selfprogram officers involved, National Science board changed over a large number of times during that interval and had to approve all the funding and congress is the ultimate arbiter of our appropriations. Making the decision to continue investment that nobody was quite sure would have a result. How risk taking is that . We all knew that einstein had his stuff right, and so we could expect that accelerating masses somewhere in the universe would produce Gravitational Waves. When the calculations were done, the difference, the little jiggle that the earth experienced for just a fraction of a second was so very very small that who would have guessed 100 years ago, when einstein predicted this would happen, that wed ever have the technology to find something so incredibly technically challenging. So since the observatories have been built we have two widely separated in the u. S. , one in the state of washington, in hanford, and one in the state of louisiana at livingston. Now, theres also another observatory in italy near pisa, we can now narrow down where the location of the sources are. In order to achieve such a technological triumph, a lot of erng engineering had to be done in successive ways and all produced outcomes enjoyed by Startup Companies and others who would have had no motivation for going in those particular directions without motivation of trying to nail this effect down and make this detection. So we dont know where it all will lead. Its just in its first exciting moments. Apparently the Nobel Prize Committee thought highly enough of it to award the prize to just three actually, thousands of people who have worked on it. On the latest paper with o there were 3,500 authors. That amount of print takes up more room than the actual article itself, just to identify the authors. I want to introduce the subject of this next session, which is this booklet here, transform, which is very beautiful. Its about an initiative that unicef was privileged to fund, called exploring innovation frontiers initiative. I want to give a shoutout to promode, the head of our engineering directorate a few years ago when we made the decision to fund this and he has gone on to uc irvine where he is a vicechancellor for research. During this time, there have been several workshops around the country. Ill say a few words about that and then youll hear from two of the people greatly involved in those workshops about this. Let me make now that ive introduced the subject of basic research leading to innovation and engineering applications, let me make some more formal remarks. Ill just begin with a quote from our inspiration, meaning the inspiration for the National Science foundation, bush, who quote there must be a stream of new scientific knowledge to turn the wheels of private and Public Enterprise. That man was a very very smart person, could look way way forward. He was asked by president roosevelt, at the time, just after the second world war, to writeup a statement of why it was important to have scientists and engineers involved, they had been so successful helping with the wartime effort, why was it so important for them to be involved in the peacetime effort. At that time, as you heard in this quote, hes talking about the importance of private and Public Enterprise and how there needs to be a new streams of scientific knowledge constantsly feeding into that. That really is the basis of the National Science foundation, its continually looking to support new discoveries and new discovererers because its the people of course that make the discoveries. Keeping that engine going is really the source of all innovation. We heard at some of the workshops from around the country and you will hear more about it from the next group of diversity and inclusion of discoverers and that was vital to have a plethora of new advances. That we are really tapping all the potential the United States has. Flowing from that sounding spirit, unicefs funding has resulted in countless advances for u. S. Citizens and really worldwide, from Doppler Radar to mri scans, from the internet to nano technology, from google to bar codes, customeraided Design Systems to tissue engineering. As i go about the country and world im always amazed by the numbers of people that come up to me and say, thank you. They gave me the first grant i ever had and i went to the department of energy and they fund me for more of my Mission Oriented work, we were the first editors of gene edits and 3d printing. I think bush would be happy for the first month since we moved headquarters to alexandra virginia from arlington, virginia we made a statute of mr. Bush, hard to believe a person who had such impact on science and technology 70 years ago there are no statutes of him around. We investigated and found in the basement of the smithsonian there is one about this tall, a bronze made in the 1940s with other famous people. The smithsonian wouldnt give it to us. So we 3d printed it. It looks just like the real thing. You have to come visit us, all painted bronze and nicely toned and rubbed in the right places. So he is back at his home at nsf. He would have had no idea what 3d printing was about but very pleased to see how technology brought him back. Our consistent backing of High Risk Research and initiatives that number around 30 around the country and Small Business Research Program and the icore Innovation Program all over the country and helps graduate students and even undergraduates become entrepreneurs very quickly and our 10 big ideas, our signature vision for the future now, they all signify our long standing commitment to innovative breakthroughs critical to the nations economy, health and keeping us a global leader. The same entrepreneurial ambition drove the competitiveness and robust Economic Growth in the face of serious global challenges. I am going to be speaking later this afternoon at a forum on philanthropy of science and innovation together with others and its being hosted by the science philanthropy alliance. Mark castner is the head of that. I will use the counsel on competitiveness as a great example of bringing public and private entities together successfully to drive innovation through discovery. Organizations like the council has consistently encouraged a National Climate in which science and engineering discoverers have adapted new changes and continued to thrive and new progress have led us to the new verge of discovery. We still have a lot of challenges. We face all sorts of concerns at home and abroad. We have the very big challenge educating and inspiring future in novaytors. Thats why a lot of people at the National Science foundation, the council and this room, thats one of our Major Concerns how to include and inspire them so they can in turn inspire the world. Weve navigated a lot of Major Barriers in order to come this far. The question is how do we as a nation inspire the next entrepreneurs. We have consistently driven innovation. As a please where discoverers and discovery begins, thats out motto at nsf, its what is needed to secure our future. To address this challenge, nsf has approach it to come up with Innovative Discovery and why this is called transform. Two years ago at georgia tech, Debra Wynn Smith joined me announcing the National Science Foundation Awarded a grant to competitiveness to launch the frontiers and initiatives. The eifys we call it for short how to drive competitiveness in the decades ahead. We had at all the venues and i do dialogues around the country, nation labs and labor leaders and opinion leaders all gathered together. These led us to examine the transformative innovation model that address looming concerns. I do logs conducive to discovery insuring diversity and inclusion in americas talentbased inventors and analyzing specific technologies to help drive innovation in that future. I also had the opportunity to attend to opening dialogue in tampa and st. Louis. I want to thank our host sites, georgia tech, university of california riverside, texas a m university and Washington University and st. Louis and many people in those areas that worked hard to make eifi a