the human body and mind in a way that wasn't possible several years ago. i tried to talk to people to find out what's going on and what were learning about our limits and how we might overcome them. it's pretty obvious this will be a tremendous area of growth in the next century. you guys are the ones who can figure out how to monetize it. various different areas are coming along in different places. the first person wrote about, the first person i talked to sort of demonstrates an area where already there is progress that can be commercialized. that person is a man named hugh and i'll tell you little bit about him. the sky, this was a great story of human resilience.

he was not the best student in high school, he was a c and d student but he loved to rock climb. he was already, as a teenager, a world-famous rock climber. he had been on some rockclimbing magazines of the young prodigy and all he did in class was think about rockclimbing and one day he went hiking in mount washington new hampshire with his friend in the ice climbed and they got the top of the mountain, the wind shifted and they were in the middle of a blizzard and they went down the runway. they descended into the wilderness. they wandered and they got lost and they almost died and they were rescued on the brink of death and he had severe frostbite in both his legs were imitated below the knee. the doctors told him he would never walk or run or climb again and every night he would go to sleep and he would dream

that he was running through the cornfields behind his parents house with hair, the wind running through his hair and he would wake up and see his legs were gone and was devastating care. soon he was tired of being in bed so he scooted out of bed and started climbing around. he realized he could pull himself up on the refrigerator. he had all this arm strength. he convinced his brothers to take him rockclimbing, and on the rock wall, he was able, he was even lighter than he was before so he began tinkering with his pas prosthetics. he made them long and stomps with blade so he could climb these areas that he can climb before and soon he was an even better climber than had been before and he was on 60 minutes and kind of world-famous again it was this inspirational story of this boy wonder, but when he got down, his prosthetics were no better than the peg leg that had been designed for civil war soldiers or parrots a couple hundred years ago. so he began tinkering with

them and he began enrolling in engineering and math classes and he became a straight a student and he was a accepted into mit and today is one of the leading bionic engineers in the world. what he has done is, he has taken these technologies that i'm talking about that are driving this revolution which are computing and sensing technologies and he has used them to make bionic limbs that are so similar to the real thing that when i went to go visit him at mit i couldn't even tell he was wearing them. we were walking across and i was slipping and he was wearing fancy italian leather shoes and what he did, this is sort of what we will see more of a greater resolution, but when you think about it, i wrote down this number. we have 206 bones and joints at about 4000 tendons.

small portion of those are on our leg. what he did is he took able-bodied individuals, use the same kind of motion capture technologies that you see for any of those movies, and he had them show how parts of the legs move in relation to each other. you can tell when your ankles at this angle in your knee is here and you're moving down at this and what happens to your foot. he was able to take these variables and put them into a computer algorithm and put them on a computer chip and then he built robotic parts that can emulate the real thing. it's a manageable number when you think about it, 206 bones, 306 joins, however many different parts, but it's still beyond our capacity to figure out by hand. when you think about the

advances in computing power and sensing power just in recent years is set only becomes a manageable problem and so he built robotic parts out of silicone and various things in this device that he has made a just 100 times. second. he's done tests on treadmills with oxygen and co2 and it really does emulate the real thing. it feels so realistic that disabled people, often when they tried out to begin to cry because it feels so real. there's a long way to go. you have to hook it up to the nervous system if you want to do the real thing, but that's just an example of what we can do. when you take that further, that's what i wanted to look at in my book, all the different areas we hear about have to do with reverse engineering and doing the same thing except on a much greater level. how many neurons do we have? we have 300 billion i guess i

may be 3 billion nucleotides in our gino, we don't have computational power to reverse engineer that, but it's amazing, people are trying to do that to a certain extent and it's amazing how far we have come in some of these areas. when you think about genetic engineering, there are some mutations that are caused by a single, some mutations are caused by a single mutation. i look at one of them, there's a negative regulator muscle growth and it's a protein and if you knock out that gene you get bigger muscles. there's somebody who was at the university of pennsylvania named lee sweeney and he made these things called arnold schwarzenegger mice. they got really big when he knocked out miles staten. he's been using this as a potential therapy for people with muscular dystrophy and then of course dopers got a

hold of this and meatheads are getting ripped. so lee sweeney, in addition to pushing this and trying to push this is also a member of the world anti- doping society. when you look at something called intelligence, some people, there's thousands of genes that can be involved in combination with environment we don't necessarily have the computational power. there's a company in china called bgi and they have sequenced about a thousand people with high intelligence that have been trying to get to the bottom of it, but they are using supercomputers and it's only going to get easier as these technologies improve. that's one example of where we are and in terms of the brain, i looked at the most extreme example which is china understanding and decoding and imagining speech.

there's people, it seems like the ultimate challenge there's people who have what are locked in and have lou gehrig's disease and have lost their ability to speak. there's a project that was funded by the u.s. military, there was a guy at the army research office was a scienc science fiction fan and he had always dreamed of a thought helmet. he actually funded people under some here from washington university, i wrote about him, he's in the mit technology review this month and i watched him do brain surgery but him and a collaborator, they actually, they have discovered an actual neuro- signature of imagined speech and what they found is that when we talk our mind sends a signal to the motor cortex to tell the muscles of our articulators how to talk but it also sends a copy to the auditory cortex as a

correction mechanism so we know when something is wrong. amazingly enough when we just imagine speaking, it still sends the signal there and you can actually pick up that signal. so eric from washington university and another researcher can tell if they are imagining or reciting the gettysburg address or the mlk i have a dream speech, but they can't, you know, listen in on your thoughts and decode it yet altogether. but you can imagine that once we have computational power to monitor 100 million or 300 million neurons, maybe something like that would be possible. anyway, as you can imagine there's all sorts of areas where there is potential growth in the future and that's what i explored and there's all sorts of ethical issues as well. i asked somebody at the beijing economic institute, what you think about should we

really be able to tweak intelligence and he said well, i think every parent should be able to have their child be as intelligent as they want and i thought well is there anything that would alarm you. he said why can imagine very aggressive tiger mom who wants to engineer her child with perfect combination of intelligence and ruthlessness and she gives him anti- social lack of empathy and so that was a little alarming to think about. so i don't know. we have to grapple with these issues and there's no easy answer. i asked military scientists of if these were good technologies are bad technology and they said it depends. as a baseball bat a good thing or bad thing. it's good if we play baseball and it's bad if we beat someone over the head with it. these are issues we have to deal with. in terms of commercialization, it depends on, it's just going to increase our level, what we rely on now we rely on small

molecule drugs and we systemically alter the molecules in all of our body will be able to get more specific as these technologies improve. i also wrote about a technology weather actually trying to stimulate neurons with electricity which is much more robust. we are a long ways away from us. anyway, that is my talk. i'm happy to answer questions. thank you. >> did anyone want to ask a question? >> in your lifetime do you think we will be able too.

>> in your lifetime do you think we will have solved the most complex dangerous brain cancers? >> i don't know, but i have seen many encouraging things. one thing that's going on you've probably heard of is immunotherapy and somebody was just telling me last night there was a national laboratory whether using supercomputers to look at cancer and look at some of the data sets from veterans and as we have big data, we can discover some of these things. i did, i have been down to a place in houston where they've set up this platform where they are looking at sort of, there's an interesting battle that goes on between different cancerous tumors and the immune system.

i don't know if anyone has heard of these things called checkpoint inhibitors but they saved jimmy carter's life and basically there are the switches in the immune system that can be turned on and off and some cancers are able to flip a switch that turns off different components of the immune system and at m.d. anderson they are learning to flip it back on. in glioblastoma, i'm not sure what goes on in that, it seems a very effective way to fight cancer would be to harness the body's own immune system, but i do not know specifically where they are on that. >> thinking about how you suggested that a mother might choose particular traits for

her child, sort of raises the nature versus nurture argument from a different perspective, but presumably, the child would still be limited by the genetic material they had to work with. >> right. >> well i guess the idea that bgi is going by her that people are talking about is if you understand the genetic code and what combination of nucleotides would predispose someone to intelligence then you could use something like the various gene editing technologies that people are developing to rewrite the genome and give them that combination of genes, that genetic code that would allow them to be the most intelligent, but you know i guess what i'm saying is there are so many variables involved and it's so complicated that it's such a complex combination between different nucleotides and an environment where i think we are a long way from decoding exactly what will allow us to control intelligence.

