 Good afternoon. I am to Micah Tilliman. I'm the director of the Bretton Woods 2 program here at New America We are delighted to welcome all of you to what I'm sure is going to be a fascinating discussion With George 11th and Cohean and Mike Crowley on George's new book capital in the common good Before we get to that and that is of course the main event I'd like to tell you all a little story and this is a story that begins in 1956 many years ago in a little cultural part of California and there was a brilliant scientist a Nobel Prize winner named William Shockley who had at that point Decided he was going to set up a lab to develop something entirely new and so we've got together with eight of the best scientists he could find and Launched this new effort called Shockley labs, which was after a year It became clear to those eight scientists not going to be able to take the technology that they were working on which was the Semiconductor and move it forward as quickly and as effectively as the eight scientists there had hoped and so these eight Did something extraordinary they went off on their own and they started a new firm called Fairchild Semiconductor And in the process they created the model for modern venture capital This is something that did not exist previously But they developed the template for what it means to have venture capital They developed the template for what it meant to be a tech startup and it was really the financial Innovation of creating venture capital and creating the tech startup that led to many of the Benefits and many of the innovations that we enjoy today and that we work on here at New America in the realm of digital technology if you look back At their new company Fairchild Semiconductor and trace its DNA today You will find over two trillion dollars in market capitalization That goes back to this group of eight scientists they became known in Silicon Valley as the traitorous eight and I Believe that today once again We are at the threshold of a really important stage in financial innovation and We are at the threshold of using capital in ways that it hasn't been used before To solve problems that right now are going unsolved We are living in a world where there is a massive quantum of capital and there is a massive quantum of problems But frankly we don't have good business models that are connecting those two as Efficiently and effectively as we need to and we're seeing some very expensive market failures occur as a result of that What Georgia is doing with her book is Providing us with a roadmap kind of the first chapter of this new revolution in finance this new revolution in Financial innovation and I think it's very important because it goes to the core of Not only some of the challenges that are affecting our financial system But really many of the challenges that are affecting our societies and our country if you think about a lot of the Discontent that we saw in this last election people feel that the system isn't working correctly They feel that it's not doing what it needs to in order to solve their problems We have in many ways financial architecture that is very good at creating wealth but it's struggling to create value and Georgia is really a peerless Interpreter of these new solutions that are opening up right now when I first came to these issues She was one of my guides her book her first book was one of the first things that I read As I was digging in on the work of Bretton Woods to and the work that we do with large asset owners to Encourage them to channel resources in ways that can help reduce global risks and global volatility and With this latest installment in her growing library. I think all of us are in for a real treat She's she's taking us on a very important discussion That I think is really central to many of the key challenges that we're confronting right now So with that let me hand things over to Georgia and you know Mike who who needs no introduction for his incredible work at Politico And we're looking forward to a great discussion today. So thank you Thank you to make that and and thank all of you for coming out. It's hard It's hard to compete with the distractions in the circus of the press conference I thought it was just gonna be hard to compete with the session starting later this afternoon, but It's never dull, but I so thank you for making the time And and I would just add and I sort of tried to do this In the months discussing this book since the election I actually think that they are related for precisely the reasons that to Mike outline, which is that You know, we ignore Things like economic inequality and prosperity that isn't sort of broad based at our peril And I think we've finally seen a little bit of comeuppance for sort of ignoring some of those issues And so what I try to do and we'll discuss it in this book is think about ways that Finance and investment and a broader set of capital and resources can be brought to bear on some of those problems So to make a thank you and I want to give a nod to the work that you've been doing here in America Bretton Woods And some of the other work that you're doing at the intersection of finance and technology It's been a treat to first through profits and purpose and now and sort of other capacities to work with you And I'm just also delighted to still have a relationship with New America and be a fellow here And I'm very grateful. I am Ray slaughter for sort of taking some bets on us And I think our vision for you know new and different ways that states and markets I think can and should line and other colleagues from New America I don't know if Mark Schmidt is here or or read and I know fuzz I've had sort of a lot of fun also Tyler bug in New York So that's a treat and Jonathan Soros also was very was great in getting all this off the ground And I would also be remiss. I think this this project Capital in the common good which was which I completed while I was at New America even though based in New York Was funded in large measure by colleagues at the Rockefeller Foundation who supplied financial support But also a lot of thought leadership On this work and continued to do so and so even though I'm now at the Pershing Square Foundation I continue to work with them and I know to make a new America does as well Finally a big thank you to to mine Crowley. So As to my son Mike needs no introduction, but I'm particularly grateful on a day in a week like today and this week and these months it's I think as we Sometimes we start to enter our a few couple of decades of a professional life in a career And it's just I was a credible privilege to be able to say someone that I've known like Michael for a decade There's not only an expert and a guide on making sense of the world that I know that you've reported Really from every country across the globe But I think in the last few months and weeks and even this week Really making heads or tails that sort of the importance of your we have the fourth estate, but also your work and Russia and and sort of foreign affairs and helping really be a voice and a brave voice in this