success. Being part of those dialogues is why some of us specifically here this morning are very excited about this. Today, the council is going to release this final report capturing insights and recommendations from the last two years of dialogue and im interested hearing proposals to keep us competitive in the generations to come. That should have enlightening insights for us all. Id like to end with a quote in this report i found when perusing it. I just received it jed. Received it yesterday. In the summary section as a major resource and active participant in the u. S. Innovation ecosystem the u. S. Brings an invaluable perspective on the current stateoftheart in models of innovation. Me over, the u. S. Is the only agency with a mission and thats the actual partner for a topic as broad as innovation. I havent thought of it before our strength is in our breadth, we span all areas of science and engineering. We do so because you never know where the next great discovery is going to come from. We need discovery in order to be at the root of innovation, innovation is nothing without all our discoverers. Thank you to all who have been part of this dialogue and thank you to coc. Now, please help me welcome our group of speakers who will be talking about the specific dialogues and their outcomes. Thank you very much. To discuss insights and findings from the report transform, please welcome the Councils President and ceo, Debra Wynn Smith and provost and vicechancellor for Economic Affairs for Washington University in st. Louis, dr. Holden thorpe, and the chancellor for california riverside, dr. Kim wilcox. Thank you. Thank you dr. Cordova for your remarks and leadership. Were really thrilled youre leading the nsf and all the things you do for our country and the world. Thank you so much. I think well just jump right in to talk about some of the findings and excitement and energy that came out of the two dialogues that you both hosted. Maybe start with you, chancellor wilcox. When we went to uc riverside, fairly new university in the famous University California system we were really focusing on the talent continuum and how to get more americans into the innovation journey for our country. Not only was everybody excited and thrilled about the new models youre creating, i think we took those learnings back to our own world and theyre very much reflected in our report. Id like you to start wherever you want. Tell us what is unique about your university. We purposely went to the uc riverside because you are a new model and share the findings and where to go from here. Thanks, debra and for making us a part of this. Let me do a little bit of context and purpose and need. I notice in the clarion call predictive analytics. If you want to predict a High School Students success in college you wanted a data point, what would you choose . You wouldnt choose the scores, you would choose the familys zip code. The zip code is simply a proxy for family wealth. If your family is in the upper etch lon today you have a six times more likelihood graduating from college than someone of equal abilities in the bottom income. We cant afford to leave that much of america behind. If youre an africanamerican and you get into college you only have a 40 chance of graduating from college. For riverside, the res son is about a lot of programmatic changes and things we do. The real story is deliberateness. Decades ago our university was deliberate about recruiting students from across all sectors and helping them graduate, supporting them in ways that make a difference. The impacts, i think, are starting to grow in America Today, were seeing that deliberateness in lots of places. A Talent Initiative of 80 universities across the country with the express purpose of helping students from lowincome families graduate. Dr. Crow and i are part of the elevation alliance, 11 universities that banded a few years ago to improve graduates from college from lowincome families. We increased it by 25 already in three years. Those are stories about deliberateness. Were not done yet. A place like this the council is so crucial combining the efforts of the economic world and private world. I have a challenge for our corporate partners. If you go on the websites of most of the major fortune 500 companies and identify their Key University partners, youll generally see the same list of schools, the ones we think of as elite universities in america and elite universities are trying to catch the elite corporations. You dont see east carolina or unc greensboro, you dont see cleveland state. You dont see universities that really are embracing the diversity of America Today. If were going to change the leadership of innovation and really include all of america in the innovation economy we have to find ways collectively to be deliberate. My key lesson from riverside is deliberateness. Kim, thank you. Would you also share with us, what was the magic . What was the strategy that you all developed and deployed at riverside to get women and a huge number of the hispanic populations moving through stem and into graduate school. We saw that and everybody was blown away by it actually. I talk about two key pieces. There are lots of them. One is the simple notion you can make a Big University small you cant make a Small University big. We have taken our 23,000 Student University and created small living and learning communities for groups of students that really support them and you feel connected. For families who send their students to college and no one in the family has been to college before, theres a lot of, my goodness. In a small group, you can kind of find your way through it. The other piece i talk about, riverside, in much of america we talk about leveling the Playing Field and sticks one institution in one corner and another under another corner, riverside did it in a holistic way. We built the fields so that all parts, faculty, staff, student body, everybody is embedded and motivated by the same set of values. Its ubiquitous. Each of our pieces fits together in a way that is whole and deliberate. So, turning to st. Louis, the council had a very exciting activity with washington nation Innovation Initiative was concluded. In 2004. And there were many challenges in the city and the region around entrepreneur ship and start ups and building the ecostm. Now st. Louis is named the start up capitol. You have Tremendous Energy and momentum and results in driving this entrepreneurial culture that depends on great universities. So please share a bit about that journey because again, the entrepreneur ship path. Washington u. S. And st. Louis et us ahead in understanding the new model and whats going on in the region. Sure. Thanks so much for letting us host the even. It was an honor to have you over there. And really was a chance to bring together a will the of people to celebrate some of the things that we have done. First id like to second everything kim said about access to Higher Education. Its critically important. I kemd you. A chart i wish everyone can see that helps with this corrosive rhetoric. That shows how much better off people are if they go to college. And i thank the counsel on competitiveness for helping us get the message out. As far as st. Louis and the ecosystem is concerned. Were a proud city. With the magnificent history and Washington University is compelled to be porpt part of that. And i think the things that have happened before i got to st. Louis the a lot of people in the city came together to create a cortex innovation district. Which is where we had the meeting. Which is really come a long now to have a lot of different start ups and other kinds of parts of the economy and bring back the part of the city that everyone wanted to focus on. Thats located. Thats something that came about because 15 years ago some people who really care about the city sat down and said lets get this land and figure how to enganl the university and start things. When i came along we were looking to make wash u a bert partner. Universities are called on by the counsel and lots of other places to promote the innovation economy to get