♪ carol: i'm carol massar in for emily chang, this is the " best of bloomberg: technology." coming up, we highlight our coverage from boston, including the innovation in industries that are driving the city. we have got guests leading the way in biotech, academia, and sports. we sat down with a guest getting his thoughts on the trade war, volatility, and the future of professional sports.

and turbulence and turnover at ge, upending the plans for the city of boston. but what exactly happened? boston is a city famous for igniting a revolution and is once again leading the way. the bloomberg innovation survey finds massachusetts as the second most innovative place for business in the country. and boston is a primary driver of that destination. fundingenture capital to academic brainpower, boston is undergoing a revolution into its economic future. boston, a city that knows a thing or two about revolution is undergoing a new one. an innovation revolution. boston tech is booming, powering massachusetts to the second highest spot in the nation on bloomberg's state innovation index. based on factors including research and development and education levels and its number

of tech companies. >> the score is really high, much of that led by the boston area, which is a tech hub. it has many programs for science and engineering and also has a high tech company density as well as robust venture-capital investment. carol: fundtech density alone, bloomberg ranked the state number one. publicly 60% of all traded companies are classified as high tech. >> one of the reasons it is ranked so high is because of the tech company density. a lot of that is led by the boston region. you think of some of the top s&p 500 companies, be it biogen, raytheon, some of them are in massachusetts, some in boston. carol: that density is no accident given the boston brain burst of including 70 graduate programs. where 70% of adults

have college degrees. there are now 1.3 million jobs in the innovation economy, and 8.6% jump since 2012. a boost in capital investment has helped fuel that job growth. invested $7.6rms billion in boston area companies , an increase of 126% in six years. purchase$800 million of this online pharmacy was a coming out party for the areas startup sector. and a shot heard around the country and boston's new innovation revolution -- in boston's new innovation revolution. carol: all week long, we have been highlighting the innovation in the city. in august of last year, it saw total venture investments exceed raised.ith $5.2 billion one example is toast, a leading

all in one point-of-sale management platform. the company has just raised millions last month, ringing the valuation to a whopping $2.7 billion we caught up with the ceo. >> we will do a lot with the money. we have been busy over the last two years. we are trying to affect a lot of change across the restaurant community. we are enabling what we call eight new era of hospitality. carol: talk to me about the r and d. you have got a platform, services, what else do you want to do? >> we look at the stakeholders, the guests, the employee, and the owner and operator. we are trying to affect change across the platform. one example is how do you get orders to the restaurant? in today's consumer environment, how do they get orders in? tool like toast

takeout, which allows you to do mobile orders ahead, or if it is kiosk or online ordering, or a device called the toast go that allows the wait staff to take orders at the table and turntables faster. carol: this is what it is about, more customers, more tables means more revenue and more tips for the workers. >> i would say it is two things. revenue in the store and operational efficiency. carol: you started back in 2011. you have been around eight or nine years, you have got to be thinking if this is the time to take the company public. >> yeah, so, this is a massive opportunity and the restaurant community is a massive market. carol: untapped? >> untapped, yeah, and we are in the days of a early -- a massive transfer -- transformation. carol: so you don't feel the pressure to do that? >> no pressure. carol: the reason i ask is

because we have been focused on a couple of stories. mower pertinent to you is some of the ipo's that have come to market. these are companies that have been around for a decade, like uber. well, and i amo wondering if you think about how long you stay private. , we are happy to stay private and put investment to pilots in our and the breakthrough for the future. i have a lot of friends who have gone public recently and we are in no rush. we are after building long-term shareholder value. so when we look at the opportunities, it is to build a pillar company for the restaurant community that builds long-term investor value. carol: as you say, it was an untapped market. i know you don't like to give up numbers, but give me an idea of the growth rate. >> we are north of 100% year-over-year. carol: in terms of the customer base?

