and place to our favor. because this is where enterprises and businesses that will be able to become digital companies and working with service providers be able to connect that, that is the area we have a strengthened. thank you. >> the communicators is on location in las vegas for the annual international consumer technology show. the largest trade show in the world. if you're interested in seeing more of our programming to meet conducted c-span.org -- you can go to c-span.org. >> c-span, created 35 years ago and brought to you as a public service by your local cable or

satellite provider. >> the guard towers are gone but the memories come flooding back for so many people who, until today, had lost such a big part of their childhood. some buried the memories and with it, the history of this camp. now, more than 60 years later -- >> this sunday on cue a a, the only family internment cap during world war ii at crystal city texas. >> the government comes to the fathers and says we have a deal for you. we'll reunite you with our families in the internment camp. if you will agree to go voluntarily. i discovered what the real secret of the cap was. they also had to agree to

voluntarily repatriate to germany and japan if the government decided they needed to be repatriated. the truth of the matter is, the crystal city camp was humanely administered by the ins but the special or divisions used it -- the special or divisions used it as the private prisoner exchange program. >> sunday night at 8:00 eastern pacific. >> next summit discussion on digital technology and data collection. speakers include robin murdock and larry downes. this was hosted by the club in san jose california. it is one hour. >> welcome, everyone.

i am from the cheat economist for the consumers electronic association. probably best known as the producers of a small trade show in las vegas called international. we are off our biggest fear. almost 50 years of history. 2.2 million square feet. we will be talking about that today and this is my opera moment. we have given you a copy of -- oprah momet. this looks at the history of how we ended up here but pens a picture of what the implications are when everything becomes digital unconnected. -- digital, connected. we see a world were that starts to impact every experience we have. let me turn it to you, larry. perhaps you can spend a minute to introduce yourself. >> thank you.

congratulations on your book. i have the privilege of reading it in manuscript i can say with confidence it will be a terrific success. i think it encapsulates a lot of the same kinds of technologies that i have been looking at in the research i have been doing. that was the basis of our book last year, big bang destruction. we certainly talk about ces this year. my feet still hurt. one of the big themes i want to look at is what we think of as the second generation of disruptive innovation as a result of the digital revolution. 20 years ago, when i first started writing about these trends, the industry's that really affected immediately were

the obvious ones, consumer electronics, can indications entertainment and media. the ones were effectively using those technologies all along. what we found in the research was that now we are entering a new stage were all of the other industries that were not as transformed the first time around it is their turn. a lot of interesting reasons we can talk about why history is happening slower or faster than asked -- than others. being amazon, all of the things that happen the first time around, they are starting to happen in industries who had little -- last time. that has created an interesting set of threat for businesses and startups investors. those are the technologies i

think that you write about so well in the book and we should start hopefully talking about as many of them as we can. >> robin. >> i lead the global industry. i have been here for two decades. one of the privileges of working here is i get to work with a lot of exciting clients and actually kind of god -- kind of , i was working with the music majors when naspster hit. then i did a lot of work in the console gaming space. i worked with the last three generations of consoles we know

today. that is interesting because unlike the smartphone that we throw away every couple of years, consoles have to last for a much longer time. the product strategy and the decisions you make around architecting the consuls and how you launch them and how they work through their generation is very different from a lot of the throw away consumer electronics we see today. i have been lucky to work with the leading cloud providers. that is interesting because you are making decisions that are quite often, a two decade investment trying to guess where the world is heading.

then you look at some of the other areas i have worked mobile. if you look at the results from ces, amazing development over the past year. just bringing it rolls are, i started my career with ford motor company in europe. i worked with ford back in 1995 with virtual reality using silicon graphics. 20 years on, it actually works. back in the day, it did not and we could not achieve what they wanted to. as we look at digital disruption, we look at the soft pace we see everything is changing really fast. there are these developments around digital technology that actually underpin a lot of the change we see right now.

although we look at disruption right now, a lot of the foundation that allowed that do occur is over a decade or so old. congratulations on the book. i have scanned it. i have only had a day to read it. a fascinating read. >> it is interesting we have talked about timing. we tend to think of these eureka moments where innovation is binary but really, it is part of this broader, evolutionary path that plays out over years or decades. that is what we see with the trends we're talking about today -- connection, digitalization. we started with devices like televisions, one of the first to become digitized.

90% of households had them. you take something widely owned and start there. we have now gone through all of the core devices we have and are starting to spill over into these adjacent spaces this -- the second order effects. what does this start to look like? we can go to the end of the story where everything is impacted. that is an easy job. what is the sequence of events we see from now until the end of digitizing nation? >> as a general rule, one of the things we have found in our research is it happens, there is a famous quote from ernest hemingway. a character asks, how did you go bankrupt? the other says, gradually and suddenly. that is what we have found in

the industries. you see a long time of gradual change where the new technology is coming, it may eventually affect the core customers but it is happening in an incremental, predictable way and we do not have to worry about it. one day, some event happens some product, somebody finally gets the right combination of technologies and they put it together and they let it go and it is facebook. all of the sudden, all of the rules are changed. i think the general trend we are seeing is that. as you talk about in your book a price performance and size are also important. sensor technologies, computing stuff is getting better all the time. it now becomes cost effective to start introducing intelligence

and do more things. my take away from las vegas last week, i said in an article that we did for forbes was if there was a one overriding message, it was the kind of thing -- famous song from the lego movie. it was everything is connected. one of the ones that struck me was the smart thermostat. they now have a partner program. the list of partners initially seemed up lately -- completely bizarre. the car companies, the lock company. what do those have to do with the thermostat? also whirlpool. what is going on?

if you get in the car the thermostat says, there is no one home so they will turn off the air conditioning. if you are not come, the dryer can be told, they are not coming back so slow down the cycle. 10 minutes before they arrived turn it back on t -- darn it back on. -- turn it back on. it can adjust accordingly. these are connections that initially seem quite bizarre. then, you think, it makes a lot of sense. these are totally different industries -- car companies washing machine companies. they would not normally be partners. once you get to the incredibly low price point you shove a sensor into everything and

suddenly, these connections become possible and the idea of industry the very idea starts to fall away and you see these very strange things. >> one of the thing that happens is we have these times were removed from a scarcity to a surplus. we think about the 1960's and 1970's where computer power was a scarcity so we used it sparingly. universities may are may not have had computer access. there might have been a mainframe people could sign up for time on. then around 1984 we took that resource and it came an abundance so we start to waste it. apple introduces macintosh, the first to use a user interface.

it essentially was a redundant feature. xerox had tried to use a graphic interface but it was not successful and it was very expensive because you had to pay a premium for the computing power. sensors have gone from a scarcity to a surplus so we start to waste it. when we do, it creates these new opportunities. think about image sensors on phones. we used to only have one image sensor. now we have a second one on the front. it already in -- changes are behavior. it introduces the selfie. we can argue whether that is a good or bad thing. if you are in an industry, you

can think about whether the deployment -- what the deployment of sensors will do. >> one of the things driving the sensor resolution of everything is an unexpected event which was the smartphone revolution. we now have a billion smart phone devices and what that has done is created this secondary market for all of the parts. if you take a drunk, a 3-d printer, you can find that most of the pieces are smartphone pieces. often they are last generation smartphone pieces that you can buy cheap, because they have been made in such incredible volume. they are being made and such incredible volume just for the smartphone market that has spilled over into other industries. suddenly what might have been years away from being cost

effective is happening overnight. >> i would say if you look at the course of technologies, i like to think it in terms of the device level or the sensor level. he think of the network and conductivity. arguably, conductivity is not moving as fast as we are seeing with devices. then you have the clout that is just unlocking incredible creativity. i am struck by, on the technology level, these things are happening, but there are other things that are not as vital. the reason we're seeing an explosion of creativity is not only the technology but also the fact that there are open ecosystems for development. if you are a startup today, you

cannot conceivably go into the hardware space. you can work with a variety of different players. you can actually get into the hardware space, and you can stand on the shoulders of giants. the other thing is if you look at the smartphone, and the financial power of the user. with android and ios, that is one billion customer accounts. one billion paying customers. you can access that. that is unique. that is something that has happened over the last year. back to your world, a continual rise in consumer electronics.

