but the challenge now is that our energies have dropped off. it had funded more than 70% of basic research. 70%. most of that went universities and university base federal research centers. since then the government's share of basic research funding has fallen from the 70% down at 57% and that is a trend that must be reversed. the government must take an active role to protect the internet shot -- intellectual property their patents, copyrights, and other enforcement mechanisms. after all, intellectual property in innovation and keep the entire economic engine churning. when companies are more

confident their ideas will be protected, they have more incentive to pursue offenses to push the cost down and with that, employment up. . .

12.8% of u.s. college graduates, 12.8% were in fields of far fewer than of a 44% of foreign students in the united states majoring in stem field. significant economic competitors such as south korea with 26.3% and germany with 24.5% are on a long list of countries producing a much higher percentage of stem graduates in our 12.8%. that must change. and then with a third area of investigation of investment that

we need is in infrastructure. the infrastructure needed to support a modern economy will rise on publicly provided resources. this goes beyond traditional infrastructure like highways, lines and ports though those developments to help business compete by opening up markets and keeping costs low. but the report finds we must do more to grow a truly modern electrical grid with a broadband internet access in both urban and rural communities. here in america 68% of households have adopted a broadband and almost eightfold increase since 2001. and get a 68% adoption rate still leaves about a third of american homes cut off from the digital economy.

it's worth noting that in particular small and medium-sized enterprises have benefited hugely from the internet. those with a strong online presence created more than twice the number of jobs as firms not on the web creating 2.6 jobs for each one eliminated. so education, innovation and infrastructure, these are the areas where we cannot afford to cut the role of government. indeed, investment in these areas will lead to a more competitive economy and higher growth. unfortunately, this report unearths the sad truth of that federal funding for basic research, education and infrastructure have simply failed to keep pace with economic growth and the

innovative performance of the united states has severely split during the past decade. so they report solutions. to reverse the trend reports the following actions are necessary. we must increase and sustain the levels of funding for basic research by the federal government, and in addition, we need a simplified enhanced corporate r&d tax credit. the one that the words firms for undertaking additional r&d, not just activity that would have occurred even without that credit. and we must follow president obama's in need the support for the r&d back to a level not seen since the kennedy administration that's reversing the

decades-long decline in federal funding of that basic research. and as to the education let's hope we must invest in the skills and knowledge necessary to compete in an increasingly competitive worldwide economy where other countries are now surpassing us in the percentage of young people with college degrees, something as simple as that. ongoing and new administrative initiatives are addressing these challenges by making colleges more affordable, spurring classroom innovation at all levels and expanding the size and quality of teacher ranks to succeed in the global economy must encourage students and workers to the stem the education. and then for infrastructure it is clear that we have to invest

in 21st century networks including fostering access to high-speed internet for citizens and businesses no matter where they are located. and the federal government must continue its stride forward towards a smart electricity grid and a robust network of broadband internet access. and then a fourth area of economic competitiveness mentioned in the report i think definitely deserves our attention. a flourishing manufacturing sector in the u.s. is crucial to our competitive strength and will continue to be a key source of the economic growth and job creation. manufacturing pays higher than average wages, provides the bulk of u.s. exports, contribute

substantially to the r&d and protect national security. manufacturing has ruined our economy isn't going away anytime soon. in 2009 manufacturing made up 11.2 per cent of gdp and 9.1% of total of u.s. employment directly employing almost 12 million workers. manufacturing is also the biggest source of innovation in our economy. over two-thirds of all industrial r&d in america is done by manufacturing. without a small manufacturing base we simply can't create enough good jobs to sustain a strong middle class. we cannot be a strong country if we build it here and sell it

everywhere we can become the world's unquestioned greatest economic power yet again. so conclusion, this administration does not believe government has all the answers but it does believe it has a role to play in creating the conditions that make inspiration, innovation and invention more likely to happen. this is what the private sector needs to grow, create new products and services and most importantly, generate jobs that offer good wages it is the magic that is most important. of long-term job growth will only occur in a world where entrepreneurs and researchers find it easy to pursue new ideas

