more money, but we can't spend our money until we restructure the institution that creates new institutions to do this and particularly i want to focus on younger children. ..

posted a forum on the economy, jobs and global competition. participants include commerce secretary john bryson, former treasury secretary robert rubin and executive dupont bloomberg and the first discussion is led by former white house budget director alice rivlin. >> we are going to hear a lot today about ideas for strategies for making the u.s. economy more competitive and creating more jobs but we have to start somewhere we are. and where we are is a difficult spot as all of you know what a

realistic look at how the economy is struggling. why do we have 8.5% unemployment at a lot higher number as you include all the people who are who are looking for work and have gotten discouraged and to work more hours how do they stay so long? what is standing in the way of a more rapid recovery so good job of this panel is to focus on why we are where we are and where we might be doing one thing you may be very glad of is you are not

going to hear any political blame game. no references it's all the fault of the democrats it's all the fault of the republicans you'll hear no politics but sober analysis of what the situation is and what can be done him but it's not controversial. it's an uncertain situation and you'll hear different views of what is happening and what might happen to start us off, we have my colleague gary, one of my favorite colleagues you can always count on very to show the numbers are to have done in the

subjects like unemployment or unemployment compensation what is happening to the distribution of income now that we have welfare reforms gary is very considerably skilled and to those kinds of topics in. he will summarize the main point of the background paper which he and his colleague adam have written and i hope he will read and then you will turn to the major global companies to see how they see the markets and u.s. competitiveness. so, gary, you did what i thought was an excellent job of laying out the current state of the labour market and how we got

here, the high unemployment and the slow growth in the recession ended and the recession precipitated in the crisis in 2008 we have a stagnant wages for a long time it isn't a lot of good news in your paper we had inadequate consumer demand and all of this is especially influenced by the plunge in the household net worth in the catastrophe in the housing market and you and adam has also explored hypotheses about why the economy hasn't come roaring back. so i hope he will tell us about in a few minutes for those who haven't read the paper and summarize what you think the situation as.

this is the first session of the day so it would be worthwhile to talk about what got us to the left current fix and what are the explanations for why unemployment has remained so persistently high over the last 24 months what we recognize is the great recession was connected to a big run-up in house prices and the collapse in the house prices would fall out with the financial institutions that held all kinds of financial instruments that are backed by home loans. the spectacular decline in the value of houses which directly hurt consumers' buying power translated into an equally spectacular fall in the value of a lot of the financial products

that are backed by home loans. and that collapsed in those critical values brought the financial system of the country very near to collapse. federal action, treasury action, the t.a.r.p. legislation played a critical role in keeping that financial catastrophe from occurring so the financial system of the united states continue to function, but there was a huge falloff in the value of first of all the financial institutions and a second of all of them on the financial and institutions that are selling goods and services to the american public. between 2007 and the beginning of 2009 for households fell by more than a quarter that erased

$19 trillion worth of wealth in the united states. the markets recovered so there has been a rebound in some of the asset prices but we have seen about a 15 trillion-dollar disappearance in the wealth that households had before the recession began. there's been essentially no rebound whatsoever in home prices they are still very low. if households spend about 3% of the value of the assets that they own, the drop in the household net worth what translate into consumption is falling by about $400 billion a year. that means without the crash and asset prices the flow of the household consumption would be about four or 4.5% higher than it was in the last quarter in

the housing is a very widely owned asset in the united states and there's a lot of evidence from the last 20 years. households spend more than 3% of the improvements in wealth that they have in their home they may spend as much as 5% of it and this suggests household consumption might be $750 billion higher without the erasure of so much household wealth. with average estimate you prefer the house price collapse and the ensuing asset price decline removed a whole lot of consumer spending power from the economy. the drop in consumer spending can be expected to reduce business and for workers which has another impact on consumer buying power when people lose their jobs they lose their wages that those jobs give to them.

in short the direct effect of the financial crisis, the big spectacular decline of holmdel use has created a short fall in the united states. the federal action, the t.a.r.p. legislation of the stimulus programs have all offset part of this loss but not all of it. interest rates have fallen in the short run for the safe assets to 0% so there's not much more the federal reserve can do through traditional monetary policy tools. the drop in the economy reduced the market income of american households. those fell 10% compared with those people in the recession began. all of the federal countercyclical measures tended to reduce the decline that 10% decline of the market gives us as household income.

3% loss. we pay less taxes than we did before the recession. we received more direct government benefits mostly in the form of unemployment benefits, but still there's been a decline in disposable income in the united states which also reduces the consumption. so there's been a huge loss in though household wealth which depresses consumer demand for a wide range of the goods and services that are produced here in the united states. we are emerging from the slump slowly wait too slowly most people would say the gap between what the economy does produce and what it could produce is about a trillion dollars or roughly 6% of the potential output of the united states is. there's an explanation for why we are where we are with 8.5% unemployment ratio that has dropped five points, five percentage points since the beginning of the recession and

we have a 6% gap of the potential and natural gdp. the explanation that fits the fact is that it is just too little aggregate demand in the united states. using conventional monetary policy tools, there is little more that the fed can do. it has reduced interest rates in the short run as low as they can go. short-term interest rates and safe assets to zero early in the slump and that is where they have remained. the usual policy remedy to exhaust the monetary policy tools is to rely on a fiscal policy. some of you may be saying we tried that and it didn't work. there is no evidence that the fiscal policy failed. none. six months after the onset the biggest stimulus package that we had on the slump, the economy stopped falling like a rock and started to grow again. within a few months private

sector employment began to grow slowly but it began to grow and it's grown ever since. about one-fifth of the growth in the private sector employment since the low point has been offset by declines and a number of people on public payroll state and local governments face harsh fiscal realities and they are reducing their payroll offsetting some of the gains in the private sector. i estimate we would need about ten or possibly even million jobs today in order to reach full employment. we added 1.6 million jobs. at last year's pace we would need about six and a half years to generate 10 million more jobs. and during that six and a half years, the population of the working age is going to grow so there will be millions more jobs to decide that. what is tragic is that much of the excess unemployment is unnecessary. there are a lot of useful things

that say two or 3 million more employed americans could do if they were put on public or private payroll to improve the country that we live in. there are millions either to offer the united states government and their savings by purchasing the united states government debt and otherwise lend funds to the government the historically low interest rates so that the government can put those to use. of the households and businesses are unwilling to spend their cash reserves consumption or investment the federal government can certainly identify and organize and it can complete useful products with the money that households and businesses are willing to offer to the federal government to that purpose. the first thing we can do to boost aggregate demand is to build or improve the nation's public infrastructure. we can also offer direct incentives to businesses to add

to the payroll this year or next year. for example we can exempt businesses that expand the number of the payroll from making payroll tax payments on those additional workers. this year and next in comparison to expanding them three or four years down the road. so what are some of the other explanations but why we are in such a persistently terrible state as far as the labor market is concerned. one is that there is a skill mismatch. today's unemployed simply lack the skills that the expanding businesses occupations need and consequently this mismatch means that they are unnecessary on employment which can be fixed if we retool the skills of unemployed workers which could be fixed if we pay businesses that are expanding to train workers in those skills. a second theory is the social

protection and the united states has become much more generous in this slump compared with all of the previous slumps since world war ii. it's true that the united states has been more generous to its unemployed this time than it was in the earlier recessions that have added to tenths of a point or three tenths of a point to the current unemployment rate. some economists say it's added eight tenths of a point. still the fact is the unemployment rate even if we subtract eight tenths of the percentage point would be very high by the postwar standards. so far after the end of a recession. personally i'm not sure that the upper level estimate is a very good one but something to remember is all of the improvements in the social protections stand the slump began have been explicitly temporary. many have already come to an end and i'm pretty certain that the extension and unemployment benefits up to 99 weeks are going to be scaled back over the next year or two and they are

likely to go back to where we were before the recession began within two or three years. my reading is the unemployment rate is high and has remained stubbornly high because the unwinding of the house price boom had a direct and indirect consequences that has removed a lot of buying power from the nation's households and that in turn has made businesses very unwilling to expand or make investments that are going to increase the scope of what they produce here in the united states. the remedy it seems to me is to take direct action to boost aggregate demand for the most reliable tool available to us right now mainly directed government purchases of investment goods and indirect subsidies to employers to expand their payroll and businesses in the near term resident four or five years from today. thank you very much, gary for a

very position of your beeper and its finding. but we turn next to seinfeld who runs alcoa absolutely huge industrial company global company that employs about 60,000 workers in many other places. you've been dealing with this very difficult situation around the world with a volatile markets and in rapid change and lots of dimensions and you've dealt with it for a lot of your career. you came from another big global german based company. can you tell us how you see the current situation both economic

situation but especially the future of the labour market in the united states and comment on the skills mismatch hypophysis has affected telco and how you see it generally. estimate of one ghostwritten to the aspect to describe the environment and let me throw a few faults out on what opportunities to we have here to create jobs because i'm with you there are a lot of opportunities here and some of those reports on a short-term basis. there are three letters. the one thing that you already talked about is why would call it the work force of the future and that has the two aspects i would be happy to allow freedom. one is the recycling at the second is immigration. we cannot leave that part out. so the second thing i see is the innovation, the innovation we

have the first panel a lot of good ideas around that. we should not forget about it and that also has two big aspects. one is entrepreneurship. america is the country where the entrepreneurs are growing thousands of stories. the american dream is still alive and would be kept alive and the second thing is large scale innovation and where you need government on the first one the government could do with the conditions on that. the second is the question of the countries competing around the world on global market so to say and there's a lot of things going on. you saw at the detroit show this week no politicians have been going there and why did they go over there because a lot of the automotive companies have seen a market growing and believe they want to have a bigger share and what do they do, they invest so

the competition are on the direct investment to get more of it over here bringing some of the things that have been outsourced bringing those things back the opportunities work in many places not to the better weather these things have been to experience are having extend also the environment has changed and the third thing on that end is dealing with the same issue at who we let in when you travel around the world you see that middle class is growing allure of the world we have the distributor and the car dealer to travel coming to them on tv so the tourism is linked and the interesting thing is last year they saw more chinese visitors from the u.s. and i think that is not a question of the preference of the chinese but

more a question of how we deal with it experts that say for tourism alone is in the sector or we could create the three short term jobs. when you talk to people all of around the world they like to come and visit the u.s.. on the recycling front you ask are we affected by it absolutely. and we talked a lot about the case through 12 education. we know that that's an issue with good solutions there but let's talk about the occupational skills. the way the schools are changing drastically the workplace today requires people are knowledgeable about handling the security equipment, so we see that there is a shortage here in the u.s. and almost all places. we have started a lot of our sites here in the u.s. who started the programs together with the community colleges.