what is fascinating is not only are we spending more and more in consumer electronics at the expense of other categories, but products like the tv is costing less. you kind of get headroom opening up. that kind of fueling of spend in these new categories is phenomenal. it comes to the point where you say, how many units will the apple watch be sold? there is such a huge amount of spend opening up. i totally agree. i think we are in an amazing time of creativity in the digital space. it is almost this moment where we are seeing proliferation of so many different products as evidenced by ces.

it is interesting to see which will survive, which ecosystems will survive. how will they interact -- a very good question. which services will be picking makers? will it be ios or android or some new company we haven't thought of? i think this is an absolutely fascinating time. >> the standards as well. we are seeing this now on the internet. there is not yet kind of dominant standard for how these devices will share data and interacts. there are maybe five competing. i wouldn't predict which one is going to win, but we also found in research that it is very typical that you will see a fight among different standards.

until he gets worked out, it is very chaotic. most of the internet of things and solutions, most of them are kind of point solutions. this is a smart baby monitor this is a smart electric grill. smart yoga mat was my favorite. you can see the groping towards that. we know it will happen, but we don't know who is going to make the market. >> i think what we are doing is bringing -- building up the notes--nodes of the network. if you use go ill a couple of core devices.

a few years ago, it was mobile phones and tablets. we have changed the structure of the network, making the mobile phone the center of this network. it has become this hub device for all of these things. if you look at many devices that are connecting to the internet they don't have an interface. the interface is the smartphone, that is the viewfinder. 15 years ago, our digital existence was very separate for -- from our analog existence. we would actually go online. we even talked about logging online. reviewed those very distinct identities.

we see that blaring with the mobile phone becoming the bridge that allows us to easily toggle between those two identities aired their once very --. they were once very distinct. i think it is an interesting premise that social norms will start to set in and start to apply those to what we want to have digitize and what we don't want. the question now is not can we digitize it. it is not a technical question anymore. that used to be the focus. the technical solution. now it is, should we digitize it? if so, how do we connected -- 2g or 3g? bluetooth or other communication protocol? i think that becomes the paramount question. what does that scenario look like for my experience. >> one of the positive side effects of all of this entrepreneurship is you do get kind of 1000 flowers blooming. it is so easy now.

you source the parts over the cloud, you buildings, everything can be done virtually. you can really be in the hardware business even if you are one person. we found great examples, of people making products for fun. the risk is because there is no had to this monster,--head to this monster, the concern is privacy and security. which is no surprise. a lot of folks are going into the business of the internet of things. smart devices don't have a lot of history. they don't understand the concept. they don't think about encryption. they don't really think about what is the risk. not so much the damage, but the bad pr it causes for everyone when somebody hacks the base of a smart baby monitor and starts talking to someone else's kid. it is so creepy. people start to step back, and say maybe there's be some central authority at four standards. clearly not the way it is

happening in the united states. but, it is one of the downsides to our open-ended permission was innovation culture. >> you mentioned the data sets being built. one of the things that we are seeing is that there is all of this data being built up by multiple different players. they are not talking to each other. google exercise has lost -- i extracted all the data i could from every digital service that i need. i went to google, facebook, to fit that hearing all of these sources. the reality is when you do that, there is an unparalleled amount of information being captured. the average altitude last year was 600 and two feet.

i'm struck by the data. i suppose what i'm intrigued by is all of the security threats. put that to one side. what is the opportunity of that part of being connected. where was that lead and how that data be pulled together? a nice example is in our personal memory space. in our photos and videos. if any of your like me, you have your photos stored in a variety of different places. you have your fitness data. think about that narrative. what you did last year and where you were. some of it is done on facebook. they are doing interesting

things with their year-end review. i'm fascinated by, how does that data set get harnessed in the future? how does it draw insights and improve our lives, entertain us, inform us? i think we're in this interesting era where things are not really talking to each other. we're creating proliferation of data. but if you have to really behind -- it has yet to really be harnessed. when technology finally catches up, my 40,000 photos on the icloud or in google, interesting things will happen. >> predicting a recommendation especially when it deviates from this historical course. there's no reason today that some of these fitness devices, couldn't also look at my calendar which is digital, and say, you are not going to hear your gold today unless you deviate from your course.

looking at the photos, you could easily imagine the recommendation engines that look at where you have in or suggest, you have done a lot of beach photos. it really connect with this inner enjoyment that we have that we didn't may be fully recognized. i thought highlight the beach, but i didn't -- i thought i'd liked the beach, but i didn't know i like it that much. one of the big things today's figuring out how much the companies tell the customers.

they can't be too over-the-top with how much things they can tell you. they don't father to tell you your average altitude. they don't want to freak you out. but when that becomes a useful data source, a data bite, to inform and predict something that you might be interested in, i think that is interesting to see. >> and how you drive usefulness out of it. i have been using the tile app which you attach to your keys. it is tracking my location. and i fully aware of it? they have all this location data for me. i am, but is also the reason why when i parked my car in a place i forgot, it was able to guide me in the rain and dark back to where my car was. i'm happy to have that trade-off. when events like that happen, it is remarkable. >> you are both talking about this use of the data for

personal enlightenment. that is a collective enlightenment. i was hearing it on the radio about genetic testing, where you take a swallow saliva and they decode your dna. and they have already built up a pretty substantial database of individual dna samples. with permission of their members, they have sent data sets to pfizer to using research on future lupus treatments and drugs. there is some ways, it is information about a lot of people, you abstracted, and we use it for something completely different than what it may have

originally been collected for. but then the creepy factor. sending data to drug companies sounds awful. but then, they had permission, and it's for research. you have to make these trade-offs. you have to do a lot more as data starts to become connected or connectable. the good news is x, the bad news is y. >> one of the things i find amazing is over the last couple of years, we have been talking about as when we will use the cloud as the golden source of data. if any of you bought a new iphone, and you had your old

one, and you wiped your old iphone and connected your new iphone and all of your photos got downloaded, most people did not do it through itunes. in that one case, all of your personal data went to the cloud. and your phone became secondary to your golden copy sitting in the cloud. i think that flip from stuff being stored locally to now the golden copy being in the cloud is something that has happened. most people don't really realize

that massive shift has occurred. i think back to one of the earlier comments. each one of those might not seem that big, but it takes you so far. in the golden globes, richard linklater won for "boyhood" where he shot it for three days every years for the last 12 years. he made sure that in every shot they did, every shoot, each year, they included some technology of the day in the shots. you can see the advanced that advance that occurred. he was insightful and all the things that will change of the 12 years of selling the film. one of the things impressed upon people was the change in technology. you could feel her 12 years the technology being used in each year of the movie was remarkable. >> phones get smaller and smaller.