and turn them into new products and successful businesses. these are the building blocks for fulfilling america's fullest potential and the conclusions and competes act report can make that promise a reality. i had hoped to be able to take a few questions. i regret unfortunately i need to leave immediately to attend a meeting over at the white house. but i am delighted and leaving you the very capable hands of my deputy secretary rebecca blank who live understand committed previously and also to aneesh chopra from the white house with us this morning. thank you very much. [applause] >> i would like to welcome to the panel sarah who is our

executive vice president for policy as well as aneesh chopra to talk about the findings of the report in more detail and i think they will be able as well. [applause] >> first of all i should say for the people standing in the back we have vacated seats of in the front so what we encourage anyone who wants to come up and make themselves feel comfortable. >> i'm going to pick up where i left off in my seat. >> why don't we do some rearranging of seats these are folks who need very little introduction but let me just

remind us we have today. as the secretary mentioned, the acting deputy secretary of commerce becky plank is here. she arrived -- [inaudible] >> try this. there we go. sorry about that. my apologies. becky was previously the dean of the public policies with the university of michigan and i had the pleasure of working with her when she was previously at the council of economic advisers to president clinton. sitting at the far in this is aneesh chopra, currently the chief technology officer of the united states also assistant to the president and sissy director of technology at ospp. previously the secretary of technology for the commonwealth of virginia and he was in the private sector as well as the end of his record company.

finally, we have james minika. he was one of the members as we mentioned here earlier of the secretaries advisory board and he will be as a part of our advisory board fair at the end of this panel as well. what we are going to do is to kind of keep things moving i'm going to ask just two questions to each of the panelists and then we are going to take a two questions from the audience and then to allow people to have a more wholesome conversation we are going to fight every bhatia in the room so that different folks will be at different members of the advisory committee not only these folks with the folks who are on the advisory committee are here with us will be in different corners available to talk about the key elements of the strategy that was developed here. let me start with you though. today's job day and we have good news on that. the conversations that we have about competitiveness and the

the conversations that we have almost every day all the time about jobs and wages and economic opportunity and what is happening to the middle class america. those conversations seem to have been in different rooms. they don't always get very well connected. but i think the competitiveness we are talking about here today are related to our economic opportunities in the middle class. how does the report talked about that and how do you see this? >> i agree those conversations took place in different rooms and they shouldn't. in many ways they are closely interrelated. let me run the causality both ways. on the one hand if you don't have a competitive economy, with strong and stable economic growth, you are never going to have any chance to address the any quality problems or the current middle class. you must have a competitive economy in order to address some of those issues. on the other hand, if you don't have some degree of stability

and promise of economic success towards people in the middle class or people in the lower end of the income distribution you have a great deal of difficulty generating the political support for the agenda that this report lays out on the competitiveness because if people do not see that they are going to gain from some of the investments we talk about in this report if they think they're going to go to a different group of folks they are not going to support these types of investments. so i think it is. the other issue here is the education issue that one of the things that really concerns me about the look bifurcation is in terms of inequality is that there are large numbers of people who just don't quite see the point of the college education much less systemic that we talked about here in science or engineering or technological fields and fuel that that is to capture, but that is someone else that is going to be doing that and one of the things that a strong competitive growing economy does is give people incentive to

capture on to the growth to see what it is you get by going to college by being serious about the work that you do and in particular pursuing some of the faster growing fields which are going to lead to high technology fields. >> if i could add one other comment to that to reinforce what was just described, there is another straightforward reason why raising the income actually matters which is it helps address and drive the economy. as you keep in mind the last two decades something like the u.s. gdp growth has come from consumer and household spending. so if you take because of the of those households and consumers spend most of which lives in the middle class you put a big dent into the advocate demand and drivers of economic growth in the u.s. economy, so it really is important. >> that's a good transition to my next question which is about american competitiveness with the other countries. the secretary went through we

are kind of used to hearing these days the statistics about american of being a top of what ever list of the competitive measure you want to use. how are we doing relative to others and more importantly are we as an advanced developed economy that is further ahead in many ways to be on the downside of the rankings or do we have a chance to be able to sustain a high rate of competitiveness even as other countries are rising? >> it's important to keep in mind that if you look historically from the end of the second world war the u.s. economy has been by far the most productive economy and most attractive economy on the planet. i think that is still the case. however, something has begun to change which is others have begun to get better as well. so, and actually that is a good thing for the economy because when you take people out of poverty and prove that is a good thing but it puts pressure on the united states to stay ahead and i think that sort of becomes

