 Our next conversation is called, Transform the Economy with the Internet of Things. It's a terrific conversation, and it's really, for me, such an honor to introduce Karen Cornblew, who I never had the pleasure of working with at New America. I came just as she had left, and I remember hearing that she had left to go work for this senator from Illinois, Barack Obama. She went on to be his, she was his policy director, and went on to write the platform for the Democratic party most recently. She was the U.S. Ambassador to the OECD, and now she is executive vice president at Nielsen. I'm going to let her introduce the rest of the panel, but I also want to give a quick shout out to my colleague Michael Lindt, one of the founders of New America. This is his idea. You should read it in the materials you have, and look forward to reading the fullness of it when it comes out a little bit later this summer. Thank you very much. Hello, thank you, and welcome to the panel. It's called Transform the Economy with the Internet of Things, and it's going to pick up on one of the points that Secretary Clinton was just discussing, which is how do we spur the economy and create jobs. But I want to put it in context. There are a lot of people who don't agree that we can grow the economy and create jobs. And if you look at some of the discussion that's going on about Thomas Piketty's new book on inequality, you'll see that there's this fatalism. He says actually that the growth rate worldwide will be stuck at 1 to 1.5 percent no matter what economic policy we use. This is a fatalism that's actually quite common. We've given up in a lot of ways from thinking that there's anything we can do about the real economy, that there's anything we can do about growth, that there's anything we can do about jobs. His solution is radical, global wealth tax, but this prescription, this diagnosis really isn't. There's this fatalism that the age of invention is behind us. It's over. And it's sense that there's nothing that policy can do. And that fatalism I think flies in the face of the history of the country as the Secretary was discussing. If you think about what we did to spur canals and highways, and then most recently under President Clinton the Internet, you'll see that there are things that policy can do that government can do that business can do to spur innovation. So this panel I think will try to inject a bit of hope and hopefully realism into the debate about all that. And I just want to remind you that according to McKinsey the Internet has already generated as much growth over the past 15 years as the industrial revolution generated in 50 years. So we've already seen that the age of invention and innovation is with us in the Internet. Now we're going to talk about what's next. And I think we couldn't have a better panel. It's really exciting. I'm very interested to hear what they all have to say having read their work. I'll start with Suzanne Berger. She is Professor of Political Science at MIT. Recently co-chaired the MIT Projection in the Innovation Economy Project. In September she published Making in America. She created the MIT International Science and Technology Initiatives and discusses the MIT France program. Katie George, who's right here, is the author of Next Shoring, a CEO's guide. She serves as Global Co-Leader of McKinsey's Manufacturing Group. And she's a leader within the Pharmaceutical and Medical Products Practice. She also directs the New Jersey office and has a Ph.D. in Business Economics from Harvard. Marco Enantiato, sitting right next to her, is GE's Chief Economist. He's Executive Director of Global Market Insight at GE. He's the author of The Economics of the Financial Crisis and a two times winner of the Society of Business Economists Best Paper in Business Economics. Marco holds a Ph.D. in Economics from Princeton. And Michael Lind is co-founder of the New America Foundation, whose hospitality you're enjoying right now. And with Ted Halstead he wrote The Radical Center, which is New America's manifesto. He's currently Policy Director of the Economic Growth Program. And he's been an editor or staff writer for the New Yorker, Harper's, the New Republic and the National Interest. I bet no one else can say that. Lind is a columnist for Salon. He writes frequently for the New York Times. He's the author of numerous books and his most recent one is called Land of Promise in Economic History of the United States. This is going to be a fabulous, fabulous discussion that will blow your minds away. So I'm going to start with a question for Katie. Just to set the stage for us about what technology we're talking about. What is the Internet of Things? What is the Industrial Internet? What exactly are we going to be discussing and just get our lay people's heads around all this? Perfect. Thank you. It's great to be here. The Internet of Things is transforming the way manufacturing works and, in fact, the way supply chains work across all different kinds of industries. When we think about the Internet of Things, we think about six different related elements. So the first to think about are smart machines. So think about every machine in the world having sensors such that they can transmit real time data about their performance. The second is smart products. So think about, from the time a product is developed, having a product have