and then bigger and bigger. >> it has changed in a very short space of time. you're much more qualified to talk about it, but that change in smartphones, we went from small smartphones and thinking that was the norm to small smartphones being weird. if you hold iphone 5, you think it is a toy. behavioral change can happen very fast. that is why i'm quite bullish on the apple watch. i think we will shift rapidly. >> i think that is the experiment taking place now. it's no longer a technological question about if, but if it is technologically meaningful. what were looking at is does the internet make sense on the wrist

for a smart watch? one of these scenarios for apple is payments. so we can empower payment on the wrist. at the fundamental level, that is the question we are asking everywhere -- does the internet makes sense in a yoga mat? in your vehicle? that is the question we will be asking for the next 3-5 years. does data elsewhere make the internet in that yoga mat a better experience than you start to tie those together. that to me, it is the ultimate test. something happens in the physical world, we digitize it connect it, and that is the easy part. the real question is do we close that feedback loop and do we get something to then change back in

the physical world? if it is a fitness device now digitized, the level of fitness, does it cost me to eat differently or sleep differently? if it doesn't, that is where things really start to unwind. that is some of what will start to set in. or they say i will keep my analog whatever, yoga mat. knowing that i have payments on my wrist doesn't influence that. >> it is interesting that with technology prices collapsing, do you actually even need to make this decision? isn't it a question of whether everything will be digital? like the yoga mat, are we going to get to the point where they are so inexpensive and maybe

they can draw power from your motion. it's just going to be implicit in most products over a certain value. >> i think yes, but i think the bigger question is, does it provide a meaningful experience to the user. it doesn't really provide a meaningful use, then it really doesn't matter whether it is digital or connected. it doesn't really change what is happening. i think you see that in some states of the world. if you look at the way we greet each other. we still do that in a very analog way. digitization hasn't really impacted that yet. just because digital can be doesn't mean it will be. >> by the secondary effects can be often on even more dramatic and important from an economic

standpoint. is this valuable for me, but more importantly, as you look at the whole range of health and fitness related devices and biometrics. you start to and -- imagine a world like that. if you put all this things together and collect that information in some standardized way, it tells you bunch of stuff about yourself and changes your behavior and nutrition. i'm not even interested. i'm interested in what effect does that have on at the health care industry? we have 100 plus years of the model where there is a professional class of doctors and health care professionals, the only ones who have that secret information and the ability to tell you your pulse and blood pressure and glucose levels. that in some ways is how the health care industry for better or worse has been structured. now suddenly, as it accidental

consequence of cheap technology, you can imagine a world in which every patient has that information about themselves. they are collecting and analyzing and getting feedback. how does that affect the health care industry and its model of delivery and training? those are what i think of second order effects from an industry standpoint that can be much more devastating. largely because they were unintended and unplanned catching incumbents by surprise. >> and it is something that is changing the dialogue. at the minimum. ultimately, i think it changes the experience that we have. we already see that taking place. if you look at the digitization of entertainment, one thing that the digitization of music that was allowing us to break apart and album easily.

we saw the explosion of singletrack experiences. that entire music experience is fundamentally different than it was prior to digitization. >> and now it is happening with video. >> right. is happening with books. amazon has kindle singles. it fits into a smaller space. when i look at the digitization in other spaces, it has the ability to really influence the experiences we have. you don't need a steering wheel or seats that faced forward, you can do anything you want in that vehicle that drives itself. it is a fundamentally different experience because of the building blocks.

you can change everything. if you are in an experienced industry, you need to think about how that changes once it becomes connected and digitized. >> especially when it comes from left field. when it comes from people like google or smartphone manufactories. you are just their collateral damage. >> and your obviously more connected with washington, but regulation, you mentioned health and driving. as you look at all of those, regulation plays a massive part in the ability for businesses to be able to do some of the novel use cases. how do you see that playing out? >> some industries are affected at a different pace than others. one of the big determiners of how fast to digitization and other technologies transforming

industry is the degree to which it is already protected in some ways. it's existing business model is in some ways protected by transformation by fast regulatory space. in some ways, they complain about it, but now there are protected from change. we see this publicly and how the taxicab companies are responding to things like uber and how the hotel is responding to airbnb. we have to live in is highly regulated world that may not make any sense anymore, but that is not the conversation. we want to stop these guys from working because they don't have to play by the rules. they can deliver these things at a lower cost because they don't have regulation. the regulation becomes the bludgeon with which to slow or change the pace of disruption, often for worse.

sometimes for better, but in many cases, it can really become the negating factor, as we refer to it as the bullet time. i know you have a lot of thoughts about this as well. >> definitely. it is setting up a series of hurdles that inhibit the spread of technology. let's now open the conversation more broadly. there may or may not be microphones around. there are two microphones. feel free to join our conversation. i think we have one comment up here.

>> thank you. you guys are talking a great deal about consumer electronics. is this change going to be driven by consumer toys or by industrial applications? like water grades. >> i think it is both happening at the same time. it is a question of, where does the internet make the most sense. i think we're in it. where we are moving into the next days of the internet. in 1995, the homepage for the internet was like yahoo! putting digital information on a single page. the metrics for success are how long people are using that page. then with the explosion of

websites we moved to search engines. then a further explosion of internet properties, we start to move to something like reddit. i feel like we're all living as we all from 2 billion smartphones to 50 billion objects, we are moving to the next phase of the internet where we are redefining the homepage. the enterprise side and on the consumer side are both moving in the same direction. the fundamental question is does the internet makes sense in water grids, or locomotives, or engines. we can't that the industrial

internet call that the industrial internet or the the internet of everything. ultimately we will just call it the internet. it is just the internet. i think the same thing will happen with the internet of things in 15 or 20 years. >> i think both are happening too. but there has been a fundamental shift towards consumers taking the lead. when i started looking at disrupted technology, the model we had was starting in the military application, then business, then finally to consumers. now it is the other direction. that is something that is spreading. because of social media, they can experiment and communicate about new stuff much more effectively than enterprises can. they do so. they become the lab rats for moving the other way. >> i think just the barriers -- everyone has access to the same technology. the barriers getting something in consumers hands and consumers using it i lower than getting

into an enterprise. i think consumers or end-users i went things are going. i think we will continue to see consumer led initially, and then-- water grid is interesting. it takes a while to see applications. i think consumer leads. the brand is consumer led. >> next question. >> good morning. larry, this is for you. in a macro environment with information, what companies are -- or what technologies do we need to conduit this information. what repositories can we

develop? who will lead the way in this? >> i think we have most of the core technology in place. the cloud, high-speed networks. we now talk about 4g, but we did a conference late last year on 5g coming in the next decade. even crazier than the last. those are sort of the key building blocks. and the standardized data. who is going to lead that? that is an interesting question. you can make the case economically that it could be the providers, it could be the network engineers, like the verizon. or it could be information experts at google and so on. all of those are plausible. probably some combination thereof. >> i think what ends up happening in this world of exploding opportunity and data and innovation, we go through eras of chaos and then we try to

organize it. and then we go to chaos and organize it again. and you can see that if you look at the web. google tried to organize it and then it explodes. then we do other things to curate it. you have this constant cycle of explosions of information and curation that you try to create order. i think you should look at companies that are trying to create that order. that order might look like insight and curation. but look at that companies that are trying to apply order to the chaos unfolding. >> you talk about it in your book. who is going to create the network effect that drives the most value. >> i think that is why there has been most focus on platform. they are trying to create order

to the chaos. next question. >> what new business models do you see emerging? for example, ge doesn't sell jet engines anymore. they're basically renting the rotation of the rotors. or if you take uber and the driverless car, you take away the whole industry. you don't need a car anymore. assets become services. what do you see a emerging as new business models that emerged from that? question number two is, aren't you guys afraid of what the ultimate solution could be? if you watch these tv shows like "person of interest," where a master computer directs you to do things.

