this is the best of bloomberg technology coming from you -- coming to you from boston where we are taking a look at the tech scene. shown the have startups based in massachusetts and we spoke to the investors , who have laid ros ross the region. they are expanding the reputation of all things tech, not to mention the prestigious learning institute that are harnessing this.

like harvard, where we are now. one company betting big on boston is general electric. multinational broke ground on a new world headquarters right here in the city. the ceo talked about the collaboration between the company and the city of boston. jeff: one of the oldest companies has moved its headquarters to one of the country's oldest cities for the purpose of creating this huge, whether it's in renewable energy or life sciences or technology or aviation, these the things we want to bring to the city. these of the things we think we can do together. caroline: it is a year when they won the bid for ge. it cost the city on property relief on top of a incentive package from the state. i sat down with the cfo to discuss why boston was the topic.

-- top pick. jeff: i think boston is unique. you start with a place where there is more research spent in any other place in the world. it is a bed of ideas in a sea of ideas. there is such an entrepreneurial irit and so many startups in a deep technology culture. it's the right place for us to start making this transformation. there is no other place on earth where you've got 500,000 of the smartest kids in the world going to school and graduating every year in the metro boston area. it's really unique in tt regard. we are thrilled to be here and be part of this ecosystem. caroline: you have so many areas of power, where do you think will make the most obvious and dent? where we see it be integrated quickly? jeff: we think it plays across

all of our verticals. in health care, there is an enormous market with ai and machine learning and how we think about clinical outcomes around images. our oil and gas business are full steam ahead on improving productivity and efficiency of wells and try to get the breakeven price for a barrel of oil or gas down. for our customers to make our products more competitive. there is not a business in the portfolio that won't benefit dramatically from this digital transformation. at the end of the day, we are trying to make our produs perform better f ctomers and create better outcomes for customers economically. we think there is an enormous amount of productivity in the world of machines and systems of machines. caroline: we have seen you make acquisition activity, especially in robotics and three printing. they have targeted largely european companies. what about the east coast area?

jeff: the added manufacturing is an enormous opportunity for the company and the world. it will be revolutionary and the digital transformation. we absolutely believe that. we bought two big concept laser printing companies in europe last year. we didn't start there. we started with a company called morris tech knowledge he about five years ago. we've been investing and doing research run 3-d printing or added manufacturing over that time. we didn't start with these acquisitions. they give us new modalities of technology that allow you to make parts differently and different kinds of parts. we will leverage off that. it will remake how people think about designing products or

parts or finish roddick's and how they build it. the great thing about additive, it's a constructive process. you only use the material you need to make the product and you can make it in a fidelity you could never do with today's machine technology. greatest machines in the world today won't let you make things is accurately as three printing. e sign space it never existed. caroline: do you finish with those acquisitions? jeff: we will really evaluate how we put this puzzle together. where there are possibilities to accelerate, we are wide open. if boston fits that way, we have partnerships with robotics and m.i.t. labs and northeastern labs with the research going on. there is a real ecosystem here to move the practice forward.

caroline: you're talking about investment and money spending. i know you've got to look at cost-cutting at the same time. how you able to square that circle? you been asked to take $2 billion out of operations. jeff: we have to continue investing the future. this is where the company going for the next two decades. in the long run, these investments we have to make. we have to run our own company as efficiently as possible. we can do this. we can walk and chew gum. one doesn't have to be at the expense of the other. i think running the company more efficiently gives us the opportunity to invest in these tech colleges that are the ture of the company. caroline: as you make these big commitments, it's a time of political change. how do you field the political environment fits into this area and you talked about what austin brings to you. there are worries about

immigration and funding going into biotechnology. what do you think about th trump administration? jeff: from a ge perspective, we are a global company. we serve global customers. we have a global workforce. that is the company we are and that is the company we are going to run. our supply chain and our manufacturing and technology capability looks like places and the customers we serve and that's how we have to run the company. we are going to remain a global company. i think anything we do policy wise that makes the u.s. more attractive for investment, taxes, i think it's great for ge and great for other companies. more than 50% of what we do and sell we do outsidehe.s. we have to be able to play broadly. caroline: coming up, we bring you a one-on-one with a top