a digital DNA, if you will, that follows that product from digital product development through sourcing, through manufacturing, into the way it's distributed, and into post-sales service. So you can actually trace if a product is working or not working. Trace that all the way back to some of its basic characteristics in product development. You can trace it back to exactly where a certain part was made around the world and how it was made. You can trace it back to where it was assembled, to what the conditions were in which the supply chain operated, and that it was transported and stored in the supply chain. So smart products, smart machines, the third element is the digital threat. So all of the technology kind of infrastructure and standards that connect all of that together and allow that data to be available and connected. The fourth element is advanced analytics. So when you have all of this data, how do you actually use it to improve decision-making? And so there will be, and already is, just a burgeoning field around how to use this data to make better decisions real time. Fifth area that we point to is cybersecurity. So obviously all of this works only if companies and supply chains and consumers feel protected in terms how this data is leveraged. And then finally, you see that all of this interconnection will create totally new business models in manufacturing and supply chain, very similar to what we've seen in the consumer world. So new digital marketplaces, if you will. Think about in the consumer world, we've connected a billion consumers together, and we all live every day what the impact of that is in terms of how we connect with each other around the world, how we collaborate and share ideas, how we collaborate to create momentum to get something new done, and also how we buy and sell things, totally transformed. Now we're not talking about connecting a billion consumers, we're actually talking about connecting 50 billion machines and it will have the same kind of impact on business models, digital marketplaces, new app economies, et cetera, that you saw in the consumer economy. That's great, thank you so much for explaining that. And Margo, I want to turn to you and ask you about your views. And I was just remembering as Katie was talking really early in my career, I did some consulting to GE and it was in the pre-Internet days because I'm really, really old. And GE had electronic connections with its vendors and it was just starting to think about the implications of that. So you weren't just sending an order to your vendor, but now you could have a real relationship back and forth with a vendor, could start to help you design your product. And that kind of thinking eventually really transformed business, led to all kinds of productivity as the internet spread. What kinds of implications can we see for businesses from what Katie's talking about? Huge implications, actually let me start picking up on something you just said, which is electronic communications have been around for some time and so have electronic sensors. So sometimes when people hear about the industrial internet, the reaction is skeptical, is to say, well, you're talking about electronic sensors, computers, these have been around for a long time. Why do you think this is changing now? What makes it different? And what's happening now over the last few years is a massive and rapid decline in the cost of sensors, but also in the cost of storing and processing data thanks to cloud computing. This is really accelerating things. And from a business perspective, you realize that what is happening is first of all, you are unleashing the power of an amount of information that we never had access to before. We never even thought we could access before. So for business leaders, there is also the challenge of getting their heads around the fact that they now operate in an environment where the range of possibilities is expanding suddenly. Then the challenge is to realize that all these innovations are translating greater efficiency and speed. So Katie was pointing out the sensors and the enormous amounts of data they're generating and how smart analytics then convert this into insights. But what it boils down to is greater efficiency. So you look at the aviation sector, this means for example, less fuel consumption because you understand the engine better, you could operate it better. It means fewer flight delays and cancellations because all of a sudden you can switch to preventive maintenance. So once you understand the machine so much better and the machine is smart enough to communicate with you, you can go and fix it just before it breaks down rather than waiting for the machine to break and then getting yourself stuck on the tarmac because there is a technical problem with the aircraft. It also means enormous increase in efficiency and steps towards greater sustainability by the way. We think about energy and we've talked a lot yesterday about gas. But renewable energy remains important and if you look at what happens in wind farms, you now have wind farms where the different turbines can talk to each other and depending on how the wind switches, the turbines will in a coordinated way adjust the pitch of their blades to operate more efficiently. You're talking about better health outcomes. We had an excellent presentation on the health