 Good morning. Good morning and welcome to New America. We have a really amazing program. I'm very excited about it, and I would, if I weren't speaking, I'd definitely be here because we have a couple of big events rolled into this one. First of all, McKinsey and Company and the McKinsey Global Institute will be releasing a really insightful report called A Labor Market that Works, Connecting Talent and Opportunity in the Digital Age. And then we'll have Senator Mark Warner, who will be speaking to a very important emerging set of issues around the gig economy and really starting a conversation that starts in this room but certainly doesn't end there. And this is also, I guess, one of the first events here at New America that's co-hosted by Opportunity at Work, which is an organization that I co-founded and has been here for the last two and a half months working away. And the focus of Opportunity at Work is to rewire the U.S. labor market to really help build something that's more like an operating system that connects employers and job seekers and students and training providers and really tries to move our labor market to one where hiring is based more on skills mastery and readiness rather than pedigree and resume history where training is available for public, private, nonprofit, to anybody with the motivation and the preparedness to take advantage of it and to get to a skill set where they can contribute more and earn more and where technology is being used, not just to automate work but to accelerate learning and to really tap into and maximize the human capital potential, which is really the big unlock in our economy right now. So that's what Opportunity at Work is doing. We're really proud to be a part of this event. Before I introduce Susan Lund, I'll just put a personal spin on what we're trying to accomplish here. Alan Blue and I and others here on the panel, we're just talking about various paths into the roles we're in now. And Alan, I hope you get a chance to tell your story. But my father in 1972 was working as a shipping clerk in a kosher food company. I say company, it was about 10 employees, seven family members, three non-family, two of them who carried stuff around, and then my dad who sort of wrote stuff down because he used to write stuff down. And, you know, it was a good nice family-owned business, but he wasn't going to be going anywhere in that job. And he saw an ad to study something called COBOL, C-O-B-O-L, all caps. I wasn't quite sure what that was, but it looked sort of intriguing, and he actually ended up quitting his job and going and studying that for, I think, five or six months. And then he got a job, turned out, you know, he had dropped out of college after a year. He was a literature major. It wasn't obvious that he was like, you know, the COBOL programmer they were all looking for, but it turned out that he was very good at it, and he loved it, and it became a passion. And that was the short version of my family's path into the middle class. Today, in information technology jobs, actually 40% of people in those jobs don't have four-year college degrees precisely because of that legacy that when there was just this intense need and this fast growth that they took anyone who could do the job, anyone who could do the job could get the job. And we have gone, we've sort of moved away from that in a lot of parts of our labor market where it's become very sort of locked down by kind of specific resume history. We're looking for three to five years of experience in this very job somewhere else, and so the question is, how do you get that experience? Where are the on-ramps? Where's the transition? And so we've seen a decline as the McKinsey report calls out a decline in labor mobility and fluidity. So there's a lot of people stuck in our economy and people ask whether the skills gap is real or not. The skills gap is real, but the skills gap is not the cause of our economic problems. It's a symptom of a dysfunctional labor market. Some other symptoms are declining labor mobility, stagnant wages, and just people sense that, you know, how do I know if I do X to learn Y that I can get to job Z? And there's a lot of people who have no view on that. So I think part of what we're all about today is how to expand opportunity through many paths, through the gig economy and the traditional labor market, and I think it's very exciting to have the kind of fact base and analysis that McKinsey has put together and to have some of the really kind of great thinkers and practitioners on this topic here today, and legislators. So with that, I want to introduce Susan Lund, a partner at the McKinsey Global Institute and a longtime friend. Susan is absolutely brilliant and absolutely committed to getting it right. McKinsey Global Institute has a long history over 20 years of working on issues of productivity across countries, across sectors, and in the last few years, with a lot of leadership from Susan, the Global Institute has focused on a lot of really deep policy issues around economic opportunity, around imbalances in our financial sector, around a whole bunch of issues sort of out of the traditional heartland and have really made a difference, and I think this is another great contribution. So Susan, do you want to come up and share with us what we're all about today? Thanks. Thank you, Byron, and thank you all for being here. Today, we are very excited to be introducing some of our latest findings on labor markets around the world and the U.S. economy. So it's very timely that we're sitting here on June 4th because today's 2015 college grads are out there looking for jobs, and this is a set of people who have spent more of their lives online than virtually any previous cohort in history, and so for them, using digital tools and social networks to find a job seems absolutely normal. Now, for those of us old enough to remember finding a job the old-fashioned way, like Byron's father did, responding to a newspaper ad and then maybe sending a cover letter through the snail mail, even for us, it seems like ancient history that that's what we did. But what we believe is that today we are on the verge of a major transformation of labor markets around the world. Job markets are ripe for transformation, and the same types of digital tools that have changed the way we shop for goods, the way we plan vacations, the way we connect with friends are now set to transform the way we go about finding employment. So we've called this set of tools online talent platforms, and these are digital platforms that connect individuals to work opportunities in a large-scale and efficient way, and this can include things, anything from monster.com and LinkedIn that would connect us with a permanent full-time or part-time position, and it also includes the fast-growing but small platforms for freelance work, from Uber to Upwork, for instance. So this study we've just completed and are releasing today looked at what's the potential impact over the next decade if these platforms reach their full scale around the world. And the figures we come up with are eye-popping. We think that this could conservatively increase global GDP by $2.7 trillion by 2025. That's almost 2%. It could create 72 million full-time equivalent positions and it could improve the way 540 million people find work outcomes. But before I jump to the conclusions, let's start at the beginning. So today, it's not news to anyone in this room that we're climbing out of a major recession, not only in the United States, but in Europe, and Japan, and countries around the world. And there's very high unemployment. As an economist, this is what we call the cyclical business cycle factor. So we're looking out over 10 years, but what we're already beginning to see is that even before the recession hit, there were a number of structural trends that are quite worrisome going on in labor markets in the United States and in other countries as well. And this is where online talent platforms will have an impact. So one of the first problems is that there are an awful lot of people of working age who simply don't work. In other countries, 30 to 45 percent of working age adults simply are not working. The largest majority of them are what we call inactive. They're simply choosing not to work. Now, there may be very good reasons for doing that. They may be staying at home with children. They may be disabled. They may be people who have been discouraged of trying to find a job and have dropped out. Some of these people are unemployed, and still others are what we call working part-time for economic reasons, meaning they want to work more, and have a full-time job. So the numbers are staggering. When we look across the seven countries shown on this chart, that adds up to 850 million people out of work. As an economist, that is a huge waste of human potential and human capital. In the U.S. alone, that's 77 million people. Youth unemployment is a particular problem. If young people don't get a good start in their career, it affects not just their current earnings, but it affects their entire lifetime income trajectory. In countries around the world, we now see the youth unemployment rate is over 40% or even 50%. Then we've got a much larger number of youth that we call NEETS. They are not in education, employment, or training, meaning they are more or less sitting around doing nothing. That sums up to 300 million people worldwide. If we don't solve the problems of getting them out of economic opportunities, this is going to affect the world economy for their entire lifetime. Then finally, when people do find jobs, we find increasingly that the pace at which businesses are changing, what they need is changing, and the pace at which our economies are evolving is not being kept up with how people go about finding work. This chart shows you data from the United States and it's the ratio of the number of unemployed people to job openings. You see for the top three categories, very famously computer, mathematical, healthcare, as well as architects and engineers, you see that there are fewer unemployed people with experience in those fields than there are job postings. This is the famous skills gap. There are employers who tell us routinely they simply cannot hire the people they need. Then at the bottom end of the chart, you see a whole bunch of other people where you have 10, even 20 people for every job opening. These people need a different set of skills to participate in this economy. Then finally, in the middle sort of category, social sciences, natural sciences, social services, you see that there are unemployed people but also job openings. There are questions about why are those people not filling those job openings. This is where online talent platforms come in. We're not going to claim that digital tools are going to solve all the world's problems. We are going to not Silicon Valley. We do think that these can make a significant dent and are part of the solution. There are three types of things we're talking about. The first are the traditional sites that match people to a full-time permanent job. There's a whole list of companies here, not only in the United States but in Europe, in China, in other countries as well. This is transforming how we go about how individuals find a job and how employers find the talent that they need. This is by far and away the largest type of online talent platform. Now, what's much smaller but growing fast and gets a lot of press are these new marketplaces for on-demand services. So these are platforms like Uber or Lyft, like Angie's List or TaskRabbit that connect a freelance worker with a specific work opportunity. And then finally, there's a set of tools that we include in this category that companies use to streamline the way they go about finding people, hiring, assessing people and managing their talent pipelines. So together this is the universe of what we're