investor in massachusetts, none other than the boston celtics co-owner. his plans on maintaining the place as a leader in biotech and health care. that's next. we will explain how boston emerged as a global leader in biotech. this is bloomberg. ♪

caroline: welcome back to the special edition of "bloomberg technology." we are coming from harvard university. massachusetts biotech sector has

been receiving a lot of attention. one investor helping keep the industry rolling is none other than boston celtics co-owner and bain capital manager steve pagliuca. thanks to a have two donation -- a hefty donation, the life lab opened its door last november. it is a shared laboratory space for high potential life sciences and biotech startups founded by harvard faculty, alumni, and students. i spoke with him about the significance of the lab. steve: the story started several years ago when i was running for the senate. one of my campaign promises was to protect biotech here. i wrote an editorial saying we've got to keep the lead and infrastrucreere. we have the best universities and hospitals. through the vision of dean

faust, they came up with the idea of building a facility that while the startups to stay here instead of leave and be cost-effective. caroline: were you worried about a brain drain? steve: we had seen it in the tech industry. 25 years ago when i went to business school, we had digital equipment. many of them went to california. we didn't want that to happen here. the mar d governor got involved. they promoted the life sciences. you can see the result of it now. caroline: intense competition when you're looking globally, are there areas you feel you can harness the crown away from or fight off? is it written up in the united states? steve: the talent pool is the richest in the country here in boston because of the groundbreaking research in the hospital complex and the technology.

i think we have the crown. we don't want to lose the crown. the life lab can really promote that. it gives easy access to companies. there are eight schools from harvard and 15 businesses. you've just seen one that is very exciting with vaccination. there are projects going on. when you have that kind of vitality that can start here and stay here. they will move to another facility. caroline: you know you're investing well. is biotech and area you would not only want to see for future innovation for our health, but also as a reward? steve: there are many biotech companies. we actually are announcing a large fund that will focus on the area of later stage. there is ecosystem financially developed as well so these companies can get capital and

moved to venture capital. caroline: the local ecosystem is supporting from a private point of view. what about the public point of view? we might see the taps turned off or biotech funding. what about longer-term? steve: hopefully they will see this is good for america and the economy. they certainly ran on that platform. we have been supporting locally our governor and mayor. the mayor was here at the opening. the entire administration of boston help get this facility up in record time. a lot of times these buildings take seven years. thanks to the mayor and governor ancounity, he came together very rapidly. 15 businesses are already up and running. caroline: atbout the diversity in terms of the pool of people you see here? is that something you have been able to prioritize? steve: my wife was heavily involved. e an investor.

my daughter-in-law is a cofounder of a biotech company. they work with the university to make it very family-friendly. we have rooms for women and rooms for kids, breast-feeding, all the things to ma ia very friendly and easy environment. caroline: that was steve pagliuca. facebook famously started in a harvard dorm room, is considered as the one that got away. headquartered in california, facebook quietly returned to cambridge in 2013 to open an engineering office. the company is taking advantage of the talent. kendall square in cambridge is thhet of austin's tech community. west coast software giants of

taken note. >> facebook is looking for opportunities in boston. boston is a combination of senior engineers and great universities. caroline: he helped facebook open the office nine years after mark zuckerberg developed a social network at harvard. it has grown to 18,000 square feet and employs 100 engineers that tackle some of the toughest challenges. >> most of what we are working on his infrastructure. they are working on the technology that is the underpinning for the products people see on a regular basis. caroline: compilers, storage, security, networking. these systems needed to develop the applications that reach facebook's users. the team also supports some of these social networks most visible projects like facebook live.