sector yesterday and it's entirely driven by the cost pressures. And here you have everything from greater efficiency in the operation of hospitals to the ability for surgeons and nurses and doctors to collaborate simultaneously on the same set of tests once a patient comes in, in the crowd, which gives you greater speed and better health outcomes. But what this is telling you is as a company, you're moving to selling outcomes and services rather than just selling products. And that is the first huge implication in terms of business models. The second implication is how you use talent across the world. Look at the point of view of our company. GE has always done a lot of innovation with historically done it in-house. Then in the digital age, you realize that innovation moves faster if you can open it up, if you can access a much broader pool of talent. So we started in a targeted way. We had an open competition where we said, can anybody come up with an idea for a design for a better jet engine bracket? Small thing which fixes the engine to the airplane. And we said, we want a lighter design and we wanted 3D printed. We had lots of great designs coming in, the three best designs from people with no experience in aviation, the top-winning design, a young Indonesian engineer, no experience in aviation, a design that reduces the weight by 80%. Our engineers looked at it and first said, it's not possible, it cannot be. Then they looked closer and yes it is. And we're adopting it. But you start doing it on a small scale like this. You realize that the potential is such that there will be no other way. This has to be exploited. But it's a huge challenge if you really want to have a broader use of this. What do you do in terms of incentives? A cash prize is not gonna be enough if you really want to open it up. What do you do in terms of safeguarding intellectual property? So huge challenges ahead from this perspective. And I would say that from this perspective, the third big challenge you have for business is the shifting nature of competition. Because what this boils down to is the mashing of the digital world and the physical world. So all of a sudden, your range of competitors shifts because companies who were not in your space before can enter into the services, into the digital services. Especially as you have other techniques like advanced manufacturing, breaking down barriers. So changing the nature of economies of scale, making it possible to lower entry costs in different parts of your business. So the change in the competitive landscape, how you use global talent through crowdsourcing, and really how you switch towards selling services and outcomes are to me the three biggest challenges for businesses. That's fabulous. Thank you. And we'll return to all of those issues. I wanted to turn to Suzanne. The secretary used the word ecosystem. And she was talking about Silicon Valley and that you need to have a lot more than just an idea to deploy new technology and to nurture it and to lead to jobs. Can you talk a little bit about that? Yes, I think that we're at the moment of tremendous new opportunities in the United States to really be able to bring our great innovation to market in a way that would really create great new value, both value in the form of new jobs and value in the form of new profits for companies and new companies. But the question is, what are the obstacles that up to now have really blocked us from being able to transform innovation into products that actually reach the market in a way that creates value in American society? And I think that the new opportunities have to do not only with these new technologies that we see, but with the fact that there's a lot more realism in companies about the values of locating production and innovation in the United States. We've gone through a period in which we've seen a lot of outsourcing of jobs. We've seen that people really did not entirely understand the value of co-locating production and innovation. And I think there's a lot more realism today as well as an environment with lower energy costs that makes it possible for us to imagine a locating more of production in proximity to innovation. And that's in a way the real promise of these new technologies, that they will allow us to move more rapidly from laboratory into the market and that they'll reduce what one of my colleagues at MIT calls the tyranny of bulk. That is the need to produce in gigantic factories and to have gigantic workforces in order to move products into mass markets. And I think that these new technologies together with the innovation that we can see across the country really open up great new opportunities but that we have to understand that technology is not a silver bullet. There are really huge holes that have opened in our industrial ecosystem. And if we can't fix them, we're not gonna be able to bring the benefit of these new technologies to land within our own economy in the form of good new jobs or good new companies. What do I mean by these holes in the ecosystem? Well, you could think of them as market failures. That is as difficulties that we have as a society in moving from innovation actually to the market. So something like scaling up a great new idea. When we in our MIT research project looked at startups that grow out of MIT, these companies do great for about five to seven