so we can do in the evening hours on the weekend that we can do in the training and what do we offer their? we offer industrial machinist jobs, training so to say. we offer industrial maintenance training. we had a discussion about welding where we need welders and it's not that difficult. you don't need that to be the biggest on the planet for all of those jobs. >> even girls can do it. >> absolutely. absolutely so, we are doing that with great success. people have enrolled in a program we would continue to do that for alcoa and it's good, very successful. but again, i don't want to leave the immigration side of things out because i believe that when you look at the statistics here think 25% of all the firms in the engineering space have been founded by immigrants and i

recently mentioned that statistic to vladimir putin and got an interesting response. we don't want the president of russia basically acknowledging at and start to forget about it. i think we have to come back. so those are my thoughts on the subject. >> let me pick up on one thing the use of about entrepreneurship because i think a lot of a stink that entrepreneurship is something that starts in somebody's garage and is inherently a small business thing. t want to talk about it from the point of view of a big company? >> the small company part is important because you want to instill this mindset only briefly touched the mind set of entrepreneurship is truly a unique feature here in the u.s..

it's one of the things that gets drawn from the rest of the world and there are structural aspects also. when you look at the venture capital money worldwide it is here, a table here. you talk to kids that are in other places are not the world that want to start a firm they have much more difficult time to find people that invest in them so they peniel to build your journalistic extremely favorable. the mindset, the cultural mind-set is unique and we should be mindful of that and should continue to build on that and in this structure we have a valley that exists in the u.s.. we have partial to the values that exist in boston just this morning on the way over here i saw a statistic that new york has not received more venture capital funding first time this year which is great this isn't a competition i think this is something where things come together and build an ecosystem.

the large scale innovation when you see some of the large-scale changes and i see the sector as the biggest one there is so much going on the energy sector and it's almost too big for even big companies and because it is with so many fragments if you want to put this together if these were so many fragments that together are sinner gistel, so you need an intelligent coordinating hand in that and i will give you for instance on that a good friend of mine just recently taught me that he had been invited by the chinese on one of the advisory boards during the spare time they drove him out and he comes from the nrcc and they drove him outside to a test field and it was about a two-hour drive and it's literally i haven't been

there he says it is basically every wind mill operator in china has different windmills they're so imagine this is a field that has three areas one is a wind farm and wind turbines and in the middle you have different storage devices so you can test those and on the right-hand side you have different types of solar. now with that, the combination of that you actually make something that creates a base load because during many areas where the wind dies down during the daytime and the sun comes out when you combine this you get rid of the problems that you have on that type of renewable energy that you only have to pete debate -- compete and if you put it in a storage device you can literally minnick large scale with the allies only got through kind of nuclear power

plants but you get a renewable. to do this right you need a lot of companies including the group that handles this with elements of the smart agreed. that is the kind of thing i think we need on the large-scale work companies can be brought in but you need some intelligent hand around this to say let's take a look at this and in this case is handled by some universities. it's almost a but let's go to the moon project and would be worthwhile if we don't want to lose and i saw yesterday that we are praising now that more investment has been going into the renewable in the u.s. than in china that is a statistic because if you look at the statistic into what happened in this industry it has been highly subsidized so we have to start it like that the reason why currently a lot of the firms around the world are having

trouble was because the governments are withdrawing the subsidies which i think is the right thing to do but they can't stand on their own because the model doesn't get worked. that shows the dilemma so that's my thought on not. >> thank you. [laughter] >> one of the things it tries to distinguish between the statistics. let's get andrew into this because you also run down which is a big chemical company involved in all sorts of different kinds of products. i was on the board of a different chemical company years ago and one thing i learned is it is a very cyclical business and it's very intertwined with consumer products at every level. andrew, can you tell us a bit about how you see the current

jobs picture and react to some of the things garrey has said. >> the difference being lost in the panel was everything is said but not everyone has said it. i do want to make sure i kind of highlight some of the key points that i agree with that's already been said by affairs. and i think if i can started the widest and of the panel we are indeed 160 countries, 50,000 product families not as cyclical as you think because they've got to the science based agendas we have two-thirds of the company of the united states liked the huge employee base. i would tell you that i think the united states and the forces of globalization of the capitol, labor and consumption i think we are not having the right debate and this form, this panel and what we are doing all day today is like consider the beginning of a very large debate the

united states needs to have and it's really the short term fixes and the short term political cycles are vastly inadequate now for what's going on in this global is world of ours, and really what we do need is very thoughtful strategies if you like five-year or ten year plan approaches. so it's not business as usual. it shouldn't be government as usual. and how the great thinking that occurs in the think tank's like this with the global enterprises like mine are now experiencing and have seen and how we make decisions and the myth that we are going overseas because of cheap labor and associated with the protection and elsewhere and, you know, what is fair trade versus free trade and what does that really mean and energy policy and how those all factored into our decision making. it's no longer the market, no longer putting the millman market. just for the sake of that

market. to state the obvious we have 300 million consumers here all degette up until 2008 very big consumers. their 6.7 billion outside, and so this world of ours is an acid opportunity that needs to have the united states integrated knott as the federal brevity of the loan anymore and certainly the break in the housing bubble it is described as put a new pressure point on the word consumption, so follow the market put has a new dimension and it's the globalization of skills and i want to get down to that one because that is where i think the panel is honing in on an amendment but i want to stay if i can for a while because with following the skills other countries are putting in place five to ten years strategies and having the pre-market economies not talking about direct economies like china who clearly have a five-year plan our tenure plan. i'm talking about countries like germany and others that are the free market economies but they're a little more directed and thoughtful about where we

are going with countries like the country struggling in the school was world and the markets are fairly open and labor and skill decisions these are being made based on where you can find the skills and i would tell you that the short term fix is whether it be the stimulus and or fiscal whether they be exports which is a phenomenal story in the united states in the last year or so. clearly there is a short term and what is required and i think our leaders and government leaders in the business need to come together and how to do this in a very thoughtful way is how we in fact create new demand. garrey referred to it where is the new demand and quickly i would hone in on the three that have already been talked about a think the country is in a huge need in the dirt demand around infrastructure and energy policy and clearly the whole focus on renewable which is solar and

wind so this is a holistic approach and is in a piecemeal approach and how the boon camp late into the revitalization of the united states economy is a once in a lifetime opportunity in my view for the low carbon answer to many of our fossil fuel issues and the question about exports and what a disgrace that we have only had three free trade agreements the last seven years under the administration's that wasn't a statement. and so really at the end of the day how do we put the energy infrastructure and exports central to the agenda in a fight for tenure look and i would tell you that there are policy impediments the word out there with the tax kind or whether they be of the regulatory kind, whether the be indeed the fact that we are uneducated on the trade that american workers don't understand the 10 million jobs in the united states that they have the cost of exports. we have a lot of structural impediments. but for me the structural fixes

in front of us and i think the debates of today are going to help us get to them. klaus has alluded to one and that's immigration and i think it is big for the united states that it needs to stay in place and we need to be open-minded of how to keep bringing in people from all over the world to help the country become its next century of entrepreneurship so that's why people come here. people come because of the freedom and you have a german accent here and a vaguely australian one. [laughter] we are here because of your freedom a model and just to be very clear about that so bringing in the best around the world from wherever they come. education and the address is a big structural fixed in my time the skills and retraining and the skilled mismatch. i want to segue from that point into the advanced manufacturing partnership that i cochaired with susan for mit and other remarks to conceive of this

panel. we are finally bringing together the universities, big corporations, small companies and government departments to take the taxpayers' dollars that are already being spent and focus it and focus on the import of the private sector and the institutions researched and honing in on the pillars that matter and to repeat them for you, secretary bryson will go into some detail in sure but what technologies. we've already identified the technology areas and the includes efficiency and renewables like advanced sensing and material design come information technologies, and then the manufacturing technologies. we have addressed a shared infrastructure how to get the synergy of the whole, versus the lack of synergy of the parts manufacturing innovation as one idea that is coming up as a proposal. so, education workforce development and here are the community cultures coming in. taking from the german model and taking the high school diploma

and retooling the high school diploma for the modern age manufacturing and last but not least policy issues that have already been touched on. this is a little more direct market economy than many in the free market model are ready to accept. and i really want to say and close with that statement that i opened with. this country has to realize that the countries are competing like companies. and they are bringing and manufacturers of the advanced client to their economies because they recognize the two major drivers. of just inside but around the plant fence all high skilled so you don't discount the jobs of many veteran point, you plan on the supply chain. number to, this is of low-tech manufacturing is high-tech which means the research universities that are attached to it are on

it and have a proliferation of the entrepreneurial action big company in a small company kind. that's directed. that's the competition as a country and we have to really realize if we don't bring the debate to that level we are not only going to have a jobless issue for a long time but we will lose out and whatever it may be so that is our start. >> terrific. i think it's very interesting that these immigrants have brought our attention to the contribution that immigration can and has made. i wonder if either of you think that more could be done by the business community to educate the public about people are perceiving that they are losing

their jobs to immigrants. could they be doing more to turn the tables here? >> yes, it is in all of the above. i think that clause is a great example of this and many of us sort out there today they are becoming active in public policy than ever before. the honing in on one aspect of running a global business is over, and i think we have touched so many areas not the least of them being how to get the work force of the future designed and the immigration is there for a policy that matters we have to educate our work and be doing more in concert with the government and local community people. >> i think that we are almost beyond the information point because here darryl has written a book go the last year. i said publicly that i think

that this is one of the best books that i've read on that because it provides a solution to the state. i think i've come to a point where i believe business leaders should be absolutely crystal clear to both sides of the ideal that we are not willing to accept or discuss with anybody here who is supposed to be an elected official as representing the good of this country who isn't willing to have an open mind on the immigration issue and basically uzi the state on one side people say well, we only accept, we only accepted the h1 of the visa saying if you also find a solution for bringing the illegal immigrants on and the other side says we talk about the illegal immigration but we won the h-1b one. it really cannot be and i think there are solutions to solve it on the right wing because there's 12 million people that are illegally they're how can

you really work in an environment with that? and there are good dancers and there are partially bipartisan answer is we have to take on and i think the business has to be much clearer that we are not willing to accept it because it brings our competitiveness in the u.s. down. let me raise another question before we throw it open to the audience. gary touched on infrastructure, but you talked about creating an additional demand rather than as a way of increasing the productivity and wonder how the business leaders look at the u.s. infrastructure at the moment which many of us see as crumbling and how it affects you

we all have the story is with airports in the u.s. and you feel like they are in the third world countries to landing in the beijing etc. so that is the consumer heart of the infrastructure, but the roads, rail, ports, pipelines, we have gridlock to the approval process. we have over 60 agencies involved in the permit issuing and only a couple states in the nation that are easier than that and the ability to get anything done in this country is as a private sector company is almost beyond belief, so we are trying to break through when i go overseas i get red carpet and when i go inside the u.s. i feel like it is red tape, and really it's just gridlock in terms of even getting solutions for our enterprise. if you explode that up to the national level and say how to be actually coordinate this between federal, state and local i think the answer is very evident. i think it is not only a

productivity issue but is actually determined from investment, and we go to the states that are more in the permitting process and can expedite because obviously time is money. and i think you all know which states they are. there isn't any. >> that is a big issue. it's a bigger issue than i ever thought and has increased over the last year's unfortunately and the interesting thing is all local level people are very understanding. and because they understand what needs to be done to keep the competitiveness up above their voices are not getting through and some take a long time and unfortunately what people don't see is how heavy the competition is for the investment. when we go someplace is basically waiting people say we do this and this, we do that for you and that is a very fast environment and they are

competing for our investment. investing in a place where i need that permitted this thing still hanging in there. i have the on clarity. i can get it resolved but then it gets pushed out and say okay for another four weeks. by the way i was able to present it to my board and i don't get an answer is why not going to present it to my board and i could give you a whole list of films. a very unfortunate and i think a better dialogue and a better understanding would be very good. and unleash some of the investment sitting on the side. it may not be sitting there for a very long time anymore. >> we have a lot to digest here, but let me take the last few minutes to invite the audience

to raise questions. identify yourself. somebody will bring you a microphone i believe. and since we have a c-span audience, it is good if you wait until you get the microphone before you start speaking. but direct your question to any member of the panel but keep it short, please. >> yes, back here. >> would it be possible through the fiscal policy to lower the dollar it's a high dollar now which would increase exports enormously. >> do you want to tackle that

one? >> that wouldn't be the main objective of running more stimulative fiscal policy i don't think. it's certainly true that a lower value of the dollar would help the united states find more customers than in other countries than the things it produces. but at the moment, we have to face up to the fact that a united states is still regarded outside of this country at any rate as a place where money is recently safe, and our currency is an excellent store of value against the risks and a dangerous world. we get benefits from that. it's cheaper to visit overseas and begich of foreign products more cheaply but there is a price for the people who produce goods and services in this country that either compete with things that are imported or produce things that could be

exported. i do think in the long run part of our long term solution is the weak u.s. dollar. i have a question also an immigrant you mentioned the fact regulation and delays are of essentially improvement in infrastructure which is itself needed for innovation. but the local level you often found it will come so can you go into this in a little bit more depth to where the strangling effect really comes from and whether you have ideas on how to change that.