in this Environment is is really grateful. So I know I know I have limited time with you and you're gonna have to run back to the office but but But thank you for agreeing to do this. Thank you for having me to moderate the conversation. Thanks everyone for coming We're gonna talk for a little bit and then take your questions as an audience member I always think that's the best part. So I try to remember that when I moderate So there'll be plenty of time for you all to chime in And for my part, this is a welcome brief distraction from antics in Russian hotel rooms that are not safe for For for discussion in public at the moment. I guess actually they're all over the internet But anyway, you take the point Georgia on your book Which is so interesting and congratulations Why don't we just start with the basics? Why did you why did you want to write this book? What need did you feel it was filling and in particular, you know, I have to say my first reaction And it may be a common one No disrespect to Wall Street and the many wonderfully civic-minded altruistic titans of finance in the world today is that we don't see capital and good In the same sentence uttered in the same breath very often particularly since the events of 2008 ish So you're going against that grain So why did you want to do the book and just give us some of the basics of what you're trying to accomplish with it? Gladly and I agree that you're right and The title was meant a little bit to be a non to pick it up But also to stir some of these conversations and and I'll talk a little bit about what I think are the differences between Sort of financial innovation And and sort of innovation for an evasion sake and what I call innovative finance Which is really meant to be can we use the tools of finance to advance? Or to tackle social and environmental and economic challenges the gen of this book really began life. I Had just finished a previous book on social entrepreneurship That really was chronicling the work of very dynamic and colorful change makers of the nonprofit sector and actually even in government and thinking about sort of what entrepreneurial solutions look like and I was So more along the lines that you typically think of with people sort of do-gooders in the in the usual way We define them and it was actually about the fall of 2012. I just finished that book within New York and Hurricane Sandy Inundated the city and much of them much of the Northeast Corridor And I took a pause because the city shut down But really only for a few days and there were sort of 14 foot storm surges that flooded the subway And that and when the subway the hundred-year-old plus subway system in New York shuts down the city essentially such shuts down And what I came to understand not that long after was that this city Emerged with about five billion dollars if damage to the subway system and the MTA found itself uninsurable I remember thinking not fully realizing the import of this except when I talked to folks at the MTA They did pull but was really sort of a municipal finance first and went to the catastrophe mon markets Which is talking about what capons are there a little bit arcane and typically private capital markets financing instrument But they went to the cap on markets to make sure that they could be To to reinsure themselves and to open up the subway system again for transport And it struck me in a way that I hadn't realized that this was the same kind of sort of innovation and entrepreneurial Creativity that was taking place in government using tools of finance to solve problems that most of us sort of don't think about And the woman you know who's like the head of risk management at the MTA We don't typically think of her as you know like sort of the Wendy cops and teach America the world But in fact she was she was being creative in her own right and I started to look at other I Started to take an interest in sort of are there other approaches along these lines that either we don't really think about in this way or Or that we could replicate the New York model So I started to look at vaccine bonds and I started to look at green bonds Which I see aren't all that green and social impact bonds, which are not even bonds and And just became quite captivated with really a set of tools and instruments this again, and I will Cut to the cut to the chase a little bit this led to some discussions with colleagues at the Rockefeller Foundation And they sort of said well, you know, what else is out there and One and two can we really start to think about some of these new instruments and approaches and tools as ways to bring in more Capital to bear on the problem a lot of the problem development challenges both globally and in places like New York Can we if we don't have enough money? And this this was occurring this conversation was occurring as we were sort of moving last year from the millennial development goals to the sustainable development goals Which are these you know, 17 incredibly ambitious and expensive gold of which there's you know Depending on that how you count it like a two and a half trillion dollar financing gap So it really became a discussion about whether you know You can actually access large sources of capital from institutional investors and others to bear on some of these problems given the limits of government and philanthropic funds and I will get to some examples, but I would just say that over the course of writing the book What I realized was actually What I have I define innovative finance is much more about what I would call smart capital Or not it's not just more capital more capital is important, but it's about Finance and the tools of finance actually giving us the security the motivation to to make better decisions And that's at the household level it's individuals that's government So does insurance allow us to make long-term investment decisions or does it allow us to save or can we actually make investments in purchase? It really became much more about things like trust and time and not so much more about sort of more dollars so give us some practical examples of what this looks like and Vaccine bonds are very interesting concept. So maybe that would be one and also Take a minute when you do that to tell us what's new about this Is it just a more creative way of thinking? Are there financial instruments that allow it that didn't exist before but start with some tangibles that people can visualize? Sure, and I think you know innovation I mean there is there are a lot of words that we throw around and I think innovation often is sort of seen as synonymous with new and shiny and new and Back to your early point actually about this sort of post financial crisis anxieties about Financial innovation, you know Paul Volcker among others are sitting at the only useful the only valuable Financial innovation is the ATM like everything else you know all the credit defaults are like all that stuff Let's leave it and and I think his point is well taken I guess I flip it on his head a little bit and say okay There are breakthroughs scientific breakthroughs