carol: i'm carol massar in boston, in for emily chang. this is the "best of bloomberg technology." we bring you all of our top interviews from this week in technology. coming up, we highlight our coverage from boston, including the innovations and industries that are driving the city. we have got guests leading the way in biotech, academia, and sports. plus, we sit down with steve pagliuca, getting his thoughts on the trade war, volatility, and the future of professional sports. and turbulence and turnover at

ge has upended the plans for the city of boston. we find out exactly what happened. boston is a city famous for igniting a revolution and is once again leading the way, now as a tech and innovation center. the new 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. from venture capital funding 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 the region's research and development and education levels, and its number of tech companies. shelly: the score is really high, and much of that was led by the boston area, which is a tech hub. it has many top graduate programs, many undergraduate programs for science and engineering and also has a high tech company density, as well as robust venture-capital investment. carol: on tech density alone, the bloomberg index ranked the state number one. more than 60% of all publicly traded companies are classified as high tech. shelly: one of the main reasons massachusetts is ranked so high is because of the tech company density. and a lot of that is led by the boston region. if 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 tech density is no accident, given the boston brain burst, which includes 70 top graduate programs in an area where 49% of adults have college degrees, 40% of which are in

science or engineering. statewide, there are now 1.3 million jobs in the innovation economy, an 8.6% jump since 2012. a beantown boost in venture-capital investment has helped fuel that job growth. in 2018, vc firms invested $7.6 -- $11.6 billion in boston area companies, an increase of 126% in six years. amazon's $800 million purchase this online pharmacy was a coming out party for the area's startup sector, and a shot heard around the country in boston's new innovation revolution. all week long, we've been highlighting the innovation taking place in the city. a city that, according to crunchspace, in august of last year, it saw total venture investments exceed rivals with $5.2 billion raised in boston. now, one example is toast, a

leading all in one point-of-sale restaurant management platform. and the company just raised $250 million last month, bringing the valuation to a whopping $2.7 billion. we caught up with the ceo, chris comparato. chris: we'll do a lot with the money. it's a nice capital raise. we've been busy over the last two years. we're really trying to affect a lot of change across the restaurant community. and we're enabling what we call a new era of hospitality. we are investing heavily in r&d. carol: so, talk to me about the r&d. you've got a platform, services. what else do you want to do with it? chris: we look at the stakeholders, the guests, the employee, and the owner and operator. we're trying to affect change across the whole spectrum. a good example is how do you get orders to the restaurant? in today's consumer environment, how does the restaurant get orders in? whether it's a tool like toast takeout, which allows you to do

mobile orders ahead, or if it's kiosk, or online ordering, or a device called the toast go, that allows the wait staff to take orders at the table and turn tables faster. carol: this is what it's about, more customers in, more tables means more revenue and more tips for the workers. chris: i would say it is two things, more revenue in the store and operational efficiency. carol: you started back in 2011. where is it all going? you've been around eight or nine years. you've got to be thinking, is this is the time to take the company public? chris: yeah, so, this is a massive opportunity and the restaurant community is a massive market. carol: untapped market? chris: untapped market, yeah, and we're in the days of a massive transformation. for us in many ways, we are still getting started. we are making massive investments in r&d. carol: so you don't feel the pressure to do that? chris: no pressure. no pressure. carol: the reason i guess i ask

is because we've been focused on a couple of stories. u.s. china trade and more important and maybe pertinent to you is some of the ipo's that have come to market. chris: sure. carol: these are companies, as you well know, that have been around for a decade, like uber. it didn't go so well, and i'm wondering if you think about how long do we stay private before we go public? chris: sure. first, we are happy being private and put investment to pilots in our and the breakthrough for the future. i have had a lot of friends who have gone public recently, and we are in no rush. i think it's a milestone. we are after building long-term shareholder value, so when we look at the opportunity for us, it is to build a pillar company for the restaurant community that builds long-term investor value. carol: as you say, it was a very untapped market in terms of the restaurant space. i know you don't like to give up numbers, but give me an idea of the growth rate and terms of bringing in new customers. chris: yeah, we are growing north of 100% year-over-year. carol: in terms of the customer base? or revenue? chris: both. carol: wow.