>> i think it comes from i have an old saying that when intelligent people look at the same they look at the same conclusions about assume that the decision makers are intelligent and would be my experience then only answer is the very different information and they don't talk about that so the people that are on the ground usually understand the situation and how this is going to hurt or help them much better than those and very often they don't take the time to get this type of information, and then also don't get the strong enough sense of urgency of how important it is to get this matter resolved so they cannot follow the usual procedure which is we have a backlog we will take it when it comes and it's going to take half a year to year, just speeded up. although local level people understand this is something that would have damaged us and the opportunity would have gone by to read that is why it seemed

in the different types of tasks. >> i would just a lottery to the regulatory environments have begun to be addressed to help the disconnect. i would tell you that what happens is that the prophecies of the private sector on the existing rigs whether they may be environmental or permanent issue in terms of the affected cetera are fairly well understood the local level but at the federal level the amount of paperwork required for the approvals is horrendous and they look forward and it's gotten worse. there's over 287 coming down the pike already that than basically said i don't know what they are going to be so the locals may be did with the current, but the ones coming stifle them completely saying just a second i better not take the risk. and when you get down to the

local level middle management level i have no power, so we have disabled and efficient in this country sorry to say on a diluted to meet with of the 60 state agencies and that's where we have to give ourselves much more efficient processes at the local level with local officials on the private sector as one way to beat that. it's not just environmental. a lot of it is environmental. in our industry i think one of the keystone pipeline decisions is stopping something vital to the nation. >> we have time for just one more question here. >> the hospitality workers union the u.s. trustee of brookings. i was heartened to hear what you said about immigration. i don't see how we solve our economic problems without fixing the immigration mess and especially happy to hear you say

you don't think we should artificially divided the segments of that issue. having said that, i will admit to considerable frustrations in the community says the right thing about it from my point of view about immigration and puts zero political muscle behind that. in 2007 kennedy and it can while not perfect legislation would have gone a long way in my view towards addressing these issues and a bipartisan senators have zero mosul -- mosul. i'm curious whether you believe we could do better in that regard in the next few years considering that and it isn't a political statement, just a factual statement, considering that the presidential candidate who i would suspect is the most likely to get substantial business support has jumped over the wall a lot on this

particular issue we won't solve it unless the business community puts muscle behind what you all have said today and i'm curious whether you think that is realistic. >> iowa said what i said because i have seen the same picture that you just described. and that has a moderate public statement to more non-model republics demand because i believe if somebody just recently said change has never come from washington, change usually gets brought to washington and that is one thing that we have to be mindful of. we have to take it in our hands and make it clear to our representatives here how important it is for the competitiveness of this country. i believe we can make the case and i believe we have to make the case honoring your point of how realistic it is in the current environment and with the candidates that you are talking about. my friends tell me that i should not mistake the situation where you to become a candidate in the situation of what your policy

will be if you get elected so that is the thing that gives me hope on that but i couldn't agree more with to get more aggressively into our hands and with that approach saying this is what we want and we are not compromising on it and we have a solution might think of the immigration side that was an intellectual breakthrough from your study in which we in the that in the book by saying we don't offer the illegal immigration aspect for free and there was an aspect of you have to learn english because it also changes your chances in the job market. you have to have some type of test about our constitution system works because not everybody comes from the environment and where you have learned that and you have to compensate for if you haven't paid taxes. exist for a while we would build some type of the financial model by which you have to pay up and compensate and i think that these have made a lot of sense to me and i have really not that people that at least privately said to me that it's a very good

approach, and on the agree but we don't want to. >> one-dimensional i would add, the business community i think has gone through a severe wake-up call on the mismatch point that we just had a discussion on there for immigration and lover of its forms. there were 30 research institutions that had the owners in china in 1999 today there are 1200. why we go to china because we can get the skills. but equally we can't bring the skills here anymore. okay. so difficult to get people into this country. let's face it. and i have three children, none of them have ever done science so i can say it our children are not studying engineering any more as we've moved past the curve and at enamored with other professions and that is the generalization but our immigrants love going into the professions and we need to make sure that we keep that pipeline

coming because of the big skills mismatch we have in the science based provisions for so for that reason alone would be reawakened to it i believe. >> thank you very much. i think that this has been a good start. [applause] thank you. [applause] [inaudible conversations] [inaudible conversations]

[inaudible conversations] we are grateful to the secretary for finding a little bit of time to be with us this morning. obviously she is the cabinet officer most focused on the issues that are before us today and that we've already had some very good discussions of. there are two reasons why he is the ideal person for us to hear from and to interact with a little bit. one is because of his current job that goes almost without saying and also the experience that he brings to that job providing he's going to say a word or two about report called america competes that was published just last week by the

commerce department. but i think as you all know, he comes with a very rich and relevant such experiences from the private sector. so we have here somebody who embodies both what the u.s. government can do and what the private sector can do and what can happen in partnership between the two. he served for 18 years as the chair and the ceo of esen international. he's been a director of disney come he was the director of some startup companies including automotive if i'm not mistaken the ceo of that company was with us a year ago for this forum, which is very much into innovation and the use of new technologies in particular electric vehicles lithium ion battery systems, which is just one indication of the extent to

which the secretary has been a part of the solution to one of the biggest problems of our time. one referred to in the comments earlier which is the need to transition to a low carbon ultimately no carbon economy and he has been active not just in the for-profit area in that regard but in the ngo world as well as the co-founder of the national resources defense council. his time with us today is a very limited. we have -- we are going to have a little chance to hear him make some opening remarks and then he has agreed to stick around for some questions. the way we are going to handle the questions is very simple. at least i hope it will work simply and that is that we have got cards distributed around the room. any of you that have a question, write down your question on a piece of paper. pass it to whoever is in the ogle we will collect those.

bruce, the director of the metropolitan policy program will then pick from those, the most trenchant and work them into a conversation with the secretary. on a personal note i just have to say mr. secretary that i reminded you when you arrived a few minutes ago that i last saw you looking even more relaxed than you do now on a flight from sun valley back to los angeles in august. that must seem like a galaxy far, far away in a time long ago. welcome to the brookings institution. [applause] >> many thanks to strobe and all of you inviting me here and i look around the room and see so many friends it feels like i'm right back at home, could even be right back in the valley because i usually see kathleen another for example. but this winter our paths

crossed. a was a wild and wonderful time and we do our family gatherings and we try to pretend like we see all those kinds of things that are wonderful. i will try to go through my remarks, and i'm going to cover the responsibility the commerce department took on a year ago almost exactly a year ago and do something that was striking and i think quite important and that is the reauthorization in the legislation and the only thing the commerce department was asked to do was had the responsibility was to assess the competitiveness with the u.s. economy. ..

the central question, how competitive are we? what are we doing that takes this competitive around the world? we have been an extraordinary economy. the leaders in the world for a very long time. but it is not unknown. it's relatively conventional observations to say we are losing that decision. and we need to address that now.

so what the complete report says, we've got the great benefit of spectacularly strong businesses and business leaders and we thought that for a long time. but the key thing is that was not allowed. the responsibility was not alone the consequence of having strong businesses, do we have done as low as we have all these years. and the reality further is that the federal government has made a decisive difference. anthology would recognize, their tendencies across businesses, cross privates like to to underinvest some areas in this traditionally have been substantially invested. enter the federal government,

through state governments in three areas in particular i'll touch on that are set out in some detail are in the field of education and infrastructure and in basic research. so i'm going to talk about those. and then i'm going to -- i know and you live is -- i cannot mistake after liver is coming here is a manufacturing is. i agree. but i'll say a few words about that in advance of manufacturing in particular. but what i want to do is start on what i think is at least a fundamental point. and that is, what is happening? what has happened in federal policymaking that means we are doing less and support of those key areas. education, infrastructure, research that was the case.

10, 15, 20 years or more ago. and the focus they are can be pretty simply put. what we've seen over the years increasingly is the damage that has been done by very short-term thinking i'm a part of policymakers here in washington. it's a one-way ticket at this is if you run a business come you make a distinction between what economists call investment and on the other hand, consumption. there are long-term investments that have to be made to ensure the ballot of the company inability to grow in the future. there's those in media expenditures that to be made to keep the business functioning day by day. electricity payments and payrolls, for example. and then there are the long-term

investments that have to be made to ensure the health of the company and its ability to grow into the future. and too often in washington what we have our decision-makers who simply to and have lumped those columns, this two columns on the spreadsheet together. whether it's short term line item or a long-term investment is treated almost as if they were exactly the same. and they are not. pass federal policymakers make more consistently decisions that took those things into account. the simple fact is the private sector for part of reasons does underinvest in those areas. but when federal and state governments to him to thought that cap, there has been a significant benefit to

businesses. and a big return on investment for taxpayers in the form of new jobs, higher living standards and life-changing advances. but unfortunately, the federal commitment to longer-term investments has pretty steadily decline now over some number of years. u.s. policymakers have too often rested on their laurels of our 20th century. at the same time as you all know vote the past decade and more, in many developed in what was formerly thought of as developing countries have grown way more sophisticated. i may have come, at the same time, very disciplined in the execution of carefully developed plans for optimizing economic

development in their respective countries, where they have a advantage is that out and then follow through on. so the result, even as american businesses become more efficient, more productive and increased in the overreach, our underlying economic loading dock that they wrote it and what not, so has our unquestioned global economic leadership. so today and you know these things today, u.s. ranks 14th in the world in terms of percentage of college graduates that produces. we used to be number one. the world economic forum ranks are infrastructure 24th best. we used to be at or near the top. in the current federal share of

research spending is now only one half of what it was in the eisenhower admin is haitian. 50% then, only 25% now. each of those to clients is impacting our ability to attract and create the jobs of tomorrow. encouraging news in the codpiece report does show that this administration over the past three years has been working to reverse the trend lines on each of the friends i've mentioned. so let me get just about. first basic research. for businesses and much printers are generally the most innovative source of new ideas, the federal government plays a key role in supporting and developing those innovations. our country has been a very

proud tradition of supporting the work of federal and university labs to help change our world, internet, satellite communications, some i cannot use among other job creating advances, would not have been possible without the use of wisely spent u.s. tax dollars. but that commitment has dropped off. in 1980, the federal government funded more than 70% of basic research. since then, the government's share of basic research funding has fallen to 57%. so then, education. all of this very, very focused on education and we are not doing. that is the second pillar of the

report. we know now that the highly skilled workers oozed innovation and economic competitiveness. but assuring that our children have the skills employers need for the jobs of tomorrow requires dedicated attention and resources that the state, local and federal government levels. critical importance of the science technology, engineering and mathematical fields, since they are called, this audience knows full well that the numbers or if they think they are worth mentioning. in 2009, about 12.8% of u.s. college graduates, 12.8%. significant economic competitors such as korea were 26.3% in germany with 24.5% are on the long list of countries producing

a much higher percentage of graduates who are stem graduates. that simply has to change. and then quickly, the third area of investment is infrastructure. the infrastructure needed to support a modern economy relies on publicly provided resources and must do more to grow out a truly modern electrical grid with broadband internet-access in both urban and rural areas. here in america, 68% of households adopted broadband. that is an almost eight fold increase since 2001. and yet when you think about it, 68% adoption rate means about a third of american homes are simply now cut off from the digital economy.

