lego pieces, chris built an accessory that kept the card stable. with the successful design, chris wanted to bring his new innovation to market. it would have been costly and inefficient using traditional production methods, so instead he invested in a consumer level 3-d printer which is literally become a factory in his desk enabled him to produce his invention from home for a couple thousand dollars and sell thousands of them. we take pride in stories like this. to us they demonstrate we are not just a business of producing 3-d printing machines. we are also helping empower entrepreneurs by bringing manufacturing into their homes and workspaces. our presence here today show that is the interest in 3-d printing is strong and the future is infinite. our industry is experiencing rapid growth. it is giving domestic

manufacturing a new competitive edge in this global economy. the best thing washington can do is to encourage further growth in investment. as president obama noted in his recent speech touting 3-d printing hubs, if you want to attract more good manufacturing jobs, you need to be on the cutting edge. our company could not agree more. i'd like to thank the committee for holding this hearing and i'd be happy to answer any questions you might have. >> thank you, mr. cobb. our next witness is peter weijmarshausen founder and ceo of shapeaways, the world's leading 3-d printing marketplace and community. prior to shapeaways, peter was the chief technology officer at sanjen which he and his team developed satellite broadcast modems. he's director of engineering at ermiska where he's responsible for delivering a business broadband service via satellite. he was born and raised in the netherland and moved to new york in 2010. thanks for being here.

>> good afternoon, mr. chairman and members of the committee. i'm peter weijmarshausen. i'm ceo and founder of shapeways. i'm honored to be here today to discuss how 3-d printing is fueling small business growth enabling anyone to create a business with fiscal products at low capital cost. as a kid in the netherlands, i loved playing with computers resulting in a passion for open source software. driven by this and my entrepreneurial spirit, i spent much of my earlier career at various startup software companies. one of these was blenders, the first company to publish a 3-d software. in 2006, much later, i learned about a product called 3-d printing technology, which prints physical objects based on 3-d computer designs. i immediately thought of the blender community. a large group of enthusiasts. they were using 3-d software but never imagined it would be possible to hold their own designs in their hands. i asked some of them for their designs to print. when i showed the 3-d printed products to them, they were completely blown away. they immediately agreed it was a good idea to build an online

service where people could build their 3-d designs, and i knew there could be a business opportunity. how big was yet to be seen. i started working in shapeaways in march 2007 within the lifestyle incubator of phillips electronics. who share the vision that 3-d printing could be very innovative. at the time 3-d printing was used mostly for prototyping for large companies. and was very expensive. in 2008, we launched shapeaways.com for anyone to make and get products they wanted. we started printing products, not prototypes. we moved our headquarters to new new york is perfect for shapeaways, high talent tech savy talent and creative epicenter so we have the ability to talk to so many of our customers. at that point we had fewer than 20 employees. today over 140. in new york, seattle and in our factories in long island city. these factories are transforming old industrial helps with factories of the future. with new and innovative processes and machinery. shapeaways is now the world's leading marketplace and community to make, buy and sell

custom 3d printed products and looking at design opportunities for entrepreneurs and creative consumers. shapeaways is a success story in terms of small business growing out of endless possibilities of 3d printing but the opportunities created for 3d printing for entrepreneurs are immeasurable. when i think about what we can achieve, i relate now the internet has allowed software engineers to become entrepreneurs. bringing new software to market was difficult. you had to know what users wanted, build the software, test it, and then produce a lot of cd roms or floppy disks, bring it to retail and hope people would buy it. today, using the internet any software engineer can become an entrepreneur. the internet has removed the barriers, launching a website has become incredibly easy, and this is one of the reasons companies like google, amazon or facebook has become successful so very quickly. similar to how 3-d removes barriers. update their designs quickly no need for marketing research in

advance, build products without costly upfront payments and distribute their products directly online with no retail investment. plus, they can continuously evolve their products since they don't have to keep any inventory. and there is no question that entrepreneurs are taking notice. from 2012 to 2013 product uploads increaseded from 40,000 a month to 100,000 a month. and new people. 3d printing transforms how we think about launching products and enables the entrepreneurs in ways we never could imagine in the past. let me share with you how shapeaways works. anyone can upload a 3d design. there are many free and open source software programs available to use 3d modeling to literally anyone who -- literally anyone can do it. after the design is unloaded the user selects the material to print and make it available. shapeaways over 40 materials and finishes including precious

metal, bronze, ceramic, plastic and sand stone. designs are reviewed by engineers, then unloaded to our printers and then printed. after which they are cleaned by the engineers sorted and put in the boxes sent to anyone. the printing as described above is the core of shapeways. people have used it to create endless products for their business, model trains, jewelry, home decor such as lamps, dish ware, cups, plates, et cetera. i've brought a few samples you can see over here. let me share one of the examples of a successful business in shapeways. gotham smith is an example. four friends working in new york city wanted to create something more tangible and lasting than a website or app. starting with designing cuff links and eventually moving to other jewelry, gotham turned to 3d molding applications to develop unique ideas. shapeways gives them the ability to turn those into prototypes and then finally products.

without relying on costly metal casting machinery they sell their products on shapeways.com directly or through other channels and their business wouldn't exist without shapeaways or 3-d printing. the ability to easily create one-of-a-kind customizable products, extremely costly and labor intensive process, 3-d printing and shapeways make it seamless. one company levering the technology is nervous systems. designs a process creating custom simulations, such as the growth of coral. their process generates jewelry and light fixtures. all of these are one-of-a-kind and 3-d printed by shapeways, sold on our sites and in new york. one example of a successful business that is rapidly growing and employing more people as demand grows. i would like to conclude even the president of the united states has acknowledged this great opportunity shapeways is working on -- shapeways is working with the white house to partner on the first ever white house maker fair. dedicated to showcasing and celebrating the maker movement. the goal is to support the culture of making and use it as a call to action for

stakeholders and shapeways has committed to help the white house use this moment in time to facilitate entrepreneurship and in the state of the union last month, president obama spoke about the facility in ohio saying the one warehouse is a state-of-the-art lab where new workers are mastering 3d printing and which has potential to revolutionize the way we make almost everything. it's true. 3-d printing does have the potential to revolutionize the way we make everything. i'm passionate about helping others see that and i hope i have effectively demonstrated to you the positive impact i can have on small business creating many jobs in the process. moving forward it will be critical the accessibility to 3-d printing remains uninhibited. thank you for your time today and allowing me me the honor to speak about 3-d printing, the technology i'm sure will change the world. >> thank you, peter. >> our next witness today is jan baum, the director of 3-d maryland which has been charged with bringing the 3-d printing and rapid technology agenda to the greater baltimore region. miss baum is a full professor at

towson university and founder of the university's object lab, a comprehensive state-of-the-art rapid technologies and digital fabrication lab. in 2012 she co-hosted the first rapid tech and additive manufacturing conference in the baltimore region and 2013 named an innovator of the year by the maryland daily record. miss baum, thanks for being here. >> chairman graves, ranking member velazquez and committee members honored to have the opportunity to speak with you about technologies about how we carry out our work across industries from product development and manufacturing to skull surgery and bioengineering, 3-d printing gives us new capabilities that alter how we compete in an increasingly global marketplace. i would like to start with a real world example. so i'm the executive director of 3-d maryland a statewide leadership initiative to advance the engagement and implementation of 3-d printing and additive manufacturing as an innovative economic driver for

maryland and america. 3-d maryland is located in the maryland center of entrepreneurship in howard county, maryland. within two weeks of a new client joining the maryland center, he sought me out and he said i hear you're the 3-d printing person and i said i am. he told me about his product he was innovating and wanted to prototype and sent $2500 to china and hadn't heard anything and could i help. i said well when do you need your prototype. and he said yesterday. i said, well, send me the 2-d drawings and i'll see what i can do. i promptly turned them around. i had the 3-d digital files made and two days later he knocked on my door to check the progress. i'm sure not expecting what he found. he put his head in my door and i pointed to the build platform and the 3-d printer across my office. he looked at the -- his prototype on the platform, looked at me, the printer at me, speechless. and i said that's your prototype and he looked at the printer and back at me and said this is like magic. well, it's not magic, but it is a tool that helps us do our work better, more efficiently, locally and many times, most

times faster with optimized solutions across industries. whatever work it is we're carrying out. 3-d printing and additive manufacturing is a disruptive 21st century technology changing who, how, when, why and the what of what we make and how we solve problems. if we can imagine it and we have the skill to design it the 3-d printers will print it. there's tons of examples on the table here today. it's disrupting economies of scale, current business models and democratizing production across industries. innovation and entrepreneurial opportunities are at the heart. there are barriers to engagement. access to knowledge, both trusted knowledge sources and understanding what the technology can and can't do. overcoming industrial thinking is a huge one. we have made things attractively for a very long time, and we're very good at it. cost of entry, the allocation of resources whether capital or human is a challenge for small businesses and entrepreneurs and

the position of the technology. are we there yet is a question we all receive regularly. 3-d -- the leadership of howard county in maryland, county executive ken allman, howard county economic development authority ceo larry twiel and the director of the maryland center of entrepreneurship are a strong leadership team for howard county, and they very easily saw the vision and the opportunity that these technologies brought and how it fit in with and supported small business and entrepreneurial ecosystem. 3-d maryland itself is an innovative initiative addressing barriers to entry and advancing the business, industry and entrepreneurs, our target audiences. raising awareness and facilitating engagement in implementation. it is identifying and addressing opportunities to strengthen and advance the rapid tech ecosystem in maryland. and we're building a loosely coupled system of collaborative relationships and partnerships across sectors to innovate and

accelerate the region and the country's economic competitiveness. i respectfully recommend that this committee encourage and support initiatives such as 3d maryland that have a focus on multisector, cross disciplinary precompetitive collaboration building on the strengths and core competencies to advantage practices, foster innovation and grow regional ecosystems taking advantage of public funding sources. supporting initiatives like 3d maryland builds on the momentum created by recent initiatives such as the national manufacturing national additive manufacturing institute. addressing and creating an adaptive work force that all points on the spectrum is critical to our engagement of these technologies. i would recommend working at the grassroots level, locally with users, with proven track records from both industry and education. so we can institute some changes in k through 16, vocational training and apprenticeship programs, et cetera. wider adoption is inevitable.