technological breakthroughs and finance elsewhere whether it's like high-speed trading or like very complex derivatives Or even you know we'll talk maybe a little bit more about some sort of blockchain and bitcoins up Which are innovations sort of that that maybe improve the efficiency of markets But aren't intended to do good in the world in the set the category of instruments that I look at or by sort of by definite I mean I'm defining him tautologically, but I'm focusing on ones that I think are designed to do good So so it's sort of and and the newness is either because they're intentionally designed to do good or because Because you're taking something that worked in one context Maybe you know in one market and applying it to things like public health or climate change So a little bit more specific most of that it did be Begin life as a project in the book focus on development finance Although increasingly and now my work is much more focused on these applications in the US sort of get very tangible and very specific I'm not sure how most people got here today. I know my day began Much earlier it has involved two mass transport systems or three of you include Amtrak But I imagine most people or many people were on the metro this morning and my day also included a stop on the New York City subway system and What I hadn't fully appreciated because every time I had the two days two times a day at least usually more I Am on the New York City subway system is I have a 30-day metro card So I'm actually you know I pay up front each month and I don't fully think about how much it's costing me on the ride But it turns out that you know each subway ride in New York costs 275 a pop And so if you are a daily commuter and you're doing that two times a day That adds up in between 500 of the trips every year it adds up now. Fortunately. There's a 30-day pass for New York There's also a seven-day pass. I imagine in DC. I don't have one, but there's like a smart right You know, there's something here as well In New York that monthly pass costs 116 bucks upfront So it's a substantial discount, but you have to have $116 up front and it turns out that That is a cost prohibitive barrier for many New Yorkers So there are 200 there are close to 300,000 students in the CUNY system for example We're all commuting into school every day and it turns out that they don't have the hundred and 16 bucks up front So often the cost of riding the subway is cost prohibitive And the same thing is true now that you know poverty is no longer really an inner-city thing And you have people commuting in on the subway turns out that's cost prohibitive So this small group called Alice financial and I still can't figure out whether I'll be currently who runs it and said it's not a acronym But I'm not sure where they got us, but they essentially said, you know what? We're gonna allow people to do layaway, which to your point is not new right? We've been doing layaway for a long time, but they basically said we're going to allow people To buy a metro card on their phone from us and we're gonna have a small float and we're gonna set in there Essentially subsidizing so people can pay in weekly installments This turns out New Yorkers are overpaying $500,000 a day in aggregate because they can't afford the subsidy So I think that you know again This is not the brilliance and innovation of what Alice financial is doing in New York And by the way, the same is true in London like all major cities, but now it's a workaround I mean arguably the MTA should be doing that we should be thinking much differently about how people pay But in the interim there are interesting innovators who are doing things like that with the with the subway in New York and I will Be quite a minute, but I'll explain how I got to that I got to the New York example and the Alice financial example because I had been looking at Mobile payment systems in develop in the developing world context, which is where we're sort of much more familiar So I had been looking at the sort of M-Pesa story in Kenya, you know, we're ten years ago 70% of the population Kenny was on banks the faricum comes in everyone has cell phones now You know class for ten years 80% of the population actually has mobile money And Everyone knows that story what became even more interesting to me when I started looking at this or payment story was not just Oh people are paying for schools or people are paying Setting money to relatives all over Kenya all over the world that people are paying for utilities would actually Caught my interest because this removed that story was not what people are paying for verse. It was how they were paying for it So what I hadn't what I discovered was that even though you now in Kenya and elsewhere you have 80% of the population now using mobile having a mobile wallet of some kind and mobile payment They're still off the electrical grid So we sort of solved one infrastructure gap, but we still have people who you know It's like two billion people the world or not on the formal electricity grid So what this means is you have you have Kenyans who have phones But they don't actually they're using like single-use batteries or they're using candles or they're using lanterns or they're using kerosene for all of their energy needs, which is you know incredibly noxious and it poisons and it Is a major source of global warming And it's really expensive except that people can buy in small batches. So this is why this is why they're doing it and if you are a Kenyan family who is spending You know more than two hundred dollars a year on kerosene, which most are it clearly makes sense for you to install a solar panel That only has 199 bucks, but it's the Alice financial $116 situation all over again. So people just don't have the hundred and ninety nine dollars up front So out of the impasse of story has grown a series of essentially layaway companies that are allowing people by electronic devices via their phones to do to install solar on a layaway and Mcopa so it's like everything's like my my swahili has improved tremendously since writing this book, but that but Company called in and copa sort of does the same thing that Alice financial does So it now allows you to install solar and to pay and lay away and once and then once you to me that Sort of exploded my mind because once you go down that and that has by the way accelerated people's adoption of solar in place Like any about like fourfold But then you start to think okay This could be this is being used for other utilities like water, but this could be used for to download text But I mean this this like opens up all sorts of really interesting Really interesting opportunities so Again, this is that gets a little bit back to the tech, you know, how much of this is about technology That's my question. So what What's key to both those examples that you just cited is that there is people are using their phones To be connected to a service that allows them to do this So how fundamental is technology to what you're writing about me? Is this a story about technology and finance