so education, innovation, infrastructure would be areas we cannot afford to cut the role of the federal government. indeed, investments in these areas will lead to a more competitive economy and higher growth. so, what can be done? the administration is committed to destroying the consensus that once existed through democratic and republican administrations. but there are long-term priorities in which the public sector must invest so that our business is coming during a better chance that success. what are we doing? we are increasing on sustaining the levels of funding for basic research by the federal government. a recovery act of course included a one-time infusion of federal r&d of $21.5 billion in

federal funding for research increased from $56 billion in 2008 to $60 billion in this past year. the president's budget for the past year called for more but congress didn't concur. still, the enhancements we have seen has made a real difference. we are seeing not at the commerce department and elsewhere across the federal government. the commerce department for example national technology columnist, the administration has expanded the core research mission by about $50 million. the president and his administration will also continue to push to make permanent the r&d tax credits that give companies appropriate incentives to innovate and improve to a basic research is transferred from the lab

promptly, directly, quickly into commercial products. mms to education, we simply must intensify substantially our investment in the skills and knowledge necessary to compete affect elite and the worldwide economy, whereas i vindicated many other countries are simply surpassing us. ongoing and new administration initiatives are addressing challenges by making college more affordable, and spring classroom innovation at all levels and expanding the size and quality of stem teacher ranks. one such initiative is the aspen institute's skills for america's future effort, which the administration hope to launch. that program, maybe you know if it appeared that programs works with businesses, community colleges, labor unions and other groups to encourage the growth of job training and job

placement programs that really work. and then infrastructure. this administration is committed to investing in 21st century networks, including strains high-speed networks for citizens and dismisses, no matter where they are located. federal government must continue its strides towards a smart electricity. and a robust network of pride be an internet access and the commerce department is deeply involved in both of those initiatives. and then, let me bring mr. manufacturing. so this really deserves very careful attention. a flourishing u.s. manufacturing sector is simply crucial to our

competitive strength and it will continue to be a key source, both of economic growth and jobs. manufacturing pays higher than average wages, provides the bulk of u.s. exports to protect also national security. the manufacturing site there is also the biggest source of innovation in our business economy. 67% of all the business r&d in america is done by manufacturing companies. that's why the adopted one phrase as a central organizing principle for my priorities as commerce secretary. some of you have heard me say this before. i say it again and again. we want the commerce department, we want to press the administration to build it here

and sell it everywhere. build it here and sell it everywhere. if we do that, we can retain and even enhance our u.s. economic preeminence. build a tear and sell it everywhere means of course helping u.s. companies sell more of what they may to the 95% of the world's consumers who lived outside your borders. through the national export initiative, we are doing just that and we are now on track. after two years we are on track to meet the president school of doubling exports by the end of 2014. but i will underscore with you, this is a nonstop challenge. we have to continue to intensify. so we have three more years. the first two years with an

increase. 16% in exports, than 17% and exports. this month announced this morning results were not very good for the month of november. there will be ups and downs. this is an undertaking really have to constantly focus on new means of taking us further. i will say the free trade agreement, for example is very important in our ability to take that further. so, building here also means attracting and retaining more investment so that companies are building new factories here in america. and it means doing everything we can to strengthen u.s. manufacturing and particularly advanced manufacturing because if american businesses start building inferior, it won't be

long before the actual innovating happens somewhere else. so the president and i are determined to reverse the tide, to revise manufacturing in america. last summer the president announced the advanced manufacturing partnership and recently we created a national program office for that initiative at the commerce department. it brings together industry, universities and all the federal governments. so we work across the entire federal government. i leave that to drive investments in emerging industries like i.t., biotech and nanotechnology. and in december, the president named both gene sperling and me as cochairs of his white house office of manufacturing policy. but that is the policy focus.

strengthening american manufacturing, especially advanced manufacturing where we should enjoy a comparative advantage i will say is an issue that is close to my heart. with more than 25 years now in the business community, putting 16 years, for example, serving on the board of a wayne. i watched a broad decline in u.s. manufacturing and the erosion of the middle class jobs that came with it. i'm committed to working to stop that declined on past administration success, like the ones happening right now that her economic development administration within the commerce department, which in the last two years alone has invested in 68 competitive job creating projects nationwide to support advanced manufacturing.

the promising news is we are starting to see a rebound in the fact your tiered manufacturing employment increased by 225,000 in 2011. 225,000 jobs. that is the fastest year-over-year growth since 1997. so i'll conclude with this. the administration does not believe that all the government has all the answers. but it does believe the public or has a role to play in creating the conditions that make inspiration, innovation and invention more likely to happen. ultimately, job growth is commensurate that is most important. long-term job growth will curve most powerfully in a world where entrepreneurs and researchers are supported, pursuing new

ideas and taking out an accelerated pace, the essential step of turning them into new products and businesses. the priorities set out are building blocks for fulfilling our country streets potential. it is critically important that we translate these ideas and strategies into action. wherever possible, this administration and i personally want to be a partner of researchers and entrepreneurs and any and all of your businesses and not after. the thank you very much. [applause] >> said mr. secretary, [inaudible] >> we are going to have to wire you up.

first of all, i just again want to thank you for being here and for that discussion of why manufacturing batteries. as it has been out of our dialogue in the united states for quite some time. so i try to do yesterday. we had a group of mayors in. people from metropolitan chambers come university presidents, the typical metro mix. they would love to sell it anywhere or everywhere. because i think they believe fundamentally we do have a manufacturing moment in united states and we have an export format. the advanced when you factor in partnership, you are like a rock star right now. they are sharing the message about the fundamental policy change that we need to make around workforce, round clean energy, round infrastructure, et cetera, et cetera. they lit some cultural issues

yesterday. i just want to see what your responses. do we have cultural barriers to achieving our manufacturing moment in our export format. i manufacturing, as a cultural sense that we diminish the manufacturing as dignified work. we talk about the creative class. we talk about the consumption and the amenity economy. we talk about everyone getting a four year degree. we don't really talk about the large portion of our work force moving into manufacturing, working with their hands in their mind. the second piece they mentioned his u.s. is somewhat export folding, where the most diverse country in the world. but we are the most insular country in the world. we don't get out much. only 20% of americans have a task force. so i'm wondering if you think about really unleashing the

dynamism and manufactured in the united states, whether we need to think about and how you thought about moving beyond a policy conversation to almost a cultural discussion in the united states, and given where we've been for the past 25 years and how that's steeped in to our taxes. they knock well, i think you're right. there's been a sense that in some ways has been more pervasive. i think in the federal government then at the level of mayors and local government. but there's been no sense for the long time that manufacturing is about kind of job, people with in a world in which we put such an emphasis on getting traditional college degrees. we put that away of any kind on working with your hands, bringing things together, making the difference that way.

and i think we've lost a lot. and as a consequence, very little has been invested in and very little call it public support, public recognition of what manufacturing brings to us. 67% of the innovation in american business, and the manufacturing site are stunning. i mean, to stay at this in detroit, there of course you see this in the automobiles that they are and what is being done is extraordinary. it is not just the u.s. automobile companies. it is the overseas, the u.s.-based automobile, these and what they are about is manufacturing a really key product. cars, trucks. and you know once again, so much of this is moving into advanced manufacturing. the old ways of thinking about manufacturing are mostly very,

very outmoded and the kinds of skills that are required if you're a ford motor company and you have 30% of the value of all the new ford, 30% of the cost of all of those new ford and the manufacturing production are in advanced the comics. we have to have people that have this goes to bring those to the market. i could go on and on that way, but that's traditional. other than southern california. i'm going home for the first time since i became secretary of commerce to me to be in los angeles cannot be with antonio dierker centocor around the schools. then you know, he is a real leader. i mean, he is a guy who was the labor representative fighting a lot of what was being done in

the field of education. and perhaps as you know, he has totally changed his views and has taken the position that, for example, the uaw is taken and we have to work together because the way to have in this country is bringing business and labor representatives, places where labor unions are part of the factor and doing it together. >> it seems like we might ever going to follow this panel with the representatives from dupont. 40% of their workforce is going to -- thank you, potentially retire in five years. 40% of the workforce are eligible to retire. so in some respects, what we have is almost an urgent moment she began to reach out to community colleges, reach out to

the high schools, reach out to other intermediaries who work on skills. must resort it began to change the image of manufacturing, really began to train in a way to skills of people who can move directly. these are good jobs. >> germany has done that spectacularly. i was a student twice in germany a long, long time ago. but there is just that we students not to get a job between sessions, you could get one of these jobs that were about learning and applying yourself to making instruments have been. as we know, the german tradition was in the first days or for a certain academic elites. the parents had tremendous pride and continue to add tremendous pride on the training and skills that lead into manufacturing. and they do it really. so i have a whole bunch of

questions. we will be here until around 2:00 in the morning. but i thought what i would to do is at least enable you to give a little more details about some of what you just described. please share more details about the goals of the white house office of manufacturing policy and the value you expect to add to already existing federal efforts to advanced manufacturing in the u.s. i have a serious questions here actually about the president call for agency consolidation, and agency restructuring. will that be under the agreement is that this of manufacturing policy? because what you've described cuts across the federal government. but are you thinking about timelines, the kind of legislative proposals or administrative actions that she makes the occur over the course of the next three, six, nine months? >> the white house office that

gene sperling and i share is focused on bringing together, affect the way, all the elements of the federal government. so the defense department and it's hard to identify any one identify any one department of the federal government that doesn't have a manufacturing arm. some of these are extensive, that they have it in for it together in the past. and even in the commerce department, substantially every girl has a manufacturing arm and one sort of another. they've tended to be sad to. so the core policy point here is, let's work effectively to make this more just, more efficient and skills exist in one place. they don't have to be duplicated necessarily in another. let's make a really good then let's take the dollars that are