you have google kind of doing that already. are you worried that at some juncture we are just -- we are not the director, we're just a cog in a machine? >> to the first question, what is the real business model. [laughter] >> i think you hit on a piece of it which is this idea that capital becomes more productive. one of the things we see over a long time is we replace labor with capital. we give our workers pc, have a machinery. -- heavy machinery. then we give them sensors and sensor data and that is one way that will make them are productive. i look at areas with large pulls of labor -- pools of labor. i look at leisure and

entertainment, hotels that have crews that clean the rooms. today, they ring the doorbell and weight, ring the doorbell and weight. they move onto the next one. we see hotels use infrared doorbell so they can tell if there is somebody in the room and they become more efficient. you look at uber, airbnb, this is taking capital underutilized and employing it in a more useful productive way. anywhere we have capital being underutilized or a large labor pool are areas that will be disrupted in the next 10 years. >> i do not have any signs or empirical evidence that -- but i've always been optimistic

about the likely impact of future technology. there are two possible outcomes and if you put this in star trek terms, you have the united federation of planets where everybody cooperates and has the ability to achieve their own personal enlightenment or you have the board where everybody is nobody, it is just one giant collective. these are too, very different futures that company same set of technologies will stop i have all -- technologies. >> i think you could look at the negatives with all of the fear but i think there are so many problems that need solving. how the planet -- half the planet is not connected to the internet. there are so many big-ticket problems to get solved that will

be solved over the next few years that i think it is hugely exciting. the progress being made already. you mentioned the change in the automotive space. there are so many of these big items like the number of people killed on the roads. things like that being driven down. the idea our kids will be to their children and talk about a time when 30,000 people. killed on the roads. there are so many really big-ticket items to get solved that technology will help solve that i am really optimistic. >> i look at the way we toggle between the physical, real world and our digital world. we used to view those as separate identities and then they started to blend.

today, the mobilephone is that bridge. over time, as technology becomes more pervasive but more seamless with our analog world that it becomes less intrusive. i think it will become a more natural, intuitive experience. i look at the way we talk to computers today. we used to use things like punchcards, things we did not understand but that computers understood. we have moved them along the continuum so it is a much more natural conversation. similar to what we might have with another person. last question. >> i have a point to make. i was at ces last week. what struck me was what is the ability for us to get past the early adapters and the gadget freaks to make his of these things? we used to laugh at our parents that had a vcr that blank 12:00 all the time. now, the product works.

we have a real problem i think with early adopters to mass market for these consumer products in a matter house is dictated they are. and not know what to buy or how to use them. how do we get past that adoption curve? >> i think we are moving into an environment where we have fragmented innovation. we have focused thus far on the products that are widely owned in 90% of households. very few products are actually owned by 80% of products. only 64% of households actually owned their home. i think we will start to move into niche markets or the saturation is 40%, 50%. we start to identify -- i think the idea is you start with really well-defined, discrete problems and you offer a

solution to that and then you start to, over time, pull those together to create a more holistic experience. you look at what is happening with driverless cars. we get there by solving these discrete problems. parallel parking. falling asleep. approaching a vehicle while you have cruise control engaged, adaptive cruise control. all of the seventh on each one of those start to look like a very discreet, economist experience. you put them together and end up with a full economist car experience. we start to define and solve these really well-defined problems that may only be applicable or of interest to 20% of individuals. i do not think we will necessarily see mass-market adoption of connected yoga mats because not everyone does yoga.

then we have propane tanks. that is probably not applicable to everyone. we start to move into these smaller, niche markets. >> i have the opposite response. because of the cost of experimentation being so low cost of what you see -- low-cost, you see when consumers are buying the right one --we talked about "draw something" and how it went to a million users in a matter of days. they got it right. consumers essentially tell each other it is not broadcast marketing. it is social media-based. they say, this is the one that works. this is the right television smartphone app.

consumers, as a group, figure out the winner and it is a winner take all in these markets. essentially, one experiment or a couple exceed the rest. the rest all fail. the investors are willing to keep that system going. >> think you'd -- thank you very much. [applause] >> tomorrow, gary herbert is our guest as vice-chairman of the national governors association. he talks about issues facing states when it comes to the health care law, the budget, and education standards. the nga's meeting this weekend to discuss some of the very same issues. watch our interview with governor herbert tomorrow at 10:00 a.m. and 6:00 p.m. eastern on c-span. >> keep track of the republican

led congress and follow its new members. new congress, best access on c-span, c-span2, c-span radio, and c-span.org. here is a look at our primetime schedule on c-span. next u.s. governors discuss jobs and their state's economy. after that, a look at conservative messaging for the 21st century and ways to make political candidates more appealing to young voters. then, back to the national governors association meeting to hear remarks by danny meyer. >> u.s. governors gathered in washington this weekend for their annual winter meeting. this session includes a discussion on jobs and the economy as governor's outline the major economic challenges at the state level, including foreign work, infrastructure needs.

fox this is networks moderated this event. it is about an hour and a half. >> all right. governor barbour, if you would like to sit with the governors i'm sure you would be welcome. let's get this session started. again, thanks for all of you making the time to be here joining us for this discussion of where is this economy headed. obviously, i don't know a single governor that doesn't have jobs and the economy at the very top of their priority list.

we talked about states operating more effectively and efficiently, but also looking at the culture of hospitality as danny meyer talks about it. and looking how we make our states more successful. i think part of that is better partners with business. i think the initiative -- delivering results -- is a large part about economic innovation how we can effectively apply management tools from the private sector to state government and get dramatically improved benefits. i think we will continue to speak about economic innovation and economy throughout the session. i'm sure one way or another we will be coming back to it throughout the weekend. it is my pleasure to introduce maria bartiromo. we are grateful that you could create the time to come down here for the second annual

economic roundtable. maria is an award-winning journalist. she is an author, news anchor, certainly has been on a number of different networks with a couple of different perspectives. she is one of the leading journalists today in this country. again, we are honored he would take the time. four those of you who weren't here lesher, maria is going to join us and create lively discussion from different perspectives. she has experience with cnbc. she was the face of cnbc. she launched the program squawk box. she anchored the closing bell. last year she joined as a global markets editor. she is the anchor of closing

bell. she hosts sunday morning futures on fox news channel. she has received many awards two emmys and a gracie award. she was the first female journalist inducted into the cable hall of fame class of 2011 and was the first journalist to report live daily from the floor of the new york stock exchange as if all of that is not enough. she is the author of several books including the weekend that changed wall street. police help me in giving maria a warm welcome. [applause] >> thank you so much. it is wonderful to be with all of you today. thank you for joining us. i am thrilled to be here at this particular time for the economy, and to get perspective from all of you about what you're seeing as far as moving the needle on

the economy. it feels like we have emerged from the great recession of 2007 very successfully. now we face a new set of challenges, things like a 50% selloff in the price of oil, which one would expect to be a positive. although we have only seen negative so far come out of this drop-off in oil, including cots and jobs and spending. as well as the strong dollar as well as a brush stroke attitude when it comes to a number of initiatives you all are working on. let's talk about where is the growth in the economy and what has worked so far. i am hoping that all of you will be interactive with your colleagues to get this conversation going. i would like to begin with you given that you have seen a big drop-off in unemployment in your state, can you give us a sense of what you have seen in terms of what has worked in that regard? >> thank you. we are honored to have you here

with us. in my tenure as governor, the primary focus was to turn the economy around. my number one goal was to get a healthy economy and get out of the great recession. when i came, it was an 8.7% unemployment rate. today, it is 3.5%. we have had a dramatic turnaround. we tried to create an environment that is conducive to the entrepreneur and private sector and risk takers. we have cut our taxes and had regulation reform. we have our great educated labor force and we have efficiency in government that doesn't get in the way of the entrepreneur. we set a goal to be the best performing economy in america. that's a high challenge and a high goal. we also wanted to improve our opportunities internationally and be a premier destination place for international trade and commerce.