>> customer base. ,nd we have 1500 employees since we last met, we have added 1000 in the past couple of years. carol: and not just in the u.s.. >> we have an engineering center in dublin, but we are still in u.s.-based. we serve restaurants across the -- anwhether it is an s enterprise like a jumbo juice. we are all over the u.s. of a but it is still the early days. carol: putting going public aside, what about other partnerships? where else can you go or where else do you hope to go? >> we look at the entire restaurant value chain and we are trying to make their lives better. this week, we announced toast payroll and team management. a lot of operators are spending hours doing payroll every friday. if we can give them their fridays back and streamline

payroll so that they can get ours back to spend more time with guests, that is what we are doing. we launch that this week which is an exciting new venture and we will continue to elevate -- innovate. carol: back-office, front office, whatever it is. >> whatever it is. lot out there, a a lot of competitors even in the boston area. there is something about the city and the restaurant space, there is a lot happening. how do you see the competition? is it folks you might partner up with? how do you see it? >> there are areas where we build, areas where we partner. it is a space that is dynamically changing. wante end of the day, we to transform the community and move the community forward. the boston market is tremendous. this amazing supply chain of talents with m.i.t., bu, umass, harvard, plenty of talent.

these the other side, companies that are transforming industries like wayfarer, car gurus, toast. it is an amazing market for us to thrive in and an awesome restaurant community. carol: you mentioned what a great city to be in an terms of talent. what about in terms of what you guys are doing? how do you see that working? >> we feel we are enabling the community to thrive. a lot of restaurants adding -- running toast are adding workforce. they can spend more time with guests, more time cooking, managing the operations. we see a lot of restaurants thriving and adding labor and we are trying to make it easier. carol: 10 seconds, international expansion? is that in the works? >> at some point, not anytime soon, but at some point. carol: that was the toast ceo. coming up, this was the biggest tech ipo ever, but they have

faced pressure from the public. we talk to the ceo about moving into the markets and staying on the cutting edge. and if you like bloomberg news, check us out on the radio. you can listen to us on the bloomberg at and the united app andn sirius xm -- in the united states on sirius xm. this is bloomberg. ♪

carol: this is " best of bloomberg: technology." i am carol massar. boston is arguably the center of the biotech world, but amongst this competition, modernist stands out -- moderna stands out.

cambridge, they are focused on creating therapies from infections to cardiovascular diseases. they went public last year in what turned out to be the biggest biotech ipo ever. i caught up with the ceo to talk about what has changed since the ipo. isthe big different for us we used to share data all the time. all the time with everybody. and tod to do science science, you need people understanding all the pieces. carol: so you are sharing more data? >> sharing less, because now we have to be careful. carol: because you are publicly held, that is interesting. what has changed in terms of the work you are doing and the perception with your partners? >> mostly the same. our first partnership with astrazeneca goes back to 2013.

we have a of long-term investors like fidelity, long-term investors for a long time. it is the same for us. carol: what i wonder is, there is something different, right? between being privately held and becoming public. i think there has been a lot of talk about your valuation out of the gate, over $7 billion. i am just curious, what kind of questions are you getting from investors? things take a while, but you are public now. again, for many years, we have quality investors, the story has been the same. we have a technology that will build a new kind of medicine. andre building medicines biotech products. that itvery unique is is informational.

every time we inject into a , have done it a thousand times with a thousand different subjects. every time we inject a human, we give them an instruction for their own cells to make the medicine. because of that, we have a platform. and because the human genome has been sequenced, we know all the instructions for all of the proteins we have. we can take that information into our technology. and very quickly give instruction to your body and make the protein. carol: you say very quickly, how quickly is it proceeding? any kind of pharmaceutical, if you will, as you know, takes several procedures in terms of critical testing. i think about the valuation. at some point, investors are going to say are we in stage three, where are we in the process? >> you have to think about two

things. one is research, to understand the drop before it is ready to go into clinical trial. in the labs, we are able to move very fast. the human genome has been sequenced. and because the technology is always the same, we don't have two invent the product is the same every time. the only difference is the message, like zeros and ones on the software. carol: so same process for going after the protein. >> correct. if you look today, we have 20 different drugs in development, many more in research. but all are made using a similar manufacturing process. it is not like it used to be where with every drug, you have to reinvent the process. so we can go very fast. carol: can you make the assumption in the efficacy is going to be the same in every process?