available and can be enhanced in the manufacturing sector and not spend those dollars fruitlessly on things from one department to the next. so that will be a big focus. and then we have at the commerce department now set up the national programs. so it's going to be stuck secular program. and we found the outside under the leadership of pat gallagher who is a phd physicist career person who is that slithery person, so this is a case of a career person who is our undersecretary. brilliant guy and he is reaching a team of him and i'm spending a fair amount of time on this reaching out to all the other department. and this has got to go way beyond policy. anything impure policy at some

level becomes a waste of time unless you're putting it into reality in production and that's the key thing. >> other question, same line, office of manufacturing policy. your own company at out of the factory. how much do you think this is about the large corporal companies, their challenges, their supply chains? which are small and medium enterprises, or rather small manufacturing firms, some which may be exporting. some which may not be. how do you think about size and scale? that does have an enormous effect on a whole range of policies, both delivery and design. >> it's a very good question. and the reality is the largest part of manufacturing in the country actually is in the supply chain. so andrew would have here in the u.s.a. very substantial supply chain. the automobile companies -- for

it didn't go into bankruptcy, but ford could not have gone forward without the other -- general motors finding a path through the knot of its bankruptcy. because they had to have support of the common supply-chain that ford couldn't afford to do if they did it independently. so this is happening everywhere. enter and i probably got over this ground four times. widely with others goes on in all. and what they value so much is the supply change and the supply chains often are invariably not more than medium sighed mrs. and a lot of them are quite small, but growing businesses. so again, there is a stand here. the people that want to work with their hands, they're willing to have the education and develop education are really competitive because to be in

your supply chain you have to be awful good, right? for small businesses are just competing my crazy. i mean, it's the advancing business people have of getting out of winning it. >> last question going back to your prayer life if you remember your prayer life deals with the potential of the clean economy and clean tech to be a driver of manufacturing. we did a report at brookings going back about six months, where we said that the clean economy is disproportionately manufacturing and disproportionately export oriented peers so it is all the right buttons. it requires a stable and predict: certain level of national policies and national policies innocuously state and local. do you agree with the assessment of the potential of the clean economy to be part of the manufacturing moment? and are there short-term actions

at the national government can do, it either to do no harm or to potentially provide more per disc? >> and in the view that would be better across the country in dealing with clean energy steps. were there a sound level a common set of requirements across the entire federal government. this is an area in which the states have really led. in the states i think done it with innovation, with offering the advantage of our federal foreign. that is a different approaches, often very creative approaches. were i've lived in wife worked for a long time, california has been an extraordinary leader, a special leader. everybody is facing the reality. we had the great advantage in the ability and the world, for

example, of utilities to the natural gas prices come down so strikingly that allowed some room in many states for the state regulators and utilities to continue to have something in my current pricing in the market was sent their fuel costs down, leaving some additional room for clean energy technology development and application. but that's fragile. i mean, the reality is we are all dealing with the advantages and disadvantages of a tough economy. the advantage in my judgment makes us think more fundamentally in fresher ways about how you get more out of every dollar that you have, for example, the federal government. what is a disadvantage clearly is that some of the innovation and a lot of the financial support that was fair to turn

ideas into practical programs is diminishing. >> well, i know you have to go, though we obviously want you to stay. just listening to your talk in these responses, your view of competitiveness really is the agenda at this coproduced across the dirt and coproduced across all levels of government. and it strikes me that a lot of what he advanced manufacturing partnership is putting forward and what you have described here today can point out in the states in the cities in the mattress, irrespective of what happened at the national level. you may find your manufacturing moment really begins to bubble up as we sort through our political difficulties at the national scale. we really thank you for coming to breakdance. >> thank you very much. [applause] [inaudible] >> thank you very much.

[inaudible conversations] [inaudible conversations]

>> okay, we're going to try it one more time. perfect, great. this pml is the arena to focus on advanced manufacturing and exports. and both to understand why we need to make a case for that antiauthority begun a conversation in the first two panels, but also to understand what the national government can do to defend disbelief, to set a platform for productive innovative growth. and then in the absence of national action, with states, localities and partnership at the end of the first to be firms, business associations, 20 colleges and others could you take a slap, but that's a wonderful panelists here. dominic barton is the majordomo of major mckinsey, managing the

global managing director obviously based in london, but also on the board as it's been measured at the brookings institution. and tom connolly is senior executive with dupont. in your bus was supposed to be here, but she was involved in a skiing accident. this is the problem with the winter holidays. but we appreciate your taking the time. and frankly, i think secretary bryson set this up very well. i think he marched us through why manufacturing matters, why it is such an innovative set for, why it is such a dramatic impact on wages and incomes, critical to growing in the middle class. white is important to the trade deficit, broader fiscal balance of the united states. whited intervals for sustainability for clean tech.

i think you set this up well and i think that competes report coming out of the department of commerce says that in the same vein. what i look like to do a sword from your particular areas of expertise and focus, sort of chill down further. i'm dominic, i thought i'd start with you because one of the most interesting piece of work coming out of mckinsey coming daniel patchett was here, michael park, either of your colleagues. is this focused on advanced industry and in need for the united states to come ask one said, with a cleared laser like focus, to engage on or to understand that there are certain factors of the american economy, aerospace, automotive, medical devices. i mean, we could run through the listed at the same the same kind of conclusions.

they are absolutely fundamental for us to stay at the cutting edge of innovation at the vanguard of global competition. but that requires us to retain what we do unassertive coproduction between business university. and the public sector. i thought it might be helpful asserted a platform better for you to describe why the mckinsey interest in advanced industry and why we need perhaps even to reframe the conversation about manufacturing in this way. >> well thanks, bruce. it's another to be here and also work with hurricanes. mckenzie and perkins are working in close collaboration on this topic because we also think it is vital. you are to mention i think it's a bit background effect are in the various companies or businesses that are in it. a couple of more facts may be just on why we think it's

important to them. maybe some of the things we done of what we see is being some of the imperatives. his wrath at those industries we talked about, automotive assembly, national defense, medical devices and so forth. it is about 10% of the u.s. gdp. that is the size of it. it's about 45% of our exports. and it accounts for about 4 million of what i would argue very, very high skill jobs. we talk about knowledge workers. this event afar and. so we think well, it is 10%. it punches way above its weight. the secretary talked about the amount of r&d it's actually been done by these players. most of the 67% are done by the advanced industry players in manufacturing. that is where the engine is. and actually, what we would argue that all of the trends are heading south, we heard about

education. we've heard about the lack of long-term thinking. the trends are heading south and we think south quite quickly. we have to do with a strong base and we shouldn't forget that. more than my next-door countries combined. that is changing. we are to china is doing and so forth. but we believe we are in a use it as a type of thing, where we've got to make some big shifts to drive it. and one of the reasons why does about 18 months ago we decided to set up a center called advanced industries and get the r&d to be about to get the capabilities to serve these types of institutions. if you look at the big forces at work in the world moving ahead come with all heard about the rebalancing of the world towards asia and brazil and africa so forth. we're talking about the technology create, the amount of information on the repricing of the planets that's going on.

the demographic challenges with an aging population. were going to move from having basically, you know, three retirees for every worker. were going to end of moving to a situation which doubles that by 2050. there's also as a productivity issues with major shifts going on. if you look at for example food, which will be one of the biggest industries have tomorrow, the way that we are going to get the ability to feed the 3 billion people is actually through the advanced industries will be vital. if you look toward israel is doing right now in advanced industries in food, it's phenomenal. making helping cows produced from 5000 liters of milk to 11,000 liters of milk a year. this is tied to a big deal for china. they look and say how can we buy these professors and get them over here? i could go through countless examples of what's happening just in food, which you may think is low tech. it is high-tech.

this is a wonderful position to drive that all across the value chain and dupont is doing a lot of it. energy is going to be a big test. you've talked about this, the secretary talked about clean tech and so forth. that is a massive shift. in health care, fortunately or unfortunately it's going to be one of the biggest businesses of tomorrow given the democratic spirit a lot of the industries is what is going to be there to make it productive and we're seeing a lot happening. and then, logistics and transportation. this is the country that invented airline travel, all of this sort of thing. that'll sector itself was moving forward. so with these forces at work that we see there, the amount of business opportunity, which is going to be created and driven through this factor, in particular, is managed. as a multiplier effect. a different kind a multiplier

effect in wiki. i want to bore you with the old stories of the pain from the donation type of thing, but we are going to see orders of magnitude, multipliers at that. we can't predict what those are. we think it is very important that we are not. so that is why we are very passionate about this area and we think there are a lot of things that can actually be done and we think while we have this scale to be able to do it, all the forces are going in the wrong direction. and so we think a jolt, a pretty massive jolt is needed to be able to shift. >> just one follow-up question. this is a conceptual narrative really about what transpired in that economy. what is absolutely critically important. obviously the mckinsey quarterly comes out, the french read it, japanese read it, british treated. do you get a sense that our competitors and immature

developing economies have this clear sense about advanced industries and they are strained and therefore moving to policy, the platform they need to set? are we alone in the world by basically not understanding the sort of court insight? >> i think we are quite far behind in understanding and the chives for doing it. i just look at recent travel. and your liver is talked about germany, china and i know we always talk about china. they have a special initiative in the 12th five-year plan was set in strategic. they are all advanced industries. the amount of money they are going to put into that in their anti-immigration. they are talking about one of the big discussion points was how come all of the -- we don't

have any nobel prize winners. cera terms of the scientific come accept those the good of the u.s. what is going on? how do we shift that? do you have china. you'd have a say in massive focus on that side with the resources and planning, german, french. the amount of effort the french are putting into foreign direct investment in advanced industries is incredible. there is a lot of push. the english is what is going on with cambridge. so i'd say that the focus on it and the timeframe and resources and the desire to kind of cut through the blockage to move it i think is at a faster pace. and i think we are slow. and again, we have an advantage, but over time that will disappear. >> that's a great context for the conversation with tom. tom, just for the audience that everyone watching this in the

websphere and all the rest of it, just something about dupont. i mean, six allergic exporter in the united states, over two thirds of their manufacturing has been in this country. over half of your workforce in the united states and 50% of them are in traditional manufacturing jobs. it's a large company and an advanced set their bed has an enormous impact of peoples lives and obviously a the broader economic indicators that we care about. what is your perspective in the company's tip about the dialogue you've heard so far about, do we have a manufacturing moment? is there potential or industrial revival? can we not just double exports within a certain period of time, they really have this focus on global engagement become more part of our dna in the u.s. what is the fma lurch come in a?