the discoveries out into the marketplace. We have been doing a bit of that at wash u. Not nearly as well as we should. Some of the things we do one is make sure that our policies for doing all this are as smooth as we can make them. We can do a lot on that. But it also has been said many times today it comes down to the people. One of the things is attract a team of people to work with us that have been in the academic world and the business world. Because these worlds speak very different languages. And if youre trying to bring people together you need everything he said about basic research. But as i tell my colleagues who think they invented a billion dollar drug. Its not a billion dollar drug until you sold it for a billion dollars. Most of the colleagues have no idea how to sell a billion dollar drug to big pharmacy. People who can build that is important. Because no matter how good the policies are and excited you are about your region youll have hiccups and the only way to get through and have people who have been on both sides. I think the other thing that we have done thats been really good is attracting the cic. Theres talk about that in the report. They do a good job. We were lucky the first place they came which is one of the great places where lots o start ups can get going, the first play they chose to come was st. Louis. After they decided they were going to get away from the operation they had in cam bridge. We have a lot of new start ups going. We have gone up in terms of number of start ups in st. Louis. Were pragmatic about whats special about st. Louis and whats good in other places. I tell people i remind them its better to have a start up thats moves and succeeds than one that stays and fails. And so its important to have a kind of pragmatic sense of that. We want to keep as many start ups in st. Louis as we can. Not all of them st. Louis isnt the best location for all of them. We hate when they leave. But we want them to succeed. Well end upkeeping more Successful Companies in st. Louis in long run. You eluded to some of the regulatory reform. At the university. That has expedited this. And last night as our diller the director of nis was telling me they will be launching a whole new review looking at some of the things that need a new look after some 30 years. But just quickly, what do you think you did that was very important in changing the status quoen how you do business . For start ups. Something i believe in that i put in place at two schools is to have what we call the quick start license. Which is something thats prenegotiated. The foupd founder can come in. If they want to do the quick start license. Determined the equity and royalty and clauses. Theyre all there. And rather than spend a year negotiating that agreement and coming to exactly the same place you would come to you did it this way, we present this to folks and give them the opportunity to take advantage of it. And almost always they do. I put this in place in north carolina. Before i came to wash u. Its we have gone from having two or three start ups to year to more than ten. Its a big part of the reason. And its not just its easier to do. It also is kind of a symbol that the university were willing to give up a bit of upside that we might have gotten if we spent a long time negotiating. In order to get things out there and fwet them going. And partner with the Venture Community. One thing want to ask both of you before we run out of time. This whole challenge from start up to scale up. And where we have the largest venture Capitol Resources in the world. It tends to be as we know located on the west and east coast. What have you done to change some of the models to atralkt and grow the capitol to enable this transformation in your region . What do you think we need to do Going Forward . For us, were on the west coast in a broad notion. Were 60 miles from the coast. And between us and the coast is kal tech, ucla, and so we actually ironically have a challenge recruiting the capital that much further east. Just the 60 miles. Woef taken a wholistic approach to center that faculty mentoring, peer support in the industry. Venture capitol participation and created our own ecosystem in the sense. In river side. Around the university to attract the venture capitol. We have just as companies who investors will invest if we mooif it 80 miles to san diego. They dont want to lee it where it is they live in san diego. Theres a challenge even near the coast where the money is sfl geography matters still. Geography matters sfwl same thing in st. Louis. We have helped the Venture Community in st. Louis. Produce capitol that can be use td for the companies. We prefer a model where we invest in what the university invests in local Venture Capitalist and let them decide. What nvmentes theyll make. We think that makes sure the market is providing the kind of dislinn it can. So we have helped a number of venture capitol sources in the region. So they have the money that they can use to develop companies that stay in st. Louis. But as i said before i think you have to have a blend. You have to have some Silicon Valley investors who invest and some Companies May just as kim said have to move in our case a little further than if they were leaving river side. But some of those will be able to stay in st. Louis. With out of town investors. We hope a lot of those stay. Capitalism is dictates where Successful Companies are going to be. You cant fight that. You have to do as much as you can to increase the odds that will Keep Companies in st. Louis. And we do that by helping the Venture Capital sources and also partnering with Venture Capital firms arntd the country. And the large scale big Global Companies as well. We focus on stat ups. But of course for most of licensing revenue that comes into universities comes from licensing to large corporations. Big pharmacy to ago companies. To technology companies. And so that part of the tech transfer is very important as well. And we have to make sure that same things are policies and the way we deal with corporations and the inside is done as professionally as we can. So in the time we have left. Id tlik ask each of you building in what we accomplish in the dialogue. Going forward, what issue would you really recommend the counsel double down on as we move forward on the next platform for national and Regional Innovation and rough creation and job creation and also having that thriving curve Going Forward in america . From the challenge engagement side, id offer this. To many High School Students in America Today Technology Means coding. Its simply writing software. Theres a whole bigger world out there. And we have to collectively. This is a Public Private role as well. We have to help those students appreciate the technology is. My friends from john deer. And doing in the world of plants. Were putting tubes that call your cell phone when they detect explosives in soil. Thats technology. Yes coding is important. Thats real technology. And so we have to help the students of america see that opportunity for the innovation space. Move beyond the so called app economy. Involving real problems. And both of your universities interestingly are very much at the forefront of this merger of biology and agriculture. And precision and that. Its very exciting for dealing with the issues doctor con talked about on stainability and food. Id say some similar things. I think the focusing optd talent, production and helping america realize that Higher Education is producing the talent that corporations need and start ups need. We have heard encouraging things from sam allen and other carp rat leaders about how much they need our talent. And we have a huge challenge as a country on Higher Education has to part of it just as said this morning. We have to make sure people feel welcome and want to engage with us and understand what were doing and so we can explain it to them. So i think the most important thing for the innovation economy and of course we want the universities to be producing start ups and licensing technology. Making sure the young people that are coming to our campuses