we need to ensure that the work force is prepared to increase engagement. studies have shown that students who are educated in additive manufacturing processes are among the first to bring the advanced hands-on technologies to their employers something i have told my students since i established that lab. you are work force leaders. continuing to support research funding and programs that facilitate technology transfer, 3-d printing and additive manufacturing are just getting started. i thank you very much for your attention and your consideration of these technologies. >> thank you very much. we will recess just until after this series of votes. great. and then we'll come back and start with questions. committee is in recess. >> thank you, mr. chairman. and i thank all of the panelists for a very impressive testimony. it's interesting stuff. i know on the way over to votes a while ago, i was talking to mr. bentivolio who has some experience in your field and

it's fascinating to talk about the possibilities and what all you're doing. so as a small business guy it's very rewarding to see the entrepreneurial aspect of this and folks are really doing some good stuff. one of the concerns that i have is, you know, getting start-ups like what you do and because it's a rather new product and process from the standpoint of not widely used i guess, are the regulatory problems we need to be aware of here in congress that we need to put a stop to or ways we could enhance your ability to do your job better? just go down the line. whoever has some comments or concerns about -- everybody has concerns about washington these days, trust me, and rightly so. mr. o'neill, do you want to start? any problems with us? >> i do not yet have any problems with you. >> not yet. >> the keyword yet, right. obviously the health care law is something that concerns a lot of small business people and you're at that 50 if i recall. >> yes, we are. >> so that may be a concern to

you, but from the standpoint of producing your products that's the kind of regulations i'm -- >> i figure if we just keep working hard, designing great products and making money everything else will figure it out. >> so far you guys are ahead of regulations you've outrun them and probably are okay until somebody figures out we need to stop these guys and regulate them. >> i don't want that to happen. our feet haven't hit the ground. we shipped our first order out of our house less than three years ago and, you know, now we keep moving, we've got 17,500 square foot facility and that's not big enough. we need a bigger one. i understand that there are some complications and i let other people in our business worry about those things probably why i don't seem concerned. i'm sure i should be, but -- >> hire people to worry for you, right? >> i really do because i don't like to worry. >> i understand. mr. cobb? >> thanks. yeah. go back to the beginning of stratasys which is really

started like i said in '88. we've shipped about 50% of our business overseas and we continue to do that at this point in time. it's been a big piece of our business. so, you know, if you look at areas that we're concerned about or could be concerned about, would be any export laws that would restrict the -- this technology from moving out from the u.s. i mean, if you look at the bulk of our business, we manufacture in new hampshire, we manufacture in new york, and we manufacture in minnesota. and so all these products are being exported. so anything that would harm that export -- >> at this point there is no problem with that area. that's not a barrier yet. >> there's been some discussion about that. since i had the opportunity to address the question. >> we want to be watchful for that. that's the purpose of the hearing, to make sure we know those things ahead of time. >> yep. mr. wejmarshausen. i'm sorry.

>> well, we are not really concerned about things that are currently in place, but there might be something that you could help with or think of. shapeaways has a large community of designers that make their own ideas come to life using our platform. they upload them to our site and have them printed and we ship it back to them. and the other element of shapeaways is that we enable people to open shops where they can start selling these products and i brought a few you can see in front of me. now if some of these products currently infringe copyrights which very rarely but it does happen, then the dmca gives a very nice process where the copyright holder can send us a notice, we take down the product from our website, and the story or the discussion then is between the copyright holder and the person that is allegedly the infringer. that process kills very well. you have to realize we have

400,000 community members growing quickly. 100,000 new designs every month. these numbers are really large. and dmca helps with the copyright end of the spectrum. however there is no such process for patents. so if someone would infringe a patent there is no clear process that would enable, you know, the patent holder to notify us so we can take it down and then the discussion becomes between the copyright or the patent infringer and patent holder. in that case, platforms like shapeways are a party to the discussion which, of course, is really hard for us because we get so many new designs that it's completely impossible for us to check, also given the fact that in most cases we only print things only once, it's completely impossible to check whether there are patent infringements going on at the time. so of course we're open to build compelling technology to help solve this, but since the dmca works so well for copyrights, i would suggest, you know, maybe

think of having a similar type process for platforms like shapeways, and there's others coming up as well in the united states and abroad to have such a process to help the platforms stay scaleable and flexible. >> do you have disclosure statements that you have to sign whenever you are sent a drawing of some kind by an individual or a company that says if you produce this object, that you are -- you are restricted from showing it to anybody else or anything like that? >> the idea about shapeaways since it's a community is openness. our terms and conditions do ask people, do you own the copyrights, the rights to use this product and upload it to shapeaways for one. do you have the rights to have it manufactured for yourself and do you have the rights if you want to sell it to others? and people have to state that they have those rights, of course. however, you know, some people might not read that. >> very good. my time is up. otherwise i would i would let miss baum answer. >> thank you, mr. chairman. thank you for coming in. yes, we had an interesting discussion on the way to votes about the possibilities of 3-d

printing. and i explained to my colleagues that i was a vocational education teacher as well as general ed and in the automotive design business almost 20 years and i'm very familiar with 3d printing and proud to say that many of my female students went on to case western to study biomechanical engineering because of cad and some of the things they got to make in my classroom using 3d printer at the time. we sent the design, they printed it for like $35, they sent it back in a nice package. instead of putting something on the refrigerator door, hey, mom and dad, look what i did in class, they got to put it on a table which was kind of interesting. but in that regards, i'm wondering, the possibilities, we're looking at some things like, for instance, one of my questions is, if i took -- could scan something, can i, you know,

digitize that and have it made, right? so, for instance, hip replacements, that kind of thing, could i use an x-ray data and convert it to digital and then have a custom made hip for a patient if i was a doctor? >> and there's some regulations that would have to come with that too, right? i mean it has to be sterile, made from specific material? we can do that with bone as well as if somebody crushed a bone, we could replace that using a 3-d printer and how long would that take, for instance? i'm not a doctor, is so i couldn't even name a bone in my wrist. >> both of those examples are in current practice today. so most of that, to my understanding, most of that work is being done abroad in germany and sweden. our cam is one of the oems in sweden producing hip replacements. while we can take the personalized data from a ct scan or mri scan and digitize that

and make -- build that into a three dimensional model right now what we're doing is creating the hip replacements in a small, medium, large, three or four sizes, because that does the job and does the job most effectively. and there are -- i'm going to not -- may not remember the name of the university that is doing the bone planting. i think it's in texas. growing bone structures. but biomedical engineering is huge, yeah. yeah. and i mean what i would say, i would share with you at johns hopkins university, there's a skull surgeon by the name of dr. dorshar and he uses 3-d printing to create 3-d prints to do preop planning and he -- so they know before the team ever goes into the operating room, exactly what the cuts are, what's removed, what -- where the staples are, everything done to simplify that process. i think that's fantastic. the doctor is working less hours in a stressful situation, the patient under anesthesia less time and the operating costs are

a huge contributor to health care costs and that's lower. this is disruptive technology. now that's upsetting -- that's going to upset the apple cart in many directions. so the business model for hospitals is now going to be disrupted. they may not be so happy about operating room costs -- operating room times being declined because they have to go back and rework the numbers again. health care, medical is one of the first industries to engage 3-d printing and additive manufacturing. >> great. so we can actually, for instance, if there was somebody that needed plastic surgery, a plastic surgeon could use the x-rays and know where his cuts are going to be, how he's going to repair this patient's face? >> absolutely. and they also use 3-d printing for surgical guides.