>> if we can just add a little complexity to that, we thought, as biologists in the human genome project when it was complete that we would understand this. turns out as we, as most of you know, each gene codes for a peptide or protein. so if you know how many jeans you have, you should be able to match those to the number of peptides. it turns out there's several multiplication and the diversity from the genome. so just by gene editing, it won't get you that. the other complexity here, is if you take two identical twins, humans, some of you may be aware, their fingerprints are actually different. even though they have exactly the same genome their phenotype has been modified in their embryonic development let alone the nurture once are born. simply thinking that if we can identify the gene, slice it,

put something in and result in a final human being that will have those traits is far from the reality. nature has levels of complexity. i'm just giving you some examples. it's not just one gene, one trait even when we think that's the case. >> on the other hand, there are some, genetics is some weight revolutionar revolutionizing certain companies. regeneron is a company that has partnered with all sorts of academics who are studying populations that have rare mutations with powerful affect there's also this company in iceland called the code, because the population is so homogenous, they've collected a lot of the dna from a lot of the individuals and it's

easier to spot very powerful mutations that are associated with different diseases that could predispose you. usually at the combination of a lot of things. for instance, they had found in elderly patients a mutation that seem to make it harder for them to get alzheimer's disease and it didn't explain alzheimer's disease, but apparently it made it harder for them to form the tangles that actually cause it. if you could replicate that with a small molecule drug, you could presumably combat alzheimer's, but you couldn't give somebody intelligence, necessarily. >> adam, as you went around the world and talk to people, did you notice a difference from an ethical perspective in intellectual augmentation versus physical augmentation? >> i don't know. it seems like there are some

studies from scientific journals that many people in academic already try to intellectually augment themselves with ritalin or all sorts of stuff, and i don't know what it's like in college nowadays, but, i have actually, you can see the same thing that happened was steroids is happening with some of these genes and things like miles staten. as soon as they get discovered in the scientific literature and are used to help the weakest among us, steroids were originally used for muscle disease in people who were survivors of the holocaust, athletes started using them. recently i wrote about somebody for businessweek, a guy at uc san diego named james evans and he's actually found a mutation that has

found these receptors, but if you tweak them they can make, they can allow a mouse to run twice as far as he normally would. it's like this fat burning switch so if you administer this drugs, the body starts to burn more glucose and you delay the point at which it hits the wall and they call these mice marathon mice. when he first published the paper about a drug that did this in 2008, he gave a copy of, a reference sample to the anti- doping authority and i think they've seen them on the tour de france within two weeks. but the anti- doping authority was so alarmed that they put out a notice warning that the trials has been stopped because they had found it caused cancerous tumors in mice so that helps a little bit, but i think there has been evidence that the soviet,

or the's former soviet union doping society have used this in some places but recently they came out with a new drug that supposedly doesn't have these tumor causing effects. you can be sure it's already being made in china and bought on the black market. it's hard to control. [applause] think you. >> our next session is a series of fireside chats and ted style talks featuring speakers representing a broad spectrum of the private sector who will highlight disruptive technologies and their impact on the u.s. economy. to moderate this session, please welcome the executive vice president for the council on competitiveness, mr. chad evans.

[applause] >> economic growth drivers of all overtime. in the pre-18th century, the main driver of economic growth was cultivation. it was extraction. in the 19th and 20th century, the main economic drivers are really manufacturing and industry. as we look forward into the 21st century, building on a manufacturing renaissance and new energy strength, what we see is that compute power driven innovation coupled with human potential will be the core drivers for future growth. this afternoon, conversations over the next 90 minutes will reflect some of this revolution, some of this transformation. as we explore the implications and the impact of big data and data analytics. america's future workforce, the challenges and the opportunities they face.

the rise of robotics, autonomous systems and an increasingly on-demand economy. an increasingly touchless society. new frontiers of medicine and healthcare and cyber security and cyber resilience in an increasingly fragile world. this afternoon's first insight will come from the doctor jackson, the vice president and chief technology officer of lockheed martin. he will share some of his thoughts on how the physical and digital word ol world are colliding and converging every day through sensors, networks and the tsunami of data. big data is a game changer for generating value and enhancing competitiveness. as a society, we produce today , actually every two days, as much data that was generated from the beginning of time until the beginning of the 21st century. and then, in just two years the amount of the available digital information in the world will rise from 5 - 50 zettabytes. within this turbulent data rich, image driven intensive

world, companies and organizations are finding ways to seize opportunities, expand the horizon and create new businesses, new markets. i would like to welcome doctor jackson who will share his insight and perspective from space and defense sector. [applause] >> i am finding the clicker here. thank you. let me maybe that with the question. how many people got to the form via commercial airlines? so first of all, i'm glad you all made it here safely. i'm hardly surprised. the reason is, the likelihood of anyone being involved in an accident, any accident, not a fatal accident is about 3 million.

our airline industry commercial aviation has an amazing safety record and the reason is the industry has been laser focused for many years on finding and fixing every problem whether it's materials and manufacturing, design, maintenance, ultimately things like pilot training, flight operations and so, if you look at the record overtime, you see this incredibly dramatic improvement over many years. that's the great news. the disappointing part maybe is when you get that good it's really hard to's continue to improve anymore. or maybe that was the disappointing news because the reality is, when we come up against these kind of walls, what happens is typically so gam some game changer comes along and creates a whole new paradig paradigm. for our generation, one of those game changers is big data.

so, let me give you may be an example. i will start with the f92 helicopter. the f92 is built by one of lockheed martin's, it's a helicopter manufacturing division so the f92 is already the safest helicopter in the world. this brings me back to aviation. the s92 is actually a flying sensor hub. it collects 100 megabytes of data every hour. so out there there's about 200, over 200 terabytes of data, over 1.19 flight hours and the volume of that database is increasing with the time. so, we use that trove of data to do root cause analysis of

failures to monitor performance, whether it's the mechanic or the aviation system so when that flight absolutely has to be there, like that example and the video of a baby being airlifted for medical care, it's big data that is making that happen. the sustainment team is looking at this data to be able to predict in advance any kind of potential component failure long before it ever grounds the aircraft so practically speaking, now we have predictability in flight hour operations that exceeds 95% and that's compared to an industry standard of only about 75%. you can see this is making a real difference. we are not just increasing safety, improving aircraft availability, we are actually driving down maintenance costs and were increasing profitability. so now, take that example more broadly. big data, the status tsunami,

this is really driving decisions for us as industry leaders about how to increase our performance, to increase safety, ultimately to improve our competitiveness in the global marketplace. a lot of that data is generated by digital devices on the internet and its increasing at an exponential rate. figuring out as business leaders how to capture the value of that data is ultimately one of the pillars of the fourth industrial revolution. there was a recent mckinsey global institute survey and they concluded there's going to be about $11 trillion of economic value due to big data in the internet of things. leading companies are now exploring, how will we capture that value for our organizations? lockheed martin is working on

this in many fronts. one of the exciting things i will talk about today is how we are actually reinventing how we use big data to redesign or design brand-new manufacturing facilities. today when lockheed martin decides to build a factory, we start with virtual reality, the date of analytics and even artificial intelligence. we build the entire factory in the virtual and digital realm before we even put a shovel in the ground. we actually simulate years of production flow and we understand how we build the hardware and what it will mean for the resources required. then when we actually build the factory in the real world,

we do the same thing, we collect that data, we analyze it and ultimately continue to optimize our production over time, increasing safety, quality, efficiency, reducing utilization and improving business outcomes. let me give you an example. this is a factory we recently built from the ground up to produce a new military vehicle. so again, you are actually immersed here and what we show to our customer to demonstrate our production versatility, flexibility and precision. in the virtual 3d factory we are using interactive shop floor production and assembly sequences to really understand not just our resource requirements but how to optimize that flow. when we look at the assembly line from end to end, we are actually figuring out how to make ourselves impervious to disruption. we are using a combination of

proprietary machine learning software, we are using historical data from our existing factories are using this model in simulation to ultimately figure out what our risks are and how to mitigate them. we are focused then on quality and safety. to understand what this means, this factory that i just showed you, when we went and built that in the real world, we did it flawlessly in less than a year. i have given you a couple of examples, real-world use of big data. have an example that's out of this world, literally. we are also using big data to overcome both the challenges and achieve the opportunities in outer space. think back almost 50 years ago we send astronauts to the moon. the apollo guidance computer had 64 kilobytes of memory. it operated at a blistering

43 kilohertz. when we send astronauts into deep space, now that spacecraft generates 200 share otwo terabytes, i don't want to exaggerate, two terabytes of data every hour. that's 10 million times the data rate of apollo. our next flight will be on land, but soon after that we will send astronauts to the moon and ultimately to mars. how soon that happens will do depend extensively on our ability to use big data, speed, altitude, we've created what we call mark five insight.