important to keep in mind of all of the factors that affect u.s. competitiveness or any country's competitiveness where we stand on each of those and i think there are many of those that emphasize these really matter. number one, you always want to have an economy that has the most productive and globally competitive countries invest and participate in your economy and beat you down the path on how you make that attractive, how do you think that the corporate tax reform, how do you think about regulation, etc., to make sure those companies participating and investing in the economy. member to, you want to make sure the you've got, you know, a disproportionate share of the innovative and entrepreneurs in the economy. so how do you make sure that is the case? some of the current cases on education and so forth. the third point which is you want to make sure you've got the most skills and the most productive work in the economy because otherwise you get reduced to the debate and the fight around who has the cheapest labor but as long as you have the most skilled and

most productive labor this can help to compete. and then i think a fourth and important point is you always want to make sure that in fact the globally traded sector, i'm talking about manufacturing and sectors open to the global competition, you have those comments you have the most competitive and the most innovative sectors in that forum and this takes us on the path of the manufacturing particular but there are a few others. and then last, and i think we made this point all the investors sure you also want to have the biggest reservoir of research and r&d because that creates a long-term foundation for competitiveness and allows you to compete. so if you look at each of those i think you suddenly realize that other countries have begun to get better and almost every one of those points. so the question is how do we get back to where we are waiting as

a country on each of those. that is much of what is in the report addresses that. >> that's terrific. >> if you don't mind, let me do a case study on one sector to give you a study for benchmarking and the impact on the criteria james mentioned. let's take one year less. america invented the wireless industry, and for decades you've dominated the industry. now, on some measures, one could argue there are high year adoption rates on the technology and some of the asian countries. so one would look at that and say okay we have to choose our adoption rate if you're going to compete but if you peel back the onion and think about the dreamworks mentioned, let's take this and its alliance. america used to invent the underlying technologies that fuel the wireless revolution. you'll remember in your line to the combined bell labs. i grew up in jersey and i worked in the community and there is a shadow of itself to this. if you look at the actual

manufacturing of wireless communications infrastructure not a single one is headquartered in the u.s. anymore. not one and because of the collapse of bell labs and the private sector investments in some of these are when we talk about r&d it's not clear where the resources are to invest in the next generation of wireless. when i talk about the benchmarks of korea or other countries coming you could argue that dhaka we have a current model for how wireless operator you know what, america will also be the first country to have run out spectrum when there is a part dillinger this opportunity or whatever that saying. to say which country in the plan that will best understand how we try scarce resources spectrum into one of abundance for technical innovation and you would say homeland, united

states. however you would say where is the fuel that would compel or propel that reality to happen? there's not a sycophant private investment and there isn't as much in this case of wireless particularly not a lot of u.s. current etc funding in this area. in fact some of the ironies and some of the professors in the studies say we are getting money from overseas companies to fund our research. as of the president did something very interesting and i would argue innovative. he said look, there's bipartisan consensus to promote a kind of market making mechanism a voluntary incentive option that would allow us to repurchase some of the existing spectrum that may be used for different economic purpose that has better value than the mobile program. as we've got this bipartisan consensus moving that says let's get some tools in the hands of sec to offer some spectrum and that would throw off more money

that is not in the legacy budget. let's take a portion of that to invest in wireless innovation so that we can in fact expand the american capacity to achieve these opportunities and create the new industry associated with spectrum policies in the world of sharing in the world of capacity constraints. it's an amazing policy that has had a bipartisan support increased in the senate and we are working towards that now in the house. a policy that actually reduces the deficit, invests in this wireless future and makes good on a policy objective to use the one your list technology to help the first responders, a win win in terms of the economy and in terms of the operational needs and let's see if congress will make a good and deliver on this but i think that is an example of the story of where we can lead again in areas where we have had historical promise. >> let me ask you because that is a perfect segue. that story takes one -- i think