with all of the different background that he was talking about. Making sure the people are thriving according to to the metrics the gallop has jointly pointed ou out. Making sure they engage with professors and their excited about their and have mentors. Thats the multiplier effect. You have to make sure the people coming to the university are setting the world on fire when they leaf. Great. Thank you. Formally launch the counsel of National Commission on innovation and come ppetitivene. Michael crow. President of Arizona State university. And vice chair and chief scientific officer of Global Research and development pepsi co. And industry vice chair counsel on competitiveness. So. Thank you both for your tremendous leadership. Of Arizona State, pepsi coand being in the leadership of the counsel. I think well jump in to why does it matter right now at this time in our history. For the counsel on competitiveness to bring together our leaders from industry, academic, National Labs, and labor union to really launch a next Generation National focus and commitment on innovation frontiers and what thoughts both of you have on what are some of the new strategies the new models the new problems that together we can really advance by bringing the thought leadership and action leadership of our country together around the innovation future . So let me start with you. Michael. You were involved with us when we did the Innovation Initiative that was led by the ceo of ibm. And the president of georgia tech. That led to the america competes legislation. That was over ten years ago. The world is completely different. What are your thoughts and ideas for moving forward around the impartive . Its interesting chl people somehow dont realize that economic competitiveness and economic success does contribute greatly to social change and social success. These are powerfully interconnected things. And as the World Economy has grown to the point now where you have world gdp at the highest level. World per capita is unbelievable. And moving forward like it has never moved before. For the first time have a truly globally competitive market. On all levels in all things. That means then that the 70 years of advantage that the United States has had since the ends of world war ii has reaped us immense benefits but has put us in a position where we have to huddle. Bring everyone together from the labor sector to the industry sector to the academic sector and in a new world with computing technology. With connectivity. With all the things we didnt have 15 years ago that we didnt have 40 years ago. All of the strategies that work in the past are insufficient for whats needed in the future. Its the exact moment at this exact moment where we have felt the impact of the great recession. We have felt the impact of social media. We felt the impact of the new generation the new my lel yans coming together. All coming together. The need to advance all of the food and energy and Water Systems and sustainable logic with stainability as a core objective. All of 24 is coming together and the old models the simple corporate structures the old views of labor. Those are old. And no longer adequate. Its time for a new play book. New plays. Running new plays. New assessment new measurement. Everything. This is a perfect time for renewal. We have to find a way as powerful as the economy is apparently performing at the moment its not powerful enough. With need 4 sustained economy growth year after year. With some years at 6 and some years at 7. If possible. There are large country tras are able to pull that off. If we cant pull that off it will be difficult to secure the level of resources necessary to drive up the standard of living for the entire population. Opposed to just fractions of the population. To do that requires a reconcept. Wipe our hands and be done with it. Theres no reason you cant drive the potential of the American People to the highest level. The old designs have run their course. Now is the moment for the new designs to be put forth. As always agree with michael on this. Let me come at it from two directions. One is we think of historically linear progression and when we project out of what we need to get done five years, ten years from now. The reality is the future is not an extrapolation of the past. The trajectory is different. And so looking at the past analyzing it is helpful. But extralating it will get you in the wrong place. Thats the first thing. Second, when i went to medical school as an example there was medicine and biology and engineering over here. And it was rare that the engineering students ever talked to the medical. We used to make fun of each other. Let ray loan the faculty talk. Move forward 30 years. Most of the development that are going on in life science are actually happening because of the physical sciences. And most of the problems other than big Civil Engineering that engineers and math me tigss are working on are in the life science arena. The irony of it is over the last 100 years. What were the top challenges for humanity. Security. Water, access to food, health, 100 years later. Its the same issues. The difference we havent made progress. Of course we made progress. But today were dealing with in within the categories brand new tools that are going to have to leverage capability of multile institutions from multiple backgrounds and the conversion of that talent what we uniquely can to now is bring that convergence to bear. And i think this opportunity is just one more loud voice that wakes people up and says dont sit on different sides of this, you have to converge your thought your resources. No one company is big muff. And no one country has the resources to solve the big issues. The last 100 years we havent been able to really solve them. We have to Work Together. Im thrilled you used the word convergence. I want to talk about that. And how we really elevate that theme and that platform for the work of the commission. I want to take one second to quote from the transform report. While we think that we cant learn from the past and have to think of a new way for the future. This interesting. We sometimes forget it. American entrepreneurs and venturing investors leverage the convergence of rail, oil, steel, and electricity. To trooif american industrialization, agriculture, profoundly changing the country and ushering in a new era of u. S. Industrial might and jobs in the 20th century. C convergence. How are we going to address that in the context of this commission . And ensure that we have inclusive participation of our citizens in creating this new age . Its going to be challenging. The historical the last time you mentioned rail, steel and etc. Those were all ed son oriented industries. They were generally not scientifically based. All of the ones you mention are scientifically based. Deep science. Based on fundamental mathematical understanding. Physical science. Buy logical science. And the old model of that con swrer vens of the past it was easier for the general population to grasp and understand it because you could see it and participate it. Heat it, bend it. Make it happen. Plow it. Grow it. It was easier for the general population. I have been arking for sometime that in the new economy around the things that are converging at the moment it is necessary that everyone has to get to a certain level of technical literacy. They have to be literate in understanding what these things mean. The gap were experiencing now. Questioning thousand yearold accumulations of knowledge about how certain things work. That is a sign this is not an area where were going to see alignment without substantially reengaging the educational process. Rather than retreating that students dont need to know algebra. Give up on it its too hard. Its about teaching people to solve for unknowns in complex settings. So im not arguing that everyone has to be a scientist or engineer. I would argue that a convergence driven economy on science driven tech kolg platform requires how we educate everyone. Now this is almost impossible for everyone in the room to understand. It used to be the case