♪ emily: i am emily chang and this is the best of "bloomberg west." were we bring you the top interviews in tech. in boston, we have been diving into the biotech and startup scene. we will kick off with comments from maher walsh. -- from mayor walsh. own andn holding its biotech. to the heart of the innovation cluster and conversation with foundation medicine.

we talked to the director of the famed m.i.t. media lab, responsible for bringing the biggest innovations in tech from wearables to touchscreens. in boston, bringing the annual meeting of the chamber of commerce to meet the man who made the deal happen. walsh.ton mayor, marty i want to talk about boston in general. i was in silicon valley covering technology. it is the center of the tech hub, with new york in second. where is boston? >> number two in the percentage of tech workers in america. there is a lot of great things happening with the great ecosystem, innovative economy. we areoften wonder where

right now. downtown boston, 35 percent of office space is tech companies. greate a lot of innovation and startup companies. we have 25 universities in the city and 75 in the greater boston area. we have a lot of brainpower. million in incentive packages, how will you know if it was worth it? >> is already worth it. when you think of ge moving their global headquarters to the city of boston, we are seeing the benefits and results. it is incredible. the chatter in our city of the companies here and wanting to stay here when they are grounded here. we have a lot of startups, and people say why do we want to leave the city when we have companies like general electric coming in every day? general electric is such a big win for the city.

when we have conversations about moving forward, and it was a collaborative approach with the governor and myself, working closely. he is working very closely. i do not think we put the biggest incentive factors on the table. the political atmosphere in our city is healthy and in environment is healthy for business. we need a good healthy business environment. emily: let's talk about tax breaks up to $25 million over 20 years. you said they will generate more in property tax revenue even with the incentives. what are concrete ways that you think this deal will help combat things like income inequality? >> general made a $50 million in our education. $25 million will go into the city of boston's educational system. that was an upfront payment.

25 million dollars into the city working with us and schools like madison park high school. also dearborn high school which is a new high school in the city of boston. stan k to 12 school. -- stem k to 12 school. they see the importance of educating the future workforce. emily: what about affordable housing? >> there's not as big of a piece for affordable housing. we want to plan to create 53,000 units by 2030. last week we had 26,000 under construction or in the pipeline. 8000 are moderate to low income housing. we had the gun that conversation before general electric. income inequality is a big problem. number onee are the income inequality city, which is not a good label to have. emily: when i went to school

here, cabs were king, but uber has infiltrated. how do you view uber from a regulatory standpoint? >> we are looking at regulations. i think both can exist. all different types of car services can exist. i'm not caught up in the conversation where you either .ick uber or taxis they can both exist. we have to make adjustments in both. with uber we need more regulations to make sure people feel safe. , we have to look at the value system and make adjustments. emily: draft kings is a controversial boston company. how do you feel about them doing business? >> one thing that is a problem that i have been saying is the government regulates. in congress, washington, other

states, we have not caught up with how do we regulate these industries that start with an app? that is something that needs to sureoked at so we can make good business models are successful and that there could be regulations that protect you. you have been referred to as the mayor.all how do you think data will influence your term? >> we are measuring everything to diversity in our offices. data is important. at a year-to-year basis, we are looking at it on a daily basis. we keep track of everything. .e have the city score we're able to see how we are doing in delivering services, whether it is traffic or trash pickup, whatever it might be. one story in the budget, we saw

it went down. and askedhone call why the response time was down. the population is growing and we have not caught up. in this year's budget we are buying more ambulances and having another class of emt. emily: that was the boston mayor marty walsh. it is home to more than 180 topech companies and all five hospitals in the united states. we dig into the boston biotech scene, next. it is the battle of the coast, harvard versus stanford. which ivy league turns out the best entrepreneurs?

emily: massachusetts gets more than triple the amount of funding from the national institute of health then california on a per capita basis.

to $2 billion last year. here, foundation medicine focuses on matching genetic cancer profiles to give doctors the best treatment resources. third rock partner joined us this week as well as the foundation chief commercial officer. the biotechlk with scene in boston. i'm curious how boston became .he hub for biotech did start with the universities? >> it starts with the universities. you have the concentration of clinics, entrepreneurs, welcome hub of biotech. emily: what is ge get out of being headquarters in boston? rich population of talent that is exclusive in the boston-cambridge area. it is in, harvard, the major medical centers. they have access to the same