of it as a kind of piece of our infrastructure. >> it is a piece of our infrastructure and so the federal government has a role to play in ensuring just as we did with the highway system it's a different kind of role. we are not building it all ourselves but we are going to have to make sure that infrastructure gets built. the report lays out for other areas in addition to that. two or three other areas. the next traffic control, cloud computing smart grid. each of those are examples. talk about not so much where we are technologically on each of them, but the mechanisms by which the government plays a role in the 21st century way to ensure the public and private sector together build the infrastructure that we need. >> i will do a quick lead on these because i could go on and on for hours. let's take next-gen. what's interesting is what the government being an effective and efficient source of making the judgment. so the airline industry has already made investments in

essentials the gps navigation. so you can land planes. today plans planned in a choppy week. degette to 35,000 feet and wait, hang, travel around the airport, whereas the technological capacity now exists on almost all domestic airlines to push and you can just glide with gps navigation tools. unbelievable efficiency in terms of reducing our dependence on excess jet fuel you can save money on fuel, reduce pollution on all happy and goodness. it is permitting process for each and every route for us to say okay if we are going to change the landing we need to make sure that it meets all of the environmentalists and policies for this and malaise. as we made a commitment, the president said we need to make some acceleration. we included next-gen on the 21st century permitting efficiency

initiative. there is a dashboard on the white house website where we have done a dive on the metroplex to say we are going to cut in half the amount of processing time to achieve the permits so that we can accelerate next-gen. what is fascinating is it is of the private sector investing we have to do some of our legacy navigation come to met with the private sector no net or indy 500 if you will to get -- i mean there's a little bit, but no significance if you will. it's private investment. the tool is permitting. on the issue of smart grid, we have an unbelievable opportunity. by the end of the recovery act investments we are going to double the amount in the nation. we will have the data driven infrastructure in the nation's electricity grid but allows them to have the internet properties of bringing in other sources of energy and managing them any more efficiently critical for the future as we see it in reducing dependence on foreign oil. there we did have some initial capital we put about four and

have billy and recovery act, but overwhelmingly the business case for smart grid relies on state regulated for utilities and the judgment in the policy work is let's share best practices. what works so states can make the best judgment in a collaborative way to accelerate these investments and you are seeing now a dramatic increase in the number of interest from the states to move forward in the world smart grids so there is about collaboration as a policy lever as well as anything else and finally, you mentioned the last one was called computing and the the id is unbelievable the government can lead by example. you can be a lead purchaser. we shifted into the cloud first policy and we have embraced cloud computing and you'll see a lot more of our activity a lot of this is talking about the death as the infrastructure and we are both potentially by year's, so seeing some of the new market opportunities as well as suppliers of data for those of you that are going to read the report, data is the rocket

fuel for a lot of this it's the new infrastructure. who has the most of the nation's health care system on the nation's educational system? environmental system. you've got it and we are releasing it in machine form so that they can grab the the debt and build valuable service. >> what's the role of the federal government? i think historically when you look at the major technological innovations that have really at the instance country almost all of them are involved some mix of federal and private so if you look at the real world yes it was the private sector somebody build them but there was a huge amount of federal subsidy in this and with the canal system that preceded it if you get medical led advances it's a huge investment in research according to the universities and research labs succeeding directly into all sorts of private sector youth and what you're talking of doing here with new innovation is it is radical the top of the innovation, but it's not radical what you are talking about what is the role of government, the

role of government has always been to step in and places where you need funding and public goods investment of the sort that the private sector of the stuff front are the technologies will not make. >> to talking points. one on something that aneesh chopra said, for those not in the a demonstration and live in the private sector and other countries, one of the things that is important to competitiveness is regulation and other regulatory environment and i'm not talking about changing regulation but simply making them go faster. if you look at that are permitting or having approval for some of my innovation board members here feel very passionately about this that's one of the things where the u.s. has kind of slipped. you can get approval for things on the same standards in other countries might and i think that has to change. that's one thing. the other thing that is emphasizing is this idea that the federal government or the public sector can also use a lot

of the technologies to transform itself. we know that healthcare and education and the not so productive in the economy we've had a debate on these but in many ways the government can also be a customer are pleased and absorber of the technologies and a way that stimulates the growth estimate of one to ask you to follow on that point a little bit. so, last year mckinsey global institute did a report on job creation in the economy it's called an economy that works and it talks about the opportunity to job creation in a particular sector in the economy mentioned health care, leisure and hospitality and tourism, construction, retail and some particular some sectors of manufacturing, things like chemicals, transportation and some commodities and the like. and other countries have this