years because they have lots of venture capital funding. But when it comes to actually building a factory after the startup is five to seven years old, these companies just don't find capital in American capital markets. We saw a small scale and medium scale manufacturers in Ohio, in Arizona. These are companies that have great ideas moving up from the shop floor. They don't have local bankers any longer. So these ideas move to market only slowly, slowly, as these entrepreneurs drip in something from last year's retained capital. We see the same issue about training. These are companies that are now much smaller. Apprenticeships have become rare in the United States. And the only way that we can fix these holes, these fix the ecosystem is by some kind of private, public coordination and convening that can both address the issue of scale up, the issue of training, the issue of connecting suppliers within the United States to the centers of innovation and creation. And I think these are the issues we're going to need to address in order to be able to get the value out of these great new technologies. So Michael, what do you say to the skeptics who say we've become a service economy, manufacturing's moving abroad, we're the city of London and poverty surrounding us and that the internet really is an invention that's very exciting at all. It's just about cute videos of cats. How would you put this discussion that we're having in some historical context and give us a feeling that maybe something's going on here? Well, the quick answers, which I'll explain are first, that the real productivity gains come from innovation. Based on technology, not from the initial technology itself, and the second answer about the debate is the future of the economy, manufacturing or services, the answer is yes, because of the increasing blurring of these two separate categories. To explain the first point, economic historians like to distinguish invention from innovation, which are sometimes used as synonyms. Invention is the technology, it's the gizmo. Innovation is what you do with it and there's usually a time lag between invention and innovation when the real productivity gains materialize and this is all very abstract, so I'll illustrate this with the internal combustion engine. This is invented in the 1860s, 1870s, put it on a bicycle frame and you have an automobile. It took some time for the automobility to move into the innovation phase when it really began to transform not just the economy and business models, but literally the landscape and in order to reap the real productivity gains from an invention, you need an appropriate infrastructure, and in this case, a good road system, traffic lights, gas stations, all of this, but then you get both the transformation of pre-existing industries, for example, agriculture by tractors and powered combines, corporations switching to trucking so they could become national rather than just regional corporations. You also get entirely new businesses like when I finally recall from my youth the drive-in movie theater, I think in 1900 if one were predicting the impact of the automobile on society, nobody would have envisioned drive-in restaurants and drive-in movie theaters and this is where entrepreneurialism comes in because at the invention phase of the technology like the sensors, which are the basis of the Internet of Things, R&D is very important, venture capital, government R&D, corporate R&D. It's figuring out things to do with the technology to satisfy needs that nobody actually knew they had. That's the innovation phase and just to answer the second question, servitization is a really, really ugly portmanteau word for a very important process which is the increasing, breaking down of the distinctions between manufacturing and services. In the old days, you manufactured a product and you sold it and that was the end of it and then if it broke down, somebody would repair it. Increasingly, you have companies involved in the entire lifestyle of the product. As was mentioned earlier, they can be involved in the conception and gestation too with mass customization so it's not just, it's conception to grave, it's not even cradle to grave anymore and as some of my colleagues has pointed out, this really is altering the very nature of business models because you have to ask yourself, are you a service and repair company that has a manufacturing line or are you a manufacturing company that has a service business? So let's go back to Marco to pick up on that and maybe you can also talk about what you call the power of 1% and this is gonna lead to a lot of job growth. Definitely, so I'm picking up with what Michael was saying. More and more companies will see themselves as really selling solutions, outcomes, trying to figure out what problems need to be solved and how to solve them through the right combination of products and the associated services. Also, and also the point that Suzanne made on ecosystems is crucial because we can't do it all by ourselves. No single company can. So the solution has to be figured out also by looking not just what the competition is doing as I mentioned earlier, but who do you partner with in order to do this most efficiently? And keeping in mind that the potential in terms of not just business results but also the whole economic impact, so how much can we get from this