resources. it is attractive to the cambridge area. emily: one of the new frontiers of biotechnology, how does what you are working on get us closer to a cure for cancer? >> we can read the programming .ode of patients with cancer being able to read that programming code, we know what the software bugs are and can suggest what types of therapies could be best matched. that ability to read the programming code and know what that might mean is a tremendous breakthrough. emily: a cure for cancer, how far is that, really? >> cancer is a tough disease and enemy. there are probably 1000 different types of cancers. we are going through them one by one. or some, a tremendous effect has been had immediately, others we are working on. it will be a continual progress, but big improvements are

happening. emily: how close are you to getting more insurers to cover this? >> we know innovation outpaces reimbursement. we signed an agreement with united healthcare to cover us for lung cancer. we have regional contracts being signed. others are recognizing the data that we are impacting, having a major impact, on patient survival at a reduced cost to traditional therapy. that is emerging. emily: shares are down 65% from the peak a year ago. why is that? >> the whole sector has been down. it is a long game that is fundamentally happening. we are incredibly enthusiastic about the future, but work needs to be done. emily: are you changing your story, your strategy? what can you do to rekindle

investor interest? >> we focus on three major areas. education, the ability to take action on the information we provide so we improve patient care, and fundamentally servicing oncologists. they need people to be there to answer their questions and help them with patient care as quickly and seamlessly as possible. inly: the sector is still trouble. why is that? >> the fundamentals are extraordinarily strong. as we talked before, there was a period where things got ahead of themselves. things are good, but maybe there was consolidation. this is a sector that drives on proving we are making a big difference. it is the steady progress of data saying a big difference is happening for patients. emily: when do you see a turnaround? >> it is happening now.

we had a solid first-quarter. the forecast remains as we continue to do the same thing we have been doing. creating awareness, assistant clinicians in impacting patient care. emily: you have huge drug companies. pharma sometimes gets a bad rap over drug pricing issues. >> what do people want? they want to live long, healthy lives. emily: and for the best technology and medicine. compacts we have had in society is that if society rewards the fundamental innovation that lets people have those long healthy lives, bringing those important therapies to people that make thinkig difference, i the ecosystem has worked. there are strains on it. i think whatever changes we make to it, we keep the part that works intact.

about i want to talk regulation. there are questions about whether the technology stands up . regulators are looking at it more closely than they were. who is right? >> i think the feds are on that one. i believe that went to the feds. the bedrock of making this important breakthrough therapy available for patients is about data. can you show that things make a fundamental difference in the clinic? that is what foundation medicine is fundamentally about. we are fundamentally different and spend an inordinate amount of time making sure our data is demonstrating our quality. we're working closely with the parts of two certified our laboratory for continued diagnostic processes. we are close to the agency and feel comfortable with their entrance into our space. emily: we have been talking

about internet and software talent has moved to silicon valley. what do you think about biotech talent? how do you keep it here, and do you think they are here to stay because this is the epicenter of biotech? >> this is the epicenter of biotech and you mentioned that density. in kendall square, you have entrepreneurs, big companies, small companies, investors. i walk one block and bump into multiple people. sometimes our conversations are about scientific ideas, investment opportunities, partnership. that critical mass does not exist anywhere else. that is the liquidity of the labor market and ideas. that is special. emily: our interview with foundation medicine and third rock ventures. coming up, m.i.t. on -- , our exclusive with

the m.i.t. president next. the future of flight. the boston-based startup working on a supersonic business jet to carry passengers faster than the speed of sound. ♪

emily: in boston we spent time in the hotbed of groundbreaking research, m.i.t.. we turned to the president's office for a look at entrepreneurship and innovation. the university teaches 63 courses in entrepreneurship. 162 faculty members are entrepreneurs. have alums launched 30,200 active companies. how do you see the role of m.i.t. in the start community in boston and the world? mr. reif: m.i.t. is a unique place.

students with a great deal of talent come here because, not only do they want to get a degree, they want to use their skills to do something important for the world. to make the world debtor. they come here to learn and try to work on projects addressing the most important challenges the world faces. wely: you have a theory that leave a lot of innovation on the in a bottle.etchup what do you mean? mr. reif: at m.i.t. alone you see a tremendous amount of innovation. you see animation you want to go out into society to address the world's biggest challenges. strong -- extremely the u.s. is the most innovative country in the world. the system works well. you have ideas from universities picked up by risk capital, picked up by big companies. that is the way innovation moves to the market to society.