very explicit focus on sectors of the economy. america has been traditionally i think and remains reluctant of the investment strategy per say but there are ways you can give that the important sectors of the economy and ensure that the infrastructure for the competitiveness are in place. so i'm curious how you think about the opportunity for this analysis to play a role in a competitiveness strategy. >> well i think it is fundamental because the competitiveness question as well as the growth is actually different. there are sectors that will be going for the future and look very robust and others say they don't look as robust so if you are trying to solve for jobs which is a very important issue to solve for a think it's important one of the things on the job question in particular which is i think it's a mistake to think of the jobs issue has

just driven by the recession for the weak job engine even right up to the crisis or the recession's end is already the lowest job creation in the decade so it's important to recognize on the changes that have occurred in the economy and a lot of those have to do with what is on the sector level and skills mismatch and the sectors where people have skills there's a mismatch. there are mismatches between what the sector's need in terms of skills and what's available so that the education issue. there's also mismatches even geographically where the jobs have been to be is not necessarily where the people actually are. one of the things that is quite striking about the u.s. economy, we talked a lot about it being a very hot flexible mobile workforce. not so much anymore. used to be and that is true if you go back to 1945 into the 90's that was certainly the

case. one in five americans moved to the cities but never got so much anymore. it's more like one in ten. etd the devotee level of the skill level and even at the regional and geographical level should think how we solve for that. what is interesting is the déjà with that germany comes to mind. it's a lot easier to get the market information about what skills the companies are hiring for, where the job sectors are growing, that information is more available than it is here and what the outcome. it's quite striking when you look at this recession for example on a ggp basis, there's a deeper recession than we did actually. and yet there are good jobs in the same period with less infrastructure but on the basis in germany in a lot more jobs.

>> on the notion that the u.s. is on the sector issue if you constrain your view to the top down picking winners and losers absolutely we would not go there. however, i think what you'll hear in reading this report is in a bottom-up vision you can be very thoughtful about the specter specific problem but opportunities shall allow me to share the altar example for purposes of this discussion. the american health care system today is financed overwhelmingly bill on an incentive structure that encourages more volume versus one that emphasizes a value for dollar spent and therefore the american health care industry has been designed to reinforce that which has been in sufficed to do. the outcomes or the value one could unleash some of the

productivity opportunities james has written about in the past. i hopefully believe this will be the first nation on the planet to tackle what does the health care infrastructure or the economy looks like in a world of incentives about comes and value and you will see a lot more products and services that could also be exported around the world therefore it is an industry of the future. you might find that a sector. what is it we can do in the bottom of philosophy what's 20% for infrastructure? we have already doubled the doctors and hospitals in america that are using electronic health records and we are going to rock and roll forward because the act had even more i would call the infrastructure investment. number two, we acknowledge that if you want to get the value instead of volume this is a question of new readers and denominators. we don't know what we stand for how do you measure outputs, how

do we measure out what's? not well. what happened in the affordable care act? one of the most powerful provisions of the affordable care act in powered medicare to release its data for the purposes of allowing the private sector to publish quality reports on hospitals and doctors for a whopping 50 grand. did you see it? it's pretty cool. for $50,000 of company private sector to consume that data to help us define the outputs in hospital care and medical care, and that has never been done before. so now we have data is infrastructure, doctors and hospitals have i.t. systems, and a whole new industry ready to go

to combine a and b to new services based on video chats between doctors and patients that are reimbursed in a different way, tax message alerts to make sure mom, granma has taken her meds. the doctor said we play a role offering of the capitol. in november medicare and cms announced a 1 billion-dollar innovative challenge and increments of one to $30 million, so small grants bottom-up, start of america like a kid entrepreneur is moving. if you have a breakthrough idea that will shift to the health care system to value over volume and you need that initial kick, welcome. come on and. we are going to bring applications and and by march of the first drongen of investments out to see what that future will look like. that is an example of bottom-up winning strategies in line with

everything you will read in this report coming and i believe the net effect of this will be that the products and services that we invented this new value driven health care system will be exported all over the world and lead to dramatic increases in jobs and by the, will bring our health care cost to triet the capacity for other sectors of the economy. so when we win if you put this together. >> so -- >> one of the things that is quite a striking -- >> we have a successor when you're done. >> i think it comes down to four different kind of things. one is what i would describe as a smart policymaking. one of the things about smart policy braking is recognizing exchange. as a country we now have to compete for all kinds of things, talent, labor, all of that.

