system in all areas of innovation and whether there aren't better systems for particular areas of innovation. now, i've been asked to address one particularly important part of this bill, what's called the open source fund in section nine. and this, of course, builds upon the insight that we've seen since the zbining of the internet where scientists have been experimenting with alternative ways to share scientific knowledge. the traditional scientific journal provided important service but the process and constraints of journal production were grounded in the technology of physical printing. the significant investment in producing an access restriction were essential tools to provide the revenue necessary to support even nonprofit journal production, free access is simply not feasible. but as the traditional mode of scientific publication has moved to the internet, the temptation of at least some has been to exploit market power to radically increase the cost of access. in one study, for example, the american association of research libraries calculated that between 1986 and 2004, while the

it is just a spectacular way to foster innovation. >> i want to talk about innovation in the bay area for a moment. this is for all of you, but i will start with you, mayor lee. how would you describe the state of innovation in the bay area right now? are you concerned -- instagram comes to mind -- about a bubble? >> we have been trying to analyze that question with financial people and people in the industry. i do think there is more maturity with the companies. i get a chance to go out and talk to one new company week, when i get out of my city hall prison to meet the innovators. they introduced me to their employees. i get to have a direct dialogue with the employees and ask them what they need to stay. they say they really like being in our city because of the night life, the culture. they want education, they want a better transit system. they always have ideas to improve the municipal transit system. but when the talk about the bay area, including silicon valley, it is the same thing. transportation symptom -- systems, central subway, high- speed rail. clearly, bart to san jose

innovation is important. i have to also, every time we heard the word innovation, i have to put a plug in for tradition. i have a very traditional education. i spent a lot of years in silence speaking latin up in the hills, living within the medieval framework. i do respect the past. we study it. if you are grounded in tradition, you feel quite confident in change and innovation. if you are insecure, you are very reluctant to embrace the unknown. i do think we need to in our education and politics, we have to have a new appreciation for our traditions and the patterns that describe our culture and our being as americans. having said all that, we have saved in california tens of billions in energy efficiency. when i first adopted those, people reacted negatively. we pushed ahead. and now in california we have ab 32. signed by a republican actor turned governor. promoting something i pick up on and promote further. the number of people in silicon valley defended ab23 against -- ab32 against an onslaught of texa

they view pat bts as a tax, as a cost of innovation, not a benefit of innovation. they view them that way, largely because they are happily innovating in a world in which they are not restricted by the law. and when the law shows up, it shows up to limit what they can do. not to encourage them or help them to get economic benefits, right? so in the information technology industries in the software industries, where there are lots of patents and where most of the patent lawsuits are currently filed, the most innovative companies will tell you patents are largely a problem for us, and the people who are filing those patent suits are either people not in the market at all, the so-called patent trolls 0or they're the people who are, on the market decline, right? they're yahoo asserting against facebook has happened this week. here are a bunch of patents you've got to license from us. the industry which is really do need patent protection, the reason we need strong patent protection for certain parts of industries, the pharmaceutical industry and the biotechnology indus

we're innovating and maybe innovating in other areas, too, and we've got seemingly interesting movements in robotics and seemingly interesting movements in nanomaterials. ten years from now maybe we will look back and say that was the dawn of the space era and something that we all thought for most of my adult life is dead and now seems to be maybe waking up, and i guess two other points i will note on the why question that give me some pause. make me want to think further about this. one is the timeframe that peter identifies as when innovation stopped is largely speaking the timeframe not in which regulations started getting really heavy and the government started getting really involved in our lives, for the most part, the opposite, right, almost maps to the reagan revolution, to trying to back away from too much regulation and while i don't think that we have in fact significantly reduced the size of government in any meaningful way in those periods, it doesn't seem like there is a sort of linear relationship between amount of regulation and slowdown in these industries. the final po