what mark five allows us to do, first of all it totally streamlines our ability to analyze this huge amount of data on the ground, but more important, in real time, on the mission, now we can compare all of the data that's being generated to every flight that happened before, every test that happen on the ground. now we can find and fix issues before they ever impact the mission and ultimately, that means bringing our astronauts back home safely to the ground and to earth. so like orion, big data is actually opening up brand-new frontiers for us. not just an exploration, but in productivity. of course, that offers us a choice, how are we going to react to this whole new world of opportunities ahead of us. let me finish up for you with the question, how are your organizations going to react?

are you going to embrace this big data challenge, disrupt yourselves, lead that revolution or you going to arrive late and struggle to catch up? at lockheed martin, mission success is in our dna. our mantra is work to make engineering a better tomorrow. for us, the choices very start. it's about whether were going to continue to increase safety and performance in aviation or live with status quo. are we going to build the connected hyper efficient factories of the future? or are we gonna fall behind in productivity. are we going to lead in mission success across the entire solar system or are we going to miss out on the future of expiration? for all of us, the choice is obsolescence versus competitiv competitiveness. every day there are 2.5

exabytes, that's 2.5 quintillion bites every 24 hours that are making that choice abundantly clear. thank you. [applause] >> thank you. that was great. as i noted in my opening, you really brought to life, innovation comes from people. thank you for those insights. i also should note that in the workplace and in the workforce of the 21st century, we are seeing some deep transformations take place. were also seeing unprecedented challenges. perhaps we see the snow more clear than in the energy industry and energy sector. another two and half million

americans work in industries that are directly or partially related to things like energy efficiency and energy productivity. as we look more deeply into the demographics of the sector , we perhaps see some troubling trends. for example, let's look at workforce demographics. just two years ago, the nuclear energy institute estimated that 39% of the nuclear industries workforce would be eligible for retirement by the year 2018. that's literally just days away. challenges become opportunities. like to talk about some of these challenges and opportunities. mr. niclas akins, chairman, president and chief executive officer of american electric power and the international president. [applause]

>> we are just going to jump right into our time is short. nick and lonnie, we've heard a lot about the explosion of information technologies and other technologies that are really relevant for your industries, distributed generation, smartphone devices, electric battery storage innovation, all of these and many other innovations are leading to new businesses, new employment opportunities, but they will also require skills and new workers. taking into account this new reality, i first want to perhaps get a snapshot, a response to you about those general trends and then i'd like to dive into a second set of questions it's really about what you see is some of the most important challenges and opportunities and matching skills, matching work first trading to these new demands. net, would you like to take off. >> absolutely. >> our industry is in such a

dramatic change right now and it's really appropriate that the previous presentation finish with big data. big data analytics, certainly the focus on technology, technology innovation have been transforming our industry. historically it's been built around generation transmission and distribution of electric power. today, it's more than that. it's much more than that. it's cyber security, certainly physical security, but also, in terms of the way innovation is occurring, we are not only taking advantage of distributed resources and sales, but also customer usage patterns, individual customers have different ways of using the product that we deliver, and if you can aggregate all of that and use it, it actually produces tremendous value for our customers. it's truly an industry that as you mentioned, with the workforce development requirements associated with it, we not only have to map the replacement of people who could retire just in our company alone we will have 5000 people retire over the

next five years, and we have to really map that out, but we also have to think about what are those jobs of the future, data analytics, certainly from a technology perspective, we have to have a different view of how that automation and digitization will have an impact on our business. we supply a product that this country absolutely needs. puerto rico is a perfect example of that. today we are in puerto rico doing work there, there is no question that as we move this transition forward we will have to think about ensuring that we have the workforce of today but also bridging into that workforce of tomorrow and certainly being instrumentally involved. >> thoughts and reactions? >> as we do the transformation and more of the renewable energies, the linemen of today

certainly is much different than the linemen of tomorrow. if you told me 20 years ago that alignment would have to be working with computers and doing all that type of electronics, they were climbing the poles and working physically and they still do and still well, but they will also have those additional skills that they have to have to do all the electronic part in the computer skills as well. >> what if we go little bit deeper with what you both described. nick, you painted a picture of a new industry that's emerging. what do you see are some of those skills that you need to develop. how are you partnering with the ibew to get what you need and i would ask, what has been the ibew experience with neck and his team and how are you working together? i'm curious, this counsel is all about the collaboration and convergence of industry labor and it's sitting right here in front of us. could you give us this case study. >> i can certainly tell you, they have worked together for over a hundred years.

we have over a billion workhours that we worked on projects that really have changed the world. the largest transmission system in the country, the first of its kind in many areas associated with that, and we continue to make that evolution whether it solar, wind, and our thinking about what does that mean in terms of the grid itself, the electric grid and the optimization efficiencies driven by new technologies, what effect that will have on the workforce requirements of tomorrow, apprenticeship has long been something that we have done. the ibw has done that for their entire history, training associated with that, but also expanding that training to include these new technologies and how to use the new technologies going forward. it's just an instrumental part of the transition that we need to make. >> again, with the training,

right now our construction side supplements our utility but when they've got bigger projects, they will use contractors. were bringing in more training for outside construction and the we partner very closely with our utility partners protocol them partners and not employers because we truly our partnership. we are very proud of the relationship we have with all of our utility companies. working together and collaborating to make sure we are getting quality workers, quality applicants to be hired by the utilities and also in construction. >> we are also partnering with the technical colleges. i think there's a real issue here, we have a shortage of line personnel across this country, but also in terms of these new technologies to make sure that we have people that can do these kinds of work. we are starting everything from stem related education

early and middle school to high school and mapping those careers into jobs. jobs today and jobs of the future as well. >> i want to go deeper. you mentioned just a few minutes ago building the largest transmission project in the world. we've heard earlier in the day about the scale of the challenges and opportunities, not just in the united states but globally. if you begin to think about your next big project, the next generation that you think will be able to deliver the energy we all need, one i'm interested how you begin to think about that, how do you pull together the partnerships that make that happen, and i was curious in addition to the great work in a partnership of labor, what are the new opportunities with community colleges and technical colleges. other things that you see that you need that aren't there yet, are there things in this room that people can help you with much mark. >> absolutely. from our sip perspective, cyber security, making sure

that we have those kind of skills to be able to adapt to many of these new technologies that are digital and automation type technologies. if we want to continue to drive efficiency at the same time as providing the overall benefits to everyone in our society of electricity and how you use it, we have to ensure that our people can really map to those particular sets of skills. data analysts, the market is pretty strong for data analysts these days and when you think about the change from a historic system that we have today versus what were going to see in the future, the digitization and automation associated with that are going to drive huge amounts of analytics associated with it that we didn't even have before. i grew up as an electrical engineer running power systems and always thought this was the way things were map together, but there's a whole new realm. it goes back to the customer.

i give you two examples. smart cities and the city of columbia's one the sparsity challenge. that goes to electric vehicles, automation, streetlighting, all those aspects that should be mapped together. that means we need to expand the bandwidth of the workforce associated with that. >> the other thing we are doing is trying to get more qualified workers, especially on the line side. without utility trust funds actually built some training centers across country where

they need to start up a new training because of the aging workforce. we now have this opportunity if we can get people to go through this training that is like a boot camp. after they come out of that they have a pool of employees for the employers to then take a look at determine if they want to hire them. i have interviewed number of people who wanted to be line apprentices. the person you estimate is if you have any problems of heights. 30% of them don't make it past the first test of priming a pole. that's a huge skill you have to have. >> the apprentice ship program

takes five years to get to a fully functional line person. it really is something you have to think about. >> i'm intrigued by this point on the training centers. i see deputy director in front of me and other national lab leaders. curious of something, you talk about data analytics, greater and greater data needs, my other half of the council, i'm thinking high performance computing capabilities in the shared infrastructure that we have in our laboratory that perhaps could be engaged more. i would love to hear your thoughts around what you see is some of the tools that might be available that you're already using or need better access too. it's not just about the grid.