calling online talent platforms. What's different today is that these are gaining scale at a pace that nobody would have foreseen even five or ten years ago. So we have had online job boards since the late 1990s. For those of you old enough to remember we had monster.com in the late 90s was our first type of platform. But what's different today is the scale and the functionality. So this chart shows you the growth of LinkedIn which is the largest online talent platform in the world today. And just since 2010 their membership went from 64 million to 364 million people in just six years. And I think Alan may tell us today that as of the end of the first quarter of 2015 it's now closer to 400 million. So we're going to have to update this chart quite frequently I can see. In 2014 LinkedIn was estimated to have helped a million people connect with new work opportunities. So all in all this is one of the things that makes it different today. Now the other exciting thing is this online marketplaces for freelance work. We tried to size up what is the size of this so-called gig economy platforms. And this chart shows you the number of people on each platform signed up in the United States. So these are small. The biggest is Upwork. You may not have heard of it because that's a new name for a company that used to be called Odesk and Elance but it's a platform for businesses to connect with people doing business service type occupations and we have Uber, Lyft and so on. But even when you add this up what you can see is that today there are 157 million people in the U.S. workforce. So this is one to two percent at most of the U.S. workforce. Growing rapidly but still most people do have traditional jobs. So what's the potential economic impact we've got? I now have a problem advancing the slide if there is an IT person in the room. All right. Sorry about that. So what is this add up to? I'm an economist. We wanted to see how can this actually raise GDP. The number we come up with is 2.7 trillion globally and it comes from three big categories. The first category I'm going to stop touching that is helping people participate in the labor market. So this is all those people working part-time that want full-time jobs and haven't been able to find them. And it's also people not participating. That large pool of inactive workers who have lots of survey evidence that they would work if they could. And if you take just a small fraction of those people, for instance in the United States we assume that 12 percent of stay-at-home mothers would work eight hours a week if they had the opportunity to do something. And because there are so many of them that actually adds up to big GDP numbers. So that is the biggest impact, 1.3 trillion. It's followed by the reduction in unemployment. And here's how that works. These online talent platforms shorten the amount of time that people spend searching for jobs. So at any given moment in the economy there are students who are entering the labor force. There are people who quit their job and are looking for the next one. In the United States on average that takes about three months. If you can shorten that by just 10 percent what it means is that at any given moment in time you have a lot fewer people between work and they're actually in their new job. So that's the reduction in unemployment. And then the final impact it comes from higher productivity. And what we find there is that it comes from two factors. One is simply getting people in a job that better matches their skills. So in a survey that we did of LinkedIn members we found that around the world 36 percent of people say their current job is not challenging and it doesn't utilize their skill set. By helping those people find jobs that they're more passionate about, better suit their skills and what they want to be doing you can raise labor productivity. And then the final impact in raising labor productivity is particularly in emerging markets helping people shift out of what's called the gray economy or the informal economy into formal types of employment. Now the impact varies across countries and in the report we're releasing we show you the results for 80 different countries around the world. Advanced economies as well as emerging markets. You can see that the United States actually has quite a large potential and the differences across countries depend on the demographics of the country, their labor market characteristics and their current rate of unemployment. And so for the U.S. you see the impact is bigger than the global average. 2.3 percent boost to GDP. We could create 4 million full-time equivalent jobs in the next 10 years. But the number of people that would be affected by this is much greater than simply the full-time equivalent positions. So overall we think these platforms can raise global employment by 72 million full-time positions but at the same time what you see is 540 million people would have improved job outcomes. This is because many of them would choose to work a few hours a week, others would find a job that they like better, still others would move from the informal economy to the formal economy. So overall this is more than 10 percent of the global workforce could have improved work outcomes because of these. Now for companies what we find is that it's a little bit of a mixed story. On one hand the companies that adopt these types of platforms can have big profit impacts and this shows you six different types of companies and what they could achieve in terms of best in class, increase in revenue, reduction in cost and increase in profit margins. On average you find a 275 basis point increase in profit margins across companies so that's quite substantial. At the same time however companies are now going to have to realize that they're competing for talent in a more transparent way and they're going to have to invest in the technologies to actually make this happen. There are other platforms that give individuals a little bit more power in the workplace. So for instance on Glassdoor.com you can now go see anonymous employee reviews about that company you're thinking about working for and you can find out what salaries other people are earning while they're there. So all of this is putting more power in the hand of individuals to choose their career path and negotiate. So what do we have to do to capture the opportunity? Well this is well on its way to happening but there are things we can do on both the policy front and we're going to hear more from Senator Warner on that and there are things that individuals are going to need to do. So for policy makers first we've got to make sure that everyone has access to the internet and broadband and has the digital literacy skills to actually use this. The US is one of the highest internet penetration rates in the world but there are still many millions of Americans who don't have consistent access to the internet. Second is harnessing the data collected by these platforms and merging it with public sector data sources to improve how we project the demand for skills the credentials that are needed and help people make much more informed decisions about the education they receive the training they get and how to plan their careers. Third, we're going to have to rethink a whole bunch of legal and regulatory issues around data ownership, around privacy and data security and then finally we're going to have to revisit how we think about labor market regulation and how workers are provided with benefits. We've got a system in which the majority of retirement benefits health benefits, unemployment insurance, a whole range of benefits are delivered through a traditional employer. If we're moving to a world where more people are working for themselves and freelancing many of those have to be thought about. For individuals this is an exciting world but it's also a world of more challenge. On the upside people have much more agency they're going to have more transparency it's going to be more clear to them what choices they have out there in the job place. They're going to be able to make more informed decisions and this is especially critical for the young people starting out. We find in the report we talk about in the United States a quarter of people with a four year college degree today earn less than the median income of someone with a two year degree. Now I understand that there are artists and poets and there are people who choose low paying careers and are quite happy in them but I have to think that a good chunk of those quarter of the people holding a four year college degree we're hoping to be earning more money and for whatever reason they've chosen the wrong degree, the wrong school and it hasn't worked out in the workplace. These platforms can have a transformative impact on giving people more data to make better choices. They can help people find the right job. We find when we work with companies that hires from an online talent platform are eight times more likely to stay with that company because they're not fit when they come in. And then finally there are a large set of people from the newly retired to students to stay at home parents who would work for a few hours a week if they could. We know this from survey evidence. You can look at Uber, a new study of Uber drivers finds that the majority of them actually have other jobs. These are people just out there picking up a little bit of extra income and work. So all in all it's an exciting new world. I'm very pleased that we're going to hear next from Senator Warner and we're going to hear about some of the policy initiatives and possibilities for the U.S. Thank you, Susan. That was really a terrific helpful, clear start to our discussion and it's going to be a lot of good fodder for the discussion. And it's a nice segue to Senator Warner who's here today to really help broaden the discussion that we've been having in this country about the opportunities presented by the growth of the digital economy. The last set of policy issues that Susan highlighted and perhaps the most complicated ones around regulation that allows people to capture some of the upside that Susan's laid out in the gig economy and to protect against some of the risks and some of the downside. Senator Warner is an ideal person to be talking about this. He was a key figure in the birth and the build out of the wireless networks that have powered the growth of the digital economy and are becoming ever more important part of our future and after co-founding the company that became Nextel he had a second career then as an investor in hundreds of tech and telecom companies. Mark's third career and he's been at this now for a while and making some great headway has been in the public policy arena. Mark was elected governor of Virginia in 2001 and there he really applied the power and the scale of technology to bring transparency and accountability and cost savings to state government. As governor he focused very heavily on education reform and job creation and helped to launch the nation's largest deployment of broadband technology into Virginia's underserved rural communities. When Mark left the governor's office in 2006 Virginia was consistently ranked as the nation's best managed state, the best state for new business and the state offering the best educational opportunities for its citizens. And then as a member of the U.S. Senate since 2009 Senator Warner has applied his experiences in the business world and the tech world and as governor to focus on accountability, transparency, fiscal discipline and economic growth. He serves in the Senate's banking, budget, finance and intelligence committees and he's a recognized leader in forging bipartisan consensus in what rumor has it is a politically gridlocked environment. On a personal note I've had a chance to discuss policy with a number of congressional leaders over the years and there are a lot of reasons for