is technology a necessary component or does it happen to be a big part of some of the key examples So I think there is a clear technology story And I think that you know not unlike the VC example that tonight could talked about at the outset, you know once it once it becomes Once it becomes clear that there's a market and you then then you have even more investment to bring down to improve the technology You know, I think you have those virtuous Circles and we see that with insurance and satellite technology that suddenly allow Proxy sort of index insurance, etc. But I actually think there are very significant limits to the technology so one of one of the areas that I write about and I started to explore and actually my work now in as the At a foundation is sort of making grants and actually investments in this area has to do with evolutions of microfinance and I spent a lot of time with an organization in India called IFMR Trust and the reason I got to IFMR Trust was because People said, you know what that big concern in microfinance is that it's always been about credit And so it's been about small loans And in fact, that's really that's maybe necessary to get people out of poverty But it's not sufficient and there need to be other products Pensions we need to have savings products We need to do all those things and IFMR was on the map because they have all these other products So they've really started to think about what are the real? So I spent a lot of time with IFMR Trust and I sort of said to them, you know, this is terrific You have all these products and they said yeah, but we have to tell you a story So they said we had a client. This was not very many years ago and she We didn't know too much of you know young woman. She was an agricultural labor They mostly work in rural India and they said she She came to us periodically or you know to Take loans out against her gold jewelry, which was like a very very common practice all over the world Especially in rural India and so she did these jewelry these gold loans They weren't paying too much attention and then one day. She's walking to work In the fields and also unfortunately very common. She's hit by she's struck by an on kind of passing truck and killed And they discover that she has five dependents, so she has she's supporting her parents She has two children her husband left her She's also supporting a sibling and what she really needed was not a gold loan What she needed was life insurance and they had life insurance and sort of their arsenal of in their suite of products They could have offered this to her had they actually had a better understanding of what her needs were So they've completely in the years since they've completely rethought their business model There's a technology component so they now have what they call wealth managers and these people are compensated in very sort of enlightened Way, so they're not just pushing loans But what they also do is they go household to household with the tablet and they ask they get a really deep understanding of what people The households financial needs are and then they don't have to make the decisions about what products or services are sold There's an algorithm that spits it out, but it's that very human fate They said that there was no way we could be selling these products Or services to these families if it weren't for the wealth manager who lives in you know Who lives in the villages who's a local recognized trusted person and they said that it's the technology alone does not get us To adoption of these products and services that we need to have This the trusted advisor and I sort of you know, it's playing nice it. I was like this fit this finance Finance innovation and and technology and trust that allows this to happen and just just briefly one more point on this I was relying I sort of spend time with this company in Indiana I came back to the US and was relaying this story to colleagues of mine at Columbia Business School and they said well you must know Justine Zinkin at Neighborhood Trust uptown in upper Manhattan in the Bronx because it's the same story that you just heard in rural India And I said, you know, I said, oh, yeah, of course, and of course, I did not know who justine was so I mutely went uptown and paid a visit to justine and Neighborhood Trust was a Sort of you know typical 20th century actually started life as a credit union And justine took it over and again, they had done really interesting things with technology So they had developed an app called pay goal, which was allowing poor families in upper Manhattan to think about saving They had developed a social responsible credit card that was helping people pay down their debt And when they started surveying the households and sort of saying like well, which of these apps like which of which of these Products do you like the most like how are you most likely to use them? Everyone came back and they sort of said, you know, it's Marisol and So I so I looked at justine and I'm thinking like Alice financially So I think it like or it's you know It's an acronym because I had a business school So I'm like Marisol's like metrics and accountability and they're like no, no It's Marisol like Marisol's a lady who lives in Washington Heights who essentially works for the trust and is getting people to sign on to the products and services so I think There are a number of these interesting Sort of innovative financial organizations that are understanding that you can develop the apps and develop the products and you can use The cloud and you can do all these things but to get poor people to you know Use savings products and don't and not worry that they're going to be deported You know or actually to the trust a financial system that they actually haven't engaged with before you have to lay or there's this sort Of human interaction and baseline trust. It's also part of reminds me a little bit of journalism or There's all kinds of you can start up a media company and aggregate from all over the place But real original reporting requires talking people and seeing them face-to-face. So Technology is always kind of brought back down to those human interaction realities, isn't it? Vaccine bonds you you mentioned them at the top and you you start the book with them And it's just an interesting concept and I just thought that might be another opportunity for you to kind of unpack What it is that you're talking about And I think and I will just So I think the vaccine bonds case is interesting for a number of reasons what I'd say is I think it's part and parcel of a Larger discussion about prevention. So the vaccine bond case just very briefly Is something called It's part of something called the international financing facility for immunization That was created in the UK a sort of partnership Actually there between Goldman Sachs and the Chancellor of the Exchequer several years ago and the idea was relatively simple I mean the idea was and this was as we were sort of approaching so Ten years ago it was sort of lead up to the millennium development goals rather than