so they put the 3-d print on the patient's body and know the tool, the cut, the angle. they take a lot of the -- it takes a lot of the guesswork out. and i would just also volunteer that in terms of what 3-d maryland one of our first activities was to create an expert user group to gather all the expert users in maryland around these technologies and cross pollinate them and the applied physics lab is actually collaborating with dr. dorshar to build robotics to make that surgery even better, to make it even smoother. we're printing cells. i'm not sure again like who the doctor is doing this, printing skin, but they're printing skin during surgery from the patient itself. when you print cells from a patient, you really limit the risk of rejection or the body rejecting whatever you're putting in or on it. >> okay. so now we have that. and it also reduces 3-d printing, prototype build time, correct? no longer are we doing the giant

clay models. we can actually design parts, for instance, for a motorcycle? i could design everything on that motorcycle using a 3-d printing, put it together, make sure it fits and reduce my build time and prototype costs to -- do you have any numbers? >> when i see the case studies roll through, john can probably speak to this even more clearly, but when i see the case studies roll through and go what am i going to present like a baseline i think many times it's at least a third or fifth of both the cost savings and time savings. and then the other thing, too, like you have those savings but when you put those parts together and not quite right you're not going back to square one. you're tweaking. >> how long would it take, real quickly, how long would it take for me, for instance, once i have that information digitized and i'm going to do the surgery, to have maybe a model that i can practice or look at? how long would that take to have that prototype or the 3-d print. >> really, those are hard questions because you don't know how much data, what the scale is, and scale is a factor. i would say so from thinking

about dr. dorshar's skulls and he uses sla technology, i think those skulls probably take three or four hours maybe. maybe six hours. and what i'm advocating from maryland, i think it's a model that we could all look at, is that we -- that maryland create a conshore shum based mod really we have state-of-the-art medical facilities so that dr. dorshar can see a patient from shock trauma and zip files right over to a local center and get them. we don't have to worry about fedex anymore. we'll start to really see improvements in the technology as well. >> i started in business, mr. chairman, when we took a body side molding on the car, sent it to the shop and waited three months to get a prototype model and now we can get it done in a matter of hours, right? thank you very much. i really appreciate you being here. i yield back, mr. chairman. >> thank you, mr. chairman. i'm sorry i missed the opening part.

i was caught up in another hearing. thank you all for coming. so i may well be asking questions you answered and if that's the case, i apologize. i'll go back. i have a little experience in 3-d. we've been using that for five or six years in one of my companies to make small-scale models of fairly complex machinery as part of our sales proposal. you know, if it's a $6 million proposal it's well worth delivering that and maybe others are going to catch up but early on we were the only one doing it and a wow factor there and then we got the order everyone in the customers company wanted another one. so it is great. it's great for a lot of things. we use it as a sales tool. my question comes to, as this takes off, are there any quality control issues on repeatability and all the things you do in iso and other quality things for repeatability, and, you know, cnc machines and whatever. i'm a machine shop guy. are there quality control issues

and once you get into production and out of prototyping, i'm not sure who to ask, if somebody wants to jump in. >> so since we're building a hundreds of thousands of products, over a month actually at shapeways for our customers, we see these kinds of problems pop up. we make, for instance, very popular iphone cases and, of course, for them to fit and to be clear, shapeways doesn't provide prototyping only. we print final products. my iphone case i use myself is 3-d printed and many other people buy from shapeaways just to get a unique iphone case. they need to be exact fit. and since 3-d printing was used for a long time as a prototyping technology there is definitely need for the technology to improve from a quality perspective, from a price, and even from a speed perspective to meet the needs of today's consumers. from prototyping perspective you always have somewhat of an option if the prototype doesn't

come out right to do it again. if you have a consumer who has a birthday party where he needs to bring a present you have only one shot to get it out the door in time. the technology has come a long way and great we can make final products and enable so many people, but i think the technology is still to my opinion in its infancy and it will keep growing as the big consumer market ages. there will be large jumps in how the technology will mature. >> so, you know, as you're layering this, plastics, i understand, i'm sure powdered metals are probably being used some ceramics. >> yep. >> is that the place and what happens when you get into the need for some really high alloy steel, stainless steel, et cetera? is that way out or never? >> we are printing metals in several times. we print in silver, the same type quality you would find in a jewelry store, ceramics, in stainless steel, brass, bronze, we're adding other precious metals soon. it's already possible. >> carbon steel too?

>> not yet. >> okay. >> is that coming do you believe? >> yeah. >> okay. >> so as this takes off, what is the thought on the cost? you know, today you've got a lot of machines running unattended. labor cost is all but zero. set a machine up and they pop those out in a dark factory. is this similar or -- what would be the labor costs to make a part using 3-d versus automated equipment today in a factory that the machine just does it without man power? >> sure. >> i think you look at where 3-d printing is being utilized today and as mentioned before, it is being utilized in a manufacturing environment. aerospace company, automotive companies, a number of people are using 3-d printing today. so i think we were where it makes sense is, not the things we're thinking about where, you know, you're making tens of

millions of bottle caps or something like that, but where it makes sense at this point in time, is when you have a short production type of run or custom run or something where, you know, because of regulations or other reasons, the part is constantly changing and so when you look at the costs of a piece part, the piece part cost you're going to get utilizing 3d printing is going to be more than injection molding. however, you're not going to have to build that tool. so as a small business owner, couple cases that were mentioned here today, you're not going to have that up front cost. you're also probably not going to have to have that up front knowledge as well because you can design some test it with a prototype and then start printing that as, you know, as your real part. so it's a little bit different as far as high volume versus mid

to low volume. i believe. >> thank you very much. my time has expired. i yield back. >> mr. bain. >> thank you, mr. chairman. i would like to thank the panel for their testimony today. you know with the rapid growth and accessibility of 3-d printing, there is room for great innovation as it's been stated. as many of you testified 3d printing creates opportunities for entrepreneurs. however, with companies like makerbot, do you feel eventually consumers will become their own manufacturers making their services and many small businesses that -- small business offer obsolete? >> you know, certainly makerbot and products like that really enable a lot of people to do work as far as design work and then some production type of work that we were talking about.

and i think for certain products, yeah, you could see where a product like makerbot would actually be used in a home environment. i think, though, that where some of the big opportunities for 3d printing comes in is really in the manufacturing process. it, as we talked about before, it allows current manufacturers to build things in a different manner, to customize things in a different way, so i think there's certainly some products that yeah, are absolutely geared toward that but if you look at the use of 3-d printing and all the different materials that are going on today, i think the bigger advances are going to come in the manufacturing area. and with that comes a whole area where, you know, students today or people in the work place today are used to manufacturing

and traditional methods. so training of people that are currently employed or training of students to design, utilizing 3d printing is one thing, but then to manufacture using 3d printing is vastly different. it's different than injection molding. but it can be used, in fact, and that's one of the big inhibitors i think in getting 3-d printing into small and medium sized companies is because characteristics of a 3-d printer are different than the characteristics of injection molding, for instance. >> on another note i serve on homeland security as well, and the potential of creating weapons through this 3-d printing, what is the feasibility, the possibility, and, you know, someone coming along and creating a nondetectable firearm or something?

>> well, we've been staunch supporters of the plastic gun legislation that got re-enacted i think at the end of last year as a matter of fact. so it's something that has been demonstrated at some point. but we've certainly been a supporter of the legislation that's taken place up to this point. looking at the restrictions on that opportunity. >> okay. but someone could -- could someone potentially, you know, not follow the guidelines and regulations for this type of product and create something that's not detectable and cause a problem? >> i'm -- i'm not an expert in it but i think that you need some type of metal, either a bullet or the firing mechanism,

to -- for the firearm, so again, i'm not an expert on that, but from what i know i think it would be difficult. >> okay. >> thank you. >> thank you, mr. chairman. it always makes me nervous when the technology like this is here in congress because it means we're paying attention to you and let's face it, when the bureaucracy pays attention to a technology we often try to regulate it or screw it up. and i say this in the contents of someone that believes one of the great successes of the internet was the fact that it grew and grew and grew before sort of the bureaucratic mechanisms truly understood it and were able to slow down the investments, the capital, the

creativity. so what is -- for whether it be 3-d printing or even the thing that maybe you and i haven't even found out to define yet which may be the large scale or the high speed production of such, what's the systemic threat to the industry? is it copyright? is it the source files having patent litigation or copyright litigation chasing? or is it those of us in government and bureaucracy? if i came to you and said over the next decade, this is one of the great disruptive technologies that's going to make us a more efficient society but we have to conquer these risks to that expansion, for each of you? start with mr. o'neill, what would you say, what are the systemic risks to the technology? >> well, i'm an entrepreneur so i'm not representing the manufacturers.