in terms of productivity, GDP, so higher incomes, jobs being created is enormous. And Michael, you made a very important point which reminds us that these innovations processes play out over a long horizon. The industrial revolution played out over 150 years. And people have the tendency today to look at the innovation coming from the digital age and brush them off. As you said, it's just cute videos of cats. It's silly games, social media, nothing else. Unemployment is still high. What are you guys talking about? We have to keep in mind it takes time for the process to feel through. And so the power of 1% is something that we have done in our studies to try to fix ideas, put some numbers on this and asking the question, how much can we get from these in terms of dollars? And the way we've done it is, first of all, to start in going to our scientists, our engineers, our customers in the various sectors and see how much can you get from these innovations in terms of higher efficiency. And across the board, you come to the conclusion that you can get at least 1%, probably a lot more, but at least 1%. And then the temptation, of course, is to say, well, 1%, it's incremental. You're talking about a revolution, what is 1%? But then you think about 1% greater efficiency being applied over huge installed basis of engines, power plants, hospitals. The figures add up very, very quickly to very large numbers, which is how we came in our original study to the impact on productivity and GDP globally to about 15 trillion over the next 20 years. That means over the next 20 years, you add to the global economy the size of the US economy today. So this is huge. That's really... I can just build on that. McKinsey Global Institute did a study of 12 different disruptive technologies to understand what the impact of them could be. And the internet of things, we actually looked at what were the total operating costs of all of the different sectors that would be impacted by the kinds of technologies we're talking about and it's $36 trillion a year globally. So even a small improvement makes a huge difference and that's an annual figure. And Katie, you've talked about some of the decisions that companies need to make about where to locate as a result of all this. I'm gonna talk about that. Yeah, in another study, we looked at how companies were deciding where to manufacture and how macroeconomic trends are impacting that and how that will play out over time. And the technologies we're talking about impact that in a couple of really important ways. First of all, we looked at all of the different sectors of the economy, of the manufacturing economy. And only a small percentage, only about 15% are really driven by labor cost. So this whole question of labor cost arbitrage, offshoring jobs to China, could we reshor jobs from China because their wage rates are going up? That actually only impacts a very small portion of our total manufacturing economy. What's far more important to our manufacturing sectors are first of all, demand patterns and the proximity to demand. So Secretary Clinton talked about the fact that in order to really jumpstart or accelerate the US manufacturing economy, we need to see increased consumption and that's exactly right. If you look at what the most important elements of job loss have been in manufacturing, a lot of it is to do with the fact that we were growing productivity faster than we were growing demand and that became quite acute through the recession. If you look at where we grew manufacturing jobs since the recovery, you actually see it in automotive and related sectors that are really driven by increased US demand. And what's happening in demand in addition to driving localized production is actually an increase in the demand for variety. And so the kind of mass customization that digital manufacturing capabilities, digital supply chain actually enables will put even more premium on placing manufacturing or at least some portion of the value chain near demand and takes away the value of, in some cases, the value of huge economies of scale so that you can actually have much more responsive and short supply chains to meet local and highly variable customized demand. The other piece though that we saw was that increasingly where companies manufacture is based on where they find healthy ecosystems of process innovation. And so digital technology allows you to activate capacity anywhere around the world just as well as walking down from headquarters to the plant floor near your headquarters. So in some sense it allows you to operate and plan and manage capacity globally. But where companies will locate is where they can find the labor force and the whole supply base that enables them to be on the cutting edge and to continue to not just invent but innovate with new technologies. And that's where the importance for the US in creating these ecosystems is so high. So is there hope that this will lead to jobs, Suzanne? What do you think? Yes, I mean I think that the new America Foundation as I've learned over these two days is about ideas and changing ideas and new big ideas. And I think one big idea that we really need to focus on is that we have somehow imagined that production and manufacturing and services are two different economies and that we're moving out of production into services. And I think what you're hearing