 Good afternoon everyone and welcome to this exciting discussion about investors of first resort government think and I think that's a question that will be asking off the panel does that exist are we in a world of government think what does that look like what's good about it what's bad about it and how that should connect with the private sector. I'm absolutely thrilled to announce an amazing panel. We have with us President Terman of Singapore a country that's home to some of the textbook cases of innovative government investment. We also have with us Minister Faisal Ibrahim of the Kingdom of Saudi Arabia which is currently undergoing a lot of profound advancements with the backing of state investment. We have Kai Fu Lee founder of innovation ventures and the AI startup zero one AI which reached unicorn status in only eight months. We also have with us Professor Mariana Mazzucato of the University College of London known for her work on how to structure impact impactful public private arrangements to ensure government investment is effective and author of the entrepreneurial state. And finally we have Scott Sandel who is the CEO of new enterprise associates a venture capital firm at the leading edge of investment into emerging technologies and their applications. Welcome to all of you and welcome to our audience here in the room as well as those that are watching online. I'd like to kick off with just a few data points. The forum surveys every year business leaders from around the world. So last year's survey reached 11000 business leaders globally. And we asked a few questions around their views around government investment and government capabilities. And the first of those questions was around the capability of the public sector. And you can see some of that data up there and we won't get into detail and hopefully our online audience can see a lot more of that. But overall advanced economies show higher dynamism and capability in the public sector. Particularly in terms of the attractiveness of the public sector as an employer but even in advanced economies they perform poorly when it comes to the incentives for public officers towards risk taking and learning by doing when it comes to investing. The second set of data is when we asked about what forms of support are needed to foster innovation and transformation within industries. There's a huge amount of divergence from around the world and lots of detail that we could get into. But mostly to say that there's extremely mixed views about what the role of government should be and how much they should be co investing and partnering with the private sector versus how much they should be leading some of these investments themselves. So that's one of the questions that we're going to try to tackle. But first just a level set. Are we in an era of bigger and bolder government. And in your view how is active government investment changing the economic landscape. And President Harman if I could go to you first. I think we are in the era of bolder government. And it comes about not so much because of a change in philosophy as much as a change in the nature of the problem we face. The largest problem that we face around the world developed developing small large countries lies in the global commons. The accelerated deterioration of the global commons. It's not a global problem separate from what we face locally. It's a problem everywhere. It is a commons problem. And the scale with which we need to invest to address it and the speed with which we need to invest is one that requires all pools of capital public private even philanthropic all pools of capital. There's no conceivable future of solving this problem by relying on only the public sector because it's far too expensive for the public sector alone. It can't rely only on the private sector because markets won't respond with the speed and scale required. So it requires all pools of capital. And one way of thinking about it is that if we don't address this with the speed and scale necessary. There's going to be a very sharp trade off between growth and development on the one hand and solving the climate challenge the water crisis and the biodiversity challenge on the other. In other words it will be a trade off. You have to choose between one of the other and there's a very real risk particularly in the developing world of a lost decade of growth. Being the price you pay in order to address the challenges of the global commons or alternatively you don't proceed with mitigation. Just say that this is a problem of the global north and you carry on growing and you don't need that trade off and we can't afford that trade off between a lost decade of growth versus a lost decade of climate mitigation. We can avoid both but it requires a higher level of investment for a longer period of time and delivered with some haste. And that requires the public sector to be part of the act critically because the markets will not respond with the speed and scale necessary. I wouldn't call it investor or first resort as such. I would call it the way in which the public sector can intelligently join forces with a private sector. Drawing philanthropic capital where it's able to absorb real risk and address this challenge jointly. Thank you. Minister Alibrahim your views on the same question. Are we really seeing a trend towards bigger government. Absolutely. And I think the main reason is twofold. One I think some countries and economies are realizing that they need to do more to unlock their potential. And two