chris: and we have 1500 employees. i think since we last met, we've probably added 1000 in the past couple of years. carol: and not just in the u.s. you guys are in dublin and elsewhere. chris: we have an engineering center in dublin, but we're still in u.s.-based. we serve restaurants across the u.s., whether it's an enterprise like a jamba juice or nationally acclaimed restaurants. we are all over the u.s. and 30 markets but it's still the early days. carol: putting going public partnerships, what about other sides? where else can you go or where else do you hope to go? chris: sure. so we look at the entire restaurant value chain, and we're trying to make their lives better. it's hard to run a restaurant. this week, we announced toast payroll and team management. because a lot of restaurant operators are spending hours doing payroll every friday. if we can give them their fridays back and streamline payroll, so that they can get

hours back on efficiency to spend more time with guests, that's what we're doing. so we launched that this week, which is an exciting new venture for us, and we will continue to innovate across the entire restaurant value change. carol: back office, front office, whatever it is. chris: front office, back office, whatever it is. carol: there's a lot out there, a lot of competitors even in the boston area. there's something about the boston city, the tech scene, the restaurant space, there's a lot happening here. so how do you see the competition? is it folks you might partner up with? i don't know. how do you see it? chris: there are areas where we build, areas where we partner. it's a space that's dynamically changing. at the end of the day, we want to help transform the community and move the community forward. and the boston market is tremendous. it is sort of two sides of the market. you have got this amazing supply chain of talents with m.i.t., bu, umass, harvard, plenty of talent.

and then you've got, on the other side of the market, these companies that are transforming -- stries like wayfarer wayfair, car gurus, toast. it is an amazing market for us to thrive in, and it is 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 in terms of replacing workers? how do you see that working? chris: we feel we are enabling the community to thrive. a lot of restaurants running toast are adding workforce. because we are making their jobs easier, they can spend more time with guests, more time cooking, more time managing the operations. so, we see a lot of restaurants thriving and adding labor, and we are trying to make it easier for them. carol: just 10 seconds, international expansion? is that in the works, too? chris: at some point, not anytime soon, but at some point. carol: that was toast ceo chris comparato. coming up, moderna was the biggest biotech 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, do check us out on the radio. you can listen to us on the bloomberg app and in the united states on sirius xm. this is bloomberg. ♪

carol: this is the "best of bloomberg technology" in boston this week. i'm carol massar. boston is arguably the center of the biotech world, but amongst this competition, moderna stands out.

it is based in cambridge, and the company is focused on rna and 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 moderna ceo stephane bancel to talk about what's changed since the ipo. stephane: i think the big difference for us and our employees is we used to share data all the time, all the time with everybody. to do great, you need to do science and to do science, you need people understanding all the pieces. so that's the biggest change. carol: so you're sharing more data? stephane: we're sharing less data -- carol: less data -- stephane: because now we have to be careful. carol: because you're publicly held. that's interesting. what's changed in terms of the work you're doing and the perception with your partners? has anything along that line changed? stephane: mostly the same. our first partnership with astrazeneca goes back to 2013.

merck in 2015. we have a lot of long-term investors like fidelity, long-term investors for a long time. it's the same for us. carol: i guess what i wonder is, there's something different, right, between being privately held and becoming public? you have to answer to investors. i think there's been a lot of talk about your valuation out of the gate, over $7 billion. i'm just curious, what kind of questions, are you getting from -- getting more pressure from investors? things take a while, but you're public now. stephane: again, because we had, for many years, we've quality investors, the story has been the same. we have a technology that will build new class of medicine. we're building medicines and that cannot be done with small molecule or biotech products. what is very unique is that it's

information molecule. every time we inject into a human, and we've done it a thousand times with a thousand different subjects, locations, we have done it already. every time we inject a human, we give them an instruction for their own cells to make the medicine. and because of that, we have a platform. and because the human genome has been sequenced now, so we know all the instructions for all of the proteins we have in our bodies, so we can take that information into our technology and very quickly give instruction to your body of making protein you need to be healthy again. carol: when you say "quickly," how quickly is it proceeding? because any kind of pharmaceutical, if you will, as you know better than most, it takes several procedures in terms of clinical testing. i think about the valuation. and at some point, investors are going to say -- are we in stage three? where are we in the process? stephane: you've got to think