legislators to be cautious particularly in this environment to say how could we possibly do that and I have to say that Mark is one of the few who is consistently pushing the envelope on policy and asking why not and how can we afford not to do this. So in that spirit happy to introduce Senator Mark Thank you so much Byron for those very generous comments and I do have to say that sometimes I get a little concern, not concern but on my these introductions people go through and Warner did this as governor and Warner did that as governor and then he's been in the Senate and he's been trying but you know you got to start somewhere let me thank the new America Foundation for inviting me here today and Susan for the great work that you did on this study Alan for schlepping back to the east coast twice in the last I understand 10 days and your contributions to the basic underpinnings of what the report was about and somebody who probably gets the connection public policy wise and technology wise better than anybody I know somebody who's a dear friend of mine in East Chopra who has served both in government and obviously in the private sector as well a little apology on the front end this is going to be an attempt to lay out a fairly intricate set of policy ideas and for most of you in this room you're going to say I already got that but there's an awful lot of people that I hope are not only just here but watching online that we hope to distribute that really we don't understand this and don't get all these connections so first I want to start with the McKinsey research because in many ways for those of us who perhaps at least have some feeling around the new economy or changing economy it confirms what what we felt in our gut these online career platforms like LinkedIn and others to I think three takeaways I had from the report one obviously linked the individual to a broader universe of opportunities secondly they provide employers with a much broader array of talent and third I am this one when you talked about the U.S. in terms of driving down unemployment if you can do this in a quicker or easily facilitated ways that has enormous benefits the entire economy and I know in Washington there's lots of people who love to claim win-win-win but this might be the real deal and that is extraordinarily exciting for somebody like me in the policy sector this dynamic online economy that we're living through or just starting to live through has spurring dynamic challenge and where people work how people work and that will open additional doors of opportunity and mobility which I think is something that has been missing by our and I were talking about this before we came up the rate of mobility has dramatically dropped but if we can get this right it should increase the rate of mobility within the workforce and that though requires that we got to get it right this is yet another example again if indeed if we need it that the innovation cycle is getting shorter and shorter the technology has truly eliminated the whole notion of time and place and technology is replacing and restructuring the middleman across much of the economy now we need both workers and employers to adapt to these changes and I think again the McKinsey research report confirms that a networked approach has a great potential to better link job growth and better connect job growth and obviously that leads to economic growth now I thought it was a little bit ironic that we McKinsey was choosing and I'm grateful for that to and LinkedIn who's been very supportive of these efforts to release this report in Washington because in many ways Washington has truly been on the sidelines as the American economy and its workforce has gone through this dramatic transformational change now as been mentioned perhaps I've got a little bit more inclination here because as Byron mentioned I've had a background in technology I've started some businesses I've failed at some businesses and fortunate enough as mentioned to get into the early days of the cell phone industry later as a VC I heard more pitches that could actually fill up probably four or five seasons of Shark Tank in terms of both quantity and maybe not so much on quality of course I've also got three millennial daughters between 20 and 25 and they are quick to remind me that you were maybe on the cool cutting edge that was way back in the 80s and 90s so they constantly remind me that I may not be as current as I think now what is wild about that and what I see and I think most of us and many of you live it is that my kids and those of you who are old enough in the room to have kids can access more information and conduct more business on their smart phones in a single week than my dad could have considered in his whole lifetime and start with my family Byron mentioned his my dad returned from military service and in many ways was kind of a poster child for somebody in his generation he worked for 40 years for the same firm kind of slowly advancing up and we basically our family had this sense of economic security not because of the amount necessarily of money he made he never got that high in the company but because there was a social contract we knew there was going to be a pension we knew there were going to be benefits he had healthcare and other areas that kind of moved him through and then when he came to retirement there were social security pensions and his personal savings now next came my generation the baby boomers and add to that the Gen Xers and we obviously experienced a more diverse workforce and experimented and had to live through the first waves of automation and globalization and as mentioned when we were joined by the Gen Xers this whole economy got better and we started thinking not about working for one company forever but working really for three or four companies and as we thought through this and saw this we were seeing that the menu of options offered by employers in terms of benefits was steadily decreasing we saw as well many more employers move away from kind of the whole concept of defined benefits to the whole area of defined contributions we could think of us and I see Thomas joined us here those of us in that baby boomer generation we were kind of the 401k generation and that was where we kind of left off as we moved now into this new economy but we've seen employers move continually away from benefits we've seen them I think there's still a large question whether that at the end of the day is going to work out for the boomers without the potential retirement crisis but now we're that's our challenge but what is also happening and I think again key to what some of the components of the McKinsey report is we're seeing the next big wave of generational change come through and that's the millennials and the bad news for folks like me who are baby boomers we are such yesterday's news the millennials, 80 million strong all of those Americans born pushing the millennials off the stage they are a larger age cohort than the baby boomers or the Gen Xers and the kind of interesting thing is that within the next 10 years the millennials alone will account for 75% of our workforce pretty stunning statistic and what they are confronting is versus what my dad lived through or what I lived through a totally different idea of what the social contract is going to be between the employer and the employee now if my dad's generation could be called the belt and suspenders generation and if my generation, the baby boomers could be called the belt or suspenders generation we may end up with the millennials having to be called the generation that actually has to hold up their pants all on their own because there may not be any belt or suspenders now let's take a moment here and think about the 80 million millennials who are again rushing in to the workforce and changing the whole nature of working commerce now there's some great news about this age cohort because they are the most educated the most tolerant the most diverse the most open to transformative change in American history now again most millennials I think about my three daughters have grown up in the glow of a computer monitor since childhood most of them have maintained an online identity which was hard for me as a dad to accept that when they were teenagers and they have lived their whole life kind of networked together on an online and on time basis with their friends members of this generation we were again Byron and I were talking about some of these opportunities now members of this generation can using technology never step foot on a college campus yet still graduate with a college degree members of the millennial generation can use their smart phone or their tablet and live a career earn a living without ever walking into a job site and working anything that resembles a nine to five job and if there's only one thing that we can really be sure of as we look at this wave of millennials coming in is that this group of age cohort that is going to fundamentally change or continue this wave of change is going to be totally open and accelerate a lot of this transformational both policy and product change just think for a moment about driverless cars think about same day delivery by drones think about the whole notion about 3D printing all concepts that still would have seemed even five years ago beyond the pale are now actively being implemented yet here in Washington there are very few policy makers that would raise their hand if they've heard of the gig economy or the sharing economy or the 1099 economy whatever we want to call it but one of the things and some of the things that Susan pointed out if policy makers we don't want to mess this up by getting too much into the way but if we don't think about how to take on some of these issues the ability for or the millennials and others who are being forced into this transformational change aren't going to have the ability both to prosper and most importantly have some ability in this changing economy now I don't want to think we're going to fit the old model of the old economy into the new economy but we do have to think a lot more creatively about how we think about both entrance into the workforce economic stability and economic mobility now I think one of the most transformative changes maybe other than in Washington it's much more probably out in the valley if you talk to somebody in the valley maybe again different from DC the question so much is not the traditional one that we've always asked which of us once you get to know somebody where do you work it's become much more what are you working on that's because the convergence of these demographic technological and economic changes have created a very new set in the American workforce that is actually the fastest growing set that again that Susan talked about these so-called contingent workers freelancers contractors self-employed and there's great opportunities for this universe but there's also challenges because as American businesses have focused on greater productivity and frankly as too many of them have focused entirely on quarterly earnings more and more employers have used particularly the economy in this post-recession to switch to on-demand workers and let's face it has been pointed out temporary workers and consultants cost a lot less than a full-time worker with full benefits and that presents a dramatic challenge again for us as policymakers and whether by economic necessity or choice a growing number of these Americans in the so-called gig economy and we've seen numbers that range all over the map and I'm going to come back to that in a few moments but some estimates have been if you take in not just the gig but everybody who is a contractor or works two jobs we're talking about close to maybe a third of the American workforce are really thinking differently about piecing together not a single source of revenue but in many cases two, three and