we use the technology to create innovation in our own business. so, you know, these kind of questions don't really apply to us, but i would sincerely hope no legislation comes in that would restrict our ability. >> what about the discussion that i -- i know we've all been run pg in and out so i haven't heard, copyright? >> copyright is a concern to us as a copyright holder and a holder -- as a holder of 30 patents i'm concerned that people will infringe our patents and our designs and they'll print them and we've had that happen. we had that happen with shapeaways. but we worked with them and they were able to deal with it. it's a concern. it seems like, you know, something that needs to be addressed but i don't -- i'm not sure it's a 3d printing specific concern because it's still -- ip is ip. people in china making counterfeit products all the

time of us. they're not doing that with 3-d printing but traditional manufacturing. >> what's the systemic risk on ip, i think there's been the discussion of saying if i change a bit of the source code does that relieve me of a copyright? >> well, i guess as a manufacturer, you know, the laws in this country, you have the patent protection from a manufacturer, what we do is we spend 10 to 12% of our overall revenue on trying to be more innovative, staying ahead of things that will fall out as far as a patent goes. i think looking at -- you talked about what can be inhibitor. one of the things, maybe a little off base here, but i think one of the things that will not help the industry as much as possible is people, young people, and traditional workers, not being educated in this technology. and i think as a real opportunity at this point in time to have education at a high school level, at a grade school level, and then even workers that are displaced, because of manufacturing -- i think manufacturing is starting to come back into the u.s. and i

think 3d printing is a portion of that and i think there's a real opportunity for the federal government to get more involved in training of new students and traditional work force. >> but to understand, we get involved, there's also certain risk profiles that come with that. >> i understand. >> what would be a systemic risk to your business? >> well, i already laid it out briefly, is that, you know, an issue you mentioned, we want to -- shapeaways is a platform of service so what we want to do is create as many products for people as they like and make it possible for them to create things that weren't possible before. in that way democratizing how people think about products. everybody can make things instead of only big companies. but we are taking very serious the responsibility that we need

to take that we can only make things that are original. and the good thing is, you know, shapeaways has made over 2.5 million products to date that the amount of products that we had to take down, the amount of products that we actually made using the printers, that were infringing in hindsight were extremely small like in counting on one hand or two hands. less than ten that we actually made. that's i think the good thing because people grasp that they can now make anything they want, it's not the first inclination. the technology is much more expandable than mass manufacturing so much easier to copy something popular with traditional manufacturing technologies as mentioned in china perhaps, then you can do on a 3-d printer. >> and forgive me, i'm up against time, academia has an interesting world where it sits there, where what's sort of in the public domain, what is -- so you may have to navigate some

more interesting discussion there. >> well, i guess what i would -- my response to the question is, may bridge academia, may not. i'm an advocate of the technology for business industry and entrepreneurs. and what i hear from my expert users one of the things that's going to hold the industry back is proprietariness of both the hardware and the materials. so i think the expert users that i see using the technology in the most advanced way, say to the oems i don't care about your warranty, i want under the hood and they will hire a third party contractor that provides the warranty so that they then can put in any material they want and they can tweak the parameters. if you -- if you don't do that, then you are paying about $25,000 per set of parameters to be under the hood. and so -- i know peter agrees with me. keeping the technology open just like your example your leading example of the internet you got to keep it open. the u.s. is not a leader in this technology. i think the western world is

leading it, but -- >> i know i'm way over time. real quick, the code, the underlying code, proprietary to each manufacturer or sort of a common script? >> proprietary? the parameters you run the machine on and the materials you put into the machine. >> yeah. if i were to hop on-line right now and want to start design and actually do some coding, i'm a decade old, out of date, sql programmer. >> i'm going to let john jump in on that one. >> well, i think if i understand your question correctly, the capability of sending a file -- >> how proprietary is the software for each manufacturer. >> the software to actually allow you to print a part? correct. >> i'll answer two ways. the software that allows you to have access to the printer is common. it's called an stl file. that's common to all the different companies that are out

there. then what's proprietary would be actually how the printer prints. each one of them uses a variety of different technologies and parameters so that would be proprietary if that answers your question. >> mr. chairman, thank you for your patience with me. thank you. >> could each of you -- you all brought a variety of things. starting with mr. o'neill can you tell us what you've got in front of you? or show it off. >> sure. well as i said before, when we -- we have to bring products to market quickly because the iphone refreshes every year and usually refreshes around september or october. so to get the products into the stores for the holiday season, we have to be very quick.

so whenever there's rumors on the internet we'll take those rumors and take the specification actually print a copy of an iphone. copy of an iphone. a 3-d one based on the rumors. then we'll print a product that would hold our lenses, a clip, that, you know, to see how it fits, see how well, it works and evaluate whether we're happy with that. we'll keep working on this through all the rumors. every time there's a new rumor we'll do a new one and hundreds of designs of the product to get it right. when apple does release the phone, then we've got this product that we can put on there and test our lenses on the new device, we can test the fit and how it is, and then if we're happy with everything we send it out to manufacturing and have tooling made so we can do injection molding and then we're in production and that whole process takes about six to eight weeks. >> mr. cobb? >> little bit picking up on what patrick was talking about. this particular part was a part that really gets the idea of taking a prototype into a realistic area. what we've done is utilized a printing process, somewhat similar to an ink jet printer, but it gives you really the realism you get from a part and

that's what a manufacturer or designer is looking for. in the particular process that we're using here, called poly jet, what it allows to do is mix materials. so you have something very durable, call it digital abs the white part but at the same time printing this flexible material as well. this was printed as one part. okay. then just recently, we introduced the capability of the multiple material and then we've added color to that. you can actually then print a very realistic in this case a prototype shoe but a realistic prototype shoe that to most people coming in here looking at this, you would probably think it was the real thing. and then getting towards the idea of real things, this particular part is a different technology that we have called fdm. this particular technology takes real thermal plastic, so nylon, poly carbonates, abs that are being used today in

manufacturing, typically in injection mold process, but in this particular case, this is in the abs part that we're seeing here, this was printed, again, about 18 different components here, this was all printed in one particular piece. okay. so from a prototyping standpoint it allows you to look at a lot of different things that are going on because it's not just an individual part, it's the assembly and this particular prototyping technology allows you to look at those assemblies, testing for form, fit and function. and then as you go a little further, you can also because it's real thermal plastics these are the types of materials being used in real life today for end use parts in aerospace, automotive, some consumer goods. >> well, i brought a variety of products. it's so hard to choose if there's so many people creatively active. so in my testimony i used an example of a design collector

from new york called gotham smith. they make men's jewelry. these are cuff links that are made in sterling silver, designed by them and they're for sale on our platform and they sell it in a different way. so that's one example. another that is really cool is a game. just almost organic movement crowd funded, the space program, they made a little game and very passionate community behind it and few guys figured out can we take our assets from the game and turn them into real things. so they uploaded it to shapeways, and it was working. so now this is people -- went on the internet and went viral and everybody wants to have them. two very different examples. i mentioned nervous systems. they use algorithms, so they don't design the products by

hand, no cat software involved. they write computer code that mimics nature and by doing that they can create unique items all the time. this is an example of a light shade with an led light inside. you can go on their website, on shapeways, you can find these products and they are for sale. miss baum has brought another ms. baum brought another product, a neck laws. so you can see it's a wide variety of jewelry to lighting fixtures to gadgets and game accessories. i can keep going for hours, but i won't. >> ms. baum? >> right now i'm wishing i had selected my examples differently. i had skulls and fashion transplant models dr. rodriguez did years ago. i had example of 3-d printing and one of the companies print

on 3-d products extending the life of the plastic prints. what's in the knowledge center at 3-d maryland is one-tenth scale thruster they made for boeing. those objects are impressive. what i have in front of me are prototype soles from under armour, an anchor business for baltimore for sure. probably as much as i'm able to say. close friend with under armour and frequently behind the door with them. but so right now, their prototyping soles. this is a watch and this is off of mr. cobb's systems and the same idea of the gear shifter. very flexible material and rigid at the same time. end use product for northrop north rupp grumman located in maryland and an end-use part. prototyping and end use parts metal printed part that had post-production machining done on it and then i guess i would just tag on with peter about this little guy. this particular printer prints in full color and we talk about

entrepreneurs and talk about the uses of the technology. if you take a 3-d photograph of yourself or maybe your daughter or grandchildren and you want to have that retchly indicated into a doll, your kids can have dolls that look like them if that's what you want to do. mickey labs is doing that in the uk. stanley black and decker, located in maryland, use this is to color-code their parts of their tools as they put it through production. orange one division, green another division or code the parts. that's not an extra. that's inherent to the technology. the last sample i have that i'll talk about is this architectural model. we're all probably old enough to understand that architectural models before 3-d printing were made painstakingly with exact-o knives and map board. today we can print the prototype of the building and there's a saying in the industry if a picture is worth a thousand words a prototype is worth a thousand pictures. as our society gets more and

more visual, our literacy declines a little bit, but we become more visual, that's more and more true. lastly in my testimony i included a really nice profile of a company in baltimore by the name of danco arlington, a traditional foundry. a wonderful american story. 94-year-old family-owned business, three or four generations. and they started losing their pattern makers. they said, how are we going to solve this problem? they don't want to see this successful business change. and so they adopted 3-d printing in 2010. they have a number of stratasys machines. the highest end machine that stratasys makes and they say they win bids because they send a prototype of the object they are going to create for the defense industry with the bid and how they get successful bids. >> you all bring up an interesting point too. in terms of your different mediums that you print with, you know, how does that translate into durability or strength or whatever the case may be? i'll let any one of you answer that wants to.