as a response to the multiple crises we've seen recently I think these crises happened at a time where the maturity in terms of globalization interconnectedness integration is at its highest which meant it's more complex and it touches everyone. And I believe that pushed some governments to say you know we have assets we have capabilities. Let's put them to good use. And let's you know work together with the private sector to mobilize these assets towards our national objectives. People used to look at let's say the asset manager of government to Arthur and sovereign wealth funds as a patient source of patient capital thinking long term. But today I think we're seeing that sovereign wealth funds are becoming a source of impatient capital really you know finding paths to address challenges through upgrading or creating sectors and providing a long term view where you know even President Tharman talked about this earlier in Davos where short term is becoming very ubiquitous even in the markets. But today there's this momentum to think long term to solve our let's say climate action challenges our innovation challenges our technology disruption opportunities which is an opportunity for both public sector and private sector to work together. But that definitely means we should be OK with the private sector profiting and using that profit to good use and we should be OK with governments becoming a stronger partner with the private sector. Mr. Lee your views on the potential of that partnership. Right. Having worked in China since 1998 we saw a lot of this inaction. I think China is known as a very bold investor. But maybe not as well known is that it actually makes bets. They're not always right. And when they're wrong as long as it eventually happens the investment that you make in a key important area creates the brain trust. And I'm talking about the new energy sector around 2005 China made a major national initiative to invest across new energy. So new types of batteries solar panels and so on. And as you know now this has become the most important. But from 2005 to today is 18 years much too long for a company to be founded and go public. And many of the companies funded actually did not succeed. But that created a brain trust so that when the timing became right they came back and build some of the best solar panel companies. China has now 80 percent of the world's solar panel market share as well as many of the largest including the largest battery company C.A.T.L. And they're actually all at Davos now. But I think the key point I wanted to make was having the boldness that you know one day new energy would be important. You don't really know if it's going to be five or 10 years. But you make the bet even if you don't get the returns from the investment you build the brain trust. But I think that is a very challenging proposition for some governments that turn over quite a bit waiting 10 15 years may end up getting some criticism and cause cost challenges. So I'm not saying one approach is right or wrong. But I think the combination of betting on the right technological trends and having a long term view and having the patience to wait it out. I think that's an interesting thing that the government can do and can lead to big success in particular because the private sector cannot do that. I'm a private sector investor. And if I invested that way the fund will be out of business very quickly. But I think that so that's an interesting view to look at sovereign funds that they do need to look at returns obviously. But how do they take that long term view and potentially look at some investments that are less successful near term. But in eventually I think it leads to unbelievable returns. Thank you. Mariana in many parts of the world there is skepticism about the ability of governments to be that investor whether a short or long term and a sense of the risk if governments crowd out the private sector. Your view on that. Well I think that the title of this panel is super interesting because it goes against the narrative and the current narrative which is that government at best can correct market failures at best can be a lender of last resort not an investor first resort at best can facilitate the private sector enable the private sector derisk the private sector. You kind of wonder why anyone would bother even wanting to be a civil servant. So you know they do it notwithstanding the propaganda and the narrative that you're kind of in some ways an impediment. And so the reason I wrote the entrepreneurial state is that and that was 10 years ago we would have never had any of the smart technology in your smartphones if that's what government did. So the Internet GPS touch screen series. Not only did it come out of public investment but it was purpose oriented organizations of the DARPA type. But globally Yosma in Israel which is a public venture capital fund. You were just talking about venture capital. You know why do we admit that just in the venture capital industry for every success there's many failures but as soon as a civil servant makes a mistake they're in the front page of the UK the Daily Mail. So this idea that actually you can be an investor first resort and we have had investors of first resort. Again we wouldn't have smartphones without that. The real question is what can we learn from that experience. What does it mean to have problem oriented organizations. What does it mean to have the NASA kind of moonshot which was a really clear goal. It was to get to the moon and back in a