>> we are working with so many technology providers today. they're working on a relation of customer loads and system data to be able to really provide capacity benefits you don't have to build that next generation facility. i'll give you an example of a company we been working with, battery storage technologies that we've invested in directly but we talk about some of the aggregation, there is a company that does work with target. they actually cause an event to occur, the lighting comes down 50%. i'm watching customers and they don't bat an eye. they're still looking at what their shopping for.

there's value in that. that's what were looking at. >> lonnie, else when ask you a question that you raise in a gets back to this training center idea. you're working with the men and women every day, what is exciting to them to be engaged with companies like nixon others and how are you responding to that? what does the new labor movement look like in the space. >> especially with our utility partnership, they're good paying jobs. the good quality jobs. there's a lot of skill sets. their good middle-class jobs, they can provide for their families and we need more of those types of jobs. i love the partnership that we had, the utilities had mutual

aid. when they bring lineman from all over the last down in texas and florida now have a number down in puerto rico, they really are the first responders if you think about it. everybody's running away from the storm and they're trying to get things back online. we are proud of what we do. >> i'll add that to from the ibw perspective. your program is really focused on making sure people have the training necessary and also the right attitude associating with the work they're doing. when you work on your premise you know exactly what you will get. their educated, no other doing and many people think the union unions, it goes well

beyond that. there are people that some of these jobs require degree in molecular chemistry. there certainly are, cross bandwidth those kind of requirements and for the idw to be resenting those kind of professionals to our industry is extremely important to not only the security of this country and what we do everyday. >> we have a few minutes remaining. love to open it up for question questions. please raise your hand and will get a mic to you. and please introduce yourself. >> i was curious, are you using drones for any of the maintenance inspections and what kind of outcomes have you

had. >> we absolutely are. hurricane harvey, the hurricane season that's come through with irma, we used drone technology to get their space cleared and those kinds of things but you're gonna see more drone technologies continue to develo develop. then you think about what's the skill set, you need drone operators. you also need people to know about the electric extensio system. >> a quick question for you. the council has had a long-standing history over the past decade exploring things like security, sustainability, innovation and coupling it with a key driver for

manufacturing renaissance in this country. when you think about what you provide what you deliver, have you link that the manufacturing customer and the value you provide. what you see is a real opportunity. you see energy strengthen abundance or do you see fundamental challenges going had that we need to address as nation? >> we have to ensure that this transformation doesn't impede the progress of manufacturing. we serve the midwest and south central part of the u.s., a large part of our customer base is in manufacturing so very concerned about that. our business is not about building that next central station facility that cost a lot of money, it's about

optimization and efficiency. big data, all those things lead to the ability to provide that onshore manufacturer remain competitive want to locate in our territory. >> if we have to keep in mind and talk about infrastructure. they need to be thinking about energy and infrastructure as well. >> we talked about roads and bridges but we've got to go out and make sure that our grid is brought up to modern standards, we have to get more transmission lines so there's issues that would happen in one area or another we can move it around and switch around and still keep things up and running. there's a lot of modernization that needs to come even though were headed in that direction. many of our utility companies already had in that direction but there's a lot that needs to be done. >> if there's one thing from

an infrastructure perspective that we could do as a country that would really prove our competitive position for the next 10 - 2030 years, what would each of you say to that? >> i would say investment innovation and technology. this industry is the most capital intensive industry that there is in this country. over hundred thousand billion. year. we need consistency from the public policy standpoint to ensure we are making the right decision as we go forward provisional question with technology changing the way it is, we do need to have that forward view of what this industry is expecting what our customers and shareholders are expecting as well. >> i think the same thing on the construction side of the house, when we are continuing to bring people into train and do all this additional work

that needs to be done right now, having the ability for them to know that this is a career that's going to be sustainable career and that they're going to be able to make a lifetime living at it. were bringing in new people, were always thinking about will we be able to stain all these jobs. right now we need everybody we can get. >> i think from the perspective o of the council, that last point is critical. we face some long-term productivity challenges in this nation but it's ultimately about prosperity and are we creating an inclusive growing economy for the average american. i think you've provided some insight into how at least one major sector in our economy is really turbocharging and has the potential to make that happen. want to thank you both and i look forward to working with you going forward. [applause] >> thank you again.

we're going to pivot a little bit, this is a little bit of an unconventional set up. we're going to slide right into another conversation, but it's going to be about another critical emerging set of technology challenges that are really at the heart of american competitiveness, ingenuity and innovation. the massive transformation that we are living through today are just about big data and analytics although that's critical, and are not just about the changing profile of the american workforce although that's also really critical. another transformation that set the hardware long-term productivity potential is coupling both of these in ways where we are moving people, goods and services, we are truly living through a state of mobility. we are in an era of on-demand transportation, frankly we are living in an era of on-demand lifestyles but the industry is constantly redefining themselves daily through the integration and the deployment of things like in car or on

bike gps which is linked to a qr code or to a wireless mobile payment system, but all of which is surrounded by ubiquity, low cost and convenience for consumers. so i would like to go deeper on these things. i see our two cameras coming up to the stage so i would like to really welcome chancellor of the university of california san diego and the principal that all transit global advisors. [applause] >> hello. we also have a short time you get right into it. i'm going to get your reaction to something. it seems like we know a great deal about how human beings engage with traditional modes of transportation. we seem to know less today about how on-demand atomic systems in vehicles are going to respond to humans in cities

and the twisty roads of our suburbs and highways we also seem to have to learn a lot more about humans will be reshaping their own life in a world of greater mobility and economy. i want ask you the same question, and jump in, what you really see is a major societal transformation and the implications of those transformations as we live and grow in this more on-demand, super mobile paradigm. >> i think we need to think about it as not just transformation but it's also a consuming content. on-demand consumption of video and laying games. i think there's some fundamental structure changes in the economy. we are headed toward a zero marginal cost to own a car. uber is a great example. somebody had the asset.

i just pay the fair and i'm done for adobe zero emissions on the car but there zero margins on omissions because the manufacturer of the car led to omissions but the operation does not of their all electric. there'll be zero accidents, zero accidents, zero cost of ownership, zero environmental impact, and this fundamentally changes everything. imagine now that people have made their livelihood by manufacturing dishwashers and dryers and everyone of us who has a home has to buy one. now imagine you don't need as many homes because everybody is living in a room or two rooms and a larger commune type of environment or mention not everybody has a dishwasher. you can see fundamental structure changes in the econom economy, your behavior is changing, the way your living is changing, the amount of money you need is changing and that's what were seeing with the millennial spread their spending way less money

than you and i used too. i see a fundamental shift and i think will crack the economy open. living in this economy will take more technical savvy today. it's not just about creating jobs are getting jobs which is living in becoming technical savvy. >> your thoughts. >> iacocca what he is saying. if we do look at the current model for transportation, it's highly inefficient. 95% of cars are not utilized. it's one of the most inefficient utilizations within the current economic landscape. one point to million fatalities occur and if you look at the cost of ownership for combustion car, it's about $7000 above. if we look at the economic

impact, the traffic congestion has caused enormous impacts in the cost 2 - 4% gdp. if we look at 25% most congestion areas of the world, istanbul, bangkok, moscow and bucharest. an incredible amount of reduction, not only in time and wasted economics but also in health. the average child in bangkok, their iq points drop over 5%. if we look at atmospheres effects of co2, the current system is highly inefficient. what is a new system? the new system is where the

cost of a taxi is about $2.50. mile. an autonomous vehicle is 17 cents. were going to the law of zero exponentially. the cost of battery technology is dropping and by the middle of the next decade, electrical vehicle this price will be the same as a combustible engine, and if you look at by 2021, the cost of ownership will be the same. to be quite dramatic. additionally through the urban space, up to 25% of urban spaces based on parking. those parking garages will be reconfigured because of high utilization areas but at the same time, instead of driving, the cars actually become a mobile office in many ways. you get a lot more work done, or entertainment arrest because of mobile battery.

so it looks at productivity declining over time. the energy revolution is one where we actually see the increase in the increase will be positively beneficial to the world economy. additionally, if you combine that with solar energy and energy that niclas and lonnie were just speaking about, if you look at the world. [inaudible] it has the greatest differential between male and female education. the only director is female education delta. what will take place in the sunbelt, biometrics will be revolutionary. >> i wanted stay on this theme of revolutionary us. i want to present two threats. one is technological. both of you into that some technologies you might see

coming down the road that might lead toward the zero marginal cost world or toward a greater energy efficient productivity. like to hear from you both a little bit more about predictable, predict a little bit more for us. and if you could, also link that to the point you just made. couple that technological opportunity with what you see as your perfectly poised for this, what do we need from our students to make that world come to life? >> right now if you live in a reasonably sunny place, you can have someone install solar panels on your house that would power your house 247 plus put some electricity on the grid. you will get paid for it. in fact you pay nothing. you get paid for it. some operator somewhere has got the cash and the access and is using your rooftop as real estate. that to me is zero marginal

cost. i think one will see the same thing happening in a whole range of areas so the impact of this as a user now, as someone living in society, i have to understand what this means because it's not intuitive, but is potentially empowering. >> exactly, but you have to be aware. you have to have technical savvy to understand how this works and how is it that you're getting something for free and someone else is making money. so this is no different than me looking at your assets and deciding you don't know how to monetize the assets or you don't have the cash. i will have the idea and the cash in many use your asset to create some value for you. >> by the way, if you just look at some of these predictions, the economy, as is called could be a 7 trillion-dollar economy.