>> anyone who is looking at that video will see that comment in real time. caroline: location by product like the live video map and marketplace that helps you buy and sell things locally. the global company with the market cap of $425 billion has even more ambitious plans in its tenure outlook. >> we can give more people a voice. caroline: along with the engineering teams, the cambridge team will play its part, particularly in connectivity. >> had a we get connectivity to the next billion people? we build up technology that can work in a greater ecosystem to make cellular and wi-fi technology cheaper. we are trying to change the cost curve so we can develop networks to the world today that don't have network availability. caroline: it is social networking on a local and global scale.

we will have more from boston after the break. coming up, we bring you a discussion on how biotech mpies are responding to trump administration policy changes from health care to visas. we will introduce you to mass robotics, the nonprofit bringing robotics to life. this is bloomberg. ♪

caroline: this is the best of "bloomberg technology." we are coming to you from boston. more from the biotech sector which benefits from capitalists and the research center. the trump administration proposed cuts that could hamper

future growth. local companies are posing some of the other initiatives such as the affordable health care act and the typing of visa restrictions. we look at how some companie are responding. they've invested in more than 400 startups, including local success stories. >> i think some of the central companies here are her tech, some of the largest companies in biotech. they are based here. so many tiny companies spring up around the universities during i think some of the trends we look at our the move toward rare diseases. we talk so much about pricing in the industry and there has been so much pressure on pricing. some of the people who of en resistant have been those that vocus on rare diseases. insurers are less willing to fight back against high prices.

they treat cystic fibrosis. they charge hundreds of thousands of dollars here. biogenic came out with a new drug for a deadly musc disease. the first year of treatment costs $750,000. these are areas that local companies are pushing into across the country. caroline: when you are helping to cure such crucial areas, there are money for funding. how much of the ecosystem, how does it grow? >> the ecosystem is coming. boston is the absolute epicenter of biotechnology. every major company has r&d centers here. we've got 50 colleges. there are 200,000 students here. we convinced them to move from around the world to a place with great weather and they stay. and they join pharma companies

and that makes them fertile ground. caroline: talk to us about some of the concerns of have come in. they seem to have kept the money flowing for the short term. the short-term budget have kept it going. there is worry about affordable care act changes and the trump administration and their viewpoint on health care in general. >> i had concerns around some of the trump immigration orders. attracting people means attracting people from all over the world. if there are problems because of religion or which country you are coming from, that's going to be an issue for some the innovation around the area. that's what a lot of the companies have said. when it comes to pricing, some of the concern around the changes to obamacare in this act that just passed the house still meets to go to the senate. in that case, there are concerns we could get lifetime limits ba.

these are limits on how much insurers will pay for care. when you're talking about a drug that the cost $350,000 a year, that adds a pretty quickly. i think that's a major concern for some of the companies moving into these rare diseases. if those limits are back, they will face major struggles when people hit their caps. caroline: when you have a long-term perspective, how much can you factor in the day-to-day swing of the pendulum? >> no city feels health-care funding like boston. the top for funded hospitals are

all in boston. this could be a good thing. when the funding does try up, people who are entrepreneurs and do want to start companies will think about driving funding. we're there to fill that gap. caroline: how much are we seeing the vc community expand in boston? many feel that silicon valley is a big brother. are you seeing the seas, or from their? is there a buildup of money? >> in traditional technology, silicon valley is the big rather. it might be the grandfather in many ways. in biotech, this is the center of excellence. you see venture capitalists from the bay area swarm here. we've got the three ingredients. we've got the universities. we've got big pharma. that builds up clusters of entrepreneurs. we've got radically decreasing costs. that mea iyou are a young

researeror these companies and you've got an idea, it doesn't require $50 million to see if it works. caroline: is international money coming in? >> this gene editing technology, all three of the big crisper companies all have their r&d centers in cambridge. that is because you have that ustering effect going on. caroline: when you are looking at the investments you make, where are you looking in term of exits? to receive see money getting refueled back into the system? are angels exiting? >> the ipo market has been muted. we see an opening of a window in oth. in biotech, it has been wide open. you have technology capitalists moving into biotech. there used to be health care on one side and tech knowledge he on another.