four sources of revenue streams that come in to create their job again it's been called this is not news to this room but you take this ten blocks up and this is a headline news you know this is the gig economy this is the sharing economy this is the 1099 economy this is the on-demand economy and it includes a whole slew of these young invincible millennials but what I think is not always recognized is it also includes a growing number of middle-aged boomers who've been dislocated through the post-recession I think about a group of my college buddies that I get together with once a year to play basketball and there's 14 of them and about nine of them literally had lost their jobs or had been totally seen, let it many of them working as brokers in Chicago, seen their whole industries disappear post-recession I'm not sure they necessarily wanted to be in the gig economy but now a number of them are so we think about that others though as it been mentioned look at this new opportunity and see flexibility they see the ability to be with a child a person with a child although a kid with a child may not be that much of an oxymoron after all as I think about some things but you know some people may be doing this part-time because they've got children at home some of them may be doing this way to supplement or boost retirement income and others quite honestly are drawn to this whole approach by its promise of freedom and flexibility a desire for higher pay hours and time frame now there I think the question is still out and again Tom raised this in one of his recent columns whether the promise in terms of what's being currently touted as the benefits in the gig economy are really going to fully transfer and all they're made out to be but that's something we've got to work through and we also I think have to acknowledge and I want to acknowledge just more as a policy maker that while we're celebrating this change I can imagine there's a lot of folks all across the country that are suddenly rolling their eyes a little bit by thinking hold it this is something new that you've got to work two, three or four jobs just to get by we have to recognize there's a whole section of Americans particularly a growing sector because they haven't had the skills they haven't had the ability to kind of opt in that live this very very challenging lifestyle right now and frankly it's not gotten a lot easier as been mentioned as well and again Susan's I won't go through this as much but Susan's study points out not only are we thinking about this gig economy in terms of transforming the difference between work and employers but it's also completely transforming the whole nation nature of commerce we think about the Airbnbs, Uber, TaskRabbit Etsy they've really been able to think about they've been able to show an ability to monetize a whole series of items that perhaps in the past we never considered a room, a ride your spare time now many of these businesses as we've been mentioned I keep coming back to are built on this on-demand on-demand sharing platform view their workers as contractors not employees now using every independent contractors to do everything from laundry to food delivery means that the employers in the traditional social contract don't have to pay healthcare unemployment, workman's comp in a series of other benefits that my dad's generation enjoyed in full, my generation is enjoying in part and increasingly the next generation may not have access to this I think represents one of the most significant fraying of the traditional social contract many of those programs which were administered and funded by both contributions from the employer and the employee this is changing that whole relationship in extraordinarily fundamental ways and the fact is for many of these online workers and contingent workers they are operating without any safety net below them they may be doing extraordinarily well until they're not and then there's nothing to catch them until they end up candidly back on the taxpayers to die in terms of benefits that then would have to be provided so why am I up here going on this long because this is an issue that quite honestly has to be addressed and it's fairly stunning to me that we are this much transformation has already taken place and is real time taking place and yet virtually nobody in Washington is starting to ask the policy questions so let me go through these very quickly because I know we want to get to our panel the biggest challenge I think and again Susan mentioned it is that how do we think about this traditional change and what is the federal role in rethinking this traditional change between employer and employee who should provide these options should they be available should it be opt in or opt out is it going to be a government model or a public private model we might look for example to the whole notion of healthcare exchanges which are slowly starting to work and think are we going to create an unemployment exchange or workman's comp exchange can we use that tool as a way that might make sense I've been talking with folks from the labor movement and if you look at the old building trades which frankly have thought about and used a what's called an our bank model they've been dealing with this for the last 60 years because people in the building trades would move from one contractor to another many of the contractors would sometimes go out of business so they basically created a third party trusted entity where both folks contributed in that administered these kind of benefits again not the employer directly some countries in Europe and the EU is kind of actually a little bit ahead of us started thinking about proposals where the freelancers again another term people use would contribute a little bit along with some of the folks on the business side let me give you another idea that might work there's an enormous opportunity particularly with the millennials now in the workforce of consumer driven entities millennials in a way that is different I believe fundamentally than past generations want to work for companies that do well that treat their employers well they want to buy from companies that produce more eco-friendly products so they are engaged involved in the workforce what about the idea that you might have a line on your Uber receipts on your Airbnb call them to actually add not a tip or a gratuity but actually something that would go in to a third party again socially administered insurance fund now we're beginning to see with this challenge also more and more entrepreneurs and traditional firms move into this sense of the benefit space it's starting at the front anyway think about into it the turbo tax people come in and their fastest growing marketplace is what they're calling micro entrepreneurs many of them who would be called the gig workers because they've got they provide an easy product to start getting your taxes and on we're also I've talked to a Virginia entrepreneur called who's doing what's called 1099 10 he's actually again he's calling painless 1099 much better than just 1099 and he'll go forward and not only he uses a bank and basically use it as a depository for revenues coming in and then kind of starts this whole relationship but it's very in terms of paying taxes but it really is starting a trusted relationship with a third firm a third party final couple of points we also have to recognize and again this was mentioned that so many of our rules and regulations that were created in the 20th century that basically said there's only three categories of folks in America those were employed those are self-employed and those who are unemployed and we have to acknowledge that that description quite honestly does not work in the 21st century and what we've got in one hand is litigation that's already going going on to try to sort this out as one federal judge involved in these cases put it juries are being asked to put a square peg in one of two round holes now as somebody who at least was trained as a lawyer but never practiced I don't want to leave this to just simply the courts and litigation this is an area as we think through this kind of definitional piece at least we've got to be prepared last couple of points is that we also have to recognize and why I appreciate doing this in Washington that the federal government has to become more nimble something that Anish has worked on for a long time we've got to recognize that the whole sense of the federal government's time of movement is less than dial-up speed in an increasingly digital you know high-speed broadband world so how do we get that right you know for one of the things that we've seen is that we don't have good data Susan try to put out some today we've seen estimates anywhere ranging in this workforce from five to fifty million in America I'm not sure what the right number is how many of these are by choice how many of these are by economic necessity you know I've been pushing the department of labor and now I've recently written to all the appropriators in both house we ought to make sure that we fund some research here so from the public policy side you've got to have good information first if you're thinking about this you've got to size the problem as policymakers as well we've got to make sure that this opportunity and possibility doesn't just work in the valley or in New York or in northern Virginia but it's got to work as well in Anacostia and rural south side Virginia where we've seen textile and furniture manufacturing disappear in small towns and again it speaks to the whole question about broadband accessibility you can't be linked in if you don't have a link and unfortunately I think we've seen a decreasing commitment towards making sure broadband deployment is truly around the world or truly around the country we've also seen unfortunately the federal government move very slowly as because so many of these millennials in gig economy and Gen Xers particularly want to run their own businesses when we do try to take policy ideas to move and help this cohort where we did with the jobs act you know it's been three years plus since we passed that we still don't have all the rules out for crowdfunding you know that is not a nimble response for those folks who want to try to go out and raise equity capital over the internet we also know that as we said many of these millennials do want to start their own jobs and if you look across government programs as support entrepreneurs there are a ton of them but we don't have any idea in terms of ability to predict because of the funding Feaster famines that we've seen over the last few years which again go to our whole budget crisis issues but it really has to be looked at and finally you know something that shouldn't be that innovative but we ought to actually start taking innovation that we've seen in the real economy into the Washington economy and actually start assessing what works and what doesn't work and get rid of what doesn't work and consolidate into what does work now that seems like a fairly simple idea but it is very foreign where I'm going to go back to in another hour I am going to get done in a second here but this was my chance to try to lay out I think all of the issues that we're facing I've got to just mention a couple more one part of this issue in terms of the changing nature of the economy we have to take on student debt you know there's a lot of people that may be into this work workplace because of student debt 1.2 trillion we all hear about this many of you in this room live with it and this is retarding the ability of people to either pursue their careers they want take the chances they want or really live out what they train for now there's no simple silver bullet answer but I do think some of the things I've worked on such as you know making the default option in terms of repayment income based repayment would make sense I think we ought to