short amount of time. It happened with 400000 people most in the private sector. Government led the way. It didn't micromanage. There were so many different sectors involved nutrition materials electronics software because they're all these homework problems to be solved along the way of which many failed. The success has got his camera phones foil blankets baby formula so on and so forth. What would it look like to actually treat the sustainable development goals as seriously as wartime scenarios or in that case a military industrial complex project turning all the SDGs or 17 of them not just into those 169 targets but into bold missions that sit somewhere between challenges which is what the sustainable development goals are and all these different sectors that must you know be catalyzed in order to create a serious multiplier effect that doesn't happen just with bigger government right. You need bold government. That's why your question so important. You need capable government. You need strategic government working dynamically symbiotically with the private sector. Another thing that NASA did was to put into the contracts with the private sector. No excess profits. They didn't say no profits because you don't get to the moon through charity or philanthropy philanthropy is important. But as icing on the cake it's not the cake we need good government good business working together. But just the fact that NASA took the time to design that into the contracts is super interesting. The other thing they did was to change how they did procurement. They moved away from cost plus procurement which wasn't really getting much innovation towards outcomes oriented fixed price procurement with incentives for innovation quality improvement. So that idea that bold government is about taking time to structure grants loans sovereign wealth funds procurement to catalyze as much economy wide innovation will only happen with a confident government that's not de-risking the private sector but truly welcoming the underlying uncertainty member Kennedy's point we're doing it because it's hard not because it's easy but also to really also share not just the risks but also the rewards I'm not sure to say about that but I feel like I'm talking too much. But how do you share the rewards that also doesn't happen just by talking about purpose orientation. It happens through contracts intellectual property rights equity stakes prices of drugs that are publicly financed. How can it be that we don't think about getting the prices right ex ante. It happens through sharing knowledge like we should have done during COVID. Some companies did AstraZeneca because Oxford forced them to share the knowledge where some of the other vaccines didn't. Thank you Scott your view on the same question that risk of crowding out the private sector. I'm less worried about that. My you know I look at things from the ground view level we we have about five hundred and sixty portfolio companies around the globe big concentration the U.S. Europe China primarily but in other places. And so what we see is the impact of government on our companies and in some cases it's very positive and in a few cases it's really frankly killed companies. And it's often through I was I was thinking very much Mary on about a company fiscal automotive which had a loan from the government which was pulled immediately when there was a story about another startup which had failed and had government money. It was a political political decision. It killed a company that I think would otherwise been quite successful. And that was a bit of a tragedy since eight hundred million dollars had gone into the company. So yes governments can get it wrong. But on the other hand you know I don't have anywhere near the experience that Kaifu Lee has in China but I started investing in China in 2003. And he was nice enough to remind me before the conference about a guy that I met the first time I went to speak at a national conference of venture capitalists in China. This is a fellow named Chung Sway. And I was so deeply impressed because I was one of five non Chinese guest speakers and I expected in 2003 to have the National Convention of venture capitalists be composed of fewer than the number of people in this room. But instead there were eight hundred. And you know much to my surprise this fellow Chung Sway who was the number two person in the Chinese Congress at the time and probably about 70. I had a chance because I was a speaker to talk to him. First thing I noticed he spoke fluent English. And then he went on to give a speech about venture capital and the best practices which would match anything I you know anybody I knew could give. And it turns out it was because he had gotten his PhD in 1986 or something at UCLA and his his thesis was venture capital or about venture capital. Why was that. It was because the government was so far sighted as to identify that as something of interest to the development of China and sent you know people to do that. And so what I saw then from 2003 for the next 25 years is an you know as as Kai Fu Lee said you know there were there were things that in retrospect look like maybe mistakes or they were certainly losses. But they set the foundations and they spurred the rate of development of the venture capital ecosystem to as we all know now roughly the size of the U.S. venture capital system in 25 years. I think it was a year was even bigger. So I think it's you know when I when I sit here and think of what the government leaders on this panel are