>> that's a lot of questions, ruse. yes, we are the sixth largest exporter. we run a straight surplus from the u.s. gave, but we like the u.s. and our manufacturing base here and we feel we are able to compete with people anywhere in the world for many u.s. base. i kind of pushback on the notion of traditional manufacturing. the traditional manufacturing jobs are changing so quickly. there are no low-tech manufacturing industries last there may be low-tech reducers, but they are not going to be around long. if you're in a manufacturing business, either the product you produce has a distinct advantage for the process by which they produce to your logistics have an advantage. if you don't have a high-tech advantage to your operation, you're not going to be the manufacturing business very long. i think we can do that from a u.s. base, but we need to change

some things. we talked about many of them already this morning. we see more and more consumers around the world. the u.s. is still the largest and most attractive consumer market in the world. we've seen over the last few years and really pose financial crises, the emergence of china, not just a producing nation, but a significant consuming nation. we see the same thing in india. these are best markets for u.s. products they really didn't exist a decade ago. now what do we need to do to be ready for that? certainly in the new world, the next economy if he will, trade. open trade and fair trade agreements are critically. if you're going to have an innovation-based economy, ip protection takes on a more mess. we need to protect whether it's a product or process, whether it be a patent in the u.s. not this is the gold standard for intellectual property around the

world. we need to protect and enhance that. we can't let dependency get too long. it's about the quality of the examinations. where the gold standard. we've got to maintain it. if it is also about removing barriers. we heard earlier from andrew krause about that. there is some things about the regulatory approvals and how long it takes. i know dominic and i were both in asia. a connector type about asia. they missed the faster they are. we will be at a disadvantage if we allow our processes to take so long. if you're thinking to change, but we definitely have a strong future and there's a bit of a moment right now given exchange rates, et cetera. >> let me stay with you about the issue of workers at various levels because we described to me the other day with a very large portion of your workforce eligible for retirement and a very short period of time. so my sense is that you need

workers with certain skills much more substantial than quote unquote traditional manufacturing. do you have the sense that our high schools, community colleges , intermediaries, labor or others are able to produce these workers? secondly, on the management scale, someone came up to me during the break and had a critical question and actually they were three or four in here, this first top-notch management talent coming out of the best school is here and around the world still on attraction to the financial effect terry. >> manufacturing madness other issues. how do you think about the workforce challenges these multiple scales? >> so, let's talk at the production level. and clearly again we heard a good about it this morning.

there is a need for skilled crafts worker. people who are really good i've been able to build and maintain plans. they are in short supply. we've been able to meet needs and they will be increasing in the next several years and they need to be not locally because most of our production workers are recruited in the area. as the plant operator level, it used to be the plans for 20 years ago manually controlled. it is now all computer-based distributed control system. the quantitative skills and computer skills required of a plant operator and a chemical operation far exceeds where we were a wild pack. i think it is at this level that the community colleges can play a very significant role. it is not about a general curriculum at a community college level. it's really about curricula designed for industry to provide skilled workers that will need your policy without great partnerships in areas where we

manufacture the communities, the counties, the states that do want to work with us in terms of developing the skills workforces. at the professional level, i would say we recruit mostly scientists and engineers. over 70% of our professional staff have engineering degrees. we are concerned about the numbers of u.s.-born students who are interested in careers in science and technology at the research level. we hired research scientist trained by u.s. research universities, leading research universities. looking at chemistry department or physics or biology and you'll find half of their graduate student were born outside the u.s. so immigration policy to allow us to retract around the world is important. at the management level, i am an engineer by training and i am in a management role now. i am concerned that management

talent they find a financial site served more attractive perhaps, but at this point we are leading company in our field and we are able to perform in the towns we need. >> dominick, what do you think about the workforce challenges all levels and whether we are able to essentially do what they cannot just sit there their institutional arrangements, but our cultural norms in many respects. >> yeah, it's a broad area and this may be a couple angles on it. we talked about the immigration issue before another completely gecko work clouston andrew said to us, too. i think if you look at the statistics and what the source of the town is coming from, a big chunk of that is from foreign talent. if you see what is happening right now at the mit's and so forth, people who are graduating comment they probably should be going to be part of that so i should be careful what i say.

we will bring them in. they can't get a job with us. they can't work in the u.s. so we send to canada. we send men to germany. and guess where we start putting some of our centers of competence -- it's ridiculous this thing. i think we have to put that cat. i don't know how much screaming -- i don't know whether we should cantonment tense. maybe we should cantonment till something happens. it is seriously a big issue just on that dimension. i think if i go on is what i call around the polytech next. there is kind of an image because there's no cultural image if you go to polytechnic, you haven't really quite made it. i think that is just a very wrongheaded view of how things are. and we have some very good polytechnics in the u.s. and i think we've got to that of our behind them and the community colleges because in doing some

work on the unemployment gap of what's going on, there are several million jobs that are not filled because there are not the skills. if the welders and so forth that are there. we have to change the image that this is a very good thing to do. ..

one other thing we worry about i will give an example was brisk culture. if you look at some of the defense companies, something we've looked at the way the media works today it's kind of like you're getting an x-ray exam through every stage of the development of your product and that is not a very helpful thing to have happened because you are going to have mistakes made when you are doing product development. i go to the f35, these are very complex devices and there's a sense of there are now i think from young high-powered talent if you want to make a career and move ahead you probably don't want to take that risk project there will be scrubbed and you know about it. we all know about how we mentioned a boeing it's kind of like we have a youtube version of what is happening and i'm not saying we shouldn't have transparency but how can we make

that exciting again because we've made many mistakes on the past to be able to build things with the risk culture we picked up with management, top talent deferring to the big established business units as opposed to doing new things and again that is very microbut it's something on the culture side i think we have to look at and i think this relates to something that again was mentioned in the previous panel. we are way too short-term and our thinking we are driven by quarterly reports. in the quarterly report focus has seeped into our r&d and so forth so that's another cultural point of view i think we have to shift. its bounce like what you are saying particularly with regard to international comparison because i think the khartoum version of the international comparison is -- >> they get stuff done.

>> regulatory approval, that is provided public sector does what it means to do around infrastructure etc., etc.. i think what you're describing also with particular to the german model, is that there's a kind of ecosystem where large firms and supply chains interact with the research institutions and the skilling institutions almost like a seamless way. am i right? are we reading too much into what other countries are doing or are they really protecting this and we tend to be more compartmentalized were segmented business support? >> you describe some helpful alliances with the community colleges. is that the norm, is that the exception? >> from my standpoint it's something that's developing. it's becoming more acute because of the hiring needs and also because of the increased skills

associated with those new manufacturing jobs if you will. let me say that looking around models in the world we mentioned germany had experience in switzerland you take a look at japan all these countries have fiber and manufacturing sectors and they all have very good skilling. i like that term. the skilling piece. at the research and it's hard to argue with the research established, but at that skilling, the craft the community college, the polytechnic as you refer to them, that piece of the puzzle i think is done better in certain manufacturing economies like germany, like switzerland, like korea, like japan. >> the thing i would say is on execution i would say many of the country's beat us. i was mentioning in the break-in example from beijing where this isn't to do that since the industry's it's about start-ups of new businesses and meeting of

the mayor of beijing he wanted benchmarks. we said it takes six days in singapore if you have an idea in a business to get approval to start doing some complex medical problems versus sitting at a kentucky fried chicken but basically six stages is the measure and for beijing the equivalent was 36 days and shanghai was 35. three months later going to visit them a year on wall or chinese letters i couldn't understand but they were five members of their, 36, 35, 14, i can't remember the other one and i said is that a new slogan? no, that is how long it takes to start up a new business, someone wished she remembered it was me. [laughter] you go into his office this week it turned out way and it's a different thing there but that is to be kind of the execution. what is in there and i

completely agree is the cultural dimension, the number of countries that have tried to develop the silicon valley there is a long list malaysia the super corridor russia is doing this right now trying to build this and that's very difficult to try to replicate. that's magic that we have and why aren't we doing more of that but we have the institute and medical which it is a wonderful one week and all sorts of stories of the complexities of getting mit and harvard to collaborate which they did apparently at the mit campus and harvard is the other way around. but they are working together with business. you've got researchers, business and it's a very vibrant place and we've offered many opportunities like that here to really talk to this before but cybersecurity incentive consider

security is very important and huge growth business or area and i think that is something where how we put that together? we talk about cracking when you think about the shale gas and there are ways to build the centers and by the way, we can get other people's money not only can we get talent this may seem strange, china for example has a lot of money obviously. they need to develop this for their own development. it's not just pride. they have to do energy efficient investment to deal to grow without melting the place. it's an imperative. we've been suggesting to them why don't you spend some of that money in the u.s., you know, spend that money in the u.s. to get the technology, so i think if we could build those sort of serious we could not only attracted the talent but also

the money but we need to get moving on at. >> i want to switch the policy because i think between the two panels that we've already had and in looking at what the of advanced manufacturing partnership has put out there is a sort of common sweep of the policy reforms that we need to undertake here. we've already mentioned on the panel trade, ip, immigration, skilling. we could easily add infrastructure tax, energy, they're seems to be the common seven to ten areas of policy in the last year or have we gotten done in this town? we finally got the free trade deals done in some advances and the compete act. but relatively speaking, not the

kind of change that we seem to need to release of a platform for pertaining what we have and building on. so the question i guess is if you have to prioritize this presumes this is even a semi rational system but if there was a prioritization of we have to get these two or three things done because how you see the competitive threats would those be a national scale and the second issue is sort of building on the last conversation with secretary bryson. if the national government goes on a detour for a period of time can we imagine the states, the cities, the metro, the advance research universities, the major corporations doing what they can do to set the platform for the advanced industry and advanced manufacturing and how would you prioritize that? but maybe the world we are in a politically.

so, first question national scale because we need national solutions how do you prioritize in the near term and then assuming we still are in this period of partisan gridlock and the ideological polarization can we push this out in a structured way to our laboratories of democracy. >> i will take a crack at that. first of all at the national level, and again most of these key issues have come up today. i think the education with riss k-12 for the university community colleges that's one where the international comparisons are unfavorable and becoming worse. when i talked to my some of them have been to the plants the the question i ask is which do you bet on? the one that is out in front or the one that is running the fastest?

of course the answer depends on how long the race is. but if we are in this for the long run we can't afford to have other people out there running faster than the u.s. economy. that is one of the things holding us back is education. let's get after the education peace. the next thing i would put together a number of things that create uncertainty. nothing is worse for business or investment in manufacturing than uncertainty and we have elements of uncertainty that can be addressed. hiring is a long term commitment. you don't want to take that, if you don't know what your future is going to be like. manufacturing requires fixed assets to make investments you need to earn a return on that over perhaps the tenure period. if you don't know the future is going to look like to keep your money in your pocket or invest in another jurisdiction where you understand. so uncertainty around the tax rates, uncertainty around the r&d policy, are not energy and

climate policies, all of these uncertainties but cumulatively result in the reluctance to invest. so i think what this town can do is really drained of the uncertainty for the manufacturing investments. >> i would probably have 3i would do. one is around the immigration issue because what i feel this we need to jolt the system and i think it would give business a lot of confidence. people would say we are serious now about trying to build this. so why would did that to happen. the second one is actually around the are indeed getting the tax credit. it is an uncertainty issue because it is every year and the nets made -- does that link with what people think about the r&d? you do it not for a year. you do it for longer. and we have a trillion dollars, manufacturing companies have a trillion dollars in cash out

side of the country. by the way urning zero. we heard about that before. this is i think it's not only do we need it for the r&d we also needed for the velocity of getting things moving. so i would try to do something on the front of the tax holiday. i would want it though as i think someone mentioned earlier it's not just the white lab coat. i would want the manufacturing to with it because we can get all sort of tax loopholes by think something on that, i do the immigration, the are in the size and the uncertainty think i would think about setting up somebody has like a fast-track mechanism where people can go somewhere to deal with all the convoluted process these because part of the challenge and we've seen this with some of our clients that want to invest there's one chinese client who basically said we would like to invest within a particular conductor.