look as well at making the same tools around data and that we see in transparency in terms of many of the sites that look at travel or look at hotels why don't we have that same kind of transparency at looking at colleges and universities it is going to be the single biggest purchase other than your home and your career we have no transparency there we've got to look as well at things like allowing employers to use part of your salary if you want as an employee to be applied pre-tax against your student debt great retention tool and we've got to make sure as well that we look at the overall cost of higher education last point I promise and that is that I think there is one other fundamental change as policy makers that could be as big as anything we've talked about and that is we have set up an economy in America that its heart is based on ownership yet we increasingly have an economy that's based on a concept of sharing those are dramatically different ideas and how are we going to frankly grapple with this and deal with this I was talking yesterday with Brian Chesky CEO of AirBnB who I thought laid out something that was very again hit the nail on the head in terms of part of this transformation he said for his family who was very middle class grew up in Albany he said the sign of success in America was owner in a house getting two cars and if at the end of you did all this and work really hard you might get a summer place he says the kind of bling or success his word bling not mine Tom of the millennials was more didn't have any of that concept particularly from the sharing economy they wanted to own their data they wanted to have a good reputation online and they wanted to have a series of experiences they might share on Instagram if that's the direction we don't have a tax or governmental system that has really been thinking this through you know it's also and as long as I've gone on here today it sounds like a long, long speech but one of the things that there are 25 people running for president at this point in the country I don't think when we're thinking about these numbers isn't it remarkable that nobody has even mentioned any of these subjects now who knows where this is going to lead and that's what you are going to all be part of one thing that I think we are probably safe to say is that this notion of the gig economy and continual transformation in the next five years is going to only exponentially grow so as policymakers we can't sit on the sidelines any longer it's my hope that the kind of conversation we're starting here today will lead to a serious discussion I know I've gone through a lot of points but lead to a serious discussion of a lot of these points and quite honestly probably a number that haven't been raised I don't come to you today with thinking we've got all the answers but I hope at least we're starting to ask the right questions this is a conversation I hope we'll continue and I know we're going to be able to do it now in a few minutes Tom, thank you very much thank you Senator Warner that was really terrific when I said it's the start of a conversation I think that's right you've given us a lot of rich food for thought I know we'll address some of this on the panel and then we'll keep going now for our panel so it's a it's a cliche when introducing a distinguished speaker to say that so and so needs no introduction and that certainly applies to Tom Friedman however the cliche slinger usually proceeds then to give a recitation of that person's resume that person who needed no introduction so given that opportunity at work is committed to a job market in which hiring is based on skills mastery, readiness competencies, attitude rather than just your resume your resume history I want to highlight some of Tom Friedman's non-traditional credentials to moderate this panel things that you can't find on his resume so first attitude Tom is all about not where do you work but what are you working on as Senator Warner just nicely put it I hear the New York Times is a pretty good gig I hear they've got good benefits but nonetheless Tom considers himself to be in competition every day with a million bloggers and is hustling to get the ideas out there and to really kind of move the debate second, no one is more committed to lifelong learning than Tom Tom has an insatiable curiosity to understand the underlying machinery driving the world believe it or not despite everything he does Tom has no research assistant the entire world is Tom's research assistant and he can be found all over the world sort of picking the brains from Uber drivers to Prime Ministers and all points in between and third, Tom really embodies the softer skills of reframing and dot-connecting and creative synthesis the cherry on top as I think he's put it once and he really raises the game of anybody on whom he unleashes his insatiable curiosity so I think we've all decided that as a result Tom is well qualified to moderate this panel and we're delighted to have you here Tom and I'd like to invite my other panelists to join us up on stage Tom for you Well Byron, thank you I have two compliments to give out and I got here a little bit late one is to Senator Warner I don't remember the last time, I've been here since 1988 but I can't remember the last time I have said this to any American lawmaker I want a copy of your speech ok really really I want a copy of that and Byron is better than to put me up here because this is so good I brought my laptop to take notes and I'm really pissed this will have to get in the way but I'll work around it so we have a terrific panel here let me just get out my notes while you've already heard from Byron you know Susan you already heard from Anish great to see you first CTO chief technology officer of the US government and Alan Blue one of the founders of LinkedIn co-founders of LinkedIn I've always been to LinkedIn a lot yeah terrific so since we got really in depth from Mark and Susan let me start with you what does the world look like from LinkedIn you've got a hundred million companies online you're in the middle of this incredible interaction between employers and employees what would you say are the sort of top trends that you see that are relevant to this discussion so so thanks the so the perspective is actually a very interesting one so when we founded LinkedIn it was in 2003 and basically we started creating a graph of people we prefer to do it as a graph basically of people and the way they're connected to each other and the original purpose of LinkedIn was to allow any single individual to reach out to another individual to get something done so to hire them or to work with them or to bounce an idea off them whatever it might actually be so basically we started with this group of people started primarily in Silicon Valley in the tech industry and then we began to grow over time and over that time our view of the world shifted quite a bit originally composed entirely of people that graph becomes something we now refer to as the economic graph which contains not just people but also schools and companies and jobs and skills tons of information and the original information we were able to get out of it was very local very like me and a couple of other people but as we went forward we began to be able to see new things like being able to see how talent moves around we were able to do research right after the crash in 2008 talking about how people moved from Lehman to other to other providers in the world of investment banking and so forth we were able to actually see that occurring because people had put information into LinkedIn for them to be able to pursue their career goals or get something done about their profiles and their job history to see people moving around as more people become part of LinkedIn and share more information our view gets more and more precise and crisp within the economic graph so earlier this year we went to New York City and the mayor basically had reached out to us because he's working something on the tech pipeline in New York City about how to get more New Yorkers trained for technology jobs in New York and then working in New York and so we work with them in terms of providing some of that data so they can get some real visibility into how people are moving from universities in New York or outside of New York into the city and then staying in the city to do tech jobs that kind of visibility is something that basically hasn't really existed before so we see many of the trends that we're talking about here today we see more people basically taking on roles which have higher education which prepares them for roles with higher and more precise kinds of skills over time we see more people moving more frequently from job to job we see a wider variety of experiences making up people's pasts and we do see some of that feeling that basically there are a set of changes in the employer-employee relationship employers now are ending up fighting for specific kind of talent because the expectations of employees are changing so it's actually quite a beautiful relationship. What are the attributes of that talent? What would be interesting to people here who are employers fighting over besides the genius software programmer? So definitely genius software but basically anybody who lives in the world of technology Any columnist anyone fighting? We will let you know the one of the interesting things that we've seen is that as we watch these skills become more technical and more specific over time it becomes obvious that every job in the world is becoming a technology job to one extent or another so even if you're doing something which you wouldn't normally associate with technology you're using technology to do it so whether you're running manufacturing or you're operating even if you're serving at a restaurant you're using technology in order to make your job possible those changes basically mean that we've got a set of people who are coming into the workforce who have a much greater idea of how they will deploy technology to be successful so that means basically two things it means first that there's a set of people out there who know they have strong technical skills and basically they're going to go someplace because they have flexibility to go where they go they're going to go someplace where they believe in what the employer is doing where they like the people who they work with where they believe in their corporate culture because they know they have flexibility to jump to something else then there's a set of people out there then there's a set of people out there who are and Susan talked about this during her presentation who basically on the other side who don't have those skills don't have those capabilities and they're essentially locked out this is the set of people who need to change that set of skills and you're I think my favorite slide from the and part of my favorite part of the work from this study was looking at the ratio of job of job seekers to open jobs that section at the bottom of people who need new skills these people need to take on those technology jobs in order to be included in the economy so those are the that's where the split is actually occurring today it's a great segue actually what the US government to pick up Mark's point can and should be doing to build that bridge let me connect the dots right away we actually done some research on LinkedIn data along with Monster and others to try to look at this from the lens of unemployed veterans so just a couple of pieces of information is context Tom the human genome project for labor market data is run by the labor department it's a non-net database it is an open source piece of data and it defines the economy to some degree it's maybe 950 plus unique items that define the economy Tom in a wild guess how many skills do you think LinkedIn uses to define the economy is it 950 or maybe a little bit more than that