now with the powers of machine learning in artificial intelligence, you see the converging of those spaces. caroline: you are in a number of companies. you have exited half of them. which should we look at? >> i think pill pack is one you have focused on a lot. they are making fundamental changes to the way prescriptions are delivered. we are changing people's access to doctors reports in booking. we use the power of big data. the theme is the convergence of traditional technology with health care. it's incredibly exciting. caroline: coming up, we speak with the harvard university president drew faust and discuss how boston is synonymous with higher education and what the university is doing to engage its students. all episodes of "bloomberg technology" are streaming. this is bloomberg. ♪

♪ >> look back to the best of bloomberg technology. i'm carolyn hyde. what if the areas that we visited digging into the boston tech field. harvard is where mark zuckerberg came up with the idea for facebook. we sat down with the harvard president and discussed how this institution fosters innovation amongst students. >> we have a vibrant community here.

it is exciting to see and growing. it is exciting to see mark zuckerberg coming back. enter a mind us else in the many beenof which we have innovators and will continue to be innovators. caroline: looking at the wayt innovate, sending them out to the greawod, how long has that been in play? and how is that helped build companies? >> it was founded in 11ith the notion of providing people a space and support in terms of experts and venture funding and building companies into the commercial world. we could enae udents to follow their ideas and dreams and make tangible realities.

so it has turned out to be a success beyond our further streams as people have flocked to it. we now have 75 cpaes. we have the president challenge. students and groups of students compete for funding to move their idea to the next phase. and that is always exciting. to see the things they have dreamed up. caroline: you are a historian, by trade. how do you see the multidisciplinary focus of harvard helps the varied groups of technology companies? >> i do think they are closely linked. i understand that things have been different, it enables you to think that it can be different, and again. if you just accept the status

quo, you are inhibited in your ability to figure out the new directnse may go in the future. so science history -- but more generally -- i think liberal arts and broad gauged education, it stimulates ideas. it gets people out of the comfortable zones and if you shift this per spec of, what could you do differently? we have seen this in many of the teams that to come together. someone with the law school together with the kennedy center and someone with the policy questions. but maybe the product they think about is a scientific project so that someone from the science department will be part of that team. so i believe that this wide-ranging approach enables people to think more ambitiously.

>> we are talking about diversity. what about diversity of ethnic origin and women? this is something that particularly text giants are struggling with. how to get enough women and diversity into their doors. is this something that you think is coming through the ranks? >> we have seen a great growth and interest in education here at harvard over the last decade or so. we have established our school of engineering as a school outright with a tripling and people who want to concentrate and major in that area. women make up 35% of the engineering concentrators now.

we think they should make up half and we will keep striving or that. but i do think that diversity relates to what you spoke about earlier, reason for trying to say that engineering is a liberal arts field. engineering could have a place in that. if you are a citizen of the 21st entry, you need to be a citizen of technology. so i think we challenge people by saying that if you're not going to be einstein, you don't belong here, and we will flood everybody out and the like it impossible -- we have a completely opposite attitude. try this out. want to give you a path to succeeding because we think it is important. that has helped us out. i think it does include ethnicity as well. >> what about wisdom of the things you have learned over the years of building up diversity that he would give to business leaders that perhaps are still struggling and are looking for

ways in which to become more diverse? >> i think rather than by giving wisdom, i think partnership. we seek to understand career choices and pathways that do make this attractive. to see if a career in science or technology is -- so how we recruit and organize individuals. i hope we can have a lot of conversations about the shared commitments to the diversity. >> how much you think the administration understands an ovation and how do you feel optimistic or pessimistic about the talent pool coming your way? >> we have them working hard to

explain what we do to people in washington. i've spent a lot of time working with individuals in a congress trying to make the case for how research operates and how universities are dependent on a long-standing partnership with federal government. we have also been concerned about immigration issues and the free flow of talent. the greatest advantage of our country has been the attraction that we can pull people with. to the united states. and we benefit enormously from that. so many of the young companies that we ever for two are founded by people from overseas. we find that individuals who want to come into our graduate programs are extraordinarynd the opportunity for them to stay here after they are educated at a place like harvard or m.i.t. is to a great advantage as a country. so these are things we do need to explain and advocate for.