the results have been pretty remarkable. many publications have named as -- us as one of the best places in america to do business. >> were there other things done in particular to get the business section hiring and creating jobs? what are the specifics that you can name? >> the motivation for most businesses is to make a profit and increase market share. creating an environment of competitive tax rates was part of it. we also did a significant review of our regulations. as i get around my state, around the country, the most common complaint is the regulations that get in the way of their being productive in business efforts. we did a regulation reform where counted our business regulations.

we had about 2000 there were impacting business. in getting input from the public and others out there, we found three have succeeded of those 2000 had no public purpose. they were simply a drag on the economy. we did what any sensible person would do eliminate or modify those. and we want you to be successful. we are going to eliminate those barriers. we are known as a business friendly state because of that. >> and yet throughout the country the themes are real in , terms of persistent unemployment elsewhere and income disparity we are seeing across the country. governor, you also have to be very focused on trying to move the needle on this. what challenges are getting in the way? >> i think there are a number of challenges. many of them reside in washington. the reality of the great

recession was it did lasting systemic damage to our economy. i think in some senses has changed how we lived. the fact it has been the most prolonged and slowest recovery of any post-world war ii recession is not lost on anyone. although clearly there are states that have benefited during that period of time, in many cases because of the production or the harvesting of natural gas or oil. what we needed to do in connecticut was change how we do business as well. we eliminated 1000 pages of regulation. not simply is assigned to the business community that we meant business but we needed to change how we do business. we created a series of tools not the least of which was the small business express program. the first on the state of connecticut got the business of supporting small businesses with

grants, matching grants, and loans designed for small businesses. in 2011 and 2012, that was a literally a lifeline to get through what was the remainder of the great recession in our state because it went 16 months longer in connecticut than it did in a national basis. though small firms that we saved and assisted are now driving job creation in connecticut. to put it another way, if we had failed to support them in their darkest moments, the jobs that are being re-created in our state would not be there. we have concentrated on things like trying to match our educational system, particularly tying education to the needs of the state. we have been retiring engineers faster than our state and public universities have been

graduating them. we recently decided to increase the engineering school at the university of connecticut by 70%. the first two classes towards that effort are 50% larger than predecessor classes. it is the sort of thing you need to do in higher education. we're also using our community colleges. a lot of governors around the table try to match the needs of the business community tighter to the courses and certification that are available in the community colleges at the same time as we try to improve our pre-k through educational system. i think this is all hands on deck. i love spending time with other governors and stealing their ideas and telling people they were mine. [laughter] >> >> it is important to be able to hear what colleagues are doing to be able to match the success there. you mentioned at the start of your talk many of the challenges

are because of washington. does everybody on the panel agree with that? who agrees with that? is that the inability to come together when you say washington? >> i think there are a series of issues that washington fails to make substantial progress on. actually the governors have been , talking about our transportation needs and how do we project transportation spending when both our state transportation dollars and federal dollars are closely tied to a tax that is disappearing, which is a gas tax. what are we going to do about that? what is the clear course to take to replace a reliance? tesla is building the world's largest battery factory in nevada and probably one of the number one brand names in the universe, apple is apparently toying with the idea of getting into the car business. i assume they are not going to

be making cars that are run by gasoline and yet we are going to , be overly independent. or immigration and education issues. there is an inability to respond to our needs in washington. even the progress that they do sometimes -- that they are sometimes able to make takes too long to produce as a product. >> this is an important point, because the truth is what happens on immigration may very well be seen differently in arizona as it may be seen in colorado. there really isn't a brushstroke attitude or way to move the needle on these issues. if in fact the mentalities and geographies are so different. let's talk a little bit more about that. who raised their hands when i said the challenges in

washington -- governor mcauliffe? >> it is a challenge and opportunity for virginia. we have unique circumstances. virginia is the number one recipient of the department of defense dollars. we have the largest naval base in the world. the pentagon, the cia quantico, so when you have government dysfunction around sequestration that impacts a place like virginia and the whole washington area is dramatically impacted. we have got to become less reliant on government and bring in new businesses from around the globe, which is what we really focused on. it has given us the opportunity to build the new virginia economy. i just announced that we have had the lowest unemployment in seven years. we did about $5.6 billion in direct investment last year. i did it by traveling the globe. bringing in international businesses to the commonwealth of virginia. we brought the largest chinese company to invest in america.

we are trying to do it on a global basis. it has presented us with an opportunity. you have to become less reliant on the federal government. cyber security biotech, that is the future. it's also a great opportunity. we do all wish the federal government would get their act together. the issues on sequestration of october 1. if that happens, remember if congress does not vote for it, they have to to vote to stop it. it will have an impact on many economies and states around the country. primarily the biggest hit will , be virginia and maryland. i'm just hoping they can figure this out. it is really devastating to a family to lose that family paycheck. >> you make a great point, particularly about attracting foreign capital. we all know that today the u.s. is the best game in town. you have real struggles elsewhere, your deteriorating

the ecb trying to help. it is much more than monetary policy. asia is much slower than a few years ago. china is having come down from the highs in terms of economic growth. an enormous amount of money is coming to the u.s., which is creating another issue for the strong dollar and multinationals in terms of manufacturing, because that is one of the places for jobs. what else can be done in terms of communicating and moving the needle on the federal government, understanding to get congress and the president to understand that these issues affect real people? thoughts? >> we are specialists at blaming washington that obviously fills up a weekend and beyond. the quagmire is reflective of the quagmire we are in in this country. we talk about recovery that is slower than before.

it is a situation as usual where the united states once again rules the world economically. were not. i'm from minnesota. the economic confidence index was published last week, minnesota ranks highest of any state in the nation. we are at zero. they think that this year the economy the united states will be no better than before. every other state is a minus. every other state, the citizens are less confident about their future and the future of this country economically than they were a year ago. yet, objective conditions have improved. they're saying, washington doesn't know the answer. what is the answer? raise taxes, cut spending. the economy is growing. the deficit is less than it used to be. but we are not making the

capital investment. we are not investing in transportation or infrastructure, the things we know need to be done. the resources aren't there. so we are caught in this trap where we can't name it, let's name this quagmire we are stuck in. our people are telling us they don't have confidence for the future. what we going to do about it? >> do you feel you have the space and time to actually have these conversations? do you think you can communicate this better to congress and the president? are you not getting the availability? this seems so obvious that the states should have more access as well as ownership of their economic policies. >> i can't not respond to that. absolutely we should. 52% of our land is controlled by the federal government in alaska.