it's about 50,000 so there's a certain level of precision now why is this relevant well pay scale tells us that the highest rate of underemployment in America is with veterans which suggests that they're actually undervalued in the market for their underlying skills it also turns out that if you file for unemployment benefits in every state in the country you're obligated under the law to fill out a profile on a government run employment system it defines you with a single onet code all of your work experience is one of these 935 items how did we come to think about this well the president in 2011 issued a call to action he said I want 100,000 veterans hired by the private sector and at the time firms like LinkedIn stood up and said we will freely offer our premium LinkedIn service Monster offered something everyone did for free for veterans and folks started to connect and we also asked employers to open source job postings if they wanted to make a veteran hiring commitment so what did we do in April of 2014 I thought for a research project what made a more modern talent platform look like that's public-private there were about 600,000 unique job postings at the time Tom where an employer said I want to hire veterans and thanks to the generosity of LinkedIn we said what's the skill profile of those jobs because they all have different titles different sectors but run them through this 50,000 human genome kind of a thing and see what comes out aggregate and give us a map for every community in America what's in demand we then went to the federal government and said hey what's the skill profile of a job seeking veteran our DOD refused to release that data in aggregate even though perhaps they could have but others chose to step up and we tried to figure out whether or not we could see a mismatch and we opened up the underlying combination of that data we found in Virginia alone 28% of all the technology jobs from employers who wanted to hire veterans were entry level at the exact same time this is April of 2014 at that exact same time there were more people who were unemployed veterans that researchers said had the underlying skills to be tech trainable that could have filled every single one of those job postings but neither the employer knew to look for that veteran nor did the veteran know that they could have a future in that job two ships passing in the night and our current public posture about labor market connectivity because it's the government only doing its thing and then the private sector is disconnected from that is that we've failed to use these capabilities to help people now and so I think the challenges put the icing on this cake it's why the president frankly under guidance of Byron when he was in the White House actually suggested that in this budget we should double the skills data so that we can actually open up more so this 935 job the skills piece can be more modernized with a public private model and that that's you know doubling the skills data budget is how much in your guest Tom Freeman how big is that number doubling the skills data budget for the country two million dollars five five million dollars so in the win-win-win language of Senator Warner here we and I think Republicans modest investment let's dramatically collaborate and improve the capacity of this country to do it right and if we do it for veterans state home moms we have a whole army of folks that we could benefit from if we put the capacities of the private sector together with the public to make it work let's just close the XM bank first and then let's really get our priorities right you know what you're really talking about is a huge what Byron says there's a huge market failure there just it and Susan pick up just pick up a little on that there's a lot of economists out there there's no skills gap out there there's no skills gap out there because if there would the wages for all these people would be going up and there isn't I keep reading this and and yet every employer I talked to says there's a skills gap and all kinds of people looking for jobs tell me they've been turned on because they don't have the skills so what's going on well Anisha's favorite chart is the answer in aggregate you can look at stagnant wages in the economy but when you look at specific occupations and that chart didn't even have nine hundred fifty skills that had maybe twelve occupations at very broad levels you could already start to see the mismatches so the difference is if we look in aggregate it's true that wages for a large swath of the population have not risen since the recession and even before but when you look at specific occupations when you talk to folks at LinkedIn and other Silicon Valley firms they say we can't afford to hire the number of software engineers we want they command such a huge premium so the difference really is in the granularity that you're looking at it is true that there are lots of people at the bottom of that chart who have skills they're unemployed that are no longer needed or in demand in this economy and so they're pulling down overall wage growth but there are pockets of and it's not just Silicon Valley programmers I mean we talk to companies all the time we found that if you are a welder that can work on an offshore oil rig in the Gulf of Mexico you can earn a hundred fifty thousand dollars that doesn't require a college degree we hear about specific types of nurses that require two year degrees all sorts of different medical specialties skilled electricians and plumbers there's been a big drop off in the number of young people entering what we used to call the skilled trades or the blue collar trades so much focus on everyone going to college that there's actually an acute shortage of very skilled technicians to build buildings and houses so I think that's where the gap is in the language about is there a skills gap is there not a skills gap so just to follow up on that Byron and I were talking yesterday and he was pointing out this study from burningtree.com or burning glass bring trees a golf course or I play that's where my head is at that secretaries that nineteen percent of the current pool of administrative assistance in America have a college degree a hundred percent of job requirements for new secretaries require a college degree two thirds so we have people working in jobs that they couldn't get if they quit their job and wanted to move to another job are we overvaluing what is that part of this mismatch it is exactly why we need the human genome of skills because right now we go out into the labor market and we have an extraordinarily crude signaling device I got a four year degree and maybe it matters what college you went to and maybe it matters what you studied at that college but it is extremely crude at signaling your value to a potential employer but that's all we have and so that's why all the job postings for administrative assistance say you need a college degree if we could disaggregate those skills we would find many people who don't have a college degree who would be fantastic because they have the organizational skills the communication skills they can keep a hundred balls in the air and still remember to make sure you have your hotel reservation and so on and so forth and you don't need a college degree for that but right now we just have this very crude old fashioned way of signaling our value to potential employer there are companies like higher art and others coming in and actually creating tests for the specific skills that a job needs and I think that has at least some promise absolutely I think Alan can probably speak to this certainly much better than I can as an economist but to hire coders in Silicon Valley they don't need college degrees they go online and go through codability and you can like test their skills there you go like Byron's dad so Byron you're in a very interesting bridge position you've been in the consultancy world on this subject you've now been in the government what do these three don't understand about each other what did you what did you learn in the white because all I hear here is really about a big mark and Mark really alluded to this is kind of a giant market failure no one really fully has the synthetic picture of what's going on and therefore to design the most optimal policies to bridge these differences so how long have we got we went to take a bathroom break and then get back to it yeah well there's a lot I'd say that the business world the government and the sort of non-profit sector don't understand about each other but to hone in on this particular issue and how it plays out in the labor market dysfunctions we've been talking about this is an oversimplification but we have an information problem and we have a collective action problem the information problem we've talked about a lot just there are very in general we have very poor ways of describing what skills are needed and being able to connect the dots and that is a no one should underestimate the size of that problem we talked about veterans who are already a big population and an important one but 35 million Americans have some college right they've gone to college they were accepted to college they did some study but they never got a degree 35 million right they are not able to sort of reflect the skills that they mastered you have millions of people who were educated overseas and then immigrated to America and whose credentials are not recognized in the same way and who are underemployed you have people who are displaced from one industry they're a project manager in the construction industry construction tanks how do they get over to be project manager in the energy sector the healthcare sector where they probably have 80 to 90 percent of the skills you've got the whole generation coming out of school that doesn't have three to five years of experience in that job right there's that transition there's people who have been out of work either because they were taking care of their kids or because they were unemployed for more than six months all of these people have a tremendous difficulty making that sort of transition and it has everything to do with what Susan was alluding to is that just the very crude like the decision heuristics on hiring and so this is a big problem now the information part of that the government doesn't have the information to solve this problem right and higher education typically doesn't have the information to solve this problem they're not in the market competing they don't know how the skills are evolving if the government knew exactly what skills were needed today it wouldn't know in a year right so you can't the government can't solve the information problem directly um employers have to do that but employers have a collective action problem and employers don't have departments of collective action right which is to say that it's maybe a rational thing to say well I'm going to try to hire someone with three to five years experience but if everybody does that right and it might be a rational thing to say well you know I think maybe it would be a little better this administrative assistant that I'm going to hire had a college degree but if everybody does that right you're imposing huge costs and you are actually you're creating the skills gap I mean the skills gap is really a symptom of this kind of dysfunction but an individual employer particularly one that's not extremely large is going to have a very hard time solving this problem by themselves they can't in fact so government can't solve the information problem employers can't solve the collective action problem so the question is how do you work together to do that a big part of that solution is the data issues that we're talking about I think a big part of that solution is not to reduce our investment in job training programs but to think about those very differently and to really there's a big case for more