 Live from the Congress Center in London, England, it's theCUBE at MIT and the Digital Economy, the second machine age. Brought to you by headline sponsor MIT. Welcome back to London everybody. This is Dave Vellante with Stu Miniman. Dean Dave Schmidt-Line is here. He's the MIT Sloan School Management, the Dean of the School. Dean, welcome to theCUBE. Great to see you. Thanks for coming on. Thanks for having me. So MIT IDE, we're here in London. How's London treating you so far? You know, from Boston, we come to London for the spring weather. It's fantastic to see you. How about that, right? One is gloomy and cold and the other one's London. Yes. So tell us about the initiative on the Digital Economy. Yes. Why IDE, why now? Yeah. You know, Moore's Law changes in information technology. That's a 20-year story. So it's a fair question to ask what's new now. And it's a qualitative change in what business opportunity looks like. It's a qualitative change in what products and services look like as they're being designed. This is not just the next stage, it's a new stage. And I think some of your viewers have been seeing and hearing some of that. So I don't want to cover or recover that ground too much, but the, you know, if the first machine age was about replacing muscles, the second machine age is really about replacing mines. And so what that means is very different in terms of opportunities for individuals and for companies. Yeah, of course we're here. I said earlier we're here at the site of the first machine age, really, which is the steam engine right now. We're launching the second machine age. It's apropos, I think, to be here. Where does IDE fit in with the broader agenda of the Sloan School? Yeah. So, you know, the Sloan School is MIT's School of Management, and we want to be MIT's School of Management, not just another B school teaching MBA students and so on. What are the themes that are central to that? It's understanding complex systems, doing deep analysis, innovation and entrepreneurship. And I would tell you, by the way, that modern finance was invented at MIT, not in Chicago or Philadelphia. And so the themes for the school are around innovation, entrepreneurship, analysis and complex systems, and finance. And this fits right in the center of all of that. So it's very important to us. It fits with our history. It fits with our connectedness across the rest of MIT. We're not just a standalone business school, but we draw on the rest of MIT very significantly. Okay, so it's very relevant to the broader MIT agenda, and we are talking off camera how we've done a number of MIT events, the chief data officer or the data quality event. And always such a focus on the alumni. We've got such a broad network. I wonder if you could talk about that a little bit and how it relates. Yeah, so we have an amazing alumni network. Not everybody knows that. It's not the biggest network in the world, but when we put together the way that we reach out to MIT's alumni network, it's 125,000 people around the world. Those are people who are, you know, yes, some of them scientists and engineers, but at this point in their career, they're driving innovation in major companies. And so the network that I serve as dean is largely the MIT network, not only the business school network, but we have an amazing network here in London, you know, just all over the world. And people who are so incredibly proud to be associated with MIT, a place where new ideas are born all the time. So you've taken the second machine age message around the world. We're here in London. You guys are in São Paulo, I think, last year and other venues planned. How do you decide sort of where to go and what does London mean? Yes. Well, London is a centerpiece in so many ways. You talked about the first machine age and the commitment here in London as well to innovation and entrepreneurship is very strong. One of our faculty members, Fiona Murray, is advising David Cameron with respect to entrepreneurship policy here in the United Kingdom. London is seen as such a global center not only for finance, but also for new business activity. And so it's quite natural to be here in London. You certainly would wonder why we went anywhere before coming to London. There's also a historical role for education and knowledge creation that is very special in the United Kingdom. And we at MIT have been deeply engaged with the UK in that regard also. So just great to be here. And they like complex problems over here, as we know. So I'm wondering, actually a little bit of a personal question from your job. Second Machine Age talks about a lot of disruptions and how technology is creating its huge opportunities but huge challenges. In an age of MOOCs and people saying, I mean, everything needs to be from government and education, as Dean, what have you been seeing? How is the business that you're in changing and how is it going to look over the next couple of years? Yeah, you know, honestly, it's a great question. And I'm asked that quite often. I would give the schools a high grade with respect to curriculum, with respect to understanding or helping our students understand this, but with respect to using the technologies, using the digital world ourselves. You know, maybe a passing grade on a good day, that's about it. There are some things that we do that I'm very proud of. So you talked about MOOCs, these massively open online courses. They're fine. I like them. Yeah, I mean, MIT, I can go as just not an MIT alum, but I can go online. I can do MIT MOOCs. Absolutely. And if all you want to do is learn, you can learn for free. If you want to be certified, it's knowing some topic. There's a modest fee that you pay for that and so on. What I think is more maybe interesting around the digital and online world for education is not creating an almost as good experience at a lower price, but adding to the experiences. That's really been, I would say, more our focus at MIT and at the Sloan School is to do some new things. So I can give you just one little example of that. Look at developing people as entrepreneurs. So we have a massively open online course introducing people to entrepreneurship. We have our faculty. We have some of