there are restrictions on the mining, oil and gas development, they have taken on another 20 million acres off. of the nine states combined. they are turning this into one great big park and we are having a tough time with an economy that we are not allowed to develop. plenty of resources, clingy people who want to develop but , they are making it more difficult every single year. our revenue sharing percentage is zero. other states get 37.5%. we get zero. not a good time to talk about the role of the federal government in our state. that's one of the reasons i'm here, to carry the message that they are literally putting us out of business. >> this is a regulation issue that we will be delving into. >> i think it is easy for us to blame washington. there is plenty of frustration around the table. in the one hand we live in a world with 3 billion people looking for jobs and there are 1.2 billion jobs available. we are clearly in this unbelievable global war for

jobs, which means we are in a global war for talent, because the jobs are going to go where the talent is. at the same time there are , millions of jobs in this country that are open because employers can't find people with the relevant skills. to me, i like to focus on the things i can actually control. it is that latter issue. we have a couple of financial services employers in delaware. delaware is a small state but between them, we may have about 1000 vacancies, primarily in the technology area. what we have been focused on and picking up on something governor malloy has talked about, is making sure that our institutions of higher education and our k-12 system is at the table with our employers understanding at a pretty granular level the kind of skills they are looking for, whether it is the launching of pathways to prosperity program where we are focused on making sure that kids in school are developing the necessary skills, or listening to our employers in

the i.t. industry, who keep telling us their recruitment strategy is to hire employees away from each other, which is a lousy recruitment strategy. it is so much better for everybody, employers and those looking for better employment. we are working with them to accelerate the pace at which we can train people in computer programming and other i.t. skills. it is not all about a four year degree or a two-year degree. there are plenty of people that we can train in intensive shorter training programs that will develop the skills they need to get a good job. when we think about the role we can play in addition to the regulatory reform efforts, making sure we have affordable cost of doing business, the quality of our schools, the quality of our infrastructure, the thing i keep hearing about from employers has to do with

access to this skilled workforce. >> i think it is a great point and i want to talk about it a lot more. we hit on regulation a bit. when i speak with ceos and managers of business i keep hearing about this revolution going on in terms of a marriage of technology and health care and this revolution in life sciences, and this and need for engineering skills and this need for science know-how. governor hickenlooper, you have seen this in terms of emerging entrepreneurs. are we keeping up from an education standpoint to ensure that our children are actually armed with the best resources they can have to get the jobs that are available? >> certainly colorado is an example of how it is working. i think this recruitment strategy we see all the time -- we are the number one destination for millennial's. the last six years, young people

18 to 34-year-olds have been flocking into colorado, a rich talented environment. and yet within our own education system, we are not delivering the kids that are sufficiently educated. it's not degrees, but skills. it doesn't need to be a certificate. just as the governor said, we have any number of technology jobs, especially these life science jobs. these technology companies are connected to health care. they are exploding and we are having to import a lot of the talent going to these companies. if we don't find a way to transform how we are preparing kids to go from -- it shouldn't be just from universities. how to get more apprentice programs. had we get more community colleges involved. how do we make sure kids coming out of college don't have a bunch of debt and are ready for

their jobs? our strategy will be just stealing from each other rather than generating our own. >> is that a private sector job or a government job? the idea that we need to train our children better? >> when i talk to most of the ceos of our larger employers, we have a number of large companies that have headquarters there. they look at it as a collaborative problem. they don't buy into that we are just going to turn over to government and let them do it. most of them are funding scholarships and programs have actually helped create community college programs that deliver specifically the type of skills and training where you can guarantee a kid, you finished this nine months worth of work and you will have a job. 98%. at the same time, they cannot do it by themselves.

we have the infrastructure in the process. the hard part is to make sure we are connecting business and all of our different facilities of education in real time. what happens to often is we plan out a curriculum. by the time the curriculum gets designed and it's in place a a group comes out 12 months , later and the job has already changed. it's got to be much, much faster. >> governor? >> i think the effort is right on target. only one out of 10 high schools in america offer computer science. in the u.k., it's mandated. in china, it's mandated. it is technology education. we have a joint responsibility to prepare the students for those skills and workplace. obvously, the private sector comes in and supplements that. that is the opportunity bringing technology jobs to your state.

in arkansas, we will pass a law that requires computer science or computer coding to be taught in every high school in arkansas. that will start the next school year. that is an opportunity to change the dynamics of the economy, provide technology education job opportunities to young people, and to bring those jobs back to america. >> across universities, one of the hottest classes right now is coding and learning coding and skills around engineering. governor bullock? >> in montana, we are creating jobs among the fastest pace in our history, about 12,000 created last year, growth in every single sector, and at the same time the highest graduation rates we have seen, double the number of students taking college classes in the high schools to get that jump.

>> why do you think that is? why such privacy. -- why such vibrancy? >> in part it is post recession and places like ours weren't hit as hard. it is the opportunity that we are creating the right climate and there are opportunities in all kinds of different sectors. i spoke to elon musk and said if you were governor, what would you do? he said i would go out and encourage all of your people to have more babies. his point was you have over one million people. you are going to have some challenges. i think it is a collaborative effort. you go to your private sector, other companies coming in and saying i need to be able to , provide you a pipeline of trained and talented workers. you work with state government in your two and four year colleges and universities.

sometimes it is a credential to actually skill folks up. i think it has to be a deliberative effort with the private sector in combination with the public sector and our educational system to make sure we are meeting the workforces and the employer's needs and all of our states. >> which underlines the idea that this needs to be collaborative. this needs to be a partnership between business and policy makers in terms of recognizing the issues and making sure we have the training around that. >> it is about collaboration between the private sector and the public sector. public sector doesn't create jobs, private sector creates jobs. what most families want is that they feel like they have to work harder and harder every day to be able to achieve financial independence. we also have the situation in oklahoma where you have a really low unemployment rate.

it's about 4.4% right now. you have employers who cannot find the workers they need. and then you have a really low unemployment rate. the real challenges the skills gap, and making sure you have the right level of attainment in your states, even regional and localized within the local communities, the local regions of your individual state. we have formed a partnership with many different organizations. one in particular is we have been realigning our k-12 education with our career technology schools and our higher education institutions for associate degrees or bachelor's degrees, and then working with the private sector to say, what do you need? i know down in eastern oklahoma the skill sets they need may be in for street, tourism manufacturing, but throughout western oklahoma, it is agriculture. it is oil and gas, wind turbines. they have a lot of engineering

and aerospace, a lot of financial services. so you have a similar skills gap. so one of the things we talked about last year was how do you meet the skills gap? get that right type of educational attainment level to be able to take care of the jobs and help people have a career path? we also know that two thirds of the jobs will require more than a high school degree. you are going to have to have an associates or college degree to be successful and reach the middle class. it is one of our biggest challenges how do we make sure , we have the skilled educated workforce that is relevant to today's ever-changing modern economy? >> the issue is so important. it almost seems like a luxury to be discussing it during a time that there is a whole portion of people in america right now who really have not seen the impact of the recovery.

you heard what vice president biden said the other day. you see it in the polls. even though we see all of the economic data that seems to beginning better every month you have poll after poll where people say i'm not feeling it. i don't necessarily think things are getting better. i think were still in a recession. why do you think that is? talk about the challenges that you have seen. >> i have been in this job for about four weeks. [laughter] i have all the answers. that's right. i can tell you what i saw from the private sector. the reason i am a democrat is because i recognize we need to have a balance as he talked about. there are four things. states aren't example of the macroeconomic trends. there are three things that i think the state needs to do, pennsylvania especially. we need to set the table for economic growth. it is the private sector that

does that but it takes a robust public sector to make sure the private sector can function. the private sector -- we need regulations. the private sector cannot set the rules of the game that makes it so the market performs optimally. government has to do those things. i think some of the things can be done in the private sector, but a lot of those things have have to be to be done publicly. we need to take advantage of the competitive advantages where we have a god-given location. we have two great cities. we have the greatest universities of higher education in the world. some of the greatest. >> just say it again. >> you jump in. >> we have some of the greatest

attributes. government is uniquely qualified to do that. government works at the margins. some of the things we can do to make sure that we are having an education system that has relevant skills, we have to have a well funded education system. it has to be accountable and it has to provide the skills that private sector and families need. i think we do have a situation where families are looking somewhat pessimistically at the future, even though unemployment in pennsylvania is down 5%. the workforce percentage is not that good. people are flocking away from the workplace, maybe because of a skills mismatch. people aren't staying in pennsylvania. we have our work cut out for us. i think i can as governor tried to address the specific it issues. one of the things i have to do

is make people feel good about what their future holds and what the opportunities are. i think they need to be optimistic. i think government can do -- can play a big role in unleashing those animal spirits. >> in this session, we want to talk about where the jobs where , is the growth, where are the main issues that are getting in the way of those two things? i would like to get the insides of a few more of you who are new to your roles. some of you won the people's vote because you are a business person and because people believe a business person can try to apply business principles to a policy framework. governor ducey, i would put you in that category. tell us what you see so far. >> i did run as a business person. i come from the private sector. my company was was cold stone creamery. you get a lot of undeserved popularity selling ice cream.