here in this panel is that almost all great new products and almost all great new companies today are making bundles that are in some way combinations of both manufactured or produced goods, material goods and services. So I would call a manufactured good something that if you drop it on your foot you know that it's been manufactured. And as we looked across the economy we saw it's not only Apple that's making iPods and iPhones, iPads that are beautiful physical objects that people want to hold and if they drop them on their foot you know it was manufactured. But it's valuable because it combines services. It's not only Apple that's doing this kind of combination. It's a manufacturer in Ohio that's making half sleeves that repair oil pipes. If you have a leaky oil pipe in an offshore or an onshore oil installation you can't weld it because the pipe would blow up. And so this company makes the half sleeves that bites into the pipe and repairs the leak. This company sees itself as a manufacturing company but the fact is they send technicians out with the half sleeves and their technicians stand on the oil platforms and coach the divers who are positioning the half sleeve. So what is this company? Well it's a kind of mix of a service together with a product. And I think that's where the new jobs in our economy are gonna come from from these bundles of services and manufactured goods. They're gonna take new skills. They're going to require a kind of proximity between innovators and producers. And I think the question for us in terms of policy is how do we generate these skills and how do we actually change capital markets so we can bring these actually to scale? I'm glad you brought up policy because I wanna get to policy and we're gonna go through one more round and talk about policy and then we're gonna open up the floor. So if you have any questions please start thinking about them. But actually Michael wanted to jump in. Michael, go ahead. So I was just going to jump in very quickly on the show of skills because to create jobs something which is becoming more and more essential is doing a better job at aligning the supply of skills to the demand. And part of it I think is to treat the basic scientific literacy as the new literacy. So it's becoming a more technologically advanced world. We don't all need to be scientists and data scientists and engineers that the level of standard education needs to rise. The deterioration in the education system over the last two decades is part of the problem. But the second is a closer dialogue between education system and industry. And Secretary Clinton mentioned community colleges. We do a lot of work with those because we don't all need to be high flying college graduates. There are a lot of very useful, very qualified, very high paying technical jobs that need to be filled. So filling this gap, aligning, supply and demand of skills is going to be crucial. I just want to make one point focusing on a particular industry that we don't think of as a manufacturing industry and that's medicine. When we discuss medicine in the United States it tends to be in terms of budgetary costs of Medicare or Medicaid or health insurance. But actually medicine is a perfect example of servitization of this fusion between manufacturing and services. If you're having customized physical implants that are monitoring your health and communicating with a hospital or a corporation or some sort of diagnostic system you're seeing that merger of manufacturing and in this case a very customized, specialized, personalized manufacturing. And I think we should embrace medicine, not you don't want to have cost overruns but as societies get richer just as individuals and other costs fall thanks to productivity people spend more on health. And medicine actually is a potential leading sector of advanced industrial economies and it provides everything from unskilled jobs for nursing haids to highly skilled jobs but also it will increasingly rely on manufacturing both as inputs and things that medical providers do themselves. So what are some of the policy issues that we need to confront? How can we not only spur this revolution but also see that some of the growth is located in the US and that people can get these jobs? And I just keep thinking of those huge buildings on the mall, many of which were built in response to the industrial age that you talked about Michael and so we had big industry and we put in place these big agencies that were gonna regulate them top down. Now that we're talking about this decentralized but maybe it's bundled, maybe it's mass customization, does it call for a different kind of policy solution? Katie, do you have any thoughts? Well I think the two things that I see from working in the manufacturing sector that are most important have been mentioned here already and one is education and skills and creating that match and the second is ensuring that small companies, so the supply base, the moms and pops and the ones slightly more sophisticated are able to keep up and able to adopt new technologies as well as to contribute their ideas and innovations into the broader economy. I would mention just a couple more, one is infrastructure, both the physical infrastructure and also the data digital infrastructure, it's crucial and the second one is cybersecurity because all of this is also opening