what is happening today and for the last five to 10 years is that risk capital is only going are a success rate quickly or fail very quickly. the most important challenges the world faces, climate change, clean water, food, and hiv vaccine -- you name it -- all of those important challenges take long development times. limited.tal is very in that way, we are leaving a lot of innovation in the bottle. emily: we are based in san francisco in the heart of silicon valley. we talk about stamford being behind companies pd think m.i.t. is at a disadvantage because they are not at the heart of the venture capital business. mr. reif: they're not at a disadvantage, they are on different things. up onf our andra news and

the west coast. you mentioned 50,000 plus companies by m.i.t. of alumni. .0% are in massachusetts 20% are in california. they go where they can make their company successful. i will not say m.i.t. is at a disadvantage. i will say the nation at a whole is at a disadvantage. the innovation we have in this country is huge, but not all of it is reaching the marketplace to benefit society. i'm trying to find to the system . it is not bad, it is perfect -- we need the googles, yahoo!s, and facebook. we need different types of companies. emily: how do you fine-tune that process when a lot of the ideas you are working on, which are potentially revolutionary, but might take 20 years before they are real? we aref: that is what doing.

the most important thing we need is patient capital. investorsmodern-day that are more in favor of philanthropic investors. already make their money doing the theay americans do, world does it. they want to invest in companies that make a difference. the most important thing we need is patient capital, and we are building that. we also need the proper amount of space, a connection with a mother institution. last question are great talk about the future of education. i wonder what is your view on the future of higher education. we were speaking with saul khan academy.an online videos taking the world by storm. he believes the more students can learn online, the more they can free themselves off-line pillars of future of higher education?

mr. reif: there is no question model ofd that the education come m.i.t., stanford, harvard, that model is the best education there is. it is also the most expensive. these places because they provide the best quality of education, but for many people it is unaffordable or inaccessible that is we cannot accommodate all the talent the world has. we can only accept a small percentage. many of those we reject would do very well here. we need to find a way for them .o also get a quality education the online, additional tools help. we need to combine those 2. we have programming that can not apply to m.i.t., but take online courses. if you do well you can be invited to come to m.i.t.. emily: that was the m.i.t. feif.ent rafael -- rafael reif.

we will sit down with the director of the m.i.t. labs and ask them what he thinks is the rough.ig breakth the best of bloomberg west continues after the break. ♪

emily: welcome back to the best of "bloomberg west." i am emily chang. we cannot leave without speaking to the director of the m.i.t. media lab. he is a two time college dropout . he is a three-time entrepreneur. to become the director of the media lab in 2011 and believes a biological revolution is next. here is our interview with the m.i.t. media director. biological revolution is next? what do you mean?

>> 30 years ago when the media lab was created, computers were about big companies working on very special projects that most companies did not have to think about. with the internet and other things, you could not have an internet strategy. similarly, medicine and health has been about big pharma companies. tools look at all of the involved, the technologies involved, and the fact that health care is 24 hours a day from when you are born to when you die, it is a convergence that is like the internet has done for information. biotech research is more expensive to fund. will it scale as quickly as the digital revolution? joi ito it is harder. you have to do fda trials.

there are more safety concerns. it is a huge market that requires real science. to of the reasons i decided come to m.i.t., kendall square and cambridge is the center of biotech. just like the computer companies the people to silicon valley, we are seeing ge bringing headquarters here. you are seeing the emergence of a new field. the ecosystem has to be built in a different way than we did for computers. emily: you think that because the bio revolution is next that austen will surpass silicon valley? is boston the next silicon valley? zhen is then hardware. silicon valley will be good at internet software. more software and artificial intelligence is required for bio. about walking over and

looking at samples. it is very physical. you need to be near m.i.t. and harvard. emily: you are working with a company called pure tech on some of these models. i had to go to capital market and got back a couple of hours ago. it is an example. a lot of companies will acquire basic science. you need to bring the academics, do fda trials. a lot of the times the technology has not made it to these companies. here tech is a new model for connecting academic research to companies. testingperimenting and new ways to translate academic research into companies and is important. that is interesting. emily: one thing in the spoken out about is bitcoin. what do you think the future is? mr. ito: it reminds me a lot of the internet.