about two things. one is research, what to do in the labs, to understand the drug before it's ready to go into clinical trial. so in the labs, we're able to move very, very fast because the human genome has been sequenced. and because the technology is always the same, we don't have to invent how to make the product, because it 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. stephane: correct. so if you look at 20 different drugs in development, many more in research, all of those are made using a similar manufacturing process. it is not like it used to be in big pharmaceutical companies, where with every drug, you've to reinvent the process. so we can go very, very fast. carol: can you make the assumption that the efficacy is

going to be the same in every process? even if the process is, you know, in terms of how you deal with an individual's body. but can we assume the efficacy is going to be the same? stephane: so, it's tough to say ahead of seeing the data, but the thing that's interesting is, because you make your own protein, and it's a protein that is known to your body -- carol: right, like a custom medication. stephane: correct. and it has been around for millions of years. when you think of drugs like lipitor, prozac, those are being invented. when we inject instruction in your body, it's to make a protein that you're already making, that is natural in humans. carol: so you know, and this is not going to come as a new argument to you, because many people have talked to you and challenged you, and 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 ailment. what makes you think you've the

magic stuff to make it work this time? stephane: so i think we are resting on the shoulders of giants. a lot of the technology we're using as a company has been invented by others over the last 20, 30, 40 years. just one example, we use next gen sequencing. so we use machines to sequence the human genome. these we did not invent. we are using those machines that are giving us information that we can then use to go into the technology. so, there is a lot of technology that comes together to make moderna possible. i'd like to say that 10 or 15 years ago, moderna could not have existed. carol: that was moderna ceo stephane bancel joining us. well, coming up, where it went wrong for general electric. how the companies plan -- 's plan to move to boston didn't come out as planned. that's coming up next. this is bloomberg. ♪

carol: welcome back to "bloomberg technology" in boston. i'm carol massar. it was supposed to be ge's crowning moment, that the company decided to move its headquarters here to boston with its promise of infrastructure and jobs in exchange for tax relief and incentives. somewhere along the line, it all went wrong. here is how it went down. for over 40 years, ge called fairfield, connecticut home. that changed in 2016, with the company announcing they were moving its headquarters to boston. brooke: the ceo at the time was really trying to reinvent the company as a digital industrial company. they wanted a software focus, to be closer to engineers from m.i.t. and harvard, and boston really was a good fit. carol: boston and ge looked 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. boston mayor marty walsh was exuberant about the deal. >> $150 million incentive package. how do you know it's worth it? mayor walsh: i think it is already worth it. ge is moving to the city of boston. we have other great companies, as well, but general electric is one of those that's such a big win for the city. carol: one year later, the good feeling was still flowing at the groundbreaking ceremony. jeff: i think boston should look to the future with great promise and great optimism. gov. baker: this is the start of what i would like to call a terrific relationship. carol: by the summer of 2017, though, the ground had shifted for ge. brooke: they started to see cracks in ge's financials. so their cash flow was a huge disappointment. their organic sales growth didn't materialize as promised.

when he was made ceo, i don't think anybody realized quite how bad things were for ge. carol: in august 2017, the company announced it would delay construction of its new tower, pushing completion back two years to 2021. as the stock price plunged, the digital dreams slipped far down his successor's list of priorities. brooke: the problem was he was too grand, too ambitious. he wanted a ge to be the be-all, end-all of all things software. as these cash problems mounted, it became apparent that this digital effort was too ambitious. that's why you started to see john flannery and his successor, larry culp, walk down this ambition. larry: we have a lot of work to do at ge. we need to strengthen the balance sheet and set the businesses up to win. carol: in february of 2019, ge abandoned its plan to build a new headquarters and announced

that only 250 new jobs would come to boston. the company won't be seeking property tax relief and reimbursed the state of massachusetts for $87 million in expenses. 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're going about it in the appropriate way. not just from a cash standpoint, but from a pr standpoint. they're clearly trying to say that we like boston, 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 general electric, we caught up with david friend. he is the ceo of wasabi. the company is taking on the likes of amazon. they are headquartered in boston. we begin on the challenges of facing international and industrial companies, such as ge, in an increasingly digital world.