investment in training on the federal side but it should be absolutely matched to employer co-investment to sort of jobs that there's a real demand signal for and with employer skin in the game around internships and apprenticeships and all of these things that are sure that you actually are training for an unfakeable signal of demand from the private sector side is critical and then this public purpose sector I include non-profits public private partnerships and some of the some of the really exciting developments in the tech world some of which are for-profit many of which are sort of open source and the like there is an incredibly important connector function as you think about where are you going to have institutions that are close to the market there are also agents of collective action ironically an institution that actually is like that is the classic skilled trades labor union right and Senator Warner you already mentioned that in the construction trades for example the unions play that role right they're close to the market they understand the skills and yet the same time they operate as agents of collective action across not only workers but across different companies but in most of our economy we don't have institutions that work that way and part of how I see the emergence of LinkedIn and Glassdoor and a whole bunch of other those you know those is providing some of that more connective tissue and so that's really the work that opportunity at work is focused on and how to ensure that these different elements of again what we sometimes call an operating system the decision heuristics the decision criteria that that employers are making the interfaces to get make it low cost it should be absolutely as cost effective to hire based on skills mastery no matter where someone got the skills as it is today to to hire based on these rather you know sort of crude indicators for your degrees and the like and then the information the flow of information is critical and then the final thing and you know we talked about it in terms of higher education financing the flow of resources one thing an operating system does if you've got a lot of applications open the one you're using is the one that gets the CPU power and that's done by your operating system and we need that right now there's really we there's you know we strap kind of money onto someone's back and say go out into the world and figure out what's the education you need to get where you want to go we need a system that is much more sort of driving kind of resources and information towards those points of demand there's a huge demand for phlebotomists how many kids grow up wanting to be a phlebotomist not a whole lot you're not going to know where those opportunities are unless they're sort of some way to to guide you so that's what I would say we need to do so you're really talking about just really well said we need to bridge the we need to find a way to identify the true skills that Anish was talking about and then give people a chance to manifest them no matter what their educational background and then a way to in a sense badge them in some way so we know you've got some kind of validation that's portable that's right portable validation I'm just writing a column here excuse me and at the same time there's from the other side university schools everybody in the education biz has got to have their own gap filled with where the market is going so they're and right now neither in a sense is happening you know universities are doing their own thing and everyone is kind of left on their own Mark you raised a question at the very end which is really fundamental and we can laugh about it and people in my biz you know make fun it's a really serious question how could it be we have a world running for president and no one did it on the basis of even a bad imitation of the speech you just gave thank you I'll be back next week but we'll talk about there's some it's really what we're talking about there's a miss batch here just a couple things good and bad and I'll again unlike the speech try to be a little briefer one as Anish pointed out with the DOD trying to release data we got a ton of data inside the federal government and we are not using that in a way to make sense I mean we could make a user friendly site with the DOE information at least in terms of tracking what's your chance of graduating what's your chance of getting a job if you major in sociology or God forbid art history the way my daughter did I don't want to go there on that somebody else on that subject I think didn't the president so get the data out number one number two I do think as you've mentioned we need to recognize that maybe we're not being the most productive when we debate export import or threatening a shutdown the government every six months there might be better places to go on the debate third thing is that we do have two last points one is that one of the things I have got frustrated with on this whole skills matching was when I was governor and I thought oh my gosh we got 44 different government training programs none really work I'm going to come in as governor and fix this all up it was the most frustrating damn thing I've ever tried to take down on and they virtually no progress because all of them had a little string of money from the feds and they all were named after congressman extra senator why and even if the program had never actually produced an output that showed that somebody got hired or were successful you know it was whatever was cool that year got a job training program and what we did do last year and Johnny Isaacson from George Republican Center from Georgia did it very well he did take at least a number from like 46 to 35 it ought to be much much lower and much more flexible last point is just why they're not here this is happening in real time I mean five years ago there wasn't an Airbnb there wasn't an Uber these are transformational changes and policy makers I think often are afraid to change and this does not fit neatly into a left-right discussion and unfortunately too many of our politicians are trying to go back to their ideological foxholes when it's much more about future past rather than left-right hmm God I just need to email this in I'm like done for the week let's open the floor this is fantastic I want to share it with the people here please do you identify yourself yeah Adam Lehmann with Lancelot and our angle is we're actually applying these frameworks inside enterprises because we think there's a lot of capacity there in terms of driving that connectivity and efficiency so two quick questions Susan did you evaluate in your research or come across the way in which existing enterprises could generate both productivity and engagement and retention through applying these new technologies and really for Byron, Mark or Anish is there an opportunity for government agencies to actually get into this mode adopt technology because you know if anyone could benefit from driving efficiency and productivity it seems like government could but is that realistic in terms of adopting those technologies I'm just going to say one thing before you answer about a company that I know a little bit about AT&T and what they've been doing which is putting everyone of their employees on a LinkedIn profile being radically transparent with their employees about where the company is going having everyone on a LinkedIn profile seeing who's got the skills to match up with where they're going and then providing a whole series of in-house courses through audacity on the skills aligned with where they're going and badging those actually work with local universities to get accreditation for those badges and really in saying here's where we're going here's the skills you need here's how you get them and if you don't we have a wonderful severance package for you but I think that that in microcosm is a many of where the country is going to go Absolutely, so we did look at this and within companies companies are especially large companies are a microcosm of the economy at a whole as a whole, so all the same issues around how do you put together teams of people how do you plan for people's career paths within the company how do you optimize making sure that you've got each person in the right role can all be applied within the company and it's part of what drove the results that you get some very big and say a professional services firm, a high tech firm, a hospital huge potential improvements in output, reduction in cost profit improvements all coming by applying those same ideas within the company If I may just take a quick one comment on that the sponsor of the veterans project was actually Dave Duffield the co-founder of Workday and the close the feedback loop imagine an organization looking at their veteran hires, they've hired them now show me promotion cycles veterans that had this skill on their DD214 had a higher rate of promotion than others which could be a feedback loop which singles back to the recruiting function look for that DD214, but on the government issue I actually see opportunities with wholesaling open government data so just to kind of think about this in the practical sense, if we force every unemployed person to set up a government sanctioned talent marketplace system either they have to invest the billions to compete with the lengthens and the Lancelots and the whatever instead what if we opened up and said hey by the way you filed we need you to make sure you're looking for work but pick any of these open platforms you're not going to charge the government are you for this service, no of course you won't and you would basically create a system where you could have more thoughtful handshakes, so a wholesale a health exchange in a sense you could imagine a talent exchange which says hey this person is we have rules, you gotta look for jobs, you gotta do this, you gotta do this maybe they'll be the emergence, maybe LinkedIn won't build that product, but maybe it'll be a partner working with LinkedIn and maybe it's a Lancelot on top of LinkedIn built for purpose in the government and they'll come up with their own revenue models and so my instinct is that a wholesale approach of government where you don't have to choose like we gotta fix the government, make it modern or we open it and allow all these multiple options available that may be the more viable path in the short run to close this innovation gap. Yeah I think the question of really using these tools to create career paths and upskilling your own workforce is a huge opportunity, it's a huge opportunity for business, it's a huge opportunity for the economy I mean hiring is risky right there's a lot of things outside of certain sort of resume skills or whatever that can go wrong like in cultural fit and so forth the fact that you have people who've been working for you you know their history, you know their reliability you know all of these things about them there's no better set of people that companies should be investing in to raise their skills and what we've seen is a little bit more of a bifurcated market where if you come in let's say out of an elite university in a kind of entry level management or sort of the higher end technical path at the start of that you're gonna get a lot of training from a good company a lot of it and not just to enhance your skills but to enhance your leadership and to create job progression opportunities for you but if you come in these days in a warehouse or in a call center or in the retail floor for the most part your training is gonna be about safety and compliance and efficiency and it's not gonna be about kind of filling the skills gaps you might have around your foundational skills and it's not gonna be so much around job progression but there's a huge opportunity to do it in a company and you've got kind of gaps in your IT workforce I guarantee you you've got a few hundred if