up new areas of vulnerability from an industrial sector, critical infrastructure, so both of these issues are top of mind. I'd like to come back to the education point because I think that what we've seen in this country is a shift from a corporate world 30 years ago where big companies provided many apprenticeships and then people who were trained in those apprenticeships have sort of filtered out into the economy and they were the base of our skilled workforce and what's happened is that as companies have become smaller, leaner, more focused on core competence, you've seen the disappearance of these training opportunities. Take for example, Rochester, New York where Kodak used to employ 60,000 people and had hundreds of apprenticeships and funded the community college optics program. Well, Kodak now has what about 5,000 employees and their apprenticeships are no more but there are a lot of small high-tech optics firms that have grown up in Rochester, New York. Each one of these companies, many of these companies are world leaders in small niches but each of these companies is too small to be able on its own to support training the community college program and the question is how do you pull together? How do you coordinate and convene these small enterprises? These niche firms in order to create links with the community college in order to have a common curriculum and I think across the economy, what we're seeing is smaller firms and the need for the federal, state and regional authorities to play some of this convening and coordinating role. That's what we need to use policy incentives for. Could we do, I mean, are we gonna do that, Michael? Should we start in an industry like health where the government already has such a big footprint? Well, I think if we're talking about a world in which millions of billions of machines and even bodies are communicating with each other, this will require standards and regulations at some point for cybersecurity reasons, for safety, for health and so on. I think the danger is if you do it prematurely you get regulatory lock-in with inferior technologies before better ones have developed. So I'm not really sure what the answer is and of course industry to industry it varies. Although to some degree there will be multi-industry standards because of the way the devices communicate. I think in the United States we can take advantage of our federal system, at least in the early stages of this and allow cities and states to explore things and you mentioned the buildings on the mall. That's essentially what happened in earlier phases of industry and technological progress that is the best practices of the states were sometimes adopted somewhat belatedly and made into federal standards. So I'd like to open up the floor. We're obviously, we have a big idea ingestation here. It seems like we need to put some more detail into the policy framework. So anyone have any thoughts, any questions, any ideas? There's somebody in the back there. Your mic isn't working. Nope. It's flashing green. I think I can, yeah. My name's Rebecca McKinnon. I'm at the New America Foundation. I have a predictable question. Cyber security was mentioned at the end of the panel. What about surveillance? How do we ensure, I mean the economic value of the internet of things seems quite clear. How do we hold government and companies accountable to the public interest? Not only economically and in terms of public security but to the values of democracy and prevent the big brother state from really moving to the next level. Thanks for asking that. It's interesting, there was just this study that I'm gonna talk for a second and give people time to think. There was just this study that came out of the White House on big data and it was just really interesting to see how it read because it said, you know, big data's good for this and it's good for this and it's good for this and then you knew it was coming. But, and all the policy prescriptions were, you know, and they had said, this was what the report was gonna be about, the all the policy prescriptions had to do with the potential harm and danger from big data and a lot of those concerned privacy and privacy is obviously a critically important issue and it's so great that Rebecca asked about it and I'm glad that we had at least the opportunity to talk about the upside at greater length than usually happens here but what do you all have to say about surveillance? I would say that part of the solution to me will come from the market incentives themselves because what you're seeing with the industrial internet is the harvesting of data on industrial machinery and here the companies themselves have a huge incentive to make sure that data is kept sufficiently private, it's not misused and it's not leaked. So there is an enormous amount of pressure and in fact making sure that the safeguards are put in place is a clear enabling condition which unless it happens, the industrial internet will not spread. So I would bet on the market forces on this one but I'm sure some of the other panelists have implementing ideas. I would bet on the law. I think that we will use the law to have some kind of trade off based on a consensus, not everyone will agree, between privacy and accessibility so that for example, it will be easy for your doctor to monitor the implant in you but it will be very