that people sat in the room and argued about whether or not people should be literate. Whether or not it was worth the investment to drive people to understanding how to read. Imagine that. Just for a second. Thats a true moment in history. Like wise Going Forward we have to rethink how to build a modern rapidly changing Technology Driven society. And thats going to require a different level of educational under pinning. Let me im going build on that. But give an industry perspective. I want to raise two points. One is i say this having spent 20 years of my career as academic scientist. I think scientists have got to put their arrogance behind them. Theres been this tradition because im the expert and xyz and deep knowledge, youre in the good enough to engage. I couldnt agree with you more. Im the ivory tower. And people have felt left out of the conversation. It isnt just the feeling of left out. We have missed opportunities. We have to not only ask ourselves can we do this and min tor my own scientists in the company now. You have to ask the question should we do this what are the consequences of this. All too often scientists left on their own will start to work on things without thinking. Ill give you a quick example. I had the opportunity of looking at a project where somebody said we could take a crop that is grown around the e kwatder. And we could transform it to a much healthier much more resourceful crop. I asked the question it sounds great we can solve the Health Problem from the crop. What will happen deforest station of every rain forest in the world if we unlock that gee knee . Theres a question of should duo it. Whats the alternative we should be working on. Some of this convergence is not just technology, but the thought process and the thinking of the different players and the stake holders that come and actually prioritize. We dont have indefinite resources. What should be we working on. How should we be working on it and who the stake holders are at the table. Without that well per pep chat and repeat the problems we have. Sot wont gif us the license to operate. They wont trust us. Let me augment that. And agree with that. The priesthood in science and separation from understanding and thinking through the impact. We started the school for the future of innovation and society. And brought together a couple dozen family members who are trying to put forth the int n to cut off where science goes. But were conscious of where were going and connected to the pop we need to be connected to. Theres a philosopher at columbia wrote a book called science truth and democracy. He said science without moral purpose is in fact without purpose by itself is an immoral act. Hes not saying that scientists are immoral. Hes saying there has to be some purpose to what one is working towards. We reached that realm. Driving businesses are driving technology are scientifically under pinned and dont have everybody connected to this. We dont have everybody understanding where were going. To be suck eszful we have to figure that out. Thank you. When we look at convergence as we build out and begin to ture the commission. The ethic ands centrals will be important to weave through this. I know our time is running out. I want to ask both of you if you can think forward five years, kind of what are you and even less, what to you hope will be an out come of the work were launching under the National Commission. We need alignment about what is going to take to drive an economy forward that doesnt leave half the population behind. Disconnected in deeper and deeper realms where people are arguing to maintain jobs and roles that arent even economically viable. That requires us to rethink everything. Work together in ways the counsel provides for. Can come together. We need an alignment. We dont have that right now. I would say as michael has said. We have for the first time in history an uncoupling of Wealth Creation from job creation. This is the first time thats ever happened. So we have the brains and the capability to figure it out. There are applications necessary. Which leads to me what i hope will happen in the next five years wlench the technical know how to actually bring to bare and focus on multilateral problems. Which are impacting not one country, this is not a case of us vs. Them. But multiple countries nobody is in isolation. I remind my scientists we are all breathe air from the same environment. Better protect it together. This is not about their problem our problem. Most of the challenges actually are going to be global challenges. Not single country. Do we have the wisdom to come together. Ill add one thing. People push back saying youre about constraint and control. And hour youll lower economic opportunity. If we can figure out how to build this collective way of thinking the economy opportunity is far greater than anything that we have seen up o this point. We have been economically limited. By thinking in the more separate boxes than we should be. So we think about convergence the tremendous challenges, opportunities. And a core mission of counsel on competitiveness is how to raise the standard of living of our citizens and be leader in the world. Inclusive, sustainable competitiveness. Will be an out come of the work of the commission. And i want to thank you for both of dwrou assuming the leadership for industry and academics and all of you who have an interest. We look forward to working with you. Were excited were going to team with the National Governors association and leaders to build this out. As a next platform for our future. Thank you so much. And the work will begin next year. The latest collaboration between the counsel. Explores the tremendous disruption and opportunity in the next generation of manufacturing technology. To share insight from this study, please welcome the chairman. Mr. Mike. Good morning. Thank you for having me here. Fascinating the last couple conversations listening to everything that we see and hear in todays world is actually backed up by research that we have done. Which always works really well. Deloit has enjoyed a partnership with the counsel for the last decade. And we have we believe we have a very deep relationship because we kind of have the same vision. We believe in the whole concept of the the future around talent and making our country more competitive. And adding more jobs. And so i think its because of that if we cogak over the last decade did i hit the wrong button . Oh. Missing a slide. Okay. Over the last decade we have chab rated on a number of important initiatives. First we in 2010, 2013 and again 2016, we surveyed Senior Executives and ceos around the world around what is competitiveness mean around the manufacturing standpoint. This study that we did sought to really define excellence in manufacturing. And implications in the required to develop and sustain the new competitive landscape. We had a chance to conduct face to face swer interviews. To gain perspective around what is going to be critical to improving the competitiveness through everything we do. We have produced something called the ignite series. Which actually was what the out put of what i said was. We have worked the second piece of out put was working with American University president s. And third was with American Labor unions. So over the past six years or so we have looked and produced some research over across different spectrums which support the area of competitiveness. No surprise theres a will the of similarities across all three. Including actionable recommendation ability the rilgt steps for the countriment as a result of research the bay si sis for transformational change. Were proud of that. I think it helped raise the game on how some companies looked at the future. Around competitiveness. In our 2016 Global Manufacturing competitive index we conducted with the council manufacturing ce ordinary care ranked nations in current and future competitiveness. One of the things that was amazing about results. The u. S. Is projected by the end of the decade to be the number one country taking over from china around competitiveness. Which