the question is, does add 7 trillion or is it part of the 20 trillion? >> can i discuss perhaps how within this, how can we make money? >> there's an area where there's so much disruption others more ideas about how capital will be lost versus where the opportunities are. i think the opportunities are threefold. we will shift away from a petroleum-based transportation industry by about the middle of the next decade. the oil demand will probably have bite 2023 or 2024 as electric vehicle costs come down. this will benefit other sources of minerals. i think there are minerals like nickel, cold cobalt, zinc and others but the technology is changing very rapidly.

the one commodity i think we will continue to have very high demand will be copper. the copper demand will go high and it can disrupt that. the other thing is electrical management so the number of companies in the u.s. [inaudible] to lee's can help enhance electric grid to an intelligent area where we can manage the electricity coming off the grid onto the grid and coming back to optimize that. the third opportunity which is a bit unusual is the fact that many countries import

significant oil. if we do look at the price of solar energy in india, it's now down to below five rupees. so, 50% of the official grid capacity are diesel generators. as we go away from that, toward battery renewable industry, there will be much less oil import. it's less for currency and you have a much better conditions and the prices will boom. areas that will boom are currently importing oil versus countries that are exporting them. those are the three areas for me to the capitalistic rhyme moving to make money. >> only give us a chance where we have two or three minutes to give the audience a chance to ask any questions.

if there are any, raise your hand. i just want to go back one more time, your position in a beautiful part of the world, you have great students in a tremendous university, you're on the cutting edge of technology. where do you see in this space of this highly on-demand zero marginal cost world, what are students telling you about where they want to go and how are you helping to empower them to really capitalize on what he's describing. >> 's not the students as much as their parents, these 18 -year-olds there only 40 or 45 is old and a third are first-generation and they really focus on is my kid can have a better life and i will just like all of us have had. now these parents are really concerned they may not so they want to focus on health, they want to focus on medical sciences and in these areas. so finding great, but what

causes me concern is a deemphasis on art, humanities, social sciences because these are the areas, believe it or not. it's not mathematics that allows you to do critical thinking. mathematics allows you to do some sort of problem solving. critical thinking, making an argument is to english and philosophy and political science. these are the areas that are being emphasized within the families, through the students, onto our campuses, and i think we are a downward spiral that causes me concern. >> how do you respond to that as you think about capitalizing on opportunities, does that matter to you or folks in your world? >> the human experience is complicated. it relies solely on technology based on binary logic and as they mentioned, the world is actually solving human

solutions and human problems so technology is a tool. we need not only artificial intelligence, but we need accommodation of broad-based area. it now comes from the interdisciplinary approach. i've heard some of the professors and chancellor speaking here at the conference and it gives me great confidence that they understand this. this is a knowledge-based economy that requires diverse knowledge and so the educational institutions that are presented here are providing the future. >> we are getting the red light here. in the final closing thoughts, obviously talked, this is a global conversation that is a

national competitiveness forum. pulling from what you've just shared with us, what would be your one recommendation for the u.s. in the space? what can we do to ensure we are actually leveraging these opportunities. >> i think you will see different business models we need to create an understanding of how these models lead to opportunities. for example, i can imagine car companies are just asset managers now in their giving mobility of the service. i can imagine them becoming transportation network service providers. that will create job opportunities for these companies which are beyond the industrial engineer, the mechanical and electrical. i think we need to be thinking about, as educators one of those areas we open up and.

>> as universities require more interdisciplinary approach for engineers look at humanities and humanities learned mathematics area and we get different groups to speak to each other as the earlier chancellor from arizona mentioned that gets biomedical with medical, this is a completely new way of knowledge learning that has huge historical precedents from two or 3000 years ago. we became so industrialized and sideload in the past century that reorganization requires leaders. >> thank you. [applause] >> thank you. fascinating. i have to just tell quick story, i was actually recently in phoenix with a colleague of mine who leaves her global counsel and we ordered in uber

which was driverless, but the driverless uber actually had two drivers, one was a driver just in case we went off the road and we could try to save us and the other was an engineer. so not quite there yet but were getting there. thanks again. earlier we heard from nick and lonnie talking about workforce challenges. we also heard about how autonomy that's on-demand, paradigm is radically changing our society. what if the transformations go even deeper. concerns are mounting around the appearance and rapidly advancing robotics and artificial intelligence across the entire economy. both of which are triggering a number of dramatic and dire positions about the future of the human workforce. some estimate that 50% of the worlds current work can be automated using already demonstrated technology. a similar estimate contend that up to 800 million people,

including a third of the u.s. workforce could lose their current job by 2030. we are hearing this constant drumbeat of gloom doom. what's really happening? might we not see a growing demand for new jobs and new opportunities that don't even exist today? might we not see the demand for work and workers increase, partly fueled by technology driven productivity growth. i'm happy to have on stage and to invite to address these issues the chairman and chief executive officer. it's really help us too sort through these plans and the conventional wisdom. it's over to you. [applause] >> the type of my talk is that the robots are coming. i feel like paul revere. i guess the follow-up question, are humans going to be needed? sure they are. by the way, nobody has called me necklaces sister francis loretta in the first grade so look, my talk is gonna be like

this. the robots are cut coming, it's inevitable but the time is uncertain. singularities are few. whatever happens and when they come, they represent a risk to america. america's strength has always been a population and they are a risk to our self-esteem. because america's view of itself always has to do this work, but there is good news associated with this because they don't threaten everything and there are ways around this in the past through, i think, managing through this, has to do with capabilities spread across our workforce that is the upscaling of the american workforce. i've said for many times that this is a seminal issue of our time. the question is how to deliver that and overcome the question.

>> i'm just a simple toolmaker. you've heard from phd's and all these other people. i'll give you my 102nd resume. i was educated as an engineer in the east. i started life as a football coach for with the american army in vietnam. was a chief strategic officer and lived for 11 years in asia and then by stroke of luck came to the great snap-on company none of which has much to do with me but it's been a good fortune of my life. along that time i have closed, much to my embarrassment and shame, several factories. i've opened many more factories. the people i've enlisted in those businesses that have been associated with, i think they have built lives of prosperity and pride and dignity of which i'm very proud that i have met extraordinary leaders beyond my station including the eminent and the honorable deborah smith who leaves this organization and is down here, but after all that, thing is most important, the thing i'm

most proud of is i delivered my own daughter in the backseat of the car in a parking lot at 4:30 a.m. when i iran around the back and went into the back seat and grab that baby by the ankles and hit it on the rear end and heard it breathe its first breath and make its first sound, it was a great moment and my wife asked me if it was a boy or girl in the backseat of the parking lot at 4:30 a.m. i was fooled by an umbilical cord. true story. keep that in mind. okay look, the robots are comin coming, but history's singularity. [inaudible] in 1829 was the first time we

saw indoor plumbing in the united states but to robert johnson at the university of chicago, kaunas in 1940 still, 40% of the homes in america did not have indoor plumbing. 2006, i remember working on adaptive cruise control when i was a young engineer. it finally came to fruition in 2006 in automobiles available as a feature. by 2020 will be 5%. so singularities occur, but the time constants are uncertain. that doesn't mean we shouldn't prepare for them. but it doesn't mean it's going to happen next thursday. the story about robots, that's the way we should look at it. it's not can happen by next thursday, but it's coming. what does it mean? it threatens america's very strength. because of the brilliance of the few and the efforts of the many, the people have made those capabilities and those innovations so strong and

robots seem to threaten that. they further threaten our self-esteem. the american dream has always been about keeping your family warm and safe and dry and having lives of pride and dignity. if you think that self-esteem isn't important, you didn't listen to jim clifton who said that one of the problems we are seeing is america doesn't know what to do because of not having jobs and i'm thinking, a lot of people have tied the opioid crisis to this although i'm not ready to do that from this podium, but americans really want to know that our strength has been about contribution and work on it has been our strength. makers and fixers spread across this nation. one of the reasons why we have so much angst when we see the middle-class shrinking in their salaries not going up. and so, you can see this, and

in fact, okay, there are a lot of proposed solutions. martin ford wrote a book the rise of robots. he's from silicon valley. he and i are quite different. he said look, we will have it and a few people have brilliant ideas and the rest of people will get a universal maintenance salary that will keep them well. that's one way to go, but i think not for americans. the atlantic monthly wrote an article two years ago called worlds without work and at the end of that he concludes that a world where the brilliant few subsidize the millions through some sort of universal basic pay where america is the road to civic ruin and loss of self-esteem and it would no longer be the america we know and in fact, in competition with other countries, anybody can employ robots.