sustainable development goals But again, the idea was similar that you know, we have these very ambitious goals in health And we don't necessarily have enough resources to pay for them and Gordon Brown said, you know Is there something he went to his chums at Goldman and says there's something we can do about it And there was an I can I just interrupt because you point out you make an interesting point Which is not just a shortage of resources, but it's It's a it's a market failure or at least it's a it's a gap that the market won't fill right So this is an effort to Sort of step in where the market won't work not just purely an absence of say government Public funds right where there's a market opportunity, but it's not being filled efficiently or it needs a little bit of a nudge So that's right and the market failure here Well, there are a number of them But one of them has to do with the fact that investments and prevention are substantially more cost effective than waiting for a problem To metastasize and so right so we know that vaccines are infinitely I mean the Gavi Alliance has the vaccines that they're investing in have an ROI of 18% So we know investing in vaccines is much more cost effective than waiting You know for sort of treating full-blown disease and by the way and we can talk about some other you know treating treating the full-blown disease like an Ebola or you know Zika Containing that is itself infinitely more cost effective than waiting for something to essentially become a pandemic And the same as you on climate right climate change now is is much more cost effective than catastrophic types of climate change You can say the same things about early childhood education job training and incarceration We we know that you know by orders of magnitude maybe 40 times more we're spending on responding to these disasters sort of human and So the market failure has a lot to do with Resources that are not available now the if I'm example and there are a number of others in the book And we can we can talk more about them what with what the if and folks said is they said okay We know that there are a number of countries that have essentially Committed to development assistance for next year for five years from now from ten years from now for 20 years from now But we don't necessarily want that money 20 years from now We want that money today. So is there a way this is to your question about innovation, right? The finance 101 is a front-loading issue finance Finance 101 says we borrow from our future selves for money that we need today and we repay it over time So what the if and folks said even where I said, okay Let's take those development pledges that are being made 20 years out and front-load them and issue a bond against them And by the way we can securitize them, which is you know, it really is a complicated word But that just means we can bundle, you know, UK France US a number of countries future development assistance front-load them Issue a bond against them and they've raised about five million dollars for and they could have used the money for anything I mean that's the thing. It's not necessarily Tied to vaccines, but the decision was made to give the money to the Gaviolines Which does vaccines because the ROI is so high, but there have been a number of We know to my goes part of these discussions last summer and the lead up to the sustainable development goals But there people are looking at that financing facility As a model to say can we do the same thing for maternal and child health? Can we do the same? Can we essentially take our future pledges and get that money and use it today? And I think that that's in some ways, you know, whether it's social impact bonds I'm happy to open it up. There's a lot of discussion. There's a lot of hype. Those are small dollar amounts Or actually really new interesting insurance products. So another case I'm going to put something called the Africa risk capacity which addresses Drought in the same way so it allows African countries to enter into an African owned insurance pool as a way of responding to drought before it becomes famine in ways Where prior they'd sort of you know drought would hit countries would go to the UN have an appeal There'd be sort of the money would come too little too late and and drought had more to famine So I think insurance is another way both at the household level and sort of sovereign Or even multilateral level that's allowing That's just allowing countries to react sooner and you know, and I think the African risk capacities has folks has started with drought But it's you know, it is ready to it is a now a model for for able or the next pandemic So a couple more quick ones and then we can take questions from the audience. I think we're probably that halfway now I'm just curious because you mentioned Bitcoin Which is such an inherently interesting subject and I wasn't quite sure what the context was when you say we can come back to Bitcoin I just think Bitcoin is inherently interesting. How would Bitcoin figure into what you're talking about? Well, where I and to Mike and I have been having this conversation now a little bit where I what I was trying to do is sort of positive that there is a difference between innovation for innovation sake and sort of financial engineering And and those that I would call innovative finance, which is where we've taken All kinds of fintech approaches at the intersection of finance and technology and said, okay We were actually going to apply these for good, right? So the so the the IFMR Sorry, the IFM case. I was just speaking about earlier took You know Securitization and sort of typical bond issuances, but they said, you know what and the guy by the way who did it at Goldman had never worked on social or Environmental or health public health issues of his life But he said I know how to securitize things and I'm going to try to apply this to a public health situation So I think that I sort of lead, you know, we're talking about a category of innovations like speed trading or like a whole bunch of sort of very elaborate Securitization approaches that aren't necessarily intend to solve problems and I think the early stages of some of Bitcoin or some of the blocking block chain technologies and other innovate other sort of fintech innovations, right? I mean all of us could figure out how to pay each other back for lunch by a then like 400 apps Which is an interesting innovation, but it's not necessarily going to sort of like solve poverty Crosstown or across the world until people actually deliberately say how do we apply some of these? technological solutions to like real pressing market failures and and public needs and so that I Think Bitcoin is moved into the realm where people are saying, okay There are these amazing blockchain technologies They weren't necessarily invented to solve pressing social problems or just market failure, but There's a huge opportunity here, right? This isn't just like so Goldman Sachs can do online lending, okay? So my last question looking ahead a little bit and of course everybody's