actually so it's like chickens talking to ducks. we just we don't even know where to go or what to do. i remember larry summers was there and said we actually don't know. we don't -- >> you are a giraffe. >> you're probably right. [laughter] so, you know, some sort of fast track mechanism where the issues can pop up and we can hear dupont is doing or what leota is doing and people can say here is how we have to try to move it. those would be some things. some in some ways you are arguing for a level of transparency about the regulatory barriers to the i'm going to open up in a second triet just one last question about the states and the locality in all the rest.

jim robinson is sitting here and he was on president ronald reagan's advisory council the federalism. we are a federal republic. washington doesn't really act like it's responsible for galvanizing the towns and energies of the formation. it sounds like it is a sort of inward focus on the government. shouldn't we be thinking about a race to the top? shouldn't we be thinking about saying to the states across the advanced r&d, across the skills, across infrastructure and export policy and fbi since the state's mostly due to foreign direct investment not the national government we want to challenge you to basically come forward with us more than likely the states will have a strategy with other cities and metro's. is that what we should be thinking about? given this moment political,

economic, fiscal and otherwise in the initial response to that? >> i'm not just saying this because you are appear but i actually think that's vital and that is where we should be heading to the state and actually the city level. first he would have a better perspective on who is more open-minded but we have just seen three or four places where there is a huge appetite to actually do this and when we think about it comes back to the world in many ways and many cities, 600 cities and account for 60% of the world's growth and if i look at singapore you could say to be drawing they do this integration phenomenally well. they think about the forces at work, they think about the jobs of the future, they have a regular -- it's every six months the of the minister of finance, the minister of education, the

polytechnic heads and business leaders and they literally that out water is going to be a big opportunity we are talking about skilled manufacturing related or research and water. how many jobs will that create and how many there for educational spots will we have and that is something to deal with. they teach history in singapore and the teach philosophy which is important, but some of the spaces are limited. there is more space to learn about water technology. i'm not saying we should go to singapore and model, but there is a lot of examples like that and i think we have a lot of places like that in the u.s. where we could actually get a lot of things going and i think that when you mention this to the externals players and investors or organizations, if they could actually see and meet people like that these states and cities are like countries in and of themselves, so i just think that it's a very big push

and if we could provide some more transparency domestically and also globally to where are the people that actually really want to make something happen who could we communicate with i think that we could really get something moving and in the kind of race for the top example is a good one if we could get other states and cities seeing that other people could do but i think that people would really start to push to get in minneapolis when you look at how business government and social sector have come together to deal with big issues there are places like that that actually really want to move and i think that we should really push on that. >> questions. right over here. >> can you identify yourself? >> my name is keith rogers and my question is for tom. if i understand correctly part of the business relates to the

advance industry, part of it relates to lower grassroots industry in terms of the customers and suppliers. so my question is are those types of local restaurants industries actually having a tough time these days because banks have gotten bigger and internationalized, investment firms are big and internationalized and at the local level to get financing for their peculiar local enterprises while the home builder, the bank meet certain standard underwriting criteria that mortgage can be sold on the secondary market, but if you have a local enterprise that's a very localized specific characteristics it probably is not going to excite a very big capital firm or a big

international banks. in your perception are some of those types of enterprises being squeezed? >> well i would certainly say that the lower tech industries in the manufacturing situation where they face competition from other parts of the world, yes, they will be squeezed. dupont itself in the portfolio don't have many of those types of product lines we certainly sell to the customer bases for example the construction industry to use your example they are local operators with lower technology mix. but i would suggest that for the future even in the industry of the construction there are opportunities to bring much more technology to the building industry in terms of energy efficiency to name just one dimension and for that producer who is feeling the pressure and is being squeezed i think it is time to innovate. i asked recently whether

innovation cost us jobs and the would be my advice to that lower tech producer who is feeling the pressure. questions. there's one right back here. >> spec my name is marilyn and my question is first of all as we talk about the advanced industries and the need to put as much as weekend behind in both of the political will and also the necessary resources my first question is around quality-control. i think that we have seen lately in the rush to what products and services it seems we are seeing or the increasing recall of a lot of products and services. how we narrow the quality control with making sure that we can get the best product out there utilizing technology? and then the second question i have relates to a survey i saw recently about china's

wealthiest class wanting to emigrate to countries like the u.s., canada and england and they raise the issue of health and education in the two regions apart from the one child policy. what are we missing that we are not seeing in terms of the opportunities they have at home but the desire to leave their country? thanks. >> let me start with of the first part of the question which was around the rush to get new products to the marketplace and are we missing something? and let me say first of all that business is always in our hurried. that's part of being business. it's about being faster and it's being more efficient. but there are certain ground rules around product stewardship and i think that is the piece where if there have been failures there in the area of the product stewardship for manufacturing opportunity the product stewardship is about how

we make the product first and foremost how we make the product, how do our plants perform, but missions do we have in connection with producing those products, how energy efficient, but the product stewardship is about how the product performs, how it performs in its intended use and when it is misused, how it performs at the end of the lifecycle and those dimensions. and i think what you're seeing is a lack of focus on the stewardship process and lead in the manufacturing companies are becoming more and more rigorous around that. we have a chief sustainability officer and that role is really all about understanding how products perform and the intended use and what happens at the end of the life cycle. so that is my response. the checks and balances are deeply in place to address that.

>> on the second part of the question the question is what are we missing, why is it the people want to move here when maybe we are complaining it isn't so good here? >> it is a whole long talk in itself but i think there are a lot of people that are moving into the middle class and it's like 900,000 people week. they are very happy with where they are and there is a -- if you look at -- it's actually interesting the trusten business in china the survey is just coming out. it's one of the highest in the world believe it or not. that's where. there are actually a lot of people that don't want to leave that are happy with where things are moving and feel very good about the future and where their children are and the focus and they've put a lot of focus on education. i think it is more in the group

that actually wants to have places in the different parts of the world but i think there's an interesting question for the u.s.. i think there are millions of people but like to buy houses in the u.s.. i don't know whether you want to do that or not. i'm just saying there is a big demand for that but there is a large number of wealthy people so that's kind of how i would look at. i have to say just on a comment when you look at education and that is one of the points that you were making and that is i think the asian advantage if you look at the amount of emphasis and focus on how important it is compared to how we think we see, and i know i'm generalizing it's very big. i'm amazed for example in korea at the size of the private tutorial markets for children between the age of four to eight.

they are a billion dollar plus companies that are serving at marquette. it's actually the third largest export is education primarily to asia. >> questions. right over here. just have to find a microphone. >> i'm with the former institute and we do a lot of work in the workforce development and there's a kind of contradictory mess that i detected which is here a lot of people have said the technical institutes colleges are an important part of the workforce and job growth but we have a strong message in this nation about everybody needs to have a four year college degree and more kids going to the university and what will the government used in the population when the degree is a metric for their success? don't you see those kind of contradictory and how would you reconcile those for policy makers? >> i would agree i think we need to put much more emphasis on the

higher the education. it doesn't mean having the university degree. it means that's where you are. we need to broaden that picture of where that is, and i think maybe we are simplifying too much when we say we want more education. i actually think we have to be again i would be emphasizing much more on the polytechnic side, and it's also the sense that it's not you go there if you have made it. i think it is just really a bad image to have because by the way, i think there are a lot of cases people have gone to the polytechnic, they do the work for a while and then there are a number of ceos that have come through. it's a time for all sorts of different reasons. i think we have to get more of the story out about that and brought in at. the approving i would say, too, the aging population, you know, why is it that we think once

someone is over the age of 55 they can't be productive? why our universities focus on 20 to 30-year-olds? maybe we have to start to think about educational institutes focused on 55-year-olds in another way if we look at the world where that is going. so i think the kind of mind set on the education needs a reset fundamentally. >> listening to this question, the back-and-forth, how many folks in the room either have read the book mount ebal or have seen the movie? brad pitt, right? as you will see the whole -- for those that haven't read the book or seen the movie the whole premise is you have to measure right essentially. it's about baseball and the athletics and the general manager who basically what have insight from a young statistician basically decided that there was a better way to measure baseball performance

than just rbi and the traditional sort of batting average on the base performances, and it's almost like we should have a money ball for manufacturing or for the metro. we are measuring the right thing and it's a little bit more comprehensive. we do these cartoon measures everyone is going to get a four year degree. we go off on that for a couple of years and we need a much more textured nuanced view of our economy. i would say also in response to this question it's not just post secondary education about six months ago i went out to see the academy which is on the west of chicago which used to be the big manufacturing base in chicago and still has many small and medium-sized enterprises. they set up a public high school. what we used to call the small and medium-sized manufacturing

firms are basically in charge of the curriculum, so before getting the normal education, but then for a portion of their education they are being trained at the end they actually get the credential. they could literally leave high school and go on the factory floor in the west side of chicago and when you look of the class coming into this high school many people are coming in with third grade reading, fifth grade reading and math. by the time they leave the can move directly into the workforce. so we can push this down further into our system probably again along the german model and some of the other models. there is a question back here. >> we were told at the outset of this day that gdp in the country is pretty much back to what it was prior to the recession. 6 million fewer workers that is

a very disturbing statistic. is this a trend we are going to see? it's a big hill. it looks like a mountain to me. >> let's go at this for a bit. that's why we are here. i think part of an answer is more manufacturing in the country because more manufacturing addresses not only the domestic market, but it addresses all of those emerging consumers and other parts of the world. manufacturing goods as we have heard represent a smaller fraction of the economy than they do with our exports. they can create wealth of the country by consumers elsewhere. on one level the fact that we are producing as much as we did before the recession we have an increase in productivity. that is never a bad thing that what we need to do is take those additional resources and put them back to work in manufacturing is a great place to do that and the emerging developing markets are a great place to sell u.s. products.