only america can take them hundreds of millions of people and apply them too capability. the important factor i believe. so, there are ways, you can say wow, the robots will replace every buddy. i think the answer is that robots are like prior industries and so will be but it's mostly the humans who are working on repetitive jobs. if you read the new york times there was an article about alex williams who had a talk about will robots take my child's job and i think he ends up with a great line. he says they're talking about the idea that repetitive jobs of all kinds, blue-collar and white color the jobs that deal of variation will not. final mine is a great one that's near and dear to my heart. the rubber plumber is far far in the future and so it is for the mechanic and many other

things. i can tell you, if you think about snap-on, it's a toolmaker. we make tools we have adopted robot after robot after robot from sea to sign shining sea and our employment has grown. why is this. because, the obvious goal of robots hadn't been the focus, and i don't think you'll will be the focus in the future. most people think we will adopt robot so we can lower cost. i think that's wrong. i think we will adopt robots and see their best used to expand the customization of the services of the product, and therefore empower those people who can manage the variation in their jobs. that's what happened that snap-on. we've expanded our employment while we batted robots. there's kind of a visceral thing to it. this gets back to the beginning. okay, continue imagining driving long and my wife

starts screaming in the back seat and i had to depend on the robot in the back. i don't think so. i don't the robot will ever be there. and oh by the way, if the robot had done it i wouldn't have that memory of being fooled by the umbilical cord. it's kind of the human example but we have preferences for this. so the robots are coming. we don't have fast, we know they threaten our strength and they threaten our steam, they threaten the american dream. we have to make sure our workers can deal with the nonrepetitive tasks. i've said this often. upscaling the american workforce is a seminal issue of our time and i see no path to prosperity without this happening. it's the idea that we are in a global competition for jobs. people get ideas and then the many compete to be the amplifiers of those ideas.

we are in a global competition. as the workplace change, america has to change with them. i am urging a kind of emphasis on upscaling. not just an engineering school. he was appear talking about liberal arts is required for critical thinking. he doesn't consider critical thinking that comes from the zen of vehicle maintenance. [laughter] the thing is more what we considered technical careers, welders and other things. there's tremendous insight because they are wielding technology. how do we do make sure that the schools match the curriculum. that's not so easy for you educators. it's not sometimes when you approach education and they say we would like you to teach

this and they say what does your businessman say about education. not all educators at do that and many are receptive and i think it's the relationship between business and education. but then there's the other thing. increasingly, as we talk about robots, the perception of the stability of the job becomes more in question. people that accept jobs, whether you're talking about a manufacturing factory or a vehicle garage or maintenance thing rocket boosters, people think those jobs are going to be taken over. : :

>> and it is fit only in huxley terms to the gamma minuses of our society. and this is something we must guard against. and the more we talk about the march of technology, the more that becomes a risk. we have to guard against it. so this is my, this is my pitch here today. i think it's pretty short. the robots are coming, but it ain't happening by next thursday. it's gonna happen. we don't know what the, we don't know what the rise is, but we've got to get ready for us. they do threaten us. they threaten america's strength. the broad population which has always differentiated us and our american dream which is having a job that delivers by my own hand, by our own hands ability to keep your family warm and safe and dry and the generation of pride and the earning of pride and dignity. all is not lost because there's a lot of jobs end enabled by technology -- enabled by technology that require to deal with variation. but they require the increase in capability and upscaling the

american work force by action and by perception of those jobs is the seminal issue of our time. there is nothing more important. you can look at it this way. when we see the future and we see robots, we can either say we're going to go to a universal minimum payment and say the american worker is a question, or we can say the american worker is the answer. and if we arm them with the capabilities, they will wield technology to our advantage, to our national advantage as it always has been. thank you all for listening to this, and i wish you all a happy holiday and a great new year. [applause] >> thanks a lot. i have to just shake your hand. >> hey, thanks a lot.

>> well, thanks for many things, nick, including reaffirming human potential. well, the radical changes that we've explored so far in news sets of conversations aren't limited solely to the manufacturing sector. many of the disruptions that we've talked about are rippling as rapidly, if not even more rapidly are, through all sorts of industries including finance. in a recent pew institute study, 24% of americans indicate they make no purchases using cash in a typical week. and nearly 40% indicate they don't particularly worry about having cash on hand to make purchases. and as we have heard every day in the news for the past two or three weeks, cryptocurrencies and virtual currencies are on a tear. the value of a bitcoin has increased by 1300% year the date. this rapid, quick emergence and exponential growth of a new type of currency tees up a larger, more fundamental long-term question for the united states and the rest of the world. can we imagine a world in 100,

50 or 20 years in which the u.s. dollar or the euro or the chinese currency is no longer the global currency of choice? what would this mean for competitiveness in the united states for the rest of the world? i'd like to introduce our next speaker, mr. jeffrey warnick, to share some of his thoughts on this topic both on bitcoin, but also the underlying block chain technology that's really revolutionizing the financial industry. so, jeffrey. [applause] >> on beginning to talk about bitcoin, i'd like to, first, discuss how it should be framed. because i think, i think there's -- mostly, there's

misinformation, disinformation, and many of it intentional, some of it unintentional. so we have to think about the framework under which the bitcoin ecosystem and the block chain ecosystem was designed. i'm just guessing to some extent, but i have been involved in conversations with people who are talking about creating digital currencies prior to the paper which appeared in 2008. so what was happening in 2008? we were in the midst of a financial crisis. so prior to 2008we really thought about it, somebody would have said the financial system is a fraud while home prices are rising, everybody's feeling wonderful, nobody would pay attention. so what happened in 2008 is the financial system collapsed. the way the political institutions responded to it has been questioned by many people. so everybody, so it became the perfect opportunity to say that there is turn to fiat money. for a long time, there's been

people -- and when ronald reagan ran for president and said people don't remember his platform in 1980 and supply side economics, one of the things he talked about was going back to gold, a hard currency. and they formed the gold commission that ended up not embracing gold. so, and the average life of a fiat money regime is somewhere between around 45 years, so we're about 47 years into our fiat money regime. so what does bitcoin and block chain represent? with respect to what are the failures of a fiat regime? it's backed by nothing. so, as opposed to gold-based money which is considered a hard currency. but we don't need the hard currency anymore if we have something that's sort of a virtual currency that everybody can hold this their, in their wallets. so that's exactly -- but if you take a look at what happened when the united states was most competitive, it was in the 19th

century, you know? prior to us being a central bank. when there was issues about really who even -- because the constitution was first formed had defined the u.s. dollar in terms of gold and silver. so we went through a period of time where we had no deposit insurance, no no central bank, lots of bank failures with very small amount of deposit or losses. so we had a financial system that people basically trusted. and through that system, the country grew. and then we created the fed, then we created the tax code, then we created deposit insurance, and since then we've had a lot of volatility. when financial system profits as a percentage of gdp, when reagan was elected president it was, like, 4 or 5%. now i think it fluctuates between 17 to 20%. so why does the financial system have formed such a high percentage of our economy? okay, mostly because of the fact

of financial engineering. and why do we need financial engineering? because the financial system creates a lot of volatility. and then we attempted to delude ourselves that the economy is proceeding well . you take a look at this existing election right now and why so many people were supporters of, you know, without being political of disaffected by the major parties, because you think about, you know, the democrats, there was a lot of empathy for sanders, and for the republicans there was a lot of empathy, clearly, for trump. and these were not tradition allocates. what was the appeal of the nontraditional candidate? because people know the economy is not very good. there's a web site called shadow stacks written by this economist, john williams. and? shadow stats -- and in shadow stats they say here is alternative measures of g,dp growth, inflation and unemployment. so we used to have one measurement of measuring government statistics in 1980.