one of my first companies that i was the ceo of was an internet service provider. i worked in a lot of the early internet circles. we had a lot of time to work out the technology before people started pouring in money. venture$1 billion in money before we figured out the protocols. the upside of bitcoin is that it will be to banking, law, contracts, and accounting with the internet was to media and advertising. the tricky part is we are ahead. i'm worried that the investments we are making to make the apps are happening before we figured out the core. in you have been here for a while, you know the web guys of the opena lot protocols here. silicon valley makes them into money here and we have not finished yet. one thing we do at the media lab

we retain a lot of the core developers. we are probably the largest non-financially interested group working on bitcoin and financial cryptography. emily: the soviet difficult question to answer, but what do you think is the single most transformative idea you are working on right now at the media lab? you can only pick one. pick one? can only i would say, importance. the reason i have been going to silicon valley every couple of weeks is that i think the artificial intelligence, singular terrien -- singularatarian in silicon valley thinks that computers will get so smart you can ignore law. the lawyers and philosophers are not understanding the

technology. bring human beings and policy together with ai is important. intelligence.d we do not think it will be about terminator or not here and we think the future will be about human beings and machines working together. whether it is individual interfaces or networks and society where we have computers and machines working together -- how they work together is important. the media lab is about the relationship between humans and machines. extendedlling it intelligence instead of artificial intelligence. emily: that was the m.i.t. media director joi ito. we are looking at big solutions to big issues. the lab were some of the most advanced bionics have been designed. a vision for a world without visibility. -- disability.

this man engineered some of the biggest recent breakthroughs in the technology of artificial limbs. after mountaineering accident, he went to a double amputation and dedicated his life's work of finding a better solution for people who need prosthetics. he believes the answer is in bionics. designnd the bionic structures, synthetics or bionic materials, that instantly connect or planted inside the body, normalize human physiological function. it extends human capability. emily: these limbs can do something that no other commercially available trust that escape. the foot ankle that i am wearing is the first that emulates lost muscle function. all other foot ankle devices are human powered, like a bicycle,

where only your energy causes it to move. emily: this technology has been spun out into a startup called bionics. it has fitted 1300 patients with the limbs, 15% wounded veterans. a new partnership with the largest prosthetics maker means that patients across western europe can access this technology. the biomedical is developing exoskeletons, equipment that could augment human performance. enhancing performance for soldiers, and making extreme sports more thrilling. the future, it will be common to see people wearing bionics. it is about self-improvement and a journey of what humanity can be. when humanity blends and integrates with good technology and design. was -- emily: that was

m.i.t. media director herb herr. a battle of the coasts, harvard versus stanford. which nurtures the best entrepreneurs? and check out our podcast with longform interviews. behavingeague schools like the medieval catholic church? here the full interview out on monday.

emily: harvard has been around for centuries and was one of the first to offer advanced education and engineering. we caught up with frank doyle, the dean of the harvard school of engineering and applied sciences to talk about the ambitious goal of becoming a top five engineering school in the next five years. also, the general partner of a capitalaised general

firm. you moved out here from santa barbara, where you had a long tenure at the university of california system to run the engineering school. what attracted you to this position? >> the legacy of harvard, the power of the institution, the creativity of the students. i was drawn to the innate talent, the raw creativity of the students, combined with the power of the harvard professional schools at large. the medical school, the business school, the law school. it is an interesting and historic moment in regards with engineering. we are tripling enrollment at the engineering school. moving to a new building. all at the same time the marvelous gifts are coming in. it is an unusual confluence. emily: some say that harvard engineering has a lag stanford,

m.i.t., carnegie mellon. you have pledged to be a top-five school within five years, which is fairly ambitious. how do you intend to do that? doyle: most of these are based on the size of the program. looking at the metrics, the scale, the size of the faculty, the publications, the funding, we can with everyone. we are at the top. we are a small program. we don't want to change that. one want to keep the small community feel, which is part of that harvarde way does engineering. that'll enable us to be at the top of the field on a scale basis. >> it is impressive what is going on. how are things going with diversity, getting more women to be engineers? are you happy with that trend? how is that going? prof. doyle: we happy with the trend, but we have more work to do.

we are at roughly one third women in the bachelors program, the undergraduate program, what we call a concentration. that compares favorably to the national average of 20% of engineering bachelor's degree going to women. if we make the top 10 rankings in that regard, but we have to keep improving. we have to push the number until we get closer to demographic in the population. emily: how do you push that number, attracting more women and retaining them? prof. doyle: we have to push the pipeline, recruiting high school students into the undergrad program. undergraduate students from the undergraduate cohorts. and women into the faculty ranks. if we did not address the pipeline at all stages, we will fall short. the absence of a small presence in the faculty, we will not have a draw of undergraduate students coming to harvard. emily: you say that your programs are very different.