>> i'm going to point the finger to mr. cobb because he's got the highest end materials.le >> you know, the bulk of our business is in the thermal plastic area. i talked about the nylons and poly carbonates. and traditional manufacturing would be utilizing an injection molding process to bring those parts. we don't quite do that. we don't get -- we don't melt it and put pressure into it. we use the layer technology that we all talked about in the past. so the characteristics of that are different than the traditional injection molding. we are using real abs, real nylon, and real polycarbonate. a wide variety of manufacturers around the world. we just select one of those. so the difference is not in the material itself, but the difference is, in the way the

part is actually manufactured. and so what i was talking earlier, we talked about having the knowledge from a designer, the knowledge from a tool maker, and the knowledge from a manufacturer, to understand that a 3-d printed part is in our case a real thermal plastic but it's made differently than the traditional injection molding. injection molding has been around for a long period of time. there's a handbook that talks about injection molding, the principles to make sure they build a durable part. there's no such thing for 3-d printing or additive manufacturing today, and as the technology evolves, new materials evolve, and they're evolving every single day. having that knowledge to understand the differences between injection molded part in the case of a thermal plastic and a 3-d printed part will be important in producing more and more parts for end users because

they can be used utilizing 3-d printing they are being used today but it's a different design criteria, different manufacturing method and it's different. >> can you take -- say you don't have a drawing or you don't have a -- you're doing just in the restoration industry, out of curiosity, can you take an existing or wore out part and create data points and reproduce that? and how expensive is this for somebody to -- like if they employ or call somebody, they kv obviously don't want to buy the technology themselves, they just as soon have somebody do it for them. how expensive is it to create that part as a model to be able to fit up? >> you can use technologies that are getting more and more powerful today. "tq)e we were [ inaudible ] you can take a part and if it's still in one piece you can scan it.

you need to see all items of it. and those are getting very affordable. they turned pictures basically they take into a mold you can print and then you can print it in a wide variety of materials. to your point of questions around what does it cost, the scanners are available from a few hundreds dollars up to tens of thousands if you want high-end professional stuff. the printing itself, again depending on the material you want to use, items the size of an iphone case would cost you $20, $30. things that are getting a bit bigger are $50 to $100 in plastics. if you talk metal objects the size of this are around $100 to $200. but this is like real stainless steel. so you know, you can make things

in silver, all kinds of materials, based on scans if you wanted to for repairing stuff and it's been done. >> you can build up in metal? >> sorry? >> you can build up in metal? >> yes. metals are possible like ceramics and plastics, yeah. >> fascinating. with that i want to thank you all for participating today and again, i apologize for the vote series that happened during the hearing. your testimony is obviously helped us to better understand how 3-d printing is spurring economic growth and creating a lot of opportunities, lot of opportunities out there for entrepreneurs around the nation. with that i would ask unanimous consent all members have five days to submit materials for the record. seeing none that is so ordered and without objection, i would say hearing's adjourned.

the congressional hispanic caucus continues its conference here in washington, d.c. today with a focus on immigration policy. speakers include labor secretary thomas perez, javier basera. you can see that live starting at 3:15 eastern on c-span. and the wilson center will host a discussion on russia under the leadership of president vladimir putin. her book at 3:30 eastern on c-span2. and right here on c-span3 tonight it's a special presentation of the 2014 new york ideas festival. speakers include the founders of kickstarter yobani yoeg either, gabby giffords and the future of finance tonight starting at 8

p.m. eastern here on c-span3. our campaign 2014 debate coverage continues. tonight on c-span, live coverage of the minnesota governor's debate between democrat mark dayton, republican candidate jeff johnson and independent party candidate hannah6? nicholette. also on thursday at 8 p.m. on c-span 2 the nebraska governor's debate. saturday night 8 p.m. eastern live coverage of montana house debate. c-span campaign 2014, more than 100 debates for the control of congress. now a look at the impact of regulations on the future of

connected cars and self-driving cars. speakers include representatives from toyota, verizon and the global automakers association. the event starts with brief remarks by david strickland, former national highway traffic safety administrator, from the annual consumer electronics association innovator summit in las vegas. this is about an hour. good afternoon. i hope you're enjoying the first day of ces. my name is john quinn, i'll be the moderator for today's panel. but before we start the brief introduction and opening remarks and i want to introduce the next speaker. he's been riding shotgun for a couple weeks. it's been a very interesting four years. promises to be a revolution in what's going on in the automobile industry.

i would like you to please welcomedi david strickland fro. thank you so much. this is a sturp star panel. i need to be staying longer to learn something here. as a number of you may be aware, i'll be stepping down from my post at nhtsa administrator in a couple weeks. i've been told five minutes and i'll keep to five. we first began our work during my tenure on distraction starting really in earnest in 2009-2010. and i remember my decision to make sure that i came to ces as the regular auto show tour because ces has effectively become the fourth major auto

show in america. gary shapiro and the team at ces residesing that car companies are no longer just car companies. because there is a convergence. and with convergence there's possibilities, there's opportunities, there's also great risks. so, as my validictory, if you will, i'm incredibly happy to see so many partners are now talking to each other, which wasn't the case not that long where you have wireless providers and hand-held manufacturers and automakers and system platform providers, androids, windows and the ioss of the world are actually now in strategic partnerships in figuring out ways forward. and speaking of which -- i wish

i said i had planned that, but i really didn't. that's all good things. but i will tell you that from the part of the agency nhtsa as a safety regulator and there are other regulatory bodies that are going to be part of this space with nhtsa, the federal trade commission, we have only one chance to get this right. i implore all of you to continue on your path of not only communicating at the level you're talking right now, but, frankly, building a broader basis of how we attack the problems we see in the future of connectivity. and connectivity writ large. connecting the driver to the vehicle. connecting the driver to the outside world and how we can

innovate all these things safely. but i will tell you the one thing that will disrupt all of this. our hope in vehicle-to-vehicle communication, ourc hope in safety systems, our push for technology at nhtsa where we're focusing on increasing belt use through seat belt interlocks trying reduce drunk driving and reducing human errors, which is 90% of all traffic crashes. the hope of reducing traffic fattalities to 10,000 people, 5,000 people, is all based on this tech knowledge cal hope. but we won't attain it if we don't address privacyxz:í and . and all those components which people hold dear. we're in a sensitive time in america in regard to these issues. and the power of everything we're relying on and safety systems/(g ñ and connection wil be attained if consumers don't

trust the work of the regulators or the work of the industry. so, my last official request is that nhtsa at consumer electronics show is we have to do more. we have to be better. we have to do it faster. the agency is in a position right now where i've always said, we sort of follow the notion of what wayne gretzky's dad said to him in his years of being a young hockey player. don't go where the puck is. you've got to go where the puck is going. nhtsa has to do that and we will. everybody in this room has the responsibility. we're going to hold these goals. we have to make sure that we have the trust of the american people for all these wonderful innovations we see on the floor. that is my hope and my wish. i want to thank everybody in this room and all the partners over the past four years that have frankly made this the most dynamic time.

that probably any nhtsa administrator has had in office. you guys truly have the ability to do god's work. keep talking, keep planning, keep innovating, keep growing. and please keep safety as the number one priority. thank you very much.zw >> thank you very much. that was very interesting. we're going to talk about privacy only today. i've been coming to they show out to las vegas for years. honestly, this year we are really seeing the start of something that will revolutionize travel, safety. david elue alluded to the idea zero fattalities but there's a

long road to get there. that is what our starting point is going to be. i'm going to quickly run through our folks on the panel here and get off on this discussion because we don't have a lot of time.> and hilary cain, thilo koslowski, andrew brown from dellfy and mitch bainwol from alliance of automobile manufacturers. the discussion how can anybody in government legislature keep up with the name we've seen.

we'll start off, if you want to start right off or we can -- >> no, that's fine. >> so, the question is, how can we keep up or how can the administration keep up with what's changing in the telematticks world or the automotive world. have to have a lot of people, i guess. full employment act for the government because it's changing dramatically. and i think a lot of the change is good. and there's a lot of innovation. the cars are getting smarter. yes, the cars are connected. and i think to his last point about safety, it's at the core of the connected vehicle is safety. i mean, there is the technology that's been around for 18 years that will notify in case of an accident. if ys think about how many accidents are reported from the vehicle from those technologies, it's out there. it's connected. how do they keep up? i think it's things like this. there are initiatives as we need to start coming together. i'm not a believer we need to throw policy at everything that

happens in the car because policy will often stymie innovation. and i think the technology that got us to(pev these safer cars connected cars, the technology that allows us to have hands-free calling in car. the technology that connects to you your dealer or the diagnostic, that same technology can be used to solve some of these things that i think nhtsa is worried about. i agree with him 100%. we need to come together as an industry. we need all the players at the table to figure out how to use that same technology to solve some of those issues. >> andrew, yes. >> first of all, i want to complicate administrator strickland because he, like no other administrator before him, actually reached out to the industry to try to understand the nature what could be possible.

to stretch their thinking about the possibles. and i think he was very receptive to that. from that point going forward, not just nhtsa but all government agencies that work in this space need to reach out to industry, reach out to the consumer electronics sector, reach out to academia, because there are a lot of players in this space. all of us have a piece of the equation and it needs to be more collaborative. it's not like the old days where we were off in our separate corners and we came out fighting. what must happen is we work together to achieve the best solution for everyone concerned. industry, government and ultimately the consumer.du >> i would like to echo what andrew just said about david.