second, recognize the kind of public-private partnerships aneesh chopra is talking about because of the ability that can be taken advantage of bye entrepreneurs and innovators so how do you open that up? the last thing is just investments, straight up. so many areas where there are market failures investing in the r&d where no one knows is going to do it so the federal government has to do it. how do you why did defy those areas when you get into the smart investment? >> the federal government plays a role in the data, the infrastructure tools that the private sector needs as well. >> i want to ask you about one of those sectors the secretary talked about in his remarks of the manufacturing. in the mackenzie jobs report from last year when they looked at the potential for the job growth opportunity to kind of meat we have to create another

22 million jobs to get us back to where we were. manufacturing does on the one hand in mckinsey's viewed does not look like a great growth opportunity, but whether it remains a strong, stable important sector of our economy is sort of an open question to continue to decline or if we focus on key areas can remain with a different protectionist mix of manufacturing and important part of our economy. talk about what this report has to say about manufacturing and how it would make the better of the paths become reality. estimate it's quite clear that we need some manufacturing to the economy and we could argue how big it needs to be, but it's an incredibly important sector. the secretary noted it is one of the major producers of exports and its generally high wage sectors so if you were worried about the wage and inequality manufacturing looks good with

higher benefits and all sorts of things. so, the question is what is the future how do you move forward to stellas manufacturing? on the one hand, productivity has grown enormously over time and that is part of the reason shared jobs. everyone recognizes that but it's also clear the forces james talks about where other countries have gotten smarter and faster and more competitive house also affected manufacturing so in particular in 2000 there were a number of very good economic research studies that simply say we have lost jobs by being less competitive and some other areas in the manufacturing sector in other parts of the world, so why is that a problem? because it is a good sector is also a problem because if you care about innovation, and i think all of us believe that a long run ideas, innovation, smart people are what's going to drive this economy. in order to innovate you also

have to produce. you cannot imagine having the research and development in the century and not having the facilities that lets you produced a prototype. there's a reason they are located very close to the production facility to one experiment, they want to see how it works in real time and then go back and try again. so to be a top line innovator you've got to also have real production facilities here on the ground. now that doesn't mean the u.s. needs every single sector in manufacturing represented here. clearly there are some areas we are less competitive and less competitive to the damage and we do want to talk about what are the sectors that we need to compete hard on and keep in this country? you go to the sort of analysis that james is doing looking at what are the skills needed, what does this do, how does it mix with the other cluster of activities going on. in general it is the high your technology, the value added

manufacturing that i think clearly this country wants to capture and maintained in a long-term stable basis and dillinger that goes right back to the things we've been talking about. you have to have the infrastructure to ship goods and it's great to be skilled that group of industries in this century's need and you've got to have the innovative capacity is of the building blocks of universities and research and other places that manufacturing takes and turns into products. >> i want to close in this group open to anyone i want to talk briefly about r&d and inspiration to the manufacturing more generally. you may want to talk about the public sector r&d and then private sector r&d. and i will do a brief cap while i'm at it. this afternoon we are releasing a report by laura tyson who is a senior fellow share and has and a lostroh of career but is a

member of the president's job council which she and her co-author have analyzed and its centrality in creating these public benefits that come from larger public benefits and encouraging private sector r&d investment and so we can all look for that on the web. the tax credit is one of the pieces that is mentioned in this report. just talk. >> the report goes deep on this but i will just share from the i.t. standpoint there is no question that if you look at the billion dollar segments of the i.t. economy nearly all of them originate with some federal investment if you look at companies like google bourn out of a grant on the libraries or the work on the browser, so