david: when you look at the giants of the information technology space, amazon, google, facebook, and so forth, they really started in this new, digital way. and it is very hard for industrial companies that are used to doing things in a certain way, everything from technology to accounting, it's entirely different, and the culture is different. so i think it's very hard to do. and quite honestly, i think people still need manufactured products. and i'm not sure that it's a good idea for people making goods to try to pivot. carol: really who you are. david: you have still got to manufacture. carol: that's a good point. there are a lot of goods that need to be manufactured. david: they will have to change notably to be successful. carol: that was david friend, the ceo of wasabi. coming up, we hear from the andairman of bank capital

co-owner of boston's beloved celtics, steve pagliuca. that's coming up next. and this is bloomberg. ♪

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carol: welcome back to "best of bloomberg technology." this week in boston. i'm carol massar at the rose kennedy greenway. this week, rising trade tensions between the u.s. and china had market watchers on edge. and then on tuesday, we caught up with a guest who is no stranger to market volatility. steve pagliuca is the cochairman of one of the world's leading investment firms, baincapital. he's also the co-owner of boston's legendary nba team, the celtics. >> well, this has been a long time coming. we've had a trade imbalance for 25 or 30 years. and i think initially, when you had emerging markets, it was a good thing. it's lifted the whole global

economy up. i think over a billion people have come out of poverty because of global trade. businesses have prospered. but now at the time these markets aren't emerging anymore. it is really a time to rebalance. so it's a more fair system. that's what's happening now. carol: you have investments in china. steve: we do. carol: i am curious, our friend we had on earlier said china is not our friend. how do you see the chinese market in terms of transparency issues, and where they are positioning themselves against the rest of the world? steve: well, we've had a lot of success in the chinese markets. we have invested -- they just crossed over to a service economy. for many years, driven by exports and manufacturing. now it is a services economy. we haven't been that affected and won't be that affected by the trade issues. so, i think it's more of a global issue. if you think about it, $500 billion of goods come in from china to the u.s. and $100 billion goes out, so that's a

large imbalance. obviously, there should be rebalancing. and i hope rebalancing and not retrenchment. if we get into a long-term trade war, it will have negative consequences. carol: how do wecarol: rebalance with china? steve we need to rebalance in : terms of them taking our goods, having similar things on patents, protection of software. access to markets. carol: do you think we can get that, in terms of enforcement? steve: they've come a long way since the early days, and the financial service companies can take control positions in china. and so i think they realized to be on the global stage, they are going to have to have the same kind of rules as western economies, and we have to negotiate something to come to the middle. i think it is too important not to get that done. carol: these are two individuals, president xi and certainly president trump, who like to win, and are thinking about their constituencies back home. is that going to be problematic in terms of actually getting a deal done? steve: i think they're both

dealmakers and both strong leaders, and they'll recognize it's bad for each country to be in this situation. so i'm hoping that cooler minds will prevail. they are good leaders, and they are trying to get something good done. carol: all the market volatility we see, do you attribute that to u.s.-china trade negotiations, or is there something fundamentally also going on in our market economy right now? steve: there's more going on, the good news is we are at record low unemployment. that really puts the u.s. in a strong position. really not much inflation, as well. so, i think it's a strong negotiating position. the markets are probably as high as they have been in a long time. we have had an 11-year expansion so far. there will probably be some kind of correction or settling. right now, the economies are doing pretty well. carol: in terms of the companies that are under the bain empire, in terms of the u.s.-china

trade, has it impacted them to do anything differently in your portfolio? steve: all of the companies have looked at contingency plans in terms of changes to the supply chain. cost of goods most of corporate , america has gotten ahead of this because it's been going on for a couple years. as soon as this started to go on, our companies worked with our folks to develop action plans. if this happens, how do you make it work, economically? carol: they have not switched yet? steve: they are prepared to switch, and many have already diversified in terms of the supply chain. many other countries besides china have been involved in the global supply chain, and companies have the flexibility to shift those volumes. the companies are very quick and nimble in the united states. so they will get through this. i would rather not have the trade war. i would rather not have the tariffs. i would rather have it settled. carol: one thing we've been captured by is the uber ipo. right, and even the lyft ipo, but i think there are a lot of stories about what did morgan stanley get wrong in terms of bringing this company to market?