he was incredibly successful guy who is -- and is. not an obituary here. very kind, thoughtful and a real love of technology that came through his work. david when he spoke said the problem of connectivity so i'm going to quibble with that a little bit. i think the issue is the opportunity of connectivity. we have a dawn of great new age and safety that connectivity will usher in. the question is, is the pace of change consistent with the modern world. i think the answer is unfortunately maybe not. every show at ces you see dramatic new innovations. yeah, we always talk about innovation but innovation is finding its way into the

marketplace now and quickly. it's really profound. i was just down the row a little bit and i went through the mercedes display and there's thj wearable watchkd that commands e interface, the integrated system. you know, that's pretty striking. that's a metaphor and i don't do this to pick on nhtsa because i think they dot best they can do with really dedicated public servants but the distraction guidelines that came out earlier this year were visual manual, dealing with 2% of the distraction problem, just the integrated problem. didn't deal with cell phone or wearable watch or voice gesture. that's a perfect metaphor for the challenge here because it just is not relevant to the problem today. the way you deal with that is government serving in a different role.

instead of government being a regularity they should be a facilitator. the manufacturers and carriers and software guys and automobile manufacturers need tos pull together to produce a product in the car that is safe for everybody. we are used to dealing with nhtsa. these other elements of this new e he c ecosystem are not. >> i think we need to emphasize there needs to be collaboration between those doing the regulating. i think we've seen that more pronounced in the past few months, last year or so where re with talking about privacy. we're talking about the federal trait commission. we are talking about spectrum policy and the federal trade committee and nhts.

i would argue perhaps there's not enough collaboration among those regulators.?. we've seen that play out most profoundly in the vehicle to vehicle communication space. >> that's one of my questions. does the fcc work with nhtsa, because we're integrating all these different services. coming back to the original idea, would it help with the study of 3,000 vehicles in ann arbor, does that help the government understand what's going on? something like that? or should we be doing something end cap. are those different kinds of approaches to that? >> i would think that's a big piece of it. i would like to introduce another level of this which is the consumer, that will

determine if it works or doesn't work. i actually believe the government plays a huge role in really facilitating innovation. not necessarily stifling. if there wouldn't be any regulation at all, this would be the wild west. you know, while maybe everybody in the room knows how to do it right and not put anybody in danger, there are other approaches i've seen that certainly would put you at a risk. that's where the government has to play a role. ultimately it's the market force that determine what sticks and doesn't stick. i actually believe this whole driver distraction will force the automotive industry, become so much more innovative in how you serve up information and enable consumers to consume that content, maybe create content on their own and share it with other people that this will help

bring innovation to the marketplace. i think you'll see the industry shifting their mind set. but if you plant the seed in order to excite consumers and still have digital lifestyle in a vehicle, that's when it gets very interesting. that's the role of the government. >> you mentioned the safety launch in ann arbor which i think is a great example of how government should engage. it's a great demonstration. in fact, i think it's an excellent model in terms of engaging or facilitating theç oems, tier ones, academic, other players who have technology, the telecommunications communities

because it's an attempt to understand the technology. not only what's possible but what's doable, what's afforda e affordable. to understand some of the flaws, the benefits. to try to understand that in the context of data. data that will help us assess workable are those solutions. any new technology for a connected vehicle that you put into the marketplace, at best, it's going to go on #=15, 16 million vehicles here in the united states and maybe 70 million vehicles globally. here in the united states, you have, what, 330 million vehicles already in the car park and yet you're only producing 15.6 or 16 million new vehicles each year. how do you really make it

effective if it might take you 20 years to propagate throughout the car part. regulators need to understand that legislating something &háhp &hc% solve the problem. you may cause a bigger problem. you may increase the cost of the technology. it's much better in my mind to try to work through and facilitate with players to understand really what is possible. >> could you do that vehicle to vehicle? i started looking at this thinking, well, i'm a major automaker, could i introduce it in my vehicles by myself? it wouldn't work across the board but it might be, the tip of the iceberg to get that technology out there. or is it something that is just no way, it's too dangerous, i could come up to an intersection and get a false alert.

>> it's only a lonely discussion. where your car has it and nobody else does. again, consumers will actually determine if this technology will work or not. if they find value in it, car manufacturers find incentive in it. you still have to put regulation around it. i come back to these two aspects. it's the consumer side, the market side, if you will, plus the technology. the government can help to create if it's proven you can save lives or increase productivity. that's the main motivation for a lot of these technologies. these two as specks and benefits we can realize, considering all of us don't -- any country in the world won't see more investments in the road infrastructure. it means we have to get smarter about using the infrastructure we already have. that alone will motivate these technologies going forward. you have an infrastructure

component that is a real role of government and we eluded to but did not get into the discussion of the fcc. you know, this is a tricky proposition. on the one hand we're faced with an opportunity to have massive gains and fatality rates that connectivity would usher in. it requires a major investment on the part of government. a majorgo investment on the par of manufacturers, major embrace on the part of consumers but also requires a certain spectrum, potentially. and this is where the organization of government and the modern world doesn't fit. the dna of the fcc isn't necessarily auto safety. it's wi-fi, the internet dna. and so this is a bit of a challenge for us. >> it's a huge -- it's a huge problem. i thought i might have cut off.

it is a huge problem. quite honestly we thought david would make some kind of an announcement on spectrum and making sure the spectrum is available. the payoff, if you look at it, in reducing fatalities and injuries by 80%, just look at what you could do as far as reducing gasoline, as far as reducing time. it's incredible. the challenge is great. the question is, are you ready to make the investment? well, what is that investment? is that standing behind your product for 20 years on v to v or v to i. what does that mean? where's the liability? if we go back to the original question and it was first raised for me in the '90s with then-nhtsa administrator who said technology is moving so fast we can't keep up with it. the problem the manufacturer

has, they run with the technology. and if the regulation is something that is different than what theypu invested in, that's the exposure they have. we're regulated bumper to bumper, seven to eight agencies regulating how we build our product. we need that collaboration. i forget who said it early on, but back when nhtsa was created in the '60s and it was, hell no, we don't to want go as automaker. but that's changed. no one has all the answers. >> quick thought on the v to v, vehicle to vehicle and vehicle to infrastructure. the magnitude of lives that can be saved and the property damage

and congestion, that's clear. but to get to that point we need the consumer and driver base comfortable with the concept of a connected vehicle. where data is going to be shared and vehicles are going to talk to other vehicles. that's not a small task. it's no surprise that even today with all the technology, a small small share of cars are connected. we have to get the consumer conne comfortable with a connected car before we can jump to v to i and v to v. i think there are some steps we can take before we get to that point. that is trying to get greater adoption of the connected car, trying to get the consumer base comfortable with the benefits of the connected car and get greater adoption. that greater adoption includes addressing privacy david mentioned. there are steps ahead of that. >> that's one of my questions too often and in these discussions. there is a gating factor and the

gate factor is us. we all think we're great drivers but we're not all great drivers. we get this new technology in the car and the book is this thick. is that the gating factor? do we have to retrain drivers like abs brakes times 1,000 to get them behind the wheel of these vehicles or is it incremental. >> to piggyback on the last thought. we have to take steps. i got a new car and it was this thick but every page said, see your dvd. there is an education process. as an industry we have to make these things intuitive but -- especially with the next generation buyer. they don't need it this thick. they're not going to read it. they grew up in connected lifestyle. i think as generations go by there's an expectation2c of

connectedness, an understanding of technology many of us didn't grow up with. we have to start and start now because we can't go straight into v to v and hope the world is a better place. >> at the same time, it's interesting -- you're absolutely right. we have to educate more consumers on the benefits. but they get that quickly. u.s. vehicle owners and we asked them what does it mean and already today 25% of u.s. consumers say i want that in my next new vehicle because of the benefits they just read about. 25% is a huge number for technology they haven't even experienced. the cell phones, the tablets we all use are influences people with regard to what else could technology do for them. we have to explain what that

means in the automotive concept but consumers are opening up to this. consumers are ready to embrace this. one more stat i want to share with you. whoa asked consumers with self-driving car. if you ever get a chance to do if, do it. there's a 30-second rule i establish for myself. the first time you sit in one of those cars, you freak out. you're like, what the hell is happening? the steeringet wheel goes like this. after 30 seconds it's like, that's comfortable. i can imagine what i can do in this car. i had an a-ha moment in the google vehicle where someone was cutting us off and the car reacted very smoothly to this. i never could have done this. i love driving. at ma moment i realized almost with tears in my eyes that a

machine can be better than me. 38% of u.s. consumers say they would want to get self-driving vehicle functionality in the next new vehicle. 38%. >> andrew and then i want to hear hilary. >> you want to hear her first? >> no, go ahead. >> what's interesting, we need to realize first that we have the convergence of two very dynamic sets of issues. one is autonomy. the other is connectivity. the connectivity sets of issues are being driven quite a bit by the smartphone and consumer the smartphoes all want mer to use and stay connected. on the other hand we have this desire to be auto ton mouse because what we've seen from the google vehicle.÷ quite honestly, we've been on a path here have automating

generally mechanical functions on the vehicle for several years. all of a sudden these two very dynamic sets of issues have accelerated their pace and they're converging in the same place, on the vehicle. and what has happened is that you have a lot of entities now saying, all right, how do i react to that? that isn't my traditional sort of scope. now they're challenged with, okay, how do i deal with the spectrum issue whether it's fcc and nhtsa in terms of providing the bandwith drc, et cetera. and you have a lot of dynamic issues. the one thing we realize in the automotive industry is whatever we put on that vehicle we want it to be safe, number one. we want it to be safe. it can't fail. it can't go to the blue screen of death. it has to operate seamlessly,