even if the process is in terms of how you deal with an individual's body. can we assume the efficacy is the same? >> it is tough to say ahead of seeing the data, but the thing that is interesting is, because you make your own protein, a protein known to your body -- carol: right, like a custom medication. it has been around for millions of years. when you think of drugs like prozac, those are being invented. when we inject instruction in your body, it is make -- it is to make a protein you are already making that is natural in humans. carol: this is not going to come as a new argument you, it is kind of the holy grail, right? the idea of using the body to create a treatment, a pharmaceutical, if you will, or not really. a treatment to deal with some disease or element.

what makes you think you have the magic stuff to make it work? >> i think we are resting on the shoulders of giants. a lot of the technology we are using has been invented by others of the last 20-40 years. one example, we use next gen sequencing. we use machines to sequence the human genome. these cannot we did not invent. -- these we did not invent. so there is a lot of technology that comes together to make moderna possible. i like to say that 10 or 15 years ago, we could not have assisted. -- existed. carol: coming up, where it went wrong for general electric. how the company's to move to boston did not come out as planned. that is next. this is bloomberg. ♪

carol: welcome back to " best of bloomberg: technology" in boston. it was supposed to be ge's crowning moment, that the company decided to move its headquarters to boston with its promise of infrastructure and jobs in exchange for tax relief and incentives. somewhere down the line, it all went wrong. years, ge called fairfield, connecticut home. that changed in 2016, announcing they were moving to boston. >> the ceo was trying to reinvent the company as a digital industrial company. they wanted a software focus, to be closer to engineers, and boston was a good fit. carol: boston and ge look like perfect partners. ge would build a new corporate headquarters and bring 800 new jobs to the city.

boston pledged $25 million in property tax relief and the state of massachusetts kicked in $120 million in additional incentives. the boston mayor was exuberant about the deal. emily: millions incentives, have you know it is worth it? >> i think it is already worth it. ge is moving to the city of boston. we have other great companies, but general electric is one of those that is such a big win for the city. carol: years later, the good feeling was still flowing at the groundbreaking ceremony. >> i think boston should look to the future with great promise and great optimism. >> this is the start of what i would like to call a terrific relationship. by the summer of 2017, the ground has shifted for ge. >> started to see cracks in ge's financials. their cash flow was a huge disappointment.

organic sales growth did not materialize. he was made ceo, i don't think anybody realized quite how bad things were. carol: in august 2017, the company announced it would delay construction of its new tower, pushing completion back to years. -- 2 years. plunged, theprice digital dreams went far down his successors list of priorities. >> the problem was he was to grant, to ambitious. he wanted a ge to be the be-all, end-all of all things software. ,s these cash problems mounted it became apparent this effort was to ambitious. that is why you started to see he and his successor walk down this ambition. >> we have a lot of work to do. we need to strengthen the balance sheet and set the business of to win. of 2019, gebruary

abandoned its plans to build a new headquarters and announced that only 250 new jobs would come to boston. they will be seeking property tax relief and reimbursed massachusetts for $87 million. ge will remain in boston as a renter, after reaching a deal to sell the land to a real estate development group. >> definitely something that needed to happen and i think they are going about it in the appropriate way. not just from a cash standpoint, but from a pr standpoint. they are trying to say that we like boston and want to be here, but we just don't have the capacity that we did when we started this process. carol: to weigh in on what happened at ge, we caught up the ceo of what sunday -- wasabi. the company is taking on the likes of amazon. we begin on the challenges of facing international and industrial companies such as ge in an increasingly digital world.

>> when you look at the giants of the technology space, amazon, google, facebook and so forth, they really started in this digital way. it is hard for industrial companies that are used to doing things in a certain way, everything from technology to accounting, it is entirely different and the culture is different. i think it is hard to do. quite honestly, i think people still need manufactured products. i am not sure it is a good idea for people making good to pit -- pivot. carol: that is a good point. there are a lot of many -- goods that need to be manufactured. wasabi. the ceo of theng up we hear from

co-owner of boston's beloved celtics. our interview coming up next. this is bloomberg. ♪

carol: welcome back to "best of bloomberg technology." this week in boston, i am carol massar. rising trade tensions between the u.s. and china had market watchers on edge. on tuesday we caught up with a guest who is no stranger to market volatility. he is the cochairman of one of the leading investment firms. he is the co-owner of boston's legendary nba team the celtics. >> this has been a long time coming. we have had a trade imbalance for 30 years. initially, when you had emerging markets it was a good thing.