not a few thousand people already working for you that have got the aptitude and have got the motivation if you'd only give them a pathway. That's why we need more Anishas in government. He gets enthusiastic, excited about this to your question Alan most CTO's at most agencies this might be a little scary but and there's nothing there's no incentives we don't align our incentives in government agencies to really measure efficiency, productivity or job matches but I think we're on the edge of something that could be transformative if we all push. Yeah. So I make sure nobody in the back there. Yeah, the young lady back there. You, yeah. Hi, Sarah Sutton fell with Flex Jobs in talking about the digital age and talent. I'm curious what your thoughts are how remote work will play into this in terms of helping to address the supply demand issues, accessing candidates in different geographical locations and also who are outside of the workforce because they need work flexibility. Well so the big first project of opportunity at work is this tech hire initiative that was announced on March 9th which is expanding pathways to information technology jobs to fill those gaps from all sorts of angles and 21 communities around the country are engaged in this. They've got 130,000 open IT jobs and in particular three of those communities are rural in nature. They're sort of big geographic spaces or in Nebraska, they're in Colorado they're in eastern Kentucky and they're a huge part of the opportunity is the remote working. I mean if you can outsource IT jobs to India there's absolutely no reason you can't outsource them to eastern Kentucky or to Nebraska or the like or even to Detroit for that matter and there is a big opportunity there. There are I know both from prior to my White House days and from the conversations I had in the White House there are major major institutions for example had a conversation almost two years ago with a CBO in retail financial services. It's got 40,000 IT positions in India right now but because retail financial services is moving much more towards product development is more based on big data. It's a click stream of what your customers are doing online instead of developing a new product design and then throwing it over the fence to your IT department you're really integrating marketing product development IT, it's all on IT platform so they actually want to move this all to the United States. They want to put 25,000 kind of programming jobs and application development application maintenance jobs in the United States and that was two years ago they have found only a path so far to move 2,000 of those jobs because getting the sort of the talent pipeline is not there but now they're not going to be able to put all 25,000 of those jobs in Manhattan but if you start to think about that demand signal and kind of ensuring sort of a bunch of this work to locations all over the United States I think there's really an enormous opportunity. When I was governor one of the things I was proud of was we brought CGI down far southwest Virginia and you suddenly to Byron's point you shouldn't have to move away from hometown to get a world-class job anymore and they have had a remarkable success there. These are call center plus plus you know they're 68 to 80,000 dollar jobs with a lot of money in southwest Virginia and Tom this goes to so much about what you've written about about the fear of globalization, about the fear of the world's flat and all this transformational change the part of America that has been left behind that is the most afraid and I say this is a pro-trade guy of TPP and moving fast track are rural communities who have not seen the upside of this globalization movement one of the things as policy makers we should be able to do since everybody here and in this disaggregated workforce is doing this in so many ways is really I think and I hope is take a real focus on how we can move and link some of these skills with people in rural America that would do more for kind of the view of where America is headed and almost anything we could do but you know I would say Mark that you really touched on this in your talk which is there's never been a good time for us to be paralyzed at the national level but this is a really bad time you know because we're seeing a change in the pace of change that's actually I'm writing a book about this right now that's what we're in the middle of and for the two of you in the room who've never heard me say this you know I wrote the world in 2004 and I wrote a new book in 2011 that used to be us about America and the first thing I did in 2011 was get the first edition of the world is flat off my bookshelf just to remind myself what I wrote I opened it up to the index I looked under A, B, C, D, E, F, A F, A, C, E, B, Facebook wasn't in it so when I was running around the world in 2004 selling people that folks the world is flat we're all connected Facebook didn't exist Twitter was still a sound the cloud was still in the sky 4G was a parking place LinkedIn was a prison applications were what you sent to college big data was a rap star and Skype was a typographical error okay all of that happened that all happened in seven years now let's just go forward from that so I was down at Walmart asked me to speak at their Saturday morning meeting last month great fun real thrilled down in Bentonville and they invited me down to speak I said I'll come but I want to be paid and I want to be paid a lot but I'm not allowed by the New York Times to take money so here's how I want to be paid I want you to get your IT team together and show me what happens if I try to buy a 32 inch television off Walmart's mobile app on my cell phone and they walked me through the whole thing with their engineers now most interactions on Walmart's mobile app happen in between 7 and 14 milliseconds just to remind there are a thousand of those in a second they explained that as you're going through our app you know all this happens but they said once you press buy the engineers explained to me once you press buy he said then we have all kinds of time to figure out how to get it to you do you pick it up in the store or do you ship it he said then we have a second I said wait a minute did you just say that or is that like a motto here then we have all kinds of time then we have a second the man who built team that built Walmart's mobile app built Ebay's I believe in 2007 when they built Ebay's mobile app they needed 200 software engineers mobile e-commerce app they needed it with 12 Walmart is the biggest retailer in the world that's what's happened between 2007 and 2015 so there's a change in the pace of change and it just keeps it's all accelerating and and the biggest idea that one of our two parties have is that in order to get TPP we should close the export import bank you know I'm picking on that as an example but it's just there's such a I don't remember a talk about a market failure we have a government failure here because the mismatch here is going to be so great and the danger of that is we're going to get a backlash rather than wise policy so we'll actually shut ourselves more off from these flows rather than put our people in them and then the thing is just going to spiral and get worse and worse and worse so how much more time do we have there about a minute so one oh please I'm sorry okay so in contrast to the Walmart mobile app to the point about how are we going to get jobs out to America Americans are moving less and less 50 years it was very predictable one in five American families picked up and moved every year and that's been declining for the last 15 20 years and it's now one in 10 and as we have underwater mortgages and two career families and people with four jobs the likelihood you're going to pick up and physically move to get a job is going down and down and down and so somehow reaching people to see the employer as having a social contract I'm not going to pick up and move my family and go for this job the jobs are going to have to move to the people but the story that you told in the report is one that actually you've been seeing for a long time actually it's down to that one second or that millisecond measurement because in the end so much that has changed in the last 10 years 15 years basically the history of the internet has been about empowering individuals to be able to do things basically for themselves being able to work remotely is yet one more mechanism by which I have control over the way in which I do my work so Uber is part of it Lyft is part of it all those platforms are part of it the ability for me to have this information about what skills are necessary for me to be able to make that jump for me to know which college programs are most successful for me to know what the skills gap for me to be able to deploy those skills independently over great distances those are all about empowering me and one of the great things about this is that I think there's a real opportunity for the empowered individual to lead government forward in terms of what we're actually able to achieve it's so well said there's just one problem you touched on what I think is the meta shift going on right now and Marina Gorbus talks about this 15 years ago it might have been called the digital divide it was very popular 15 years ago and it was about how DC has internet and western Virginia doesn't and Virginia has it and Montana doesn't, America's got it and parts of Africa don't have it we could spend all afternoon talking about the digital divide and Marina's argument is that in 5 years pick your number, 7 years, 10 years there's going to be no digital divide anyone on the planet who wants to have a network connection will have one and we're getting there probably faster than we think and when that happens there's going to be only one divide that matters, the motivational divide it's all going to be out there for you but who has the inspiration and self motivation because everything you talked about was the empowered person I'm going to give them that information, those tools but more will be on you and that is not going to be changing and I think that is going to have enormous social implications just to end on positive note I can ruin any dinner parties so it's a no and I think a call to action though because Tom in a world in which the world turns out the way you're talking about where everybody's on their own it's not going to be a world we're going to want to be in we actually need the institutions to develop the institutions so that the people who are trying to figure out their path they have a lot more support they have a lot better information they have absolutely and you can do it too because we're just getting started here think of the last 30 years all the most capable institutions of the private sector have been all about maximizing the return on invested capital capital that you can own machines, software, buildings but human capital is two thirds of our economy and we are just getting started we're just scratching the surface we don't have anything in the tax code that supports human capital we have nothing so there is low hanging fruit everywhere and if we get serious it's going to be hard to overcome some of these governance challenges that you talked about Pennsylvania Avenue can't solve this problem by itself but the United States of America can definitely solve this problem you look at our problem solving capacity our technology, our innovative potential and you know if we work on this we are just getting started on the two thirds of the economy that is human capital and that's going to be the basis really of an economic boom that we can unlock this way and really if we were having an election if we actually were having an election that was about that was relevant someone would be running on the human capital agenda yes Mark? what are you doing in the next couple of years? thank you very much