they have an incredible spirit of innovation in those laboratories. and they are inviting other companies, not just from the bay area air even our country, they're inviting international. we had our first canadian incubator that was established just a couple months ago. they are excited to be kind of cross-referencing their research and ideas. >> why are they coming here? >> they are coming here because there is really ongoing levels of conversation and sharing of experiences that are part of, kind of, thinking outside of the box and thinking in different ways, turning things upside down, hacking your way through some of these ideas and not being afraid. and trying to find applicability for them. that is the spirit of the valley, the spirit of san francisco. we have always been edgy when it comes to openness. we're taking advantage of that. we want to embrace different cultures to impact that as well. what people see here might be different from how they see it in india and some of the other countries that are emerging here, trying to apply it in ways

innovation, of course, is absolutely at the core of that strategy. i think it's one of the few areas of where the government can and should be providing greater funding. at the same time, i'm aware that if we do decide to spend more on energy innovation we have to make very difficult choices about the amount of spending and the duration as well as what our priorities are for it. a couple comments in each of these areas. first, the obvious, investment is code for spending and that's going to retire taxpayer dollars with our debt situation at $15 trillion right now, grating spending in the area's going to need to be offset. it's challenging to find space in the budget. i think it also presents us an opportunity here to be financially creative. let's figure out how we make this work, let's assess the priorities and focus on it. for years now, i've significantsignifican significantsignificant suggested portion of the revenues should be devoted to energy innovation. it's a key part of my anwar legislation which would raise an estimated $150 billion for th

let me ask about how we pay for all of this innovation. in my opening statement, i mentioned that one of the things i think makes sense is to take the revenues from greater domestic energy production to help pay for our innovation. your report outlines that as one of the options. i appreciate that. some of the other possibilities include raising energy prices, but that is kind of tough for us all right now. i think we have looked at that. i am reading your language that says that the aeic does not advocate one revenue option over the other. as one of the individuals on the committee here, do you think there is one approach that is perhaps better than some of the others that you have outlined for us? >> i suspect once again that some are better than others. the reason we try to make a choice is that we simply did not get into enough detail to bake be due to take a strong position. -- enough detail to take a strong position. today we will send a billion dollars overseas to foreign countries to pay for the net cost of the oil that we buy. for

augustine mentioned to drive further innovation in that sector. i think it's an intriguing model here. early shale fracturing and directional drilling technologies were also developed and later the department of energy, the bureau of mines and the morgantown energy research center in west virginia, now the national energy technology lab, to senator bingaman's home state, the national laboratories played a key role in developing imaging technology originally to detect fractures and collapses in coal mines. that was later applied to understanding the geology of shale deposits and where the fractures would occur so private industry could figure out where to locate their drill bores and fractures. so -- and beyond the initial demonstration of these technologies, there was also a period of time when shale was technically recoverable but prohibitively expensive compared to more conventional extraction technologies. once again, this is the second key role the government has to play. the government instituted the section 29 production tax credit for uncon

we have developed an innovative technology. a two-step process that taste -- takes a variety of ways to carbon resources and converts them into oil through a biological process. we do it at a lower cost and sustainably, and it has a benefit for not only industry but the planet. >> i will go get my checkbook. a round of applause for our panel. [applause] according to carl, we have five more minutes. so you get to clap again in five more minutes. [laughter] you have all talked a little bit about the culture here. how important is it that the environment here succeeds in continuing to draw people and draw talent and investment? the example we heard in your introduction was you went to school add mit. you came here to start your business. there is another guy on facebook who has said if he had it all to do over again, he would have stayed in boston. how important is that culture and environment? >> it is critical. it is critical to have minds that have been educated, interdisciplinary people coming to the table, different perspecti

those are job creators because they are the innovators that are building this momentum around innovation and job creation. >> i think that most people would probably agree that they would love to see, you know, highly skilled, well-trained, educated immigrants come here and be able to stay. what you hear from people in congress, though, is it's completely unrealistic just to be able to solve that piece of the immigration problem without solving the bigger piece. >> yeah. i don't -- there's something a little bit off pitch, i think, about focusing so much on high tech and silicon valley and high education. i'm an educator, so i feel uncomfortable saying those things. but i think talking about 19th century america, which is a remarkable story that actually i'm writing about these days, it was -- you had innovativeness over the whole breadth of the economy, not excluding farming, far from it. you know, the plow that broke the plains. that was a huge thing. and you had people at the grassroots waking up every morning, rushing to get to work to tinker with that thing that they want to make be