nearly every segment of the i.t. economy originates. berkeley is a beautiful chart that maps back which of the keys of segments of the billion dollar industries and i.t. originated from the federal r&d investments of the category continuing that engine to exceed basic activities does have in fact over time and this is the long-term point james made an impact on the economy we have applied benefits and no question in anyone's mind that darpa has been a resource for the benefit of the work they are doing in the internet, gps. you name it, these technologies were very much critical and were guided and attracted by the wonderful work that darpa which is why we see the president so committed both in terms of investing in areas that are already in the startup years generated significant capital

fell one investment because they already had in some of the key milestones. so the applied peace is certainly there and in the third is the tax credit policies he probably should comment more on that, they have a direct report. so in the basic area we've seen direct benefits especially in i.t. and areas of the applied work and the spillover and then i think the tax policy. the president laid out the very ambitious goal to get america's collective public and private investment back to where it was and exceeding in many cases investments he's been very committed even in the difficult fiscal climate you always know in the president's budget we always privatize the research and development investments based on this evidence. >> the only thing i would add to that initiative is long-term and again the fact the institution as long term where you tend to have the market fell years so i think that is very helpful

because it gets companies to think long-term but it's important to recognize when you think about long-term r&d especially our, i think blank made the point it comes back to bill batres and others will to get bands and build these amazing interesting companies and that long-term really happened in the government labs and universities and when companies have been given the right incentives to think about the longer-term much more than they otherwise would that is where the rule comes in as they normally do. >> great. with that i think what you're going to do is we have a few minutes for questions from the audience. please if you would wait until billy comes to you with a microphone. i will call on you. and i will also ask if you want to identify your name and any organization that you are with. so, why don't you come back here first. first, the woman with the vest.

thank you very much. >> i am a fellow and math and computer science teacher at thomas jefferson science and technology and i am jury glad to be here but i do have a couple almost concerns. i'm gerry fink full the report talked about education secretary price and brought up the importance of educating our youth for the work force of tomorrow to have the technological skills. plan also very concerned because that even the report says more than half of the jobs are computer-based. i met one of like five tie school's most don't even offer it and that is a real problem when we talk about the skill set and the technology in the schools today. >> without any doubt the president has been deeply committed to stem education, and i would break down stem he wouldn't use these words but i

would. there is a strategy and there is an exit strategy, and "sm" i wouldn't cut regulated but science and math as the core standards and so forth, but "x" is the policy equivalent of the wild west that is to say there are no national standards in some cases pockets but there's an opportunity for innovation. so what you are finding in the policy area is that we are very, very aggressive, we are leaning forward on the whole learning technologies paradigm it's like the president delivered a speech at the academy early in the year we envisioned a world of dramatically more uses of technology in the classroom and the incorporation of technologies as a learning tool. and by the way, there is a future here that you don't have to have a ph.d. in physics in order to begin working on coding. in fact now there is we just had an even at the white house yesterday celebrating all of these summer jobs we are going to provide for young people.

they are countries offering the course is how do you build iphone applications and android applications and so forth that will allow folks in school to be able to play and tinker. and so you are seeing in the investment innovation fund at the department of education opportunities for schools to promote new curriculum emphasizing stem is a key priority in their evaluation criteria but in addition to that we are thinking about how we bring the principles of gaming. one of the things you learned from the industry is that every single interaction is a assessment data which the companies use to make better judgments. if you look at our ability to assess a child's performance in school you get the letter greeted the end of the year if you compare the data file on a gaming assessment which is mb verses the two kilobits of numbers on what we know about a

child here's why think that you are going to see a couple points on the president the stem initiative more broadly that is encouraging innovation in the "x." you're going to see more investments in areas that think about the gaming and the other kind of learning technologies infrastructure which is launched as a promise and then you are going to see a lot of these collaborations in the private sector to bring the new training programs into the classrooms, into the career and technical schools, and i think that is an area of a great opportunity and progress. >> terrific. we had here of 2000 and then in the back and i'm afraid that's all you can take. >> faculty at the johns hopkins business school and a co-founder of the social media company that's focused on hospital physicians social networks and an applicant for one of those challenge grants coming up. two questions. without the structure of that