>> mackenzie can out of that study i guess it was with conjunction with the president's job council where you looked over the course of a decade and were trying to sort out what are different scenarios of growth and i think one end of the continuum was 21 million new jobs. i think that garrey did a great job of saying what is the joblessness told what we are in and out we climb out of it and how long is it going to take? how big of a deal with manufacturing be in contributing to this kind of job creation that has to occur whether there are the factory jobs or this broad continuum of jobs that we are describing? >> again we have scenarios but i think it is very large because if it comes back to what tom said, there are a lot of opportunities. our stance is that a lot of the

-- we are a very consumer driven economy, and what we heard it was great but how much we are going to spend depending upon the value of our house and where things are coming you know, innovation and technology create wonderful new opportunities for jobs and also consumption. it is its own virtuous cycle. taking a cited the plight of the number of jobs that can be created for many of these sectors health care as we look at it whether you look it positive or negative will be one of the biggest industries in the world. look at the demographics were going on there are a huge number of jobs we think can be created in that from the very basic level back to the point we don't have enough nurses were radiologists which is one level but there's a lot with a big data. if you think about what we can do now with the death and our bodies and where things are and what's happening i think this is just going to erupt into a big area.

so, it's not only the sort of basic of what we are doing now but i would say where it is going to be dillinger. that's why i say with food, somebody mentioned before about the food standards there is actually very big business is to be built on standards. i will tell you the chinese consumer will buy that. if you had -- if you think about what happened and milk and what happens with drugs, that is a very high value-added areas to develop just standards and how we do it. so our sense is we're sort of seeing the 2 million jobs we get to see directly. that was one number that we used. we could break it out on hold mcdata area we think that's going to be half a million, but again it all depends on how much we do in each of these different sectors. >> that's great. very helpful. questions, comments, criticisms. >> i don't know if it is a criticism. spinet your hand immediately went up. [laughter]

>> thank you for the interesting discussion. i met vietnamese american. we are talking about jobs and creating jobs for americans. would you say that we have any global level playing field and how we reach that? are you having trouble with the label here for us american workers compared to china? and would that create problems for the products? the secretary said that we wanted to create it here and export it around the world saw with the idea how are we supposed to create between here and over there? >> so, if i understand the question, can we commit a u.s. base compete with as a competitor who is based in a different part of the world with different standards etc. is that the nature of the question?

i would say it is an issue. no doubt about it there are parts of the world with lower-cost capital and lower unit labor rates than we have so that is a statement of the problem. it isn't a reason to give up. i think what we need to do then is to look at where we want to compete. there are some sectors we cannot through our product technology or manufacturing technology brainy enough to that sector to make it a sustainable business and we will exit those business, but we have found is there are enough places, banks to our intellectual property where we can create a product that has value for the consumer and in those developing regions are they willing to pay a price of the u.s. manufactured good? part of it is the security question and dominic is right around the food products and food ingredients is a new and important business.

part of it is the quality, the consistency of our products to get part of this specification, goods manufactured in southeast asia may be in the west and the materials will be specified at the international standard. some, there are ways to compete. there are some markets we cannot compete and it is up to the business leader to find out where and how his or her business can be successful. sola? >> talking about that at the highest level of products -- demint we have some products coming out shortly after to the estimate absolutely. and i mentioned this earlier. it requires constant vigilance.

don't think that just because you have a pet that is sufficient. you need to construct the strategies and i like to think it is the concentric shells. it is the outer shell. but you need to build layers of protection that go well beyond simply holding the patent in one part of the world. we studied the implications. we have proprietary ingredients and proprietary process these we use and we worry about cybersecurity and penetration of our intellectual property and requires constant vigilance and i think it does require government cooperation to build that fortress around our ability to manufacture in the u.s. and succeed in the global markets. question over here. yes, thank you. it strikes me that there's been no discussion of what i see as a contradiction between the need

for national investment infrastructure, education and so on and the dominant political climate in the united states where nobody wants to spend anything on anything in the congress and in fact they want to spend less on everything. and it may be worse off the earth the 2012 congressional elections. so what is the appropriate role of the private sector in publicly advocating for these kinds of greater expenditures in areas like education infrastructure? i recall a program here about a year or two ago where the case was made for the infrastructure board and the argument was being made that even republicans support that but i don't think anything has happened. >> medium the states but not at the national level. >> i don't know if it is the secretary or somebody mentioned that we have confused investment expenditure and we treated the same and i think that's just

wrong headed, so i think we have to get back to the basics about accounting and how we look at things. just on the infrastructure because it is an area that i'm very proud of, we feel we know that if he were to invest to under 50 to $300 billion a year in the u.s. infrastructure and we know serve precisely what area in the roads and bridges and so forth, you would create 2 million jobs. by the way, that to under 50 billion to 300 billion will come from outside. china investment corporation you've heard john horton talk about it earlier, the canada pension -- there are people that actually want to invest in infrastructure. it's not even our money. if they let us apply that to then it is to be honest and yet we can't -- d.c. that's great we have people that actually want to put the money down and we have needs in the areas that we've got to -- we have a market that doesn't work and that is

the shame when we have on a plant like that and i feel we need some -- to mention it i don't know if it is a transparency thing to say buy not doing things or taking six months you are costing people's jobs that are out there and i just wondered if there is some other mechanism that we could put up. why is it the we look at the stock market every 25 minutes on television about where it's moving? why aren't we watching what progress is on an infrastructure project and therefore jobs and the degette people -- why aren't we putting things a bit of that, so i feel very passionate because we have the money in there to put it in and the people are behind it, the needs are there and there's the bottleneck. the good news is that there is some local leaders that want to do something we just have to get the transparency so people see

at. >> maybe one question after this to get everyone sorted >> if you raised an absolutely fundamental question here and that is the way the government is accounting for expenditures. it's idiotic. now why is there not an outcry in the business community? this is something that could bring to ends of the political spectrum together because it is so totally obvious that we need the infrastructure to remain competitive. and so totally obvious that we have a big budget deficits. and so, it is also totally obvious that with some financial ingenuity it could develop the instrument to do this. this is where i think -- i personally think mackenzie and dupont and everybody should push

and we're brookings should push. >> this is actually going to take us back to the cultural conversation. so, you lost the stock market i want whittled a long and interesting because if we were up here talking about breaking in the city's with a celebrity let's say, there would be thousands of tweets right now. if we were focusing on transnet, urban building, maybe hundreds -- bikers by the way do tweets more than anyone else. i'm trying to get some tweets right now. there isn't a lot of twitter traffic and i wonder is that a sign that when we talk about the

real commanding height of the economy so to speak, innovation and exports, foreign direct investment we are talking about a certain code word of individuals and institutions who are not really plugged into social media, they aren't spending most of their day engaged in this and the end of this comment is, you know, to use a margaret thatcher praised what in they have to sex this a little. [laughter] to really get the culture change we need around labor, are on skills, around seeing this as a career path because when you think about the american zeitgeist there is a test that

we have and the sneakers that happen around the country, they are well intended, right? we have to think of the cultural level their needs to be a different thought process of reach along with what anthon has described as some of the key policy things we need to pack to get done. any thoughts, are you on her twittered? spec i can barely handle e-mail. >> one thing to say on that if we could get twitter going on investment versus expenditure but i agree with your profession. >> one thing we could say i think with that said we could leverage it. one story again, there was a -- the fellow who basically did chariots of fire. i can't remember his name, in the house of lords now focused on education. he basically was doing good

advertising and they gave it to a social media house and the company that won it was for lifeboat savers in the u.k. and the people who are providing the money for the average age 65. with this small little advertising agency did was they found 25 blockers who average age was 15-years-old and they had fallen on the order of 150,000 people. and then they sent a jacket, they said a little video about these people that volunteered and so forth. could a long story short the end of signing up 100,000 people with an age actually of 21. not a single dollar spent on advertising. so again i think that there is a lot to be done to happen to people to identify with the problem is.

i think people just don't know necessarily what the problem is and they can understand the tangible to people and then it is a matter of getting so many vehicles with is things like the education and the schooling system we talk about this. i think in the media to talk about a lot of it is on the compensation and where the stories of the heroes that are inventing amazing things that are going on right now. and so i just wonder in the media we couldn't to glorify, i don't know, something doesn't seem right on the invention side but that is the great thing to be doubled to go to read the last thing i would say there's a group of german businesses the decided to focus on this whole thing. the way they did is they went to kindergartens and they developed a little box which was to get people to sort of look at how you can do little experiments because their view is if we get

people excited about science in kindergarten as these business leaders did and it's probably not social media -- >> any thoughts about this about unleashing the hidden talent. >> i think that there is a culture change and i would agree it is -- custis orderly and k-12 is the key to getting more interest in science and innovation and at the higher levels. i served on the national academy committee on saturday morning sitting around the room with a table full of professor from the leading research universities. we said what did we all have in common? there were two things we had in common. one was a chemistry set and we were lamenting the fact all the good stuff was out of it for legitimate safety reasons. but the other factor that we all had in common was a high school teacher that made science and if

we can put the excitement in the classroom we will get the kids majored in the university's. >> we had the mayor at the university last night in chicago and he made the point which he has made many times before which is just so crystal clear that we are not teaching invention manufacturing any number from the early stage up we sort of lost that. we had this sort post industrial nirvana or post industrial industry so you don't need to teach at. i really am struck by a lot of what's been added to the conversation here on both the policy front and on the context

will front. last question and since i have the floor i can ask why want. we have been working with a group that literally builds on this question about vietnam and some of the southeastern economies. we've been working with a set of u.s. metropolitan areas on chongging to book enhance advanced manufacturing services but also begin to engage with international markets and our next panel is here so this is going to be sure to. in the same way when someone comes up to dustin hoffman and says plastics, you know, we have a brazillian names for all of the emerging markets and developing economies and in the united states on like other countries, we have many immigrants here who really bad to these countries, so if you are thinking about the interplay of invention commercialization production and exports, the

answer would probably be i have to understand what the metro is and what sectors are before we end up talking about which country and partner they should really engaged with, but out of all those acronyms, are we sort of missing the next group of emerging markets, are we focused too much on the big ones and therefore missing so many opportunities in the next year? what should be on that? >> well i think that there is as someone said before 90% of the consumers are outside and so forth. i -- one plug i would like to make is africa and this is a place that is moving. nigeria will have more babies born than all of europe combined, so africa and to food.

>> i would say for us brick has been more thick but i'm going to go where domenic went and this is for the veto in africa last year to go to understand them and still certainly not in the category at but it's time to lay the groundwork for what's going to happen economically over the next 20 years. >> as the british say we are going to have a march of the makers in the united states and this panel and the prior panel's have helped to eliminate how to do that, and now i'm going to turn it over seamlessly, maybe, to my colleague. thank you. [applause]

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announced improved diplomatic relations with myanmar also known as burma. after mine marce desolate to lead to military dictatorship announced would free political prisoners the u.s. agreed to exchange ambassadors with the country for the first time in two decades.

>> true political settlement. this would broaden the political activity, and by doing so it would lay the groundwork to fully implement legislation that would protect universal freedom of assembly, speech and association. i also urge that all illicit military ties with north korea. since then, we have seen progress on several fronts. today i join president obama in welcoming the news that the government has released hundreds of political prisoners. several of whom have languished in prison for decades.

this is a substantial and serious step forward in the government's stated commitment to political reform, and i applaud it and the entire international community should as well. we have welcomed these dramatic steps as a further indication of progress and commitment. many of the people released today have distinguished themselves as steadfast courageous leaders in the fight for democracy and human rights. a critical time in their country's recent history. and like all of the people of their country, they want and deserve to have a voice in the decisions that affect their lives. i also warmly welcome news of a cease-fire agreement between the government and the national union. they have been involved in one

of the longest-running insurgencies anywhere in the world and entering a cease-fire agreement that begins to address the long standing grievances of the people is an important step forward. it is in that spirit that i urge the government to enter into meaningful dialogue with all ethnic groups to achieve national reconciliation to allow news media and humanitarian groups access to ethnic areas. in addition to the cease-fire and the release of political prisoners, the civilian leadership has taken other important steps since assuming power in april, 2011 including easing restrictions on the media and civil society, engaging in a substantive dialogue and demanding electoral law to pave the way for the national league for democracy o