our prominent alumni who lead that course. That's got about 50,000 people who take it as a course for free. Some number of people would take the test to see how well they're doing. We approached a subset of those people who did extraordinarily well in the course and asked them to talk about their entrepreneurial experiences. And out of the very best answers of that, from that original sort of group of 50,000 people, we came down to about 60 people that we said, we really need to bring these people on campus at MIT. And we did. And these are already successful entrepreneurs that we had not engaged with at all before this online experience. And they've now been wave one of an entrepreneur's network that we're creating out of people that initially came through the online door. So how do you do things in, yes, online that aren't only videotaping someone showing it to people and then maybe giving them a test? I love that example. It's not, as they say, paving the cow path. That's not what MOOCs are about. It's about finding new innovation and new business models. And actually, you know, it's one other example of that from non-degree executive education. So we have had, as I mentioned, some weather challenges in Boston on occasion. In one setting, we knew that people were not going to be able to get physically to campus to participate in a big data online course. And so over a very short time frame, we recreated that program so that you could be there in person or you could participate electronically. Everyone, in person or electronic, had an avatar. And so if you think about the potential to gamify some elements of executive education, if you're sitting there in the room and you're listening to the faculty member, you're engaging at the same time with a couple hundred people around the world whose profiles are right there in front of you. And some of the most powerful experiences that people said in person that they had during that executive program was with people who weren't there at all. And so in some ways, the avatar-to-avatar connections were stronger than the people-to-people connections. I hope that's not just the truth of MIT, but we need to learn what the possibilities are to do more and to do different. It's an added dimension of communications that you're bringing up. So Dave, set up the day for us here. What can we expect? So we have the co-directors Dave, the initiative for digital economy here, as you know, Andy McAfee and Eric Brynjolsson. We have other leading faculty who are visitors and permanent members of our community be talking about some of the huge changes in the world as a result of digitization. Roberto Rigabon is going to be here. He's the person who has told the truth about inflation rates in some parts of the world where the governments work very hard to make sure nobody knows what inflation looks like. He uses online prices to be able to know day by day, item by item, what's going on with the institutional environment, the macro environment in over 100 countries around the world. It's quite extraordinary. So we have people who are really leading for new kinds of applications of big data and digital experiences. We also have people who are quite interested in the social impact of the digital economy, what it means for not only business opportunity, which is great, but what it means for economies, for societies, and how some of the policy choices that are going to need to be made over the next few years are going to be hugely important. So digital business is obviously a big theme and it's something that's a huge opportunity for us as we've heard from Andy and Eric. How are you evolving education to accommodate the future of digital business? So you think about one of the big themes in management education recently, it's been global experience. Having people get out of the classroom, get to Vietnam, get to Kuala Lumpur, get to Columbia, for instance, and engage with entrepreneurial firms in real project settings. What does online, what does digital do for that? So how do you give a sliver of the experience that an MBA student is having in Vietnam to some of their classmates? How do you crowdsource in real time some ideas that they can bring to the table in those kinds of experiential learning settings? Again, some of the best of the ways that digital and online are affecting education aren't as a substitute, but there is a supplement to what we would typically do. So of course, things like accounting courses and introduction to finance, some of that material is going to the web, that's all great, but ways to take some of the special sauce from an MIT Sloan education and make it even better through digital is a huge focus for us. And of course, the knowledge about the digital economy's future, that's in the curriculum as well. So those are some of the innovations that you're working on. What else can we expect from the Sloan School of Management in this regard, so they're going forward? So we are deeply engaged around the world with our partner institutions. One of the ways that technology will have an impact is in how we work with them. So we've been deeply involved in China for 20 years now in helping change the landscape of management education in that country through the leading institutions, the leading business schools, who are our partners in that effort. We've done that in Korea. We'll be announcing tomorrow some activity in Malaysia that I'm not supposed to talk about. I'm going to talk about MIT in Portugal and so on. So in those partnerships, the use of technology as a way to bring faculty together, to bring students together is hugely important and that's also something that's been changing very rapidly over the last couple of years. So you'll see more of that. Well, Dave, thanks very much for coming on theCUBE and having us here. So it's our pleasure to really collaborate with MIT and use theCUBE to bring your content to our audiences. It's been an excellent collaboration over the last several years. So thanks for having us and thanks for coming on. Please keep coming back. Okay, keep it right there, buddy. We'll be back with our next guest right after this. This is theCUBE. We're live from MIT IDE in London. We're right back.