we translated that into a campaign. [laughter] i think most people understand a small business. i think when you talk about this -- those principles of what makes a small business work are the same principles you can apply to government, a budget that you are accountable to, a plan that you follow, good communication with your franchisees, the investment in people in terms of what happens inside the store and customer service. i never said that government is a business. i think that is a dangerous way to look at it. i think business like principles leadership setting , out a vision, a mission of how you are going to accomplish it to demonstrate through the people that you pick on your senior staff and agency heads, and put metrics out there that people can actually see that if you are driving towards those numbers it will affect their

quality of life. expansion of the economy, per capita income, lower crime rates. those are the pragmatic way to give common sense numbers that are not partisan. they are things that say that this community is going to be better tomorrow than it is today because we are working on these issues. >> what you are talking about is accountability. when the people know there is accountability in place often , times you do see a different performance. >> i think a lot of jobs of the future are in science, engineering, and math. they are also better paying jobs. i signed an executive order in september of 2011 to really put together a public-private partnership that involves business, education at all levels, and government.

we have gone from 40,000 kids involved in stem to 80,000 to 117,000. a lot of enthusiasm and a lot of interest. there are kids who never thought they might have an aptitude in math and science who are now seeing a real opportunity there. another thing we have done is because of the skill shortage that we hear from business, and we know there is a big reduction in the military, we started something called home base iowa, we are actively working to recruit people coming out of the military for the careers and jobs we have available right now. in just seven months we have placed almost 1000 people coming out of the military in good jobs in iowa. those are a couple of things to prepare for the jobs of the future. with the stem program, long-term, and the home base

iowa in short term. >> you are all walking a balance of trying to create jobs, trying to figure out where it will come out from. maybe it is the stem area. maybe it is manufacturing. at the same time faced with issues around immigration, around the cost of health care. of course, education. let's dig deeper into what can be done. for example, in terms of immigration, in terms of the idea that the funding for homeland security may not come through, is or anything they could be done on your level that actually can move the needle to give business economics some clarity? no comment? what is the biggest issue? i would like to go around the

horn and see what the biggest economic issue you faced right now? governor? >> in terms of the state of hawaii, it really is about connecting the dots between the job opportunities and the graduates graduating. like most other states, we do have jobs ago unfilled. the students and the graduates don't really have the right job skills. >> you're saying that skill sets is your number one issue in hawaii? >> yes in terms of getting to , the next level, the economy is doing much better than it was four years ago. the challenge is the confidence issue, that the general population don't feel certain about what the future holds. the concern is about being able to get a good middle-class job that will allow them to be able to earn and create a career, most importantly being able to live and work in hawaii.

>> biggest issue in arizona? >> i talked about jobs in the economy every day. that in addition to k-12 education are the biggest concerns and the biggest things a governor can affect from that office. arizona is a state built on growth. it is a place where people have been moving from around the country. that slowed dramatically. our unemployment is a point higher than the national unemployment. getting that economy turnaround is what were going to do in this administration. >> oklahoma? >> it is jobs, economy, and my big goal this year is state to work at structurally changing how we do our state budget in oklahoma. we can find things that are priority in oklahoma and not some things we just hope works. effectiveness, efficiency, and accountability.

we ask every set agency to set goals, measurable goals with specific percentages they hope to achieve. for example we want to reduce , our smoking rates in oklahoma. we set a goal to reduce our smoking rates by 2025 by a certain percentage. we wanted high school seniors to go on to get a college degree. maybe it is improving our recidivism rate helping people come out of prison. and then tying our budget to those goals, and if we are not reaching the goals, then change the programming to make the government more accountable, affective, and efficient there it -- and efficient. >> i agree with the question of the talent and the training.

i would add to that and one issue we have not touched on is is infrastructure and energy. energy is tied to the cost of everything we do. we need to have a sound energy policy. we need an energy strategy that is long-term, that finds the appropriate balance for the environment and the development of the energy. we had been at a very wealthy state. we can do some remarkable things. one thing we had try to work on is infrastructure. it is the basic building block of economic development. i think that is not just an issue of state-by-state. we rely on commerce to flow between the states.

i think that is a challenge. how do we have great infrastructure? how to have an energy strategy that provides affordable energy and the cleanest way possible to the country? those are two big issues from wyoming's perspective. >> i want to get into energy. i think the question now is is the need for the energy policy you are talking about as urgent as it was with a 50% decline? >> i think this is the exact right time to be looking at it. if you wait until oil is up to $100 and you say it is not a problem now, you are completely misunderstanding the concept of affordable energy. we can't just have it six months by six months. it has to be a long-term strategy. this is the time to look at it. what should the portfolio be? not only including how we use

energy in this country, but what it is you export and how we make it the best possible? we tend to be reactive as a country, as states. we go disaster by the day. some of these take long-term strategy not only for the states but for the predictability of industry, and of chemical companies. what are the energy costs going to be not next year but for 30 years? i think to the extent we can provide that it helps the state. it provides predictability for industry which is critical for investment. >> one of the reasons that oil prices have come down so much is because of the supply. >> it is a supply and demand. it is a little bit artificial. it is supply and demand partly by angry opec. and the innovation of technology of our companies that have been able to find resources that 10 years ago we thought we could

never attain. >> biggest economic issue facing nevada? >> investing in k-12 education. improving the delivery of education in our state. nevada is on the move. we have added 100,000 new jobs in the past four years. we have reduce the unemployment rate. we were at 14% four years ago. we have kicked it down to 6.8%. we have a long way to go. we have new companies technology , companies. governor malloy talked about the tesla battery plant coming to our state. that is going to -- the state demographer had to change the predictions for our state because there will be close to 7000 direct jobs and 20,000 other jobs coming here. as matt said i don't want to be , reactive. i have to get in front of this and make sure we have this trained workforce all of us have been talking about. one of the things we did is we

have developed sector councils that brought together the private sector, the university's comic k-12, so that we can build those curriculums so that workforce will be ready to go when those businesses open up. that is for me preparing for the future, preparing for the new nevada. nevada has historically been based on gaming and tourism, but now we have the largest data center in nevada, the largest battery manufacturer, only one of six states that have attracted as a testing area for drones. that is another big emerging area in aviation that i have to be ready for. that is my priority is. >> and you are dealing with foreign money coming in from places like china. >> yes. we are seeing investment in that regard. i have learned from the other governors you can't wait for it. you have to go out and get it. we have been on trade missions to china, korea, israel, canada,

mexico. we will be going to your this fall, some other places as well because there are companies, foreign companies looking to expand their markets in the u.s. when they come to the u.s. i want to come to nevada. this is a great competition amongst all of us to have the most business friendly states we can have. we want to have a stable tax structure as well. the question i get asked is about education. that is why my focus is on that. >> many of you have been successful in terms of creating an environment for business to headquarter there or create jobs. governor nixon? >> just a follow-up, we are focused on making sure that we are transforming our economy for a world economy, making sure you are delivering reforms that