making their importance to national strengths clear. >> do you think it already has been dented? >> we are waiting to see how many international students wait to accept that their admission. and maybe then we get a sense of how it has been affected. we've been trying to make it clear to how dedicated we are to students to giving them a special experience. >> what you think about boston in terms of its leithin education and leadership of that? >> boston has been the athens of america for centuries. it has been a beacon of learning and scholarship. ani think now it has taken that into a new form.

where learning and innovation and science and invention has become so vibrant a part of everything in our lives. and so boston has the traditional leadership role but it also has a new kind of leadership role, as we see the kinds of discovery that harvard and m.i.t. and our other partners in this area -- the university of massachusetts -- others c ctribute to making a new kind of city on a hill out of boston. a new era. >> here is the harvard innovation lab, and it is open to students across the college with an idea at any stage. every semester, teams apply to participate in the 12 week program that combines mentorship, introductions to funding to help move startups faster. select teams move on to the launch lab which is a co-working program of fdealumni ventures.

the harvard i lab help students grow their startup. launched in 2011, it is a 12 week intubation program that provides mentorship and a community to move ventures further, faster. one of them is shields ai. >> in afghanistan, it led me to found shields ai. it was basically a recognition that technology could prove useful on the battlefield. >> he founded shields ai in 2015. and he is earning his mba from harvard, the business school. >> this drone is different from the others you see on the commercial market.

ec drones advertise themselves as autonomous drones and what they're doing is they're following gps baselines. but ours is not required gps. so using simultaneous mapping, the technology we see in driverless cars, it is able to find its environment with operators. >> the company has raised $10.5 million in funding. >> harvard's network is incredibly powerful. it allows assets to people with capital. >> it has a contract with the department of defense and the department of homeland security. but shields ai exists in a fast-growing market for competitors. the applications for drone technology, $2 billion in 2016, will bloom. shields ai plans to deploy the first product later this year. the mission is far from complete. >> down the road, their other acquisitions.

search and rescue, law enforcement, there other applications that are interesting. we are focused on our mission of detecting service members and infant -- and innocent civilians with these systems. >> biotech executives and the head of the national institutes of health met with mike pence. donald trump's administration proposed cutting billions of dollars from the nih budget this fiscal year. and $5.8 billion next year. the meeting was also attended by ivanka trump. it talked about the relationship between governments and industry. coming up, we hear from the boston mayor on his mission to expand boston interpretation as a hub of technology and innovation. this is bloomberg. ♪

>> welcome back to a special edition of the best of bloomberg technology from boston. this week, we have been speaking with ceos, investors and innovators across the city. we sat down with t bton mayor to discuss boston's role as a tech innovation hub. and how scks up to silicon valley. >> the day we officially announce ge's move to boston, they gave us a check for 50 -- for $50 million, $21 million for education and drug training and health care stuff. so we do seeheenefits of having ge here already. the thing that people are

critical of was the muddy with tax incentives, that is to get the building going. and in the next 30 years, we will get over 67 million dollars in real estate taxes fm at deal. >> which is that mean in terms of continuing the growth of the tech and biotech sectors? >> it is so important. boston has always done well in that space. when you think about our city, people think about o cy as a great medical city, a great tech city. there was a time in the 1980's when boston was the tech capital of the world and we lost that to silicon valley and san francisco. and what a seven now is almost a rejuvenation of that. people coming back to our city. we are excited about what is happening. and general electric at their whole new level of curiosity about boston. we have one or 250,000 students a year that go to school in our city and many of them will stay here for the summers and when

they graduate. we grow every year. we have college and universities within the boston area. there is a want of information -- a lot of innovation. and ge can help us with that. >> you say you have lost this to silicon valley. can you win this back? >> we can win it back and we are doing that now. massachusetts went through a difficult time because of politicadesions that set us back a bit. and i think what is happening now is that you have a climate where everyone is looking to move our economy forward. and also to be elevated. the world innovation is on the tip of everyone's tongue recently. sports, ge or other types of business. you try to be innovative here in the city of boston to attract

these great companies here. in the last three years in boston, we have added 60,000 new jobs to the economy in boston alone. we did that before ge came but with ge here it will help us grow. >> attack about a political environment thatel with jobs. do you think the administration is helping with that? >> no. i'm hoping they will just get to the job of governing. i would like to see them be suessful. i would like to watch some folks on governing and stop folks in on other issues. i'm afraid of what it will do to our economy. it hasn't had any yet. i am concerned about therefore it will care act and the actions that congress took last week. it isn't a good bill. it is ever peel.