we revised it in 1990, and after 2000 we used alternative measures. so basically we give a lot of discretion into how we measure output and inflation. so, and if we measured inflation the way we did in 1980, what do you think the inflation rate is today? what would you guess if we -- when ronald reagan was president, if we measured inflation exactly that way, what do you think the inflation rate is today? anyone have a guess? 10%. 10%. okay. so if we measured it according to the way we measured economics in 1980, we've never recovered from the recession. right now negative gdp would be about 4, 4.5%. if we measured it the way we did in 1990, okay, inflation would be at 5%. so as opposed to the statistics we see right now. because they're given a lot of discretion, and the fact is now

they can alternate basket. so they can sit back, say i don't really buy that, but you theoretically could or there's been a quality improvement that's not captured properly. so they have all these -- so they're the able to put all these assumptions into the model to basically have a lot of discretions. so really we've rendered our economic statistics to be pretty meaningless. so the average person feels that their purchasing power, their wealth is worse off. we have student loans that can't get paid, we've got a bankrupt pension system, and we have a fragile financial system. so, and what did we have to do in 2008, you know? a lot of the bankers would talk about that they paid back their loans, they were forced to take, they were forced to take the capital necessary. what they don't seem to talk about is the fact that the federal government guaranteed the deposit liabilities in the system for more than 18 months. so before the government

guaranteed the deposit liabilities, the spread between bank funding costs and treasuries was over 400 basis points. as soon as the government announced that it was going to back up those deposit liabilities, it went back down to 40 basis points. take all the amount of deposit liabilities in the financial system, okay, and assume that the government guarantee is worth 200, 300 basis points. so what do you think the value of that guarantee is to the financial system? i don't think anybody had access to the that type of levels of guarantee. then you had the investment banks that had unlimited borrowing at the discount window. i couldn't get to the discount window. so what happens is when jamie dimon says that bitcoin is a fraud, he's the fraudster, okay? he's one paying billions of dollars of fines for defrauding customers, and he has a system that would give him money, you're going to be guaranteed that the purchasing power of the money will be less when he gives it back to you, okay?

if he chooses to give it back to you, because then you have to go back, knock on his door and say i want the money, but let me explain why i want to use the money. and if they're satisfied with the explanation, they'll give it back to you. right? if you want the wire funds out, i've got to say here's what i want to use it for, here's where it came from. and they're not satisfied with the explanation, they don't have to give it to you. so it becomes their money, not your money. so i would like to be in the business where what i can do is i can take your money, i don't really have to give it back to you, okay? i can pay you a low interest rate because the government is giving me goes state insurance. -- deposit insurance. if jamie dimon went out into the world and said i want to buy deposit insurance for my deposit liabilities and knocked on the door of lloyd's of london or whoever and said how much would i have to pay to guarantee my balance sheet to get a aaa rating, it would be significantly more than what he

has to pay into the fdic. so the banking sector is the most subsidized sector, and it's the most fragile sector of the economy. so when people started saying how do i preserve my capital in a system where i think that everything is tied to this fragile financial system that makes the pricing of all other assets derivative of it, is how do i create a store value for myself? so people went out, worried people like me, you go out and say, well, maybe i'll owning ature, maybe i will own hard assets, real estate, i'll own some gold, but then all these hard assets got bid up in value. but what we also want to do is -- what also happened during this period of time is people -- trust eroded. people don't trust their politicians or any institutions. in the past we've had you can trust institutions because we try and create contracting that sort of lines our interest. or we create this third-party

intermediary, a neutral observer, and they convey trust. so what happens is about the same time we've debased our currency, we've also debased any institution as being a reliable agent as a trust agent. we sit back and say how do we create platforms where we can sit and engage in transactions? it's amongst ourselves and between ourselves, you know, and not have to worry about trust. trust becomes an irrelevant concept. hence, bitcoin. if i was going to go out in the financial system today, okay? starting from scratch, and nobody ever heard the term "money" before, and i got up here and said, okay, you're all really smart people here. we want to make sure we distribute a means of exchange that we can engage in transactions with each other, we have a confidence in the way we engage in transactions. so i come up with one idea. one idea is i'm going to go out to the forest, i'm going to chop down some trees, make some paper and give somebody a printing press, and this is the smartest

perp i know, so let them d -- person i know, so let them control the printing press and do whatever they want, okay? they'll print as much as they want whenever they want to do it and distribute it according to their own cry tier. okay -- criteria. and then you have a system that's going to produce something according to rules. we're going to create a consensus. so we're going the put all this energy into calculating, solving algorithms. the algorithms are solved by a community of computers working together, it emits currency. so we're going to have a certain amount of currency emitted each month, then a certain amount each year and a certain amount issued over a certain period of time. and we're going to do it in a system where the infrastructure that creates that currency is basically unhackable. so you know that it can't be counterfeited, okay? and whatever's going on is on a distributed ledger that no one person controls. and whatever activity that goes on that ledger is open to everybody and audited by

everybody. so which system would you choose? so i think if we started from zero, nobody would choose the system that we have today. so i don't understand why anybody defends the system we have today unless you profit from it. so the existing system today is a fraud, not bitcoin. i think many people don't really understand the rules of how bitcoin gets created, you know, how it gets mined and the fact that there is a quantity limit that impacts its life over how many bitcoins get created each year and ultimately. so the last bitcoin will be emitted in about 2140. so we've got a little more than 100 years left. 75% of the bitcoins have already been issued. so it's going to require more energy to produce every incremental bitcoin because the algorithm gets more and more difficult to solve. but the point of making the algorithm more difficult to solve is to make the system more difficult to hack. so there's a real logic into --

and an internal consistency into the model. now, when people take a look at the bitcoin, then you have to take a look at block chain. when people read about a theory amid other things. you have to separate bitcoin. bitcoin has intrinsic value in and of itself, and it's because of the way it's created and the limit on it. so you can look at it as digital gold. the rest of the systems, all the other tokens that are being issued, they're ecosystems, okay? they're ecosystems that require economic activity be put on it. so they're looking at creating smart contracts, you know, and building applications on top of it. so the point of etherium is to build an economic ecosystem as a platform and not really create a currency like bitcoin is a currency. so bitcoin is very, very different from any other thing in the crypto world. if you take a look at why the others exist, we're transforming

the economy. there was a guy who won a nobel prize in economics, and he basically said the question ronald kose asked is why do we organize firms the way we do, okay? he said we organize firms in a way to mitigation transaction costs. that's why we organized firms the way we did. well, bitcoin is an attempt to eliminate transaction costs, you know, to make them so negative negative -- negligible. you have a book where nobody controls it and how people ascribe value to it is determined by the community. i'm going to give you a couple of examples in what i mean by this framework. if i go out right now and i put information on facebook, okay? so i put information on facebook or i'm looking on amazon for cooks or i'm doing -- for books or i'm doing google searches. so i'm producing data, information. so they take that information, and they sell it, okay?

so they monetize it. and what do i get in return for them taking information about me and monetizing my data? so if you take a look at really what it means when we talked before, i heard people talk about work. i like to think about value, not work. so anybody who has, who's engaged in an activity is creating value because they're creating information, okay? so anybody who creates information, people value that information. so if i'm going out there and i'm producing information out there, the problem is right now instead of me controlling how much -- who owns, who i sell the information to and i receive the money, i'm basically giving all that power to google, to amazon, to facebook, and they're selling it in the way that maximizes their value, not necessarily my value are. i find it entertaining. i put something on my lifestyle, i put it out there, and in return i've given them all this information. i'm sure if i went to people and said, you know what? with the information that you're getting, that you're providing to these platforms, okay?

if i would say that they're selling this information for x dollars, if i gave you x dollars to never use that platform again, which would you value more, the dollars of how much money they're getting with that information or your engagement with that platform? i would guess most people if they really understood the value of the information they're conveying wouldn't offer it because there's no market value. the question is how do we create a market price for our human capital, okay in right now many businesses their money is really not -- they don't get the money because they're in the value business, they're in the rent extraction business. so the question is, is how to we create sovereignty over ourselves? for example, a bunch of people have a heart problem, okay in so one thing is we can sit back and say we go to the doctors, the doctors get all this medicine, it goes to the national health foundation, they do all the earning, and then on our apps we get reminders we should take these drugs or do these things with somebody always trying to

sell us or nudge us to an activity or product. i'm sure that really improves the quality of our lives being nudged all day long. i'm sure we really love that. i'm sure we'd like paying for that. so -- or conveying value for that. can you imagine a platform where everybody walks around with their own digital health record? whatever's my information, i go to the doctor because -- you know, i don't see, but i go to a hospital and i do a study, okay? i don't see them saying, you know, we're going to take all this data and sell it, so we're going to discount your treatment because we're going to sell the data, you know? no. it's very expensive. but if i went to the hospital, i went to a doctor and said, look, here's my, here's my digital wallet with my health records, i'm going to like the app gram. i'm going to send it to you in an app, you have 30 minutes to use it so you have enough information in which you can treat me, and then the information disappears because it's my information. and then i went out and said, you know, i want to build a platform. i'm a platform designer. i said, you know what?