hard and illegal for the communications company to then sell that data or maybe the government to track exactly where you are at any moment. No law is perfect, it can be abused by corporations and governments but that's true with standards in general. So you don't wanna see that as an enabling policy framework that would be necessary for the outgrowth of this technology would be that at least people have some assurances that there are protections to their privacy. Well I think that will certainly be part of the regulatory framework. Anyone else? Lenny. I think we need the internet of things right now. It's in the cloud. We can repeat back the question after you ask it. If you turn it on it works better. Oh there you go. Okay. So the internet of things is gonna be obviously disruptive to major sectors of the economy but it's also gonna create all kinds of innovation opportunities. In the connection of people we saw Google and Amazon and LinkedIn be created. Are Google and Amazon and LinkedIn gonna be the winners in this phase or are we gonna see other entities that develop like that to connect in the things side? I think they certainly could be winners and there are many other companies who might enter and innovate in new ways but definitely some of the same kinds of capabilities that we saw play out in the consumer space will be important and will create real value in the industrial space as well. So imagine if you think about Street View right? One of the, we can go look at the Eiffel Tower and walk around it. Imagine using the same thing to actually look at your suppliers factory floor to help troubleshoot an issue. Imagine sourcing ideas for just a few minutes just as we now go to WebMD to figure out how do I think about and interpret the symptoms that I have. Imagine being able to source globally ideas for a yield problem that you're having by being able to identify or characterize the system that you're living with. So I think a lot of different companies are starting to or already getting into this space of providing new services and I think we'll see a lot more come in and I don't know how that competition will play out but we will see a whole new economy around the manufacturing and industrial app space and other related services. It's exactly around the lines of looking at the Google and Apple model because what the race right now is to develop platforms. Now we are developing our own other people as well. The issue is the race to develop the platform that can then capture the largest share of the market. I think we're at the end of our panel time. Why don't we just do a lightning round and see what people might have left off? Do you wanna start with you, Michael? Well, just the point about the platform, I think by its very nature, this is a winner take all market. So it will tend towards a monopoly and probably take on the forum depending on the jurisdiction internationally of a regulated public utility of some kind. Although we're very much in the early wild, wild West phase and as I said, you don't want premature regulation. I would just say think where we were 25 years ago and whether we could have predicted which companies would be strong today. What we need to do is preserve an environment in which things can bubble up from lots of different places within the United States and to put out the kinds of resources and infrastructure that will allow these new ideas to be there. I'm not counting on today's winners being still the ones that we see in 25 years. I hope you're wrong on that. But I would just add that we've focused a lot on the digital in this discussion but the digital is also powerful because it's accelerating other changes which are more in the physical nature of doing things. So think of advanced manufacturing, new techniques like 3D printing, new processes, new materials. So it's really also the digital as accelerator of a more tangible innovation. I would say two things. First, we've talked about this as something that's coming in the future but actually it's here now. So as you said, the cost of sensors have dropped 90% last couple of years. The number of machines connected has increased three times at the rate of the past. So this is already happening and creating value. This is not well it happened and should we place bets on it? This is already transforming the way companies work, GE included, but others. And the other thing I think is exciting is that this really does change if you look at the global picture. This and other trends are changing us away from a win-lose zero-sum game to a win-win opportunity. We're gonna see a lot of innovation and investment in manufacturing in China but we can also see a lot of innovation and investment in the US. It is not in either or it is a both. So I thought this was a great panel. I wanna thank you all. I think this is exactly the kind of conversation and topic that New America has always been so fabulous at nurturing. It's not an issue that necessarily the right or the left is gonna make big hay, attacking the other one for. It's really an issue that's about the future of the country and the citizens of the country. And so thank you all for contributing such thoughtful things. And I think I hope New America will carry on this work and keep in dialogue with all of you and thank you to New America but thank you mostly to the panels. Thank you very much.