talking about Donald Trump today And yesterday and tomorrow What I guess my question is putting this into a kind of public policy context more Putting the focus on public policy context a little more explicitly and my launching point is That Robert Schiller Robert Schiller the noble laureate Gave your book a very nice plug in a column a couple months ago in which he said that Kind of recommended it as reading for the Trump administration now. I think I know and to Micah probably Would vouch for this that in the sort of diplomatic development community We are not at a moment high optimism vis-a-vis the Trump administration and its priorities But having said that do you think that there's anything that? Maybe not Trump himself. It's not clear how much time he spends reading books But but the policy makers around him Maybe people the State Department Rex Tillerson types or maybe some of this would go through commerce I don't know question being what could they learn from this book in a kind of practical policymaking way So I think you know, I think on whether On whether you know on the on the business orientation and markets orientation of this president this administration like everything else I think that they're still at best open questions. I what I guess what I would take away for you know, sort of Several months ago. I think the questions about some of this work on innovative finance and impact investing and Sort of role of markets and development and an economic development in the US We're very much sort of, you know, are we going to see another White House office of social innovation? You know, how is the State Department and USAID going to continue to evolve along the lines that they've evolved and thinking about these in enlightened ways You know, what is Treasury going to do vis-a-vis guidance on fiduciary or something all that kind of stuff In parallel, I think and I think that those have been incredibly important sort of federal level Measures towards encouraging Investment and social responsible investment at the same time. I think you know And this is not to totally shy away from the question Just say I think a lot of the important policy innovation has always occurred at the state and local level And I don't think that that's necessarily Going to change. I mean, I don't have a huge amount of optimism for the state houses But I do think that things like social impact bonds and paper performance legislation although we've had Federal legislation to encourage that at the local level or sort of funds at Treasury that encourage it that that is continuing sort of at the state house and and local level and I do think that you still have You know the questions that that we sort of led with which was how does the subway system and public transportation system? respond to a hurricane or how does it think about subsidizing You know subway fares for daily users who can't afford them if those are still sort of local problems and local solutions that aren't necessarily hinging on bold and important and federal federal leadership, but you know, and I The global question, you know, I mean that that's that's even more challenging I do think you know leading up to this that the some of the leadership globally on this was coming from places Like the UK or at least some of thought leadership. I know to Mike is doing some work with the Canadians I mean, I think that there, you know, it might be a moment to allow for leadership at the sort of federal level to take place in other places and then you know people who have been working on this for a long time in the US can play a role in that respect, but I don't I don't I'm not counting on Donald Trump Do you hear some rhetoric from people around Trump to suggest that they you know, harm harnessing the private sector? I mean there there could be a natural synergy to the extent that you're not talking about Sort of quote-unquote big government quote-unquote nation building. So maybe but let me keep my promise Which I've already started to break and gentlemen there in the yellow sweater and we'll go to you next trillion dollars of Infrastructure coming down. How do we leverage that? I'm suggesting that you can get social equity social problems That's what I've been doing this for 40 years So I challenge the idea that there hasn't been an effort at innovative finance in the last 10 I think there has totally been and it's been a long history that Rockefeller funded our work 15 years ago and Impacted investment we called this mission-related investment then but an insurance Capacity or guarantee or even a sovereign guarantee or a state guarantee using debt assets would help leverage a lot of Private money that's going to be spent on infrastructure So instead of just building a big pipe in the ground. How can you help build a business for a minority contract? It's better than a job No, I completely agree and the if No, no, absolutely in the if an example the world plank world Bank played the role of here on tour But it would be I completely agree that sort of you know I to my point the sort of infrastructure question is the you know multi-billion dollar multi trillion dollar question of Yes, we're gonna use the private sector But you know is there an enlightened way to do that so that there's some you know It's not just sort of outsourced privatization that is not really done into like an enlightened public private partnership way Hold on wait for the mic For being here. This is very interesting very enlightening So I'm a consultant and I work mostly with donors and social sector organizations on helping them kind of navigate the space And I think there's definitely like an Informational barrier in terms of trying to figure out the universe of things that are kind of happening I think your your book does a fantastic job of kind of laying that out But of the handful of organizations that are aware of what's happening I think that they're they're they kind of struggle to kind of understand how to really implement and operationalize some of those things and also says trade-offs between different types of instruments Do I do an impact bond? Do I do this? Do I do that? And kind of lacking on sort of those practical tools and also like assessing kind of the cost effectiveness of engagement since innovation obviously requires Extra costs and so I'm wondering what your views are in terms of kind of like what's next in terms of kind of moving the field forward Yeah, I mean I I assume when you say you sort of work with some donors that you mean largely philanthropic Yeah, I mean I you know I buy them a few copies of the book Who's the sales? Yeah, excellent. Yeah, right. There you go That's step one. I mean I think I you know I I Now work for it, you know I work at a sort of philanthropic investment fund that does both grants and investments and I you know It's reasonably sophisticated and yet I still think that people don't really you know either You know either the real deep you know the infrastructure type deals and all of those are sort of you know Really for high net worth or really for institutional investors