how do you see it? did morgan stanley overvalue the company? how do you see that? steve: we actually came out at the low end of the range. carol: ok. steve: so i don't know if i blame morgan stanley. i think it was a well done offering. but we have volatility with trade. we had -- we have a market that is volatile in general because it is at an all-time high. anything to do with trade or political tensions affects the market in the short-term. if you remember when google went public, it took a beating and went way down. facebook as well. so there is going to be some volatility in these tech offerings. i think they got hit at a very choppy time in the market. carol: i'm also curious about the general private equity environment and how you see it. there is a lot of cash. we talk about dry powder sitting on the sidelines. what do you think about valuations? steve: no question valuations are high. but i believe -- i have got a question on too much money

chasing deals in the 1980's, 1990's -- by the way i thought they were all true all those times, but bain capital has grown from $36 million in 1984 to $105 billion today and had very successful returns. our latest ones are some of the most successful we have had. why? it's because private equity really is a great business model. it really comes in and tries to transform businesses, and the model has proven to go global, help mergers and acquisitions, companies get more efficient. companies get new products. the whole world has changed in terms of private equity and the value that is being added by bain capital, which is founded on the principle of taking consulting skills and bringing those to companies to create great businesses. carol: what are the kind of deals you are looking at right now? what are the areas you are looking at that you find interesting? steve: we do it as a needle in a haystack business. that is how to stay out of trouble. 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.

but in the last 10 years, we've really become specialists, and we have always had a big technology practice. we've 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 weed them down. carol: what about the real estate that you -- you created a real estate unit last year. you wanted to raise a billion dollars. did you hit that mark? steve: absolutely. carol: do you want to raise more? steve: we actually -- it was a fantastic situation. harvard wanted to get out of the direct is this. they had a fantastic group, they really fit with bain capital, only three miles from us. and the team came over, we had harvard one day, the next day we had office space and they became bain capital. carol: so it worked well? steve: it was a seamless transition. they have focused on great growth segments in real estate, such as medical offices, college

dorm type facilities, biotech, which is booming. carol: baton here. steve: -- a ton here. steve: they're very successful and we're proud to have been part of the bain capital family. carol: i have to ask you about sports a little bit. otherwise people would yell at me. i am sorry you guys are done from the season. what did you learn? steve: you always learn is hard to have that playoff game and not be coming back because you think it will go forever. we had a great team. we had a great coach. the ball didn't bounce our way this year. the credit goes to milwaukee, who could win the entire nba. that greek player is incredible. the future is bright for us, we will have up to four first round draft picks. they had a good young crew and a great coach and general manager. the future is bright for our team. but today this time, the ball , didn't bounce our way in milwaukee. carol: that is the way it goes sometimes. steve: absolutely. i watched the end of the

toronto-philadelphia game, a long shot from way out as time expired. i had visions to my high school days of that happening to me in high school standing there watching that ball go in, and your season is over. it's terrible. carol: tell me about mr. irving, will he be back with the team? steve: we can't talk about free agents or any team moves. i would rather give it to charity than give to adam silver who is a fantastic commissioner but is strict on these issues. carol: that was steve pagliuca, cochairman of bain capital and co-owner of the boston celtics. coming up, we explore the competitive world of athletic apparel from reebok headquarters. this is bloomberg. ♪

carol: welcome back to "best of bloomberg technology" in boston. i'm carol massar. we spent some time with reebok, which is in the midst of a major turnaround. over a decade ago, adidas bought