and cities, urban cities around america, it is going to hurt hospitals. i wish they would focus on what they talk about, moving the country forward, and not repealing health ce d defunding nih funding. i think we need to do more than that and better than that. >> boston has thrived from nih funding. it is the number one city in terms of spending. are you worried about the recession development area? >> i was up until the congress passed the short-term budget through september. in that budget it seems like everything is ok. i think it is important today. when you look at the research facilities and in boston and cambridge, there are a lot of discoveries, things are happening here in our city and it helps us keep young people and talent in the city. i am a cancer survivor and i was

treated at the cancer institute and the children's hospital and the pretty woman's -- and the brigham woman's. so knowinghawhat i had is cancer 40 years ago,od the cure rate is a lot higher than when i had it. >> talking of you and your background, you're the son of immigrants. there are concerns about the travel ban. what does that mean for talent? do you feel there is a conce for talent coming into your academic institutions? next it was a concern before hand. because there wasn't enough

eases being given out to people -- there were not enough visas being given out. i had the college universities in this room. i had the tech writers in this room. every single one of them have the same concerns about the fear of people not being a was a come to the united states of america to get education or to start a business. and i think congress has been six or seven years or maybe longer, they really should focus on immigration. i think our system is not working. we have 11 million undocumented people in the country. what we do to put them on a pathway to citizenship or to figure out what you do with them here? and we have a work visa program, these come for a year but that is not good enough. we're not going to keep their brainpower here.

we're going to send them back home? i don't think that makes sense to a lot of people. >> that was marty walsh, the mayor of boston. coming up, the robotics industry has emerged as a major player in the tech scene. and if you like bloomberg news, check us out on the radio. you can listen on the bloomberg radio mobile app. this is bloomberg. ♪

>> massachusetts is home to over 100 20 robotics companies that employ nearly 5000 people. and generate $1.6 billion in revenue. and while that is still relatively small, the industry is growing and so are the resources.

mass robotics opened a facility earlieth year in the seaport district and are dedicated to fostering young robotic-based artups and keeping them in town. this autonomous drone belongs to the american robotics, one of the handful of startups based here at mass robotics. >> the name is double meaning. mass because it started in masshutts but also, mass over body. >> it opened the facility to help startups get off the ground. as the cofounder explains, it is an escalator. >> it is a new concept. incubators have been around for sometime. and the model has been effective in starting a business. but when it comes to hardware,

there is no organization there. >> products in the works include drones for commercial agriculture and 3-d printers. and according to the director, atumber will grow. >> we have six companies and two more moving in. we can grow more companies in this space. and that we will be looking house over 100 companies. >> founded by leaders in the robotics industries such as amazon robotics type brady, they mentorship and help with funding. >> we don't fund ourselves but we work with a lot of local -- we know which ones are investing in robotics. >> 50% more than 2015. nearly $1 billion tt when

two companies in california. the number of boston companies is growing and it is attracting sponsors and partners for massachusetts and outside the state. >> they're looking for investment. >> where robotics going? all sorts of things. >> and for the boston robotics community, they are reaching new heights. that does it for this edition of best of bloomberg technology from boston. we will bring you the latest through the week. remember, all of the episodes of bloomberg technology are live streaming on twitter. that is all for now.

this is bloomberg. ♪

♪ >> coming up on "bloomberg best," the stories that shaped the weekend business around the world. politics from paris to washington with new faces entering the spotlight and familiar figures leaving the stage. mainly toto govern the right. he has definitely pushed the softer line toward north korea. >> different times for different reasons, people asked for an fbi director and they will get one. >> traders look ahead to gauge what is on the horizon. >> i am worried about european banks. >> markets are really no good