a billion people have come out of poverty because of global trade. businesses have prospered. these markets are not emerging anymore. it is time to rebalance. carol: you have investments in china. i am curious, basically saying china is not our friend. see the chinese market in terms of transparency issues and where they are positioning themselves? of successave a lot in a chinese markets. they crossed over to a service economy for many years, driven by exports and manufacturing. not been that affected and will not be by the trade issues. it is more of a global issue. 500ou think about it, million goods come in from china to the u.s. and 100 billion go out, so that is a large imbalance.

rebalancing.e if we get into a long-term trade -- we need tove rebalance in terms of them taking our goods. patentsimilar things on , protection of software. carol: can we get that in terms of enforcement? steve: they have come a long way since the early days, and the service companies can take control positions in china. i think they realized to be on the global stage, they have to have the same rules as western economies, and we have to negotiate something to come to the middle. it is too import not to get that done. carol: president xi and president trump like to win, and are thinking about their constituencies. will that be problematic in getting a deal done? steve: i think they are both

dealmakers and strong leaders, and they will recognize it is bad for each country to be in this situation. i am hoping cooler minds will prevail. they are good leaders and are trying to get something good done. carol: all the market volatility we see, the you which of you that the china trade negotiations, or is there something fundamentally going on in our market economy? steve: there is more going on, the good news is record low unemployment. that puts the u.s. in a strong position. not much inflation as well. it is a strong negotiating position. the markets are probably as high as they have been, we have had an 11 year expansion. there will probably be some correction or settling. right now the economies are doing well. carol: in terms of the companies under the empire, in terms of trade, has that impacted them to

do anything differently? steve: all of the companies have contingency plans in terms of supply chain. most of corporate america is ahead of this because it has been going on for a couple years. as soon as this started to go on, our companies developed action plans. how do you make it work economically? they are prepared to switch, and many have diversified in terms of the supply chain. many countries decide china have been involved in the global supply chain, and companies have the ability to be nimble, they will get through this. i would rather not have the trade war or the t ariffs. we have beening captured by is the uber ipo. a lot of stories about what markets get wrong in terms of bringing this to market.

did morgan stanley overvalue the company? they came out at the low end of the range. i do not know if i would blame morgan stanley, i think it was a well done offering, but we have volatility with trade, we have a market that is volatile in general, at an all-time high. anything to do with trade or political tensions affects the market in the short-term. when google went public it took a beating and went way down. there will be some volatility in these tech offerings. they got hit at a choppy time in the market. carol: i am curious about private equity environment and how you see it. we talk about dry powder. what do you think about valuations? steve: valuations are high. believe -- i thought they

were true all those times, but 36ital has grown from million in 1984 to 205 billion today and have had successful returns. equity really is a great business model, it tries to transform businesses, and the model has proven to go global, help merge acquisitions, companies get more efficient. the whole world has changed in terms of private equity and the value added by capital founded on the principle of consulting skills and bringing those to companies to create great businesses. carol: what areas are you looking at now that you find interesting. steve: we find it as a needle in a haystack, you need to proceed with caution in these markets. we have a global team of a thousand people looking at thousands of deals, and we cover the waterfront.

in the last 10 years we have become specialists and we have had a big technology practice. we have reorganized to have vertical markets which include technology, health care, consumer retail, industrial, and financial services. we work together as a global team to look at those opportunities. you have to start with hundreds and thousands of opportunities and we'd them down. carol: you created a real estate unit last year. a billiono raise dollars, if you hit that mark? .teve: absolutely it was a fantastic situation. there was a fantastic group, three miles from us. over, we hadcame office space and they became bain capital, it was a seamless transition. they have focused on growth segments in real estate, medical

offices college dorm facilities, biotech which is booming. they are very successful and we are proud to have been part of the bain capital family. you aboutave to ask sports or people would you let me. i am sorry you were done for the season. what did you learn this season question mark steve: you always learned is hard to have that playoff game and not come back. , thed a great coach credit goes to milwaukee who could win the entire nba. us, weure is bright for will have up to four first round round picks -- draft picks. the future is bright for our team. this time the ball did not bounce our way. i watched the end of the