is fantastic. It also was an Important Note that ten of the 15 most come pettive nations in the future are based nd asia. So two very important facts that came out of this whole concept of what was seeing in the future. So what are the drivers of mother and fatheri manufacturing competitiveness . We explored the key drivers through a competitive landscape. Manufacturing once again cited talent as the top need. Hearing the last couple panels so its interesting as i always said that that talent does drive strategy. And it was great to see that is still the number one concern. And the matching the availability of the skill talent we need with actually the skill work force. In areas like engineering sp manufacturing the ageing work force is not getting replaced with enough Skilled Labor. Theres the Biggest Issue out there. We totally adwree with that. Talent and the mismatch of having enough Skilled Labor in the yai areas. Cost come pet tiffness. People would agree that was probably up there. In a more sluggish economy growth contain the cost and increase productivity is the important to boost profit. So it is real critical that stay as one of the most important things we continue to work on. Third is work force productivity. Companies are continuing to move forward towards hire value. And more sophisticated product and processes. So work force productivity was the third thing on the list of things that are important. The other thing that was interesting is the traditional developed nations manufacturing such as the u. S. , germany and japan. The ones that high Labor Productivity they seem to be winning again in the eyes of global executives. Theres a consistency in the actually part of the world where the productivity is actually leading. These nations are back on top on Global Manufacturing. We expect them to remain there through 2020. What that said and again what i haed earlier, we are rapidly evolving. The landscape is changing. And if you want to stay as an employer of choice you need to realize that what you did to retain, create talent isnt the same thing that will happen in ten years. Its a 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. Because of that, talent is going to be fierce. Most companies it will be really difficult to get exactly the talent we need. And building it will be key. Just the latest, i agree the exact phrase was technology to trade skills theres no issue in dh members are more united than a desire to built talented diverse work forces. We have seen it in research and every day. That concept of talented work forces. That i think is really key. When we talk about diverse the concept of diverse city thought. As well as diversity of ethnicity and gender. Its really a broad base different way of thinking. Tlast thats going to be the key to how companies can succeed over the next decade is how to get a diverse work force in diversity of thought. The other thing were seeing and the research proved has been the concept of ecosystems will be important. In developing everything yourself is probably not going to be the way of the future. We see it here. We see it all over in the clients where it used to be every organization wants to build everything they need. The Way Technology is going you dont need to do that anymore. Theres partnerships and ecosystems developed. That will be the way of the future. More teaming with Technology Firms and other type of firms. The development of ecosystems is koe to the next decade. Were in the fourth industrial revolution. With that, the landscape is changing. So if you look at technology the world we use right now is expotential technology growth. The report is really around the concept of what got us through where we are today is not going to get us in the future. Because of technology. I like to use this analogy. A world will not experience 100 years of progress in a in the 21st century at the rate its fwoing today. It will be like 20,000 years of progress in the next hundred years. If you believe that people dont believe that. If you do, thats what we think thats where it will go over the next decade. Manufacturing is not about making physical product anymore. Consumer nand is changing. The marketplace is changing. The nature of products is changing. Again we agree and support at many elements of the call including the notion that innovation driven productivity is the foundation for a growing vibrant economy. So interesting is theres four a Company Called single university. Which we have done work with. Along with the council. I took our board through a day at singularity about three months ago. To talk about the concept i call it governing over disruption. Its hard enough to manage disruption. How do you govern over disruption . Spending a day there was interesting because i left there almost in a very uncomfortable state. Because there was so many concepts that were talked about about what the next ten years could look like. That i left there thinking how will we govern over stuff that will be hard to manage. And so it did leave me with a couple sleepless nights. I thought through it. I looked at it and said we all have to look at this as not telling us why its not going work but assume it will be this way. That will be the key to how suck says happens. They like to use six ds. Disruptive, deceptive. And thats kind of the concept of the expotential technology and future looks like. Does a really good job of pushing that forth. We talk about the study that were under way ragt now. Technology and manufacturing it really brings together the counsel and sing lairty. As well as broader manufacturers and technology ecosystems. Take a fresh look at how Current Technology is transforming the future. If you believe what i said earlier about the ecosystems will be the way of the future. Think about it as being a Partnership Among lots of different organizations. Thats the way of thinking about it. Thats what were doing right now in the study. Objective is focus on how Global Manufacturing companies can best tap into the transformational shift to evolve to grow and actually thrive. How manufacturing executives aand he has utilize the most promising future technology. Just we are doing in internally. I belief in you need to do see it yourself before you can talk to others about it. We have been using things like automation. And analytics for a while now to develop and change the Core Services we provide to clients. If you believe that will be we have seen amazing change and success in the last couple years. So what are we seeing so far . So the prelim flair survey has shown it requires thoughtful engaged and brave leadership. A lot of people engage in the conversation and hear it. It will take resources from each manufacturer to believe this. And invest in it. Taking resources and putding them on the journey here. Not just talking the talking. But walking it. Know what problem youre trying to solve. Theres hype around advance technology. Moe which ones make the mark for you directly. Its not just everything you hear out there. Theres stories every day, everything is not going to be effective. Theres overwhelming technology. How many days do you get a new request for a new app to be on your phone . Some things make sense some will not make sense. Let me believe in entrusting small teams to innovate on the edge. Really is almost protect a group of people to actually innovate and not worry as much as the direct immediate for that particular product. If you allow innovation on the edge and bring it. We have seen that as one of the ways in which companies will actually be much more successful. This makes sense. Its very hard to do in the economic period. Where youre trying to manage earnings. It is something we see coming out of the survey. Operate outside of the traditional walls. Keep your thinking broad. Dont say why. Say why not. Sometimes. And i think thats another thing coming out is this concept of looking at it with a different paradigm. Lastly just raise the National Dialogue on this. To be an enabler. Were hearing it a lot. The more people talk about it the more everyone will see that this is the way of the future. So