the maker of the iconic pump sneaker for $4 billion. revenue dropped 3% in 2018 causing the company to cut costs even more. adidas is looking for reebok to expand. we caught up with the company's vice president of performance apparel. >> we are in the fortunate situation. we are part of the adidas group, and we have a very diversified strategy. carol: and you've been doing sci-fir a while, differ -- diversifying your supply chain. barbara this makes us less : dependent on the portion we're producing in china. carol: not so much of an issue. barbara not so much of an issue. : carol: having said that, china is an important market, and i'm curious as you innovate new products, i remember your sneakers so well in college. but you guys have made a commitment to being the 100% fitness and you are seeing growth dramatic growth in , apparel. talk to me a little bit about that. barbara: well, the fitness industry is not just about footwear, luckily for me. apparel plays an important role,

and specifically functional products and innovative products. one of the examples is this that we launched last year in august. we throughout our research and really talking to women, we realized there is a real problem, despite the fact there are a lot of bras out there. they're either feeling pain when working out or not really feeling comfortable, so they don't work out at all. so we've reached out and really created the first innovative bra that combines a second skin feeling with the support you need while working out. carol: i have to tell you, you actually brought a model of a thick, clear solution. that's really the chemical or compound that makes up this bra. barbara: yes, correct, it is a sheer thickening fluid. stf.ll it when you press it softly, it's fluid and elastic. but when you approach it with force, it actually stiffens. carol: how much of what you are

doing in terms of apparel -- it is not just about design, but as i look around me, i see that. but it's more about technology, different fabrics, really exploring that to produce new products. barbara: i'm in the industry for 25 years, and i have to say over the last 10 years, there's been a gigantic leap in the innovations in apparel. and a lot of it is because of the manufacturing capabilities that we have today, but also the innovations that we're seeing on the fabric side. and it is our job is to find out what the consumer really wants, so everything starts with the consumer, and then we need to bring it back and find new ways, address it by creating new fabrics, finding new suppliers, or in the case of this bra, going outside the industry to find a solution. carol: does that mean you're working with a lot of chemical companies or companies that are creating different types of materials? when we all started working out, it was similar or the same

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

bigger wellness trend will be there to stay. and consumers are not only looking for products they can work out in, they are also looking for product they can wear the other 10 hours of the day while they are maybe out with their children on the playground or even commuting to work. carol: living in those close. -- those clothes. we started talking about china, and you had your first fashion show in shanghai. you created a creation center in shanghai last year. it's an important market to you. when you're either selling to china or selling into europe or some other markets, are you designing specifically for that customer? barbara: so, we are looking very closely into the regional needs, and it may be as simple as creating products and making sure we have asian or japanese sizing available, but we're also looking, specifically, for big markets like china into what are the product needs specifically for these markets.

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

carol: welcome back to "best of bloomberg technology." i'm carol massar in boston. before last year, china imported about 40% of u.s. recyclables. however, a recent import ban on more than two dozen recyclables has researchers estimating 111 million metric tons of plastic will be left with nowhere to go.

students at m.i.t.'s computer science and artificial learning lab have developed a robot that can identify and sort recyclables. it's dubbed "rocycle." >> for more than three decades, china has been one of the world's biggest importers of plastic waste. that's changing. last year, china closed its doors to over two dozen foreign recyclables, sending countries scrambling to adjust their recycling system. before the ban, china imported about 40% of the united states' recyclables. and researchers estimate the new policy could leave 111 million metric tons of used plastic with nowhere to go. now one team of researchers at m.i.t. is looking to sort through the pileup. students at m.i.t.'s computer science and artificial learning lab have developed a robot that can actually identify and sort recyclables. dubbed "rocycle," the system includes a soft teflon hand that uses tactile sensors to detect the size of an object and the pressure needed to grasp it.

from there, it determines if it's made of metal, paper, or plastic and establish a motion path. as it stands, recycling centers, -- recycling centers are tasked with the costly task of sorting waste and this -- approximately 25% of all u.s. recyclables are so contaminated, they must be sent to landfills instead. the team says rocycle can tackle the problems of today's single stream recycling systems. rocycle also provides a safe alternative to human labor. the device can be punctured by a needle 20 times with minimal damage. one complication, replicating human intuition is no easy feat. while rocycle can detect stationary materials 85% of the time, its success rate drops 20% when objects are placed on a moving conveyor belt. meanwhile other companies are building their own sorting robots, using camera and computer vision, and estimate the technology can cut recycling