toronto-philadelphia game, a longshot as time expired. i have visions to my high school days of that happening to me watching that ball go in, and your season is over, it is terrible. ing be back mr. irv with the team? steve: we cannot talk about that, but adam silver is strict on these issues. carol: that was steve pagliuca, cochairman of bain capital and owner of the boston celtics. this is bloomberg. ♪

carol: welcome back to "best of bloomberg technology." i am carol massar. we spent some time with reebok which is in the midst of a turnaround. a decade ago adidas bought them

for $4 billion. revenue dropped 3% in 2018 causing the company to cut costs more. reebok is looking to expand. we caught up with the vice president. we are in the fortunate system --situation, we have a diversified strategy. carol: you have been doing that for a while. >> this makes us less dependent on the portion we are producing in china. .arol: not so much of an issue having said that, china is an important market, and i am curious as you innovate new products, i remember your sneakers, but you have made a commitment to being about 100% fitness. you see dramatic growth in apparel. industry is not just about footwear, luckily for me. role,plays an important

and innovative products. one product we launched last year in august, through our research and talking to women, realized there is a problem despite the fact there are bras out there. they are either feeling pain when working out or not feeling comfortable so they do not work out at all. we created the first innovative broad that combines a second skin feeling with the support you need while working out. carol: you brought over a bottle , that islear solution the compound that makes up this broad. -- makes up this bra. barbara: yes, it is when you press it softly, it is fluid and elastic. when you approach it with force, carol: how much in terms of

apparel, not just about design, technology,re about different fabrics, kind of exploring that? barbara: i am in the industry for 25 years, and over the last 10 years there has been a gigantic leap in the innovations in apparel. a lot of it is because of the manufacturing abilities we have today, and also the innovations we are seeing on the fabric side. out what thend consumer wants, so everything starts with the consumer, and then we need to bring it back and find new ways by creating , or going outside the industry to find a solution. carol: are you working with chemical companies that are creating new materials? when i started working out, it was the same stretchy fabric.

what is the future of fitness apparel? barbara: it is going more diversified, and working with chemical companies, but also mills thath the create those fabrics, and order to create the right components, the right ingredients that solve the problem. then i would say today more than ever it will be more in the future about finding those smart fabrics that allow you to personalize your garments to your activity, to your body. carol: in terms of the apparel industry, there are competitors out there, but you have grown that side of the business over the past four years by double digits. the you continue to see that growth? to see: yes, we continue that growth, but there is a lot of competition and opportunities out there. , and thess industry

trend will be there to stay. consumers are not only looking for product they can work out in, but product they can wear the other 10 hours of the day while they are out with their children on the playground, or commuting to work. carol: we started talking about china, and you had your first fashion show in shanghai. you created a creation center in shanghai. it is an important market to you. when you are selling to china or other markets, are you designing specifically for that customer? we are looking closely into the regional needs, and it may be as simple as reading products and making sure we have asian or japanese sizing available, but we are also looking for big markets like china and what the product needs specifically for these markets.

that is why we opened our creation center and are working closely with the shanghai center so that we are maximizing innovations and products we are developing here. carol: reebok's barbara ebersberger. coming up, m.i.t. is using robots for recycling to keep the planet clean. that is next. this is bloomberg. ♪

carol: welcome back to "best of bloomberg technology." i am carol massar in boston. before last year china imported 40% of u.s. we cycles, the recently researchers are million metric tons of plastic will be left with nowhere to go. students at m.i.t. have

developed a robot that can identify recyclables. for more than three decades china has been one of the biggest importers of plastic waste. that is changing. last year china closed its doors did two dozen foreign recyclables sending countries scrambling. , china imported 40% of the united states recyclables. researchers estimate the new policy could leave 111 million metric tons of used plastic with nowhere to go. now a team of researchers at m.i.t. are looking to sort through the pileup. artificial the learning lab have developed a robot that can identify and sort the site levels. a softtem includes teflon hand that uses tactile sensors to detect the size of an object and the pressure needed to grab it.