And you know aren't no one's interested in doing anything below 30 million or you have you know Very interesting social enterprises along the Alice financial, but they can absorb any you know They're these tiny little social enterprises, so they can't actually absorb any real kind of investment capital I think increasingly we're starting to see some exchange, you know that there there needs to be to your point about information, and I think we're seeing some but some exchanges that make of make sort of people aware whether they are really sort of Seeking market rate returns that are you know straight-up investors or whether they sort of a philanthropist seeking some kind of blended return Or just making you grant but that knowing sort of what the range of options are I think it's still Yes, you know in some respects that you know the community reinvestment act of 1977 sort of started that like in some ways the field is decades old Right and it's and in some ways some of this newer the interest from high net worths and the interest it's sort of you know the financial service firms that all have An impact arm it's very new and I and I think the newness suffers still from some of their sort of real They're still informational and frankly definitional Problems and that may be something that you know in this in this next period a little bit more work on sort of some of the Definitional issues and some of the I know some of the clarification on sort of how you actually do investments is a good use of everyone's time There and I introduce yourself if you would please. Okay. Hi. My name is Marcy I work with PSI a non-profit that's engaging in impact investing We spent a lot of time over the last couple of years sort of trying to understand What might be worthy of an impact investment opportunity particularly in the public health sphere And what we found in the conversations that we're engaging in we're sort of hopefully near the finish line of an impact investment project That combines both what we call outcome payers and the investor and it's been an interesting Experience for us in the sense of we talk about what might be dibble from a development impact on perspective And a lot of that ties down to metrics and cost per and their risk factor associated with an investor And I think it's a space that isn't necessarily well understood at least by the development sector and I'm interested in your research for the book if you If you came across or if you have any thoughts around What has worked or hasn't worked or how do you set the stage for the future? Hopefully what is a broader future when you think about these at scale because when they're small the amount of work that goes into them isn't necessarily a Good return on investment when you're thinking about the trade-off between traditional development dollars and more impact investing dollars The question of dibs which are essentially development impact bonds which are kind of the developing country version of social impact bonds You know I think and I've been tracking these and I'm actually now an investor in one and we support philanthropically social finance which has sort of I put together a number of these I think that you know It is also still quite nice and it feels like okay We've been at this since 2010 if you start with Peter Berlin, so maybe you know, that's 70 years in we should have a better track record or these things should be more scalable at this point or like Why isn't there a template or why still take six months to put one of these deals together? You know on the other hand I think like to my dismissional framing was very useful that like you know The early days of VC was like these industries do you take a while to take off? I I I still struggle I On this social and I've had this discussion, you know with third sector and social finance and I think they'd actually agree I think the social impact bonds which are you know, they're not bonds They're basically you have a service provider that's loaned working capital from a private investor Which is typically a philanthropist to say make this intervention now So work with prisoners so they don't go back to prison or work with early work with kids poor kids and early You give them early childhood education so that then they don't need special ed teachers and kind of you know And they're sort of a whole range of them They are still for the most part really philanthropic plays I mean, I think that the the notion that these that you're really gonna get a private investor I mean the New York State Sib, which was folk not the city one but the state one which was had Merrill Lynch to a private placement and that's what Pershing Square Foundation came in But this was still the transaction cost to your point associated putting together a deal far outweighed the benefit And I still think that they are for the most part and probably will in this iteration of them will be really Philanthropic plays and it's probably also true of dips. I think that said There's really interesting work that has come out of them It has to do with paper performance and evidence-based policymaking and this notion that you know, we should only be putting taxpayer money Into Interventions that we know work and so that this the Sibs have sort of tested some of those and say okay Well, maybe the Rikers one didn't work and so that intervention doesn't work, but you know That there are others that have to do with like nurse family partner, you know, like early sort of Child and maternal health that I should do work I would say also what I think is interesting and this may be more relevant than dip in the developing impact on context It's just how quickly in some ways these are morphing. So we went from recidivism. It's really child education to maternal health. I know in DC like in the fall, I think The I think it was Goldman Sachs and the Calvert Foundation and like the municipal source is cut You know DC waterworks or whatever it is put together 25 million dollar Essentially a social impact on the college environmental impact bond to deal with water Storm runoff and how that gets into the DC water systems and I think that again It's like to your question about what's innovation like the idea was they said okay that sim thing is kind of interesting It's about paper performance and it's about bringing in private capital But can we think about it in a totally different way? Can we think about it to the problem of like green infrastructure in Washington? You see where we're only going to pay for outcomes only going to pay for positive outcomes So I think that they will start to take scale When people when when they start to be applied in context that we just haven't seen the couple of dips I've seen have been so small, you know like sort of girls education one in India where it's like there It's not that they're not good, but you know, maybe they're basically straight-up philanthropy plays Totally agree and the time horizons are completely different and the complexity of all the drivers are very I completely agree I mean those things work well when you can like