thinking I think you're absolutely right that if you want to. If you if you do it the right way and you're trying to solve problems and accelerate solutions there are ways to do it. Thank you. Let's pick up on that. Doing it the right way and the skills and capabilities that exist in in governments. As you saw there's a very mixed picture and many people even advanced economies don't feel that their governments have those skills and capabilities may not be in the right position to make those long term big bets. And even if it's oriented towards public big public good challenges may or may not have the capabilities and skills. Perhaps President Harman over to you first. Singapore obviously known very well for both the public sector skills and the private sector skills but maybe getting a bit more specific about those long term bets. How do you build up the kind of human capital and other capabilities that are needed to do that well. Well I'll make two points that first both learning from past experience across a range of countries including our own and several other countries in East Asia for industrial policy to succeed. It has to be accompanied with social policies on an industrial scale. In other words a systematic approach to developing human capital and that requires first and foremost obviously education systems that are for everyone providing a high quality education for everyone. But very importantly in today's new environment it requires a constant replenishing of skills. And it's very hard to get it right because you can't actually bet on specific skills that are going to be relevant five or 10 years from now. But you do know broadly speaking that digitization is going to be important. AI is going to be important. Robotization is going to be important. There's a whole set of green energies that are going to be important. And you know that there are clusters of skills required in each of these areas. You might not get it precisely right but you can get it roughly right. And you've got to do that roughly right with some gusto. And it requires again the public sector to participate. It requires mobilizing employers very importantly and it requires motivating individuals. And that new generation of social policies which not many countries are adopting is to my mind extremely important the replenishing through life of what you'd call human capital investment. But it's really investing in the skills of ordinary citizens. I think that's extremely important. And the countries that do pure industrial policy encouraging an investor foreign or local to plonk a plant in a particular town. And thinking we've succeeded there will find over time that it's going to cost more and more because you don't have the skills ecosystem to sustain it and you have to keep subsidizing. Thank you. Minister Ibrahim how are you building up those capabilities in Saudi Arabia specifically within the government. So maybe I'll just take a step back and say Vision 2030 which is our plan to diversify our economy also hinges on two other key areas which is empowering the youth. Locking the potential of the youth to improving human capital development outcomes and continuing to do that. We're a very young nation but also building continuing to build institutional capabilities. We have a legacy of strong institutions but under Vision 2030 stronger institutions are taking shape and you don't have to choose do I build capabilities first or do I think you should do both. We decided to implement Vision 2030 and build capabilities at the same time. And if you truly think long term and you want to build capabilities you'll start with people because that's the best thing you can do. Like I think what President Thurmond was talking about. And in terms of building capabilities either through actually improving the work conditions improving continuing to improve education and health care offerings but also our ambition leads to more pressure in terms of what we want to achieve. But also partnerships. We're partnering with institutions from all around the world. We're partnering with governments as well. We have a partnership with Singapore on strengthening the capabilities of the public sector that we're very proud of. We acknowledge the success story there and we want to learn from it and also contribute to its evolution. I want to comment on the link between that and the question about crowding in or crowding out the private sector. In Saudi we looked at the vast assets that are available that are idle and we started thinking about how do we mobilize these for the betterment and for the contribution of our national towards our national objectives. PIF was one great example of how that happened. PIF today is not just only investing for returns but contrary to the belief that you can't really achieve double bottom line PIF is also creating the environment in which returns can achieve through a developmental lens. So not just returns driven but also developmentally driven and in that regard PIF has built in parallel to its mobilization of these assets and resources and organic capability that today is working with the best and attracting the best talent from around the world. It jumps into sectors either leads them or mobilizes them or invests in them for strategic or returns purposes and crowding in the private sector is not a byproduct that is a good to have it's something that we must do. Today it's part of the evaluation process. PIF has a dedicated department for national sector development and on top of that it has created