as someone who points to stamford as being the father of google, whereas mark zuckerberg dropped out of harvard and went to silicon valley, how do you keep that from happening? our. doyle: as educators, mission is to educate the students. to bring them through to fruition to the degree they are training for. that is our merry objective. along the way, things happen. kids get ideas. they take them and run with them. we are not trying to create short circuits to drop out early, but focusing on the complete package. what it means to get the harvard degree, complete the training, and use that to springboard into successful endeavors. the dropouts are successful exceptional people. studentsot the mass of that we are educating. do you think that there is room for online to supplement these things? you have a view on the online

schools? toyou think that is a way widen the aperture of the harvard experience? prof. doyle: i think it is. we have beenx doing a lot in that institution and in the engineering realm. in computer science, i think we can do more. a bigger piece is bringing innovation more broadly into the curriculum. this is something that has been slow to change at harvard, but there is a mindset that harvard pushes fundamental boundaries. i think we do that brilliantly. over the last decade i have watched where a number of the have beenculty successful entrepreneurs. i had a meeting with ryan adams who is one of our cs tackle to you. we have a lot of faculty getting into the entrepreneurial space. their excitement is infectious, and that affects their graduate and undergraduate students.

capture that and bring it to the curriculum, the classroom curriculum as well as the online curriculum, i think we could be more effective. emily: frank doyle, the dean of the harvard school of engineering and applied science with spark capital. on the bostonocus startup scene continues. supersonic jet technology. you're watching the best of "bloomberg west." ♪

emily: continue with our focus on boston innovation, let's turn to aerospace and the research to bring supersonic aircraft to market. speed ofster than the sound. the technology has been around since the 1960's and is used in

the military, but the last to carry civilians crashed in 2000. now nasa is working on supersonic flight along with spike aerospace. andat down with the ceo spark capital. explain boston's role in the aerospace seen. we think of the west coast, but we don't think of boston. florida, california, and texas get a lot of attention. a lot of rockets are built in those areas. a lot of technology is built in boston. we have m.i.t., harvard, northeastern, boston university with aerospace programs. based thatcompany does flying cars. are developing supersonic aircraft. they have academic resources,

access to the european market. one thing silicon valley has is a great ecosphere. for boston it is easy access to washington and new york. , but a great place to be we have a lot going on here, too. emily: the concorde situation is isolated, but unfortunately looms large. how can you prove this is safe? >> the concorde exploded not because of its mechanical aerodynamics. there was a scrap of metal on the runway that punctured tire on the aircraft and hit the bottom. the market has changed. the global market has changed since then, 15 years later. the european market has exploded . the middle eastern market was in-rich but not as ambitious its global expectations of growth. the asian market has exploded.

those are tremendous opportunities. people need to get to those destinations, middle east to europe. emily: you are excited about getting on one? i am. i'm excited. i travel a lot to the west coast, which is not your initial priority, but we do business in europe and china. getting there would make my family happy. i fly to dubai frequently, but it is a 12 hour flight from boston. if i can bring that down to x hours i would go once a month. building face-to-face relationships is critical. you need to be there, shake hands, looking someone in the eye, having casual conversations. emily: the problem is that it is so loud you can only do oh cnx lights. -- you can only do oceanic flights. was very loud. our aircraft is designed because

we are taking advantage of computer technology and material sciences and aerodynamic configurations to reduce the sonic boom to a background noise like an air conditioner. you'll be able to fly overpopulated areas and someone would bailey notice. >> when you think you will come to the u.s.? >> we're going to start with europe and the middle east and asian markets in the early 20 20's. probably 15 plus years. it is federal regulation that .rohibits supersonic flights as u.s. policymakers see supersonic flights succeeding, they will look at amending those regulations. emily: elon musk, jeff bezos, these billionaires getting into space -- you need $100 million in investment to account for anything. how do you raise that kind of money? how difficult is that?

>> it is not easy. you could raise $100,000 for an iphone easier. the vision is so compelling, travelers and business users are also the investors in the aircraft. if they could see saving that much time and doing better business, they are the ones either purchasing the aircrafts or investing. for some of the airlines are interested in offering supersonic flights. >> how much will it cost a passenger to fly from here to london, london to hong kong? airlines arecial looking at offering it as a premium service to top clients. pricing would be first-class pricing. not super exuberant. emily: you are in. and sparkspace ceo capital. that does it for this edition of the best of "bloomberg west." you can join us from our tech news throughout the week every

day at 6:00 p.m. eastern 3:00 p.m. pacific. we will be in san francisco bringing you the google conference. we will see you then. ♪

david: welcome to "bloomberg businessweek." how will history judge fed chair janet yellen? trouble in paradise, and a company that might be sitting of the biggest oilfield in america. all that and more ahead on "bloomberg businessweek." ♪ carol: i'm here with alan pollack. you guys run a section about how banks are cutting off charity. >> they don't believe in