make a real difference. >> the biggest economic issue you face? >> making sure we have people who have the skills for the future. you can see these trends coming. this stuff doesn't sneak up on you. as we look at our plan, it is clear that we need to match what those jobs of the future are with education system that delivers them, especially with the high cost. we've also cap the cost of education down, the lowest tuition increase of anywhere in the country, expand our scholarship program at our community colleges. that work force side and improving the education side as to what you need for that, and keep fiscal discipline which helps us get foreign investment. >> governor. >> similar. the disconnect between the skills needed in the schools available, the effort we have made is to launch two years free

community college or technical school to every high school graduate. we had 90% of high school seniors apply for the program. that two years free has gotten everybody's attention and hopefully we can address the gap. >> i would not disagree with anybody. workforce development. in virginia in the next 10 years, one million virginians will retire and create 500,000 new jobs. we need 1 million and a half folks to fill those jobs. i have 30,000 jobs open in northern virginia in the tech space. cyber security. i'm trying to encourage education system to make sure when those kids come into kindergarten they have a crayola book with stem on the cover and a chapter on cyber security. listen it is a global economy , preparing for that. , we are blessed with natural gas. for the first time you are seeing 58% of ceos say they are going to in source because of

the natural gas costs. we can be competitive with anybody now in manufacturing. bringing back advanced manufacturing to america's a great success. we just announced the other day, i brought a chinese company back. a highly distressed area in virginia, the biggest deal in 44 years. they invested the money, reopened an old furniture plant, taking the product to our port and shipping it back to china. it was cheaper to do it here. we took their money, open the plant, and sell them back the product made in virginia. that is what you have to do. >> what about the idea that companies have so much money overseas? what you're change in tax policy to open up that in terms of getting that money -- i was just

talking to the qualcomm ceo. they have $31 billion in cash, $28 billion is overseas. >> talk to john chambers at cisco. he would love to bring it back. he has a fiduciary responsibility to shareholders to maximize returns. we have to make our tax policy so that it incentivizes. they have a fiduciary duty, to make it smart for their shareholders to bring that money back here and turbocharged our economy. i think all of us would agree you need to change the tax code. >> by the way. even though they have this money they would rather borrow more money on r&d because rates are so low. it makes perfect sense. why would you bring the money back from europe or from wherever if you're going to get double taxed on it rather than just borrowing it at 0%? governor baker? biggest issue you face in massachusetts? >> snow. [laughter]

>> fair enough. and you're going to get more of it. does that have an economic story to it? >> absolutely. the economic story has many parts. the big ones are for retailers and hospitality businesses, main street businesses. it has been a grim month. many businesses are not hand to mouth but a lot of them have the kinds of places that if they do not, in and by things, no one gets paid. the consequence of 8.5 feet of snow and the number of days lost for those operations has been profound. i think the second big issue is it puts an enormous strain on public resources because nobody budgets for nine feet of snow. you have all kinds of local communities that we have been working hard with to try and set up mutual aid programs to help

them deal with the plowing removal disposal of this. , we stopped counting how much snow we were moving once we got above 100 times filling gillette stadium. we have had folks like governor wolf who sent in the national guard and equipment from states like vermont and maine, and the irony of having vermont and maine send us national guard people and heavy equipment help remove snow is ironic. new york, new jersey. it is -- the public expense associated is significant. the third big issue which we will start dealing with over the next few days is going to be property damage as roofs start to collapse. is this apocalyptic for you? i think that once we get past the snow, probably for us, i

would basically put it in a slightly different way. we have one of the most successful and most vibrant and most forward-looking knowledge-based economies anywhere in the world. if you're in one of those spaces and you can play in it and play successfully the world is your , oyster. if you're not it is a cold place , in massachusetts these days. one of our challenges not just in massachusetts but elsewhere and it gets back to your question, why did the numbers look so good to so many people it is an anxious time for the better part of 4-5 years. they are running fast and working hard. they're having a hard time seeing where progress is going to come from. primarily because the price of food and housing, the price of energy, the price of health care. that one i do believe is tied directly to education and bills.

-- skills. we have got to figure out a way to do a better job. >> what are you going to do at the end of the school year with all of these days out for kids? are you going to have them make that up? when you think of americans kids versus chinese kids, we are sending our kids to school at much lower -- the volume of days . they are being educated more in china. the snow is one portion of this subject but this is a touchy because schools have been closed for so long. right? >> generally speaking, the performance of most kids in massachusetts, it is most, which brings me to another subject, on most national and international exams it is quite good. we can compete with pretty much anybody at the middle and upper end. our problem, and it is a problem we better fix, achievement gap which is an opportunity gap between the school systems and

the school districts in the schools that are performing, and those that aren't as profound. that is something i really believe we had better focus on because in the long run if you don't get a great high school education and beyond, your chances in this world in this economy are going to be severely limited. >> absolutely. it just builds on each other as you get further into school. high school, college. governor wolf, the biggest economic challenge for pennsylvania? >> i agree with education. we have to build up the infrastructure and make sure the economy can function. i think the biggest problem in sylvania is low self-esteem. i think one of the things the governor -- that is not a laugh line. >> you have to explain this to

us. low self-esteem is your biggest economic problem why? , >> i'm not saying this is a matter of confidence. i think one of the things that a good leader does, and as governors, we have the opportunity to do this and tout our potential and make sure we are not wasting away in part because we are not as good as we are. pennsylvania is one of the underachieving states that can do better with the resources we have. one of the responsibilities of leadership is to address not only the structural issues, but also the psychological issues to keep us and hold us back. so low self-esteem is a big , problem. >> that requires leadership in terms of making sure people have optimism and hope that they can get a better life. >> especially in pennsylvania. yes. >> governor harper? >> the biggest challenge facing utah is the challenge we have had, growing economy.

how do we keep it growing in a fast-growing state? we are one of the third or fourth fastest-growing states. the need to have economic expansion continues. i take a page out of president bill clinton's book, where he said it is the economy, stupid. it really is. the number one focus of all of us. we know we cannot have long-term sustained economic growth unless we have a skilled labor force. it goes back to education and beyond high school diplomas, and into post high school needs. there needs to be better alignment with what the skills we are teaching in schools and the demands of the marketplace are. you asked the question earlier about his responsibility is it to make sure that young people get a good education. is it public or private? governor hickenlooper talked about the fact that it is a collaboration.

part of that equation which we tiptoe around is it is the parents and guardians responsibility that their children get a good education. that is a component we overlook. we have too many parents in utah drop their children off that at kindergarten, pick them up at high school graduation and a how was it? they need to be more involved to make sure they are getting their assignments done, that they are learning in school. that is an aspect we need to talk about to make sure the parent-teacher conferences are being held and people are working together with how they will excel in the classroom. the challenge from me is to have great success. how can i continue to make sure that happens is going to be a -- require a skilled labor force. >> what is an appropriate level? >> excuse me.

>> our gdp has grown 4. 1%. twice the national average. our population is under 2% growth. we have a high birth rate. we are a young population. i have a lot of kids in school. plus people are now moving to utah for great quality of life and economic opportunity. it is a conundrum as far as how do you accommodate that and still grow and have that expand? >> in parts of colorado and parts of the country, it is confidence. people double leave. it is not just their self-esteem but a big part of job creation is entrepreneurship. entrepreneurs generally put technology and health care aside, a lot of times a guy working for us and that accompany this one of the better workers there.