partnership models co-investment platforms such as as far and tourism investment company that invests 50-50 with the private sector. Funds are funds such as Jeddah which is investing in fund managers and also it looks at exits. It leads it transforms and then it recedes itself sold down some of its assets and it's also IPO with a lot of its asset assets and also in the evaluation process today. Maybe it was in the beginning but today we look at how this investment opportunity that's presented by a certain investment team. How is it going to crowd in and increase the participation in private sector from the get go. Not just at the end of the investment horizon. Thank you. Mariana you've been working with many governments around the world. Who's doing this well. Who's building up their talent and capabilities for investment. So I mean I think it's interesting not necessarily to look at countries but examples within countries where there was investment in what I call the dynamic capabilities of the public sector. And that means actually taking care to as I mentioned before redesign or rethink kind of everything right. So you know for example in Germany because they have this very high level vision mission you could call it of the energy vendor. That required them to then change how their own public bank the KFW was giving out loans precisely in order not to crowd out but to crowd in. But the point was not to crowd and crowding in is not the objective. Working together with lots of different actors is the objective if those problems require collective intelligence. So the loan in Germany given to the steel sector for example was conditional on the steel sector lowering the material content of production. How they did it was up to them had the German government through the KFW told them exactly what to do that would stifle innovation. But that capability of for example thinking about again directionality. We want a green transition. This means changing those tools catalyzing bottom up innovation in the private sector. But that does mean not just giving out subsidies guarantees loan with no conditions attached. So that's an interesting example. The U.S. for example recently did have big government right. Lots of money between two and four trillion. If you know depends what you count. But that's not the interesting bit. The interesting bit is when they actually took time as they did with the chips act to build in a different relationship with the semiconductor company. So again there there's conditions attached to make sure that semiconductor companies are truly innovating that there is real conditionality. So conditions about not using. I mean it's kind of not rocket science. It's incredible. It has to actually be said but if you're getting 400 billion from government you're not going to then use the profits that come from that just for share buybacks. I was put in in the context of seven trillion dollars having been used for share buybacks in the last 10 years by the global S&P 500. They put in conditions to make sure that energy efficient supply chains in semiconductors were used better working conditions so on and so forth. In Denmark they have for many years actually been investing within their public service. So they had an organization called Mind Lab. And it was within the civil service precisely to kind of stimulate and encourage risk taking and finding crazy solutions that could be tested. Countries that have gov labs in Chile. They have a laboratory of the government. Everything sounds better in Spanish which is a safe place within the government to experiment precisely on those things like outcomes oriented procurement that I mentioned before which again without that we wouldn't have gotten to the moon without that we wouldn't have gotten vaccines or even personal protection equipment during covid. So all these things like portfolio thinking which you kind of gave an example of that which I'll say something quickly about it because it also goes really wrong outcomes oriented procurement digital government. Right. Because even with the health pandemic there is an infodemic side of it. Countries that had actually invested within their civil service to be able to deal with digital platforms did do better. Just one quick thing on portfolio thinking which I think is important precisely so governments don't put all their eggs in one basket but really do catalyze that economy wide change with additionality crowding in. It's really interesting what happened in the US after the financial crisis. First of all they didn't do austerity in the UK where I live. We just kind of blame the public sector for what was actually a massive amount of private debt. So they had an 800 billion stimulus program while Europe in general was cutting. So small government big government. But they didn't just do big government. They said we're going to try to have it directed towards green. That's what got them able to actually bring in really good people into government. So Steve Chu a Chinese American Nobel Prize winning physicist on the back of that announcement that there was going to be a large fiscal stimulus around green said I'm happy to come into government. He wouldn't have come in had they just said we need you to set up a carbon tax or do you risk Elon Musk. He ended up being the head of the DOE. He set up ARPA E which was modeled around DARPA which got us the Internet. Hired Arun Majumdar who later ended up running a Google's energy program but they also in the DOE ended up having these guaranteed loans to