all of these types of innovations, these share rubble innovations -- shareable innovations are on the rise. they are not centrally- controlled, one-size-fits-all solutions. instead, the increase access to resources locally and globally through market driven and volunteer-based platforms that unleashed the creativity of citizens to create an exchange value directly with each other. it is very adaptable to local conditions. with this economic shift, there is also a cultural shift. we are rediscovering that the good life is about the basic things like health and family, community, purposeful work, friendship, spiritual expression. we are discovering access better supports the pursuit of happiness than ownership. let me talk about -- let me give you a couple of examples and the potential impact to give a feel of how this could be a fix. cars sharing is a really good thing to look at. it is the archetype of the sharing economy. it has been around for a while. the research has come out recently. a uc-berkeley study showed once shared car replaces nine to 13 owned cars. 50% of households who

please visit the innovation valley on the exhibit hall to the conference. we also have a startup spotlight. we chose 16 different companies that will present. our sections in the conference are mobile and video today. a special thank you to our advisory board and judges to the conversation that will be happening over the next couple of days. by the way, we do this all over the world. i was very pleased to see a delegation of our friends from tokyo this morning. they are right up in front. could you guys stand up and wait? they made the longest plane flight to get here. [applause] all right. this afternoon at 1:15, we are really lucky to have our keynote presenter. you have all seen the slide, right? we call it the slide. it is the prodigious mapping of exactly how complicated things can be in this industry. he is doing more than anyone else to render order from the chaos. right after that this afternoon, we have a fireside chats about social media and advertising -- fireside chat about social media and advertising. later today, the author of "and outsmartin

innovation is difficult

so the engine of job creation and innovation in this country is not humming along. secondly, the second structural problem is i think in large measure that is because we have a tax and regulatory structure which is not only uncompetitive as compared to the rest of the world, we now have the highest business tax rate in the world, but it's also so complex that it is causing small businesses, risk taker, entrepreneurs, innovators to say, oh, my gosh, i can't get through this. and finally, and i think this is also a structural problem, we have an education system that is failin failing, in the quantity of the education we deliver, the quality of the education we deliver, and therefore we're sitting in a situation where companies have positions to fill and they can't find qualified people to fill them. when we have 5.5 million unemployed people, that's a tragedy. so we have to take long-term steps to fundamentally reform our education system. i think we have to take very difficult but very important political steps to fundamentally simplify and reform our tax and regula

it is one of innovation. one that invites people and their views enmeshes it up with old tradition to see if we can make an even better san francisco. my fellow collaborator, president david chiu, is here tonight. scott wiener. we have two other supervisors who may be coming later. supervisor jane kim and supervisor mar farrell, who might join us later. we're all part of the initial group of policy makers at city hall who want to hear ideas and views of this new economy, this collaborative consumption economy, a shared economy, one that we are very interested in because it has assets that have already peaked our interest. about our -- piqued our interest. about our environment, about how to do less with more, how to make an expensive city more affordable to more people. how to utilize the strength of the city as a great tourist city that maybe not that affordable to too many people and how we can get more folks to come and experience the wonder of the city. and then hopefully they make their stake here. these

program or innovative services, whatever it is called. and they are going to find that with millions of dollars. the way i read the process, it says that somebody has to apply for a grant in order to get the money. to have that come up with some kind of innovative program and apply for grants. but there are no goals and the innovative program that i can see currently that makes mental health any kind of goal, objective, or priority. >> we did not get to the goals or objectives, but is in the amended development agreement that you have had it specifically calls about the behavior health service that does, as i described earlier. the innovation fund will be a partnership between the department of public health, the city, and the san francisco foundation. the three of us together on grant making will develop of the goals and objectives that will be used in the distribution of the innovation fund in line with the general overview included in the development agreement. commissioner sugaya: you say that the service is one of the -- is not a goa