flawlessly. ther hand we want to be responsive to our customers. the ultimate purchaser. all of that is possible but we need to do it in a way where it's effective and affordable and we truly can benefit from t it. we don't want our technologies mandated that drive to us a solution that ultimately won't pan out because we won't survive one failure. we want it to be done right. secondly the industry needs the opportunity to innovate so we get proven solutions that work and we understand the ramifications. so, we're on that pathway but in the meantime, we got the smartphone. we got the tablets. now iwatches and wearable

devices. all those things that present new challenges to us. >> one of these i'd like to offer up, at least in the v to v and v to i space we're talking about right now, i would argue a lot of the regulatory uncertainty that exists is stifling innovation. by this -- and a couple of fronts. as an automaker, probably not going to deploy this technology in our vehicles right now if we don't have certainty around what's going to be the end result with the spectrum discussion. it's under debate right now. it's different if we're forced to share the spectrum. our technologyit might look different than we would if we have certainty we have that spectrum and for our use and only our use. there's uncertainty there. there's uncertainty if nhtsa is going to mandate this technology or do nothing about this technology. if it's mandated, we're all in. if it's not mandated, we as a

company have to make a decision. are we going to deploy it on our own knowing our toyota vehicles will only communicate with toyota vehicles? hope technology stays the same so our cars are all talking to each other. i think all the automakers are frozen until we have sernltd about what this landscape is going to look like going forward. >> in europe they're looking not vehicle to vehicle but cell information so you look further count road, but they're not there yet. in talking with all the automakers,there are a handful of automakers that if two or three decided to do it, that would establish a de factog standard. in terms of the percentages, i don't know if anyone is willing

to do it but there's a lot of bar talk, i guess, about that at any rate. anybody want to add something? i should -- there's been underlying talk, scuttlebutt before and during the show about who controls the dashboard and what happens when you want to make those connections at the moment. and a lot of rumors about what companies may try to do in terms of taking over that dashboard. whether a certain company with a certain kind of phone is going to make your dashboard look different than it did before. and whether that's a great idea or not. als the blackberry effect, why would i do that if i don't know if that phone is going to be here in five years? i don't know how open people want to be about that or that's

not a concern? >> i'm not speaking from an automotive perspective but it's interesting in your point f you've read the steve jobs book, which i encourage you to do because it's enlighting. there's a section about his strategy against gates strategy of open technology. in the book he talks about the one industry that is still right for an opportunity to own the entire experience is automotive. and he's done it in his industry and the apple industry. the one remaining industry is automotive. you can control that experience you open the door for someone else to, exactly as john described, control the dashboard. if you believe in his philosophy and controlling that ecosystem end to end, there's a strong argument. both models have been successful.

to the last question there is going to be a point when somebody gives up the dashboard and yields to somebody that provides a great user interface. my kids ask me all the time, why can't you just pop it in and run thefq vehicle? at some point that will be the case, but that would be a conscience strategy to move away from owning that experience end to end. my guesses are it's going to be somebody that needs that brand lift to do that versus somebody that's brand parody with one of those providers. that's my two cents of the crystal ball. >> i look at this slightly different. it's not about control but influence you can have over that dashboard. it's probably not the dashboard but the customer. maybe the connected driver first and then the customer. that's why the tech companies are interested in the automobile. that's the last remaining puzzle that would allow them to interact with you wherever you

are, even when you're mobile, sitting in your car. i think going forward, and this relates to what kevin said, maybe the auto industry will come to the level of not just smartphones and other devices but maybe the car will be the coolest device out there. at the end of the day a car does more than just provide you with information. it also has a physical mission. it gets you from point a to point b. my smartphone can do that. i doubt we'll have a feature of that in the next 10 to 20 years. that's the beauty that no other device platform can match. that's why i believe the automotive0l):vstry and the discussion is so important that the automotive industry will create products, cars, that are so much more innovative, so much more exciting and involving and cooler than anything else that consumers have seen that eventually this whole idea of having tech companies on top might be turned around. that's obviously a big vision. i honestly believe can you do

this because the car has so much more real estate where you can put technology in, a controlled environment. you know if someone is sitting or driving. you have a captive audience. that's so much more fascinating than any device platform that the car will be the ultimate mobile device. >> if i can continue dashboard confessions here. nine of the top 20 companies in analysis of the most innovative companies in the world and 9 of the top 20 were autos. autos spend $120 billion a year on r&d. overwhelming private investment, not private investment. that is producing cool cars. so i think thilo has it right on. this is an undervalued understanding in our society

that the pace of change really is rapid. at the same time, there is was an ihs stud request last week where they talk about the pace of the stcs. and i think this is really stunning. it goes to what andrew said about fleet turnover. they talked about selling 230,000 self-driving cars in the year 2025 in the world. so, we talk about self-driving cars like they're here tomorrow but 220,000 in a marketplace of about 100 million in ten years from now. in 20 years they said, 11 or 12 million units sold in a larger base. and roughly a quarter of those in the u.s. roughly a quarter of all cars in the u.s. sold in 20 years will be s tflt cs. on one level this pace of change is slow and gradual because of fleet turnover.

on another level it's immediate and this is the coolness factor where in today's cars can you buy a car that's kind of like an stc because you have lane centering and adjustable crews control and functionally an stc, which is better than std. but the -- i think i'll leave it there. >> good call. i would like to make one comment on this.h[ that stat you just mentioned, i think that's way too conservati conservative. i think you'll also see steps of progression to get there. example, i believe in three years from now, four years from now you'll have cars that are self-aware before they are truly au auto mouse.

i think the progression in the automotive space will be way faster than most of us realize. does that mean all of us will have self-driving cars or driverless cars i can send off to do myy7 shopping? no, that won't happen but steps in between. it dps back to policy. it's not technology. it's much more a question of how culturally and from a legal perspective we allow these things to happen. there was an interesting discussion today from audi when they talked about piloted driving. the question came up, who's legal -- who's responsible for any problems that happen from a self-driving car. the answer right away, the driver. which kind of shows you those legal aspects are probably the biggest hurdle. not the technology. >> and just to make a point on that, too, and i recommend everybody, if i can, to go out and see what bosh is doing out

here. the dilemmas of how much control the driver will cede to technology is totally unknown. it sounds great but a number of our members including delphi has been doing a lot of work on this. squet, where's joe six-pack, will he pay for it and the liabilities associated with it? i think technology is going to happen very quickly but i think consumer acceptance to it is still is a very big issue that has to be dealt with. >> as mitch pointed out, we" se it on the highway, it has lane-centering, adaptive cruise kroeshlgs i take my hand off the wheels and the thing follows the highway. i'm not doing anything. of course if i hit the next car, it is my fault. that's why i wonder how much will come in incremental steps

and then it will just be a natural thing for people to move to that. but actually what you just said reminds me of something else. that question is, there is some backlash to this whole movement and it looks at airline pilots and says, wait a second, when we switched this to fly-by driver, look what's starting to happen. pilot falls asleep, something happens in the airplane and all of a sudden we have problems. don't know how to teach somebody to drive in their car basically had all these things in it and would we have to retrain them every week? is that something people are looking at now? >> you go back and look at the regulatory side of things and the industry has a tremendous amount of experience with being regulated on the product. but when it comes to regulating behavior, it's another whole ball game.

i myself spent six years on mandatory seat belt use laws. today i'm not sure where that will come from and you have to go through the consumer side of it. the big risk for the manufacturer is you do something or by regulation, do you something that the customer doesn't want. go back to the interlock on people were cutting their safety belts out because the governmenú mandated we had to put them in and you couldn't start your car unless you had your safety belt on. this is the unchartered area with all the financial risk associated with that, that argues for a more gradual rollout, although i think the problem is going to be technology is coming so fast, the companies have a great deal of risk. this is with the suppliers and the regulators, to try to get it right the first time with no guarantee. >> you have this regulatory

uncertainty out there as well. we've talked -- i would argue over the last couple of years, blue in the face about all the various policy obstacles and challenges that exist to autonomous vehicles. we know what these look o%9s%-ñ now it's time to turn the conversation to what are these answers to obstacles and get the ball rolling so we can start to deploy these technologies. until these questions get answered and we know what the framework looks like that we're going to be living under in the future, we're not going to do anything. >> it's the other guy's fault if there's an accident. >> john, i wanted to interject a couple points. most of our comments have been around passenger vehicles. i'd just like to remind all of us, let's not forget about commercial vehicles. i mean, some of those applications may be more straightforward in the sense that commercial vehicles have professional drivers.