i think as each of you go back today today jobs remembering that. How we operate how we operated to get to this point we may have to operate differently in the next decade. So with that i thank you for being here. And i really appreciate it. [ applause ] for almost a decade. The United States has seen an unpr unprecedented surge in energy resources. Turning what was once an economy 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 level to maximum effect, please welcome mr. Sam allen. Chairman and chief executive officer. And Chairman Council on competitiveness. Rebecca blank. President of the university of wisconsin. Doctor walter. Under secretary standard and technology u. S. Department of commerce. And director National Institute of standards and technology. Mr. Steve founder and ceo holdings. And member board of governors argan national laboratory. And bill baits. Chief of staff counsel on competitiveness. Welcome. Thank you for the presentation. I know there was a some slides that were supposed to go along with that. Ai apologize for technical difficulties. So well talk about manufacturing. For the next 20 minutes or so. And we have touched on the top ticks that i think well get to in the next session. I think looking through it specifically through this lens of manufacturing is an important step to take. Particularly as this has been something that counsel has been so focussed on. Over the last really decade of work. Back in 2009 the council issued a report that concluded that energy is everything. Its the life blood 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 low cost energy abundance. And independence. This was due largely to the proliferation of fracking movement. And it was something that we want to explore as an organization. The implications that would have across sectors of the economy. We have looked at the space sector, energy. Advance material. Science, agriculture, to try and really understand whats happening out there. And the question that has always pervaded our work has been are we leveraging this tremendous opportunity that we have with low cost energy to capitalize on manufacturing capacity. I have a terrific pal nel with. What id like to do is maybe start with you. Because we have talked about talent over the last couple panels here. But now i want to look at it specifically thinking of the manufacturing space. And over and over again and each of the sessions whether it was grug it comes up that were not ready. Were not finding the talent we need. The need for diversity expanding the pool. 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 . Yes. So we have absolutely growing demand for energineers for computer science. Wisconsin is a heavily manufacturing state. And we i regularly hear from employers saying we wish you could tournt more. We need more. I should note that of course this is a very diverse pipeline. It goes from everything to two year people trained seriously in various Technical Skills to engineering through phd and advance research ability. So theres not a one size fits all answer. And if you grow the internal pipeline as i think michael crow noted earlier its a long process. Particularly at the higher end. First of all, i know the council is talked about this in the past. It will take time to expand the pipeline inside the United States. And the only alternative is buying talent from abroad. An intelligence skilled base dem grags policy is ought to be number one on the list. Thats the only short Term Solution to some of the shortages that firms experience. Or theyll move out of the United States. The Lower Cost Energy is a reason to stay here. Let me talk about the building the pipeline internally. Theres one thing i said on all of us. We have to make manufacturing and the science and the technology that goes into it more sexy. Out there in the public conversation. I hear regularly from you talk to people in the Business Schools or Engineering Schools and they dont see what they think of as old manufacturing is attractive. Everyone in the room knows theres not much very old manufacturing left in the United States. Most is really exciting hightech manufacturing. And that is the edge of where u. S. Manufacturing is going to grow and remain. Students dont understand that. And the parents dont understand that. And they get very little exposure to the manufacturing sector. Unless parents have worked in it or been in a town where its present. And so we have a lot of studenting coming in. You want to think about careers in science and engineering that can lead in great jobs in manufacturing. And they say why would i want to do that . Thats a media campaign. There are a number of companies who are trying to do that. We have to do more of that just to attract more people to be thinking and jr. High and high school. This is actually a sexy and exciting thing to do. Having said that once they get to college there are a number of things we need to do. One of the most important is the information that you give to freshman and sophomores when they are choosing majors. We do a good job of that . The professional schools. In engineering or business. But most schools that includes us in the past have done lousy job of that for the majority of students in liberal arts degrees. And looking around and not sure what the their major will be. They have no idea what they can do with a major in math. Or physics or a major in social science. Or communication. That can lead them into interesting jobs. Were trying hard to push career related information bringing in alumni. Bring in local companies from wisconsin. In freshman and sophomore years of college to try to get people there. Two of the last comments. One is i regularly talk to manufacturers about the fact that they need to come in and advertise theps themselves on campus early. They cant just show up when people are graduating as seniors. Most of my. No idea why they should work for them. They wont know that at the end of the senior year. That company has to be in some of the departments and schools at wisconsin early. Getting their name out. Sponsoring competition. Doing internships and thats on the company. The last comment and a number of others have made it. If we want to keep the Talent Pipeline going we have to have the sort of federal dollars particularly for the high end high talented researchers. A vast major of dollars are spent in training students and paying students to be part of research projects. Thats how they learn and end up being invaters. As others have said and document here says in front of you. We have to keep the dollars in basic science ta are just so crucial. Not just for invention. But for theal e Talent Pipeline. Sglt are you seeing challenges in hiring up and down the skill spectrum from the phd to the entry level . Are you having trouble finding people up and down . Yes. Very much so. We have had it for quite sometime. At the high skilled level. For us more than anything is imbedded software engineers. We certainly have found it in a number of dimpt areas there. Now, as we ramp back up production, us and our supply base the number one thing thats limiting us is getting a talent for our manufacturing operation. Were having a real hard time getting people to come back in into these jobs. Its a challenging factor. Absolutely. Steve, maybe i can turn to you. Another issue thats come up repeatedly. Has been the ability of start up ts, entrepreneurs and Small Midsize businesses to get access to capital. To be able to get the idea out of the lab to get the Small Business scaled toup a midsize business. Whats your perspective on how does this looking right now . Hows the Capital Market as far as potential for manufacturing . Im actually optimistic. For a number of reasons. One of them for example is the fact that historically Silicon Valley has seeded Information Technology companies. Com. If you look at the last several years they have been moving toward other sectors such as manufacturing. For example the aircraft sector. Which is one that i follow closely. In the last several years Silicon Valley firms have funded 22 Aircraft Companies to the tune of 350 million. A