i want to get everybody that has this health issue, okay, put data on this platform. you've got to have a public key and a private key. so you own that data, but you're agreeing to put it on this platform. so everybody puts it on the platform. we're going to hire these people to be the above nance of this platform. and what we're going to do is either sell the data to people that we mind we maximize the value of the data, or we're going to sell it to people -- i guess i gotta wrap up, i've got to shut up. or we can, or we can determine who people nothing on door and says you have this heart problem. sell us this data, we're going to analyze the data, and this is why we credibly are people that can help you with your solution. so it powers us. so with the block chain and the decentralization is about empowering us. we're talking about being -- the previous talk was robots, human

beings, whatever? i look at the individual. what creates sovereignty over ourselves? we're giving all this value to third parties, okay? that are using it in ways that we would never pay them to use it, okay? because we don't know how to preserve property over the intangible aspects of who we are, okay? this is the power of the block chain. the block chain is -- if everybody issues a currency, i can become a token myself. i can sit back and say this is my value, so i can create the jeffrey token. someone out there might say, you know, jeffrey token has value to me, so i'll exchange. i might have value to them, they might have value to me, so we might engage in transactions. it basically makes the issuing of the money, paper money, kind of irrelevant. we can all engage in transactions relative to each other in a tokennized world. so we're now controlling what exchange of value is, and we have an explicit price for all these transactions. okay?

we don't need banks, we don't need debt. all we need is figuring out ways of how we turn out ideas and our personal capital into something other people value with this free exchange. so when people sit and talk to you about bitcoin, block chain, drug dealers, money laundering people, okay? they're all liars, okay? there's a will the more money going through the -- a lot more money going through the financial system than the bitcoin community in any of this stuff. i don't believe drug dealers are running around or people in afghanistan, terrorists, with their bitcoin wallets in their home and saying, gee, i ran out of bullets, okay? let me see who will take my bitcoin in exchange for my bullets, okay? [laughter] not happening, okay? not happening, okay? they're using fiat money, okay? they're using money. they're using their credit cards, their debit cards, their cash, their dollars, their r&d, whatever. they're not using bitcoin, okay? so the bitcoin and the block

chain community is about returning power to the individual. that's what the community is about. [applause] >> thanks a lot, jeffrey. we're going to the move on to our next topic. another industry that's going through tremendous change is health care. and like many industries, health care finds itself at a critical inflection point driven in large part by digitization. a hundred years ago health care was about the human touch. twenty-five years ago, health care was machine-assisted and analog. today it's technology-enabled and digital. think of 3-d imaging, wearables, genomic encoding. decoding. but all this happening so quickly and so fast, we're lucky to have with us today the president of the u.s. national academy of medicine.

dr. zao, would love to well you to the stage to share some of your thoughts. [applause] >> well, thank you very much. and i thoroughly enjoyed the last two speakers. as i'm thinking about what about health care. so the topic i was given is frontiers in medicine which i interpret broadly as including gene editing, stem cells, etc. so i'm going to tell you for the next ten minutes what's going on in health and medicine. first of all, i struggle mightily, should i show slides? i went back to my chinese roots that says a picture's worth a thousand words. i think it's much easier to illustrate the complexity of the technology. so i'd like to start by saying, another chinese saying, we live in interesting timings. you think about health care and medicine, the challenges are

huge challenges; obesity, diabetes, hypertension, cancer and, of course, the tsunami, aging population. and as you look at all those things. we're getting a larger and larger discrepancy between those who have and do not have the resources to get health care and help. consequently, one also has to think about the whole context we live in. urbanization, climate change, globalization, and that leads to, as you know, e bowl, pandemics -- ebola, pandemics, you name it. we're in a mess. and the issue has got to be solved by both a combination of technology and science as good policy. so what i'm going to do is going to demonstrate to you some of what i believe are medical breakthroughs and technological breakthroughs in biotechnology, in engineering science and

nanotechnology and data robotics, artificial intelligence. so if you think about the medical breakthroughs, every day you can read a newspaper, a journal article, you name it, about a breakthrough. but some of these are true breakthroughs. you think about genetic engineering. as we'll talk about, we're at the point where we can edit genes to treat disease. we generate medicine, the use of stem cells to regenerate new tissues and particularly in elderly and also in times of heart attack, stroke, etc. immune know therapy, the ability to galvanize your human system to fight cancer. precision medicine, being able to precisely predict who's likely to get disease and what treatment you're going to get. the kind of micro-biologic organisms in your gut and elsewhere anding of course -- and, of course, tissue engineering.

the first example, human gene editing. this is ap amazing technique -- an amazing technique. what you see in this picture on the, i bereave when you look at it, it will be left side, it is a very simple technology to say if i know the sequence of gene, i can create a system called crisper that can edit that gene like molecular scissor, precisely. you can also replace it with a good gene. and so the issue is the possibility of curing diseases. i showed you here two columns. one called somatic, disease we all have, acquired, you know, but not at the time of embryo. that disease which we have can be now cured or treated with gene editing. for example, this is now hundred some people have been treated experimentally knowing the receptor which the hiv virus

attacks the t-cell to make it, therefore, you know, to kill it. making immune deficiency that receptor can be mutated so that hiv can enter. consequently, guess what? you actually, in a way, enable you to treat hiv for long term. and so far the day looks very promising that the triple therapy that you require are greatly reduced, and you can move that way. second is taking cells from adult or from a person with a yes -- genetic disease such as sickle cell. we know it's a hemoglobin problem. and, for example, taking the bone marrow cells and engineered to put in the right gene can cure the disease. the biggest challenge we face is the ethical argument that can you actually treat a genetic disease at a time of an embryo or a sperm or an egg called gam

meet? -- gamete? this is where the whole debate occurs with embryos. think about also the possibility of doing designer babies. and at the time when you think about the russians being, in fact, excluded from olympics, think about the future of gene editing that can enhance your muscle performance, your brain performance, you name it. so very controversial issue but clearly there now, thousands of companies being formed, and i would expect within the next five years you're going to see some real products being in the medical arena for curative, if not at least therapeutic purposes. stem cells, embryo stem cells, stem cells in your adult tissue can be now harvested. but also this really important work done in japan won a nobel prize. i can now take your skin cell and then genetic program it in the tissue culture and change it

to an embryo -- to a stem cell. so guess what? i don't need to go to embryos anymore. i can take an adult stem cell and make a stem cell, and now i can treatment many different diseases. to the next column that is directly programming. this is work that i do in my lap; that is, genetic program a skip cell to a muscle cell directly -- skin cell. so if you have a heart attack, as you know, when your heart attack, your cells die. then you form a scar. and then your heart gets dilated, you've got heart failure. we can now, at least in the laboratory, engineer, genetically program a skin, a scar cell to become muscle cell whereby with small molecules you can actually repair the heart and regenerate it. to tissue engineering which you see in pictures here a blood vessel that is now entering clinical trial that is tissue-engineered. and future, as you can see the other picture, is actually

generating an entire heart using tissue engineering. in brain, the brain is amazing. now we can map genes and neurons and neuro circuits in a live animal using a combination of light and activation of a gene that can show you the neurons as being activated and follow the circuit. so you begin to understand the neuro-circulatory. then what you see also here is the ability to do brain-machine interface. it's already happening. somebody who has parapledge ya now can use the brain to drive a computer to mobilize a robot whereby as you can see here this person's able to move his limbs. and at duke when my colleagues have demonstrated he can actually use brain driving, actually, a robot in china to move. so this is, in fact, real life, exciting opportunities. and, of course, precision

medicine. it's not only sequencing genome for less than $1,000, but now you can measure so many things. and by putting all these things together, the power being able to precisely predict of what to treat when to treat is amazing. so when you think about this -- and i put this slide for mahmoud khan, but he's not here. he and i are good friends. i put down prevention is important. of and the bottom of the slide is neutral genomics. it's already happening. that is, you given to say what drug do you take, can you measure your response to a diet, can you look at genetic profile to decide the what diet would be most useful for you. i want to illustrate three diseases where these things are being applied and then get to, in fact, the whole issue of data and artificial intelligence. so heart disease, cancer and aging. in