companies. Everyone knows about the Cylindra one because they went bust about 500 million guaranteed loan by government. Almost no one knows that the same amount of money just a bit less went to Tesla. Right. So first of all again that propaganda bit they said at the beginning when government fails everyone knows when government succeeds somehow we say that was entrepreneurship but how they set it up made very little sense. They said to Tesla if you don't pay back the loan we get three million shares in your company. Why would you want three million shares in a crappy company that doesn't pay back the loan is beyond me. Had they said if you pay back the loan which they did because they're a good company they paid it back in 2013 we get three million shares in your company. The price per share went from nine to 90 multiplied by three million would have more than paid back that Cylindra loss in the next round of investment. That's an investor first resort mentality. That's a cultural shift. So even in a country that is actually investing in the technologies in your iPhone or having that bold idea about greening an economy actually requires also that savviness on the investor side and also making sure that the taxpayer is not just bailing out the failures but also getting some of the upside not in terms of nationalization but in terms of smart governance. Thank you. So speaking a bit about those capabilities that savviness Mr. Lee do you see any government being able to do what you did getting to unicorn status in less than eight months time. I mean do you think the same kind of dynamism incentives skills exists to be able to get that done. Well I think sovereign funds and governments have to be cautious because on the one hand they need to understand and see the big trends and make sure that in that country these trends get to emerge the way they deserve to be and accelerate their growth. Secondly I think every country should want to have a good private sector venture capital private equity firms. So there needs to be sort of a division of labor win win proposition which implies that the government might start. I see many many successful sovereign funds starts by essentially being a fund of funds. So so that simultaneously trains the VCP ease and feeds back later for the sovereign fund to gain knowledge of the industries and then it can take on things like as mentioned earlier. Co investments. These are things that are very much alignment of interest which is very important investment so that basically the model could be the sovereign funds as this area is important. VCs aren't doing it. I'm going to give the VCs money be an LP be an anchor LP to make their fund raising easier than as they go in and invest in private companies the good ones or the appropriate ones that later rounds the government comes in as a co investment. So that's an example in the ecosystem setting. But now the other questions or what are and the other thing is I think the governments ought to pick things that are not naturally areas that would happen organically things that have a good cash flow that can make money quickly private sectors will figure those out. They don't need national nudging where this nudging is needed. I gave an example earlier about new energy. Another example is early stage startups. So this I think began in Israel. I think Singapore built on that and then China learned from Israel and Singapore. Basically these governments either at local level at central level basically says well early stage investment is really tough. High likelihood of failure. VCs don't get the same kind of returns. They invest very little money and then they have a big loss ratio. So the government might make some incentive to to help to provide even more upside to the VCs and angels. And that has worked very well for a number of countries including China Singapore and Israel. The last point I would make is that sometimes the government might spot and really important not only technological trend but a need to provide self sufficiency. So I'll give the example of the company I'm building now. My company builds large language models. But we believe that unlike previous operating systems like Windows and Android which are just technology large language models actually represent each country's culture needs cultural norm and biases and values. And those do differ country to country. So a model built in the U.S. will not work in China or won't work well in Saudi Arabia and one building China probably won't work in Singapore and vice versa. Of course the foundational technologies are the same. Open and Google have no intention of pushing Americanism. But the data they collect is largely American. And the alignment process trains it to American values which is great for America and probably good for countries close closely aligned with U.S. like many English speaking European countries etc. But I think every country needs its own model. And for that to happen. No VC no entrepreneur is going to stand up and say well we're a country of 10 million people. I can make a business case of buying you know 100 million of GPUs and then build a language model and make money in the next three or five or even 10 years. So that is where I think the sovereign fund or a national priority might step in and say hey this technology will change the world. And we can't for now use technologies built by another country. Yet the entrepreneurs aren't going to naturally get funded by VCP ease. So I think we're going to go make this work. I mean fortunately I