from there it determines if it is made of metal, paper or plastic. ,s it stands, recycling centers materials can become recyclable altogether. 25% of all u.s. recyclables are so contaminated, they must be sent to landfills instead. the team says rocycle can tackle the problem. rocycle provides an alternative to human labor. it can be cultured by a needle 20 times with minimal damage. replicating human intuition is no easy feat. 85% ofn detect materials the time, but its success rate drops 20% when objects are put on a moving conveyor belt. companies are building their own sorting robots using cameras and computer vision, and estimate the technology can cut recycling

.ost by as much as 50% reducing contamination is a top 40 for the united states. could a robot such as rocycle send us in the right direction, or will america have to find a new thing ground? we caught up with the director of the m.i.t. research lab that created the recycling robot. >> think about the fact that 20 task ago this was a reserved for experts. today we depend on computing so much we do not even know how we depend on it. the next level of technology, a i'm a short learning -- ai machine learning will do so much more for us. carol: we have been hearing that for a while. >> let me give you examples from rocycle. imagine garbage bins that will take themselves out. imagine an automated infrastructure that will take

garbage away. able the correct sorting of all that garbage so that it is environmentally good. systems that ensure you optimize your life to live well and work effectively. systemstransportation with no accidents. imagine personalized treatment plants. imagine all these possibilities that remove the routine work from us and ensure we have time to think critically. carol: what do you say to people who say this means the replacement of so many jobs out there? is that rumor going, or is it a case of robotics working side-by-side with humans? daniela: i hear a lot of inside

.e and concerns about ai i have worked in the field for many years and i want to ensure everyone the concerns around this are greatly exaggerated. we have to understand the fears of those who are not sure what the technology can do. thato start understanding it is important to provide people with alternative viewpoints. of this is understanding of robotics and ai are tools created by people for the people . like any other tools, they are not inherently good or bad. liken do so many things removing road accidents, offering personalized medicine, ensuring people can communicate no matter what language they speak. carol: we have started to see a trickle of the impact of ai and

robotics on our society, but how far before we feel a bigger impact? daniela: we already have tremendous impact because with ai, medicines are getting more precise and personalized. we can see the potential of optimized transportation systems that deliver goods and people more efficiently. in the future we will see so much more. with so manyrk well-known companies the milieu to the audience, toyota, google, ibm, they have opened up major facilities in cambridge in the past few years. talk about the collaboration between academia and the private world. daniela: it is critical that academia and the private world get together to solve some of the worlds greatest challenges. by working with companies we understand where the pain points are, and we can direct the science to where those pain points are.

we can show companies what is coming around the corner, what the technologies that disrupt are coming. carol: i think about self driving cars, and if you go back five years it was not until tesla came on the scene that people took it seriously, they pushed everybody to move forward. what technologies that we are not talking about much will be a big deal around the corner? daniela: around the corner we will see a different category of robots. today most of the robots we see are inspired by the human, they have arms, or are on wheels. in the future we will see robots that work side-by-side with humans. robots are made of soft materials, robots made of a variety of materials, whether paper or silicon or plastic.

more variety of machines, and more variety in the scope of the machines. carol: as i am walking around here saying students working groups, what are you doing to prepare students for what is needed for the future and robotics? widela: we are offering a range of important classes. machine learning is very popular . last year over 700 students of machine learning. we are offering free classes online and creating new disciplines and academic degrees that enable students in technology. we just launched a degree in competition urban science where we are training students and policy. carol: that was daniela rus. that will do it for this edition of "best of bloomberg technology." remember, bloomberg technology is live streaming on twitter. nology, andt @tech

on tictoc on twitter. this is bloomberg. ♪

jonathan: from new york city, i'm jonathan ferro. bloomberg "real yield" starts right now. ♪ jonathan: coming up, trade tensions simmering. chinese state media signals a lack of interest in talks. investors turning increasingly cautious. high yield bond funds seeing the biggest outflows since december, leaving the treasury market prime for a rate cut with yield near 2019 lows. we begin with the big issue, the market looking for the fed to nail a soft landing. >> we think we will have a soft landing. >> pretty soft landing. >> a soft landing for the global economy.