costs by as much as 50%. reducing contamination is a top priority for the united states. could a robot such as rocycle be a step in the right direction, or will america have to find a new dumping ground? carol: and we caught up with the director of the m.i.t. research lab that created the recycling robot you just saw. >> just think about the fact that 20 years ago, computation was a task reserved for experts. today, we depend on computing so much, we don't even notice how we depend on it. in the next wave of technologies, the ai machine learning and robotic technologies will do so much more for us. carol: like what? like what? we constantly hear that and we have been hearing that for a while. >> let me give you examples from rocycle. imagine garbage bins that will take themselves out. imagine automated infrastructure that will ensure the garbage is taken away. and systems like rocycle enable

the correct sorting of all that garbage so that it's environmentally good. imagine fresh produce that shows up on your doorstep delivered by drones. imagine intelligent systems that ensure you optimize your life to live well and to work effectively. imagine transportation systems with no accidents. imagine personalized treatment plans. imagine all these possibilities that remove the routine work from us and ensure that we have time to think critically, to think creatively. carol: what do you say to people who hear this and say this means , the replacement of so many jobs out there? is that where we're going, or is it more the case of robotics working side-by-side with humans? daniela: so i hear a lot of

anxiety and concerns about ai. i have worked in the field for many years, and i want to assure everyone that the concerns around an ai robopocalypse are greatly exaggerated. but we have to understand the fears of those who are not sure what the technology can do. and to start understanding that it's important to provide people with alternative viewpoints. perhaps to see things differently. and part of understanding that ai and robotics are tools. they are just tools created by people for the people. and like any other tools, they are not inherently good or bad. they are what we choose to do with them, and we can choose to do so many things, like removing road accidents, offering personalized medicine, ensuring that people can communicate no matter what language they speak. carol: but how soon before we start to see a trickle of the impact of ai and robotics on our

society, but how soon before we really feel a bigger impact? daniela: we already have tremendous impact because with ai technologies, medicine is getting more precise and personalized. we can see the potential of optimized transportation systems that deliver goods and people much more efficiently. and in the future, we will see so much more. carol: you guys work with so many well-known companies that certainly are familiar with our audience, toyota, google, ibm, all openedthey have up major facilities in cambridge in the past few years. talk about the collaboration between academia and the private world. daniela: it's really critical that academia and the private world get together to solve some of the world's greatest challenges. by working with companies we understand where the pain points are, and we can direct the

science toward those pain points. we can also show companies what is coming around the corner, what the technologies that disrupt are coming. carol: it's interesting you say that because i think about self- driving cars, and if you go back -- i don't know, five or so years it was not until tesla , came on the scene that people took it seriously. they really kind of pushed everybody to move forward. what are some of the technologies that we are not talking about much but will be a big deal around the corner? daniela: well, around the corner, we'll see a whole different category of robots. today, most of the robots we see are inspired by the human face, they are either arms or humanoid or even robots on wheels. in the future, we will see robots that work side-by-side with humans. robots are made out of soft materials, robots made of a variety of materials, whether it is paper or silicon or plastic. [speaking simultaneously] carol: is that where it moves towards? daniela: more variety of

machines, and more variety in the scope of the carol: so what are you doing, as i am walking around here seeing students work in groups, what are you doing to prepare students for what is needed for the future in terms of the world of robotics? daniela: we're offering a wide range of important classes. in fact machine learning is very popular these days. last year, over 700 students took machine learning. we're offering free classes online, and we are creating new disciplines and academic degrees to train instudents technology and something else. for example, we just launched a degree in computational urban science, where we're training students in technology and policy. carol: that was daniela rus, director of m.i.t.'s computer science and artificial intelligence lab. that will do it for this edition of "best of bloomberg technology," from the rose kennedy greenway in boston. and remember, bloomberg technology is live streaming on twitter. check us out @technology, and on

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paul: welcome to daybreak australia. i am paul allen. shery: i am shery ahn. kamaruddin. sophie we are counting down to asia's major market open. paul: here are the top stories we are covering. the dollar strengthens as scott morrison cools off the win. they are seem as the better economic bit. thes in india, suggesting