isolate one, but you know in ways that are sort of artificial There are very few problems that lend themselves to that kind of like isolation. Let's do one or two if we have them Here and we'll do you and maybe depending on how long this takes we would have time for one more And of course you can probably chit chat a little bit afterwards And introduce yourself, please Jason done of it with no one just a question of clarity when you said Naya way Did you mean that they paid it before they took possession or did they pay it off after they took possession? Well, so in the solar in the in case of M. Copa and in Gaza and solar It varies so they can so it's like they're paid They're doing installment paying payments and in some cases and they're actually a variety of models So in some cases it's sort of least to own And it's like but they are I Actually thinking in most cases with the solar panels They're actually installing them and then paying for them over time But they but you can do it and you can do it in a number of different ways But the basic idea was that it's paying it's installed. I should have said installment payments rather than my way They're in the gray jacket Thanks very much. My name is Mark Schley from with an organization called site the center for international private enterprise I haven't read the book That's terrible, but I'm really looking forward to it So thanks very much for your your your presentation I think it was interesting that you said that there's a lot of companies that are not ready to Accept investment from some of them, you know the finance and the funds that are out there I know there are a lot of interesting innovative consulting firms that are working in the space in a lot of emerging market Countries helping companies get investment ready. So, you know, maybe that's sort of that side needs to come up along with it My question actually our organization works mostly in the policy in the regulatory Environment and and my question has to do with the readiness of In a lot of the countries that we're talking about the you know the policy environment policy framework to Structure these kinds of investments and have these kinds of bonds and have these kinds of innovative finance companies operating You know what you know is the legal? You know the legal framework there and is anyone doing enough work on on that side of things In your your question pertains to sort of emerging and developing come Yeah, no, I mean I think that that you know that in some ways has always been the question of development is do you have you know, do you have the legal framework and do you have the Sort of protection of intellectual property I mean do you have all of the rights necessary to ensure that actually investments work and that there's transparency New counterparty risks and all of the mitigate and all that I think I mean, I actually think you know, the ultimately This is a and some of the examples. So first of all, I think you're right like your point about the capacity building and sort of getting Enterprises investable is exactly right and we are seeing more activity along those lines I think ultimately, you know, these need to be this is not going to be a foreign direct There's not going to be a foreign assistance question This is not going to be a foreign philanthropy question that it's not going to be a foreign direct investment question I mean ultimately these are going to be investments that are going to have to be made Locally through local resources and local savings and local institutions So sort of all the more reason to shore up the systems in place to safeguard those investments I mean I guess through the and the number of the cases that I look at are sort of interesting innovations where you suddenly have Funds that are that are looking to allow for local issue local bond issuances in a way that hadn't before orange or Insurance is against some of the you know sort of wrap around insurance No, I didn't see here But that do nurture local market development because I think ultimately that's sort of the holy grail for everybody It's you know autonomy and ownership locally, and it's not relying on foreign investment But there you know, it's obviously very country specific But I agree ultimately this is sort of it's not going to be a foreign Investment or foreign philanthropy game as much as you know, organic investment and ownership one more Introduce yourself if you would please and wait for the mic even though we can probably My name is Susie say it and I'm an independent consultant I work very closely with pension funds be it in the US or outside the US and I'm interested to know a little bit More about what are your thoughts of the appetite of these institutional investors be it Governments outside the US like sovereign wealth funds or you know big institutional investors pension funds or insurance companies in the US or outside towards these institution The products huge question and topic in itself and actually to Mike wants to grant you can talk a little bit more And he's spent a lot of time with the sovereign wealth funds. I think that First of all, I think there's there is clearly appetite growing and I think that that comes from a number of pressure sort of external and internal Forces, but I certainly think that you know There are some really dramatic examples of pension funds in the US whether it's in California or even more local municipal ones Where you you know you have the people paying in who want their who want their pensions to be spent in ways that they Align with their personal values and sometimes that means a local investment in California and sometimes that means you know if I You know I'm a teacher in New York City that I don't want my funds and my investment funds retired and invested in guns Or invested in coal and so I actually do think you see some very responsive pension funds I think You know, I do think that this question of fiduciary responsibility and how it's defined and more clarity around that is one that's on the policy front actually still needs a lot of work and clarification and sort of Advancement and I also think that just it's at some point the data starts to speak for itself and I think that when you have Real leadership whether it's from certain university endowments or other endowments or wealth funds and they're making investments that long that Either are screening out bad stuff or proactively invested in good stuff And then the return speak for themselves and their useful data points that that ultimately is going to what is going to be Motivates, I think the rest of them I Don't you bring this in it's your final approach for the runway and we'll conclude with that Could be the basis for an entire panel. No, that's good. That's good Any closing thoughts Again, thank you and I don't think I know you have my pleasure No, I just appreciate all this and happy to stick around and thank you and would love to speak for and people want to get the book Do you have it here? Do they get it on we haven't we have it up right outside? Thanks for coming. Thank you. Congratulations