kind of program, wouldn't it be better from a policy point of view instance of the billion dollar tranche now and coming up in about six months if there was a way to make it more even out over time media is a quarter of a million dollars every three months and so as the innovations pop-up especially in i.t. where things can happen in a matter of months you can have a more even cyclical process so that question one. question number two after we win one of these folks are going to be hiring the savvy nurses. a ph.d. in computer science and algorithms. how do you address the fact that these other countries whether it be singapore that has huge investments in the community have these deep skill sets you're not going to take someone who just lost a manufacturing job and put them overnight in an i.t. intensive job so how do you take the middle part of america that maybe didn't have that background that some were fortunate to get and give them

what they need in order to be able to do 21st century high and high value creating jobs. >> go ahead. >> first of all of read it to become majority of the research we do doesn't come this way. it comes by supporting people, labs, university, but longer-term support so folks who have a good idea to mauro have the money that they need to try to go and pursue it so i do think that the majority of our research does resolve the problem. the new ideas pop up quickly, and we've got a structure that addresses that. so, i wouldn't worry about that particular issue. islamic this is really important to. the reason this particular question is being asked is it isn't the money the innovation center is awarding that matters in fact i would argue it isn't relevant as much. it is the policy tools that say if what you experiment is needs to a new reimbursement

methodology that proves the quality goes up and cost goes down you can change the regulation policies of the that reimbursement scales. indeed supply references and basic r&d at all. it's basically seeding reimbursement pilots that what the evidence cummins skill to change the medicare reimbursement for malae and help us create beckett conditions for a better economy. let's just see what happens in the first to launch. in the recovery act we funded a series of community college programs that are all open source so that now dozens of colleges around the country are training what you would otherwise have called, you know, middle class americans and other sectors. you can be a metal >> caller: utter in as little as three months. i'm understand you can't be a data scientist but there is a range of jobs that are going to come out of this new sector and the fact that the grants in particular look for those so

that kind of investment in the infrastructure was critical for the programming of the health of 80 initiative in general. spikelets give everyone a look at stem understand it's not just when you do it call pledge your age 20 is what you age five, six, ten and 11 that matters and in that sense working on the stem is in a matter of the federal policy its state and local and happens in families and communities and this truly is a national partnership if we are going to work on these issues. >> in the l.a. all in the back and then we will have chances for other people to ask their questions in smaller groups. go ahead. >> the director for learning competitiveness of the university of the redwood school of current consultant. also with some questions on the talent issue largely your report has been about trimming the federal role and one of the talent. as we hear a lot about is immigration, and i was surprised

you are leaving about and interested in your thinking why because historically a big driver of innovation in the united states has been we have been a place people want to come and we welcome the best from alexander bill etc. the other question that i would ask quickly is that for a generation of current americans and parents we didn't grow up in this world as we are not used to making decisions about learning instead of or the importance of motivating their children in stem. so how do we tell the story in english to a broad number of americans so that adults and young people are making investments in themselves and voters are making choices to support this kind of framework that you all have discussed? >> let me say that about the immigration there are some

issues in the report. there's a lot of important issues here that are expensive but i certainly agree with you that innovation is an important source of skilled labor in to this country and making the availability as was mentioned for people to be able to stay in this country and to use the skills within american businesses and universities is something that we shall all be working on to make it more available in terms of immigration reform. i can address the question but if others want to. >> how do you motivate kids to be interested in this? let me say two things that are interesting and as i noted before there are multiple issues here and there is no one single answer to this. on the one hand i do think we have to do a better job of teaching science and math at the elementary school level. many of our school teachers, wonderful as they are, this is in their particular area of

expertise and the script through the curriculum to the curriculum and a variety of ways. there are projects trying to deepen and interest hands-on learning in some of those fields and see what difference that makes so it is a curriculum issue. on a whole other side i really do believe the media matters. and i just want to see a bunch of great tv and youtube and other forms of movies where the protagonist is in a laboratory or is a doctor matt gorman engineer. you never see those role models. >> the department is now promoting. [laughter] >> on this very point today is a telling day. it's the launching of the first robotic challenge that will come out for the kids to compete in. tens of thousands across the country, and this particular

example -- i was a judge in my earlier life and i was out last year. will.i.am paid out of his pocket to buy an abc special for one hour and he said look if the black eyed peas can sing at the super bowl he brought them to sing at the halftime show and that plus a bunch of other issue was in the special so let's acknowledge that the celebration is a big part of this equation and i want to say that today's the day for the first segue. ..