lot of that stems from Silicon Valley companies such as uber. Google. Going into those sectors and thus the Silicon Valley funds sort of follow them. So i think if this can trend continues its going to be like a force multiplier to manufacturing. The other thing is because of the last couple of decades of investment, one of the things that you see thats interesting is that the sort of the social media and internet infrastructure made it much easier for Companies Small Company Start ups to access and find investors. Through social media sites like linked in for example. They can reach out directly to an investor. Or someone who can help them place a product. Crowd funding for example. Where you can say i want to manufacture this and ill give you a discount price if you put down a deposit i can use to manufacture the product. So thats another interesting. The other thing thats happened is there has been a proliferation of sort of feed and infrastructure. I mention crowd funding. For example accelerators. Theyre everywhere now. My University University of chicago for example now has the largest accelerator in the midwest. And they have invited National Labs to join. Even other universities such as university of illinois with their Engineering School has become part of it. Whats interesting here is that even for example the military has gotten into the game. They opened up offices in places like Silicon Valley. The Army Research lab opened an office at the university of chicago. And large fortunate 500 companies are setting up venture arms where they didnt have those before. And so for example in the energy space you have ventures. So an entrepreneur somewhere in the u. S. Can access money in saudi arabia and china. And so forth. And then the final point thats interesting to me is over the last three years in a row Venture Capital funds have raised over 50 billion each year. And the reason thats important is that size makes it ease your for Institutional Investors to start to participate more. And that will add more fuel and growth as well. Im optimistic as far as how easy it is to access capital. The comment deborah made earlier about the focus on the app economy and quick short term gain. Youre optimistic there is is the money there for the longer term actual product making thing. Thats correct. Even things such as for example crowd funding and as c funding enables smaller investor secretary of state participate so it broaden the Investor Base in that way as well. You still have to sell someone on your investment, but i think its easy tore find those investors now. Got you. Walt, representing the entire federal government up here on the panel. Whats your perspective on the role that the federal role in enabling advanced manufacturing and trying to create the right environment and the rules of the road that are going accelerate this area . Thanks. Thank you. Its great to be back if the counsel and the role you do for the advocacy and the role in government in driving invasion 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 claireon calls that actually got a a grade. So thats a wonderful thing. Nyst as some of you know is the lead for the Manufacturing Organization and has a role to accord mate the publicprivate engagement with leading industry, with the Entrepreneurial Community and driving work force development. 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 and to prototyping, access to user facilities. So through our federal complex, its a great leverage that we provide for the nation as pleased to preside over the 50th anniversary celebration for Neutron Research which has been used in advanced materials operation and studying die logical material for drug manufacturing and systems control. So we really see ourselves at nyst as a convener in the federal government to bring all the federal sector together with stakeholders in the public side as well as in Corporate America as well as within act dem ya. I believe he see ousts as the Nations Laboratory for industry. And so addressing all market vertic verticals, i have had i think some great conversations with folks within the high tech sector, who basically say without the metrology to guide the future of wireless 5g and others this nation would have a decade behind the rest of europe, for example, in the development of those capabilities. And so i have had folks from corning and intel and hewlettpackard come up to me and say, thank you for the work you have done in the federal sector to help drive u. S. Innovation manufacturing and technology transfer. Debra mentioned 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 has a representative of the federal Laboratory System and the from the department of commerce, we have also identified opportunities to enhance this for the nation. I would challenge the counsel to engage as we kick off a National Initiative under nist authorities for the buy dole acts and federal transfer construct. Its going to be time fortous revisit 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 says specifically they come to benchmark nist to see how they can replicate that in asia. So i think we have an opportunity for channelling 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 issuing that came up and every single one of sector discussions we have held over the last years they would be talent, which we have talked about and the other one would be the itchly communication 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 process and the other was the down side, the potential for cyberattacks. And manipulation by outside entities of these new sensors. Just to be curious i know we are what stands between everyone and lunch but this issue cuts across industry, akhadim ya and government. But any thoughts on how he capitalize on the good side of that and minimize the bad . As some of you may know, mist was asked because of our leadership in the National Cybersecurity frame work as well as systems inopera ability to take a look at things on behalf of congress. Its a huge upside and Risk Management through the driving of the frame work and testing interop rablt and also in an industry sensitive way is critical. For example, we have as our National Cybersecurity network a test grid for the 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 they Work Together and hard the vulnerableableties that they experience. So we really see this is an area thats going to need top level leadership in this nation to drive awareness and then also the creation of a new work force in addition to new standards to enable our country to take advantage and harness the opportunities around the internet of things. We spend a lot of time with your students talk about facebook posts are going to come back and haunt them and they have to be careful about how they use the media. Growth of the internet is going create universities for people to go out in the work force be aware of how all the devices in which they live can be use in the ways that can harm them. And can harm their families and places where they work. Increasingly, i know at different points the university, we are Training Staff about all sorts of issues with how youre careful. Internet of things takes this to a whole other level, right . 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 has already been said. Our view, we are going to we are in the process with the internet of things of connecting every part of our value stream from the customer back to the dealers, back through the factories and the supply base in second tier and third level. Tremendous upside opportunity with it. As was indicated by others, our number one threat we see is cyber. Its a risk you have to manage. Youre not going get away from it. You better dedicate the resources to it. Stay on top of it. Because its here and the only way you are going to mitigate it is to stay on top watching it. Absolutely. The only quick comment i was going add is that i think the same Block Chain Technology thats driving, you know, bit coin to tulip bubble levs is also going to be a big part of that solution. Fantastic. Interestingly or importantly, two topics cyber, bit coin, are