and they have a very defined route, beginning to end. and it may be a better platform for initially establishingv no only connectivity, more broadly, but also automated operation. let's noty3búa forget about tha opportunity. and then the second comment i'd like to make is the fact that we're looking at what's immediately in front of us and saying, all right, you know, how we're going to control this invasion of the center stack in the vehicle. well, i think we need to step back and think about the broader issue. the broader issue is one about mobility. some call it e-mobility in the sense of being connected to things but more broadly, as our society becomes more urbanized, it changes the context by which we transport ourselves, we transport goods and it may mean

different types of vehicles and platforms which could become a great opportunity for connectivity and autonomy as we move forward in time. if you look at some of the p r(t&háhp &hc% prognistacators are saying, we'll be more urbanized. certainly there are sectors on east coast and west coast where the expectation is that by 2025, for example, will be more and more urbanized than it is today. that will mean a different form of moenlt, of goods and services and people. so, in that context, if you take the blinders off and think about in that future, what does

connectivity mean? what does automation mean? >> are you thinking things like platooning to my way of thinking, i drive a car. i can't imagine letting my vehicle do that. but is that the kind of thing you're thinking about -- >> certainly on commercial vehicles. in europe they demonstrated road trains. they concluded that project last year. and it was successful. with respect to our own personal transportation, i mean, we may be, you know, willing to accept a transport pod that comes to our home, picks us up at some stated time, takes us to our appointments and comes back and picks us up and then goes off wherever it needs to go. that's a different mode of mobility of transportation. and certainly our young people, you know, given their declining'

proclivity to want to drive, may be more receptive to those things. we need to think of what the future may mean in terms of what we regard as transportation. it may be entirely different. while we're focused on dealing with the issues of connectivity, and i'm not trying to minimize them. we still have big issues there, as well as on autonomy, we need to keep looking to the future to say, all right, how is this going to move from where we are, where we want to be into that future of tomorrow. i've only got a couple more minutes and we can catch people right after. we can catch people right after. i would like to let them keep going. i mean, in terms of those -- that connectivity, part of the expense, the investment, not all cars have what troy calls an

imbedded modem. not wanting to stretch margins, et cetera, or is that going to happen quickly in the next couple years anyway and get that kind of connectivity? >> i definitely believe we'll get the connectivity because consumers are, again, asking for it. it's actually one of the very few things how car manufacturers are differentiating these days because most consumers' differentiation on classic engineering-based features isn't that easy to do ֖anymore. yes, if you're an enthusiast you can tell the difference between different suspensions and maybe the engine and responsiveness of acceleration and so on. but for the average consumer it doesn't matter. we talked already about the younger generation that's not interested in cars very much. this is the opportunity for the automotive industry to reignite the fascination that comes along with an automobile. mobility and being mobile used mean one thing for a generation of people, probably most of us here in the audience, that next

generation has a different definition of mobility and the car has to fulfill that need as well going forward. but, you know, there are bigger implications of this, as andy pointed out. maybe to take that further, what you talked about, this whole idea of come to the city center and live there because that's where they work and play and have fun. might actually be influenced by mobility as well. if i have a car that drives itself, it doesn't matter if i live that close to the city. i could live further away because i can do whatever i want if the car drives myself. there's really big implications. the connected vehicle is here to stay. there's no question about this. i anticipate that by the end of this decade, 70 to 80% of all new vehicles will give ut option of being connected in a car. because everybody wants to continue with the digital lifestyle as soon as you get into your vehicle and not stop that because it's part of our lives. >> back to the apple question but it's a question about

standards. again, you know, every manufacturer has a different interface in their car. you can touch some. you can't touch others. some work well with voice commands. some are terrible with voice commands. there's a lot of noise over last five years about some kind of standard. is that just a non-starter still in the automotive business? or will there be some coalescing around guidelines that could become standard? i know standards very well. i think the key is that in any standard, any guideline, you don't want to legislate the technology. you don't want to say, this is the way to do it. i think what we have learned that the industry knows how to work towards the key standards that are necessary to enable the introduction of innovation in

our industry. i think what we need to do is what we have always done, and that is to collaborate, work together, find out what the real issues are, establish what the necessary standards and guidelines that allow us to drive the cost down but at the same time to facilitate innovation. because you get the best solutions when we're able to compete against one another. and it also allows us to differentiate ourselves based on our brands. so what's necessary for -- in the area of connectivity is, yes, we need some guidelines ultimately some standards. but that's not something you dictate. that's something that i think we can work towards. we need to work towards and get some of those fundamental foundational elements established. and that will help us move forward a bit more faster. >> i think you have to differentiate between safety applications and connectivity

that are just for fun. if you're talking about where the screen is or how long are you going to adjust the dial or how you work voice or again tuesday -- gestures, that's the way to go. >> i wonder about navigation. suppose they had to react within two seconds or something like that. that would be great. it doesn't happen. is something like that going to happen? >> just as a reminder, too, for those of you that don't follow what the industry is -- as closely as we do, we say, tell us what it is that you want us to do. don't give us a design standard. don't tell us how to do it. tell us what you want to get accomplished. that creates that flexibility and competition that it becomes so important. the other thing is is that the planning process on your new vehicle runs in a good year three years to four years out into the future. the other thing as we talk about

this, we like to see if it's a regulation, we know what it requires us to do. it gives us lead time that we can phase it in over product cycles and over production cycles. and then finally, that we have the flexibility to compete with each other to accomplish the objective. >> i would add to that, regs when they are predictable and stable, they serve a purpose. i wouldn't want anything we say to be interpreted as anti-regulation. all that said, regulations do take two to three years to produce. the rate of innervation is faster than that. if we want nimble coherent policy to makes sense, it does need to be guideline based and it does need to be multi-sector based. it should be the software designers and everybody with the automotives to do stuff that makes sense for consumers. >> how long did electric stability control start to

finish to when it was mandatory take, for example? >> by the time it was -- mike was around when that happened. by the time it was -- by the time they imposed regulation, it was basically done in the marketplace. >> it was already accomplished before the regulation. >> the creation of the technology started years before. so there was a lot of learning that occurred before you got to that regulation, got to that standard. and so you still need to anticipate that. there's one other factor, and that is we're no longer just a nationally based industry. we are an international, global industry. so i mean, all of the oems and the suppliers are global organizations. and so the one thing we cannot afford and the consumer cannot afford is having different standards, different guidelines in different regions of the world. that only adds cost.

we want this to be affordable. we also -- it will add complexity which means you have to have more complex designs which can add some challenging issues. and so while we're focused towards north america, we need to do the same thing on a global basis to assure that we have a set of guidelines and standards that work consistently across the globe. >> mike, you look like you want to say something on top of that. >> no, i'm fine. >> two other issues that we just have a few more minutes i wanted to touch on. hilary mentioned enforcement. i remember seat belts. i still drive with people who do not want to put them on, believe it or not. that still happens. the texting is the most obvious. there's $150 fine when i'm walking down the street and i can count the people going by me that are texting while driving

of every age. it's not generational at all. is that something that's ever going to really help us? it doesn't matter what we do enforcement-wise. it has to be control the driver, restrict them from doing certain things. >> this is an example of what people want to do in a car. they want to communicate with other people. in my eyes, we have to figure out a solution that will allow you to do something like this in a safe manner. saying that you can't do it period isn't going to cut it for most consumers. unfortunately, they have to violate the laws and put other people into danger. when we do studies with consumers to help us predict what's going to happen in the future, we know that in the u.s. 89% of all vehicle owners are concerned about distracted drivers from using the internet in the car or being on their phone. yet 47% want to use mobile applications while driving on their phone. as long as it's safe. everybody has a different definition of what that means. that's the problem. that's again where technology plays a big role.

the guideline or the laws have to say, you can't do what you typically do when urine siyou e vehicle. i want the car to be smart enough to differentiate between me driving on highway and texting versus sitting at a stoplight where i can do all kinds of other things. the law says no it's either or. that kind of black and white mentality just doesn't work in this context. i think that's where innovation needs to set in. maybe the car can send out text messages or tweet -- machine tweets so i don't have to do anything like this. that's an interpretation of communication innovation in a vehicle environment. >> anybody else want -- >> i think that this goes back to the behavior issue that we talked about earlier. i think technology is going to have to solve the issue. you look at the young people today and they are constantly in connection. they want to be connected. they are not going to draw the differentiation between traveling down the highway at 60 miles per hour or stopped at a light. then you get to the enforcement

issue. many of the laws that have -- they are secondary enforcement. they can't stop you even if -- the policeman pulls up and you look over and sure enough they are texting, they can't do anything. so -- that's a real enforcement issue. it says, where is it on the criteria of importance to the policeman? it really is down there low. so i think it's -- technology will solve it. it's wonderful that the technology is moving so quickly and we have this connectivity and all everybody really enjoys it. but now we have to make sure that the technology takes care of it. plus, education and responsibility for individual users. but i don't think that's where the solution is going to be in the long run. >> i close with kind of where i started. texting is a perfect met faphor for the failure of government because the rate of innovation. the guidelines don't deal with

texting, they deal with visual manual. but the real issue is texting, which is not addressed. the second point that relates to that is how do you deal with it? you get them in a room. what david suggested at the beginning, instead of talking about doing it, we do it. we find ways to use technology to combat a problem. we can't go through an exercise in prohibition that's going to fail. we have to find a way to channel it so it's done safely. >> that would be getting everybody in all the different halls that you will see together to coordinate tablets, iphones, cars, everything. it's gradually sort of coming together. i wanted to wrap things up. i wanted to thank you folks very, very much today for the panel discussion. i think it was really helpful. i think it's always helpful because it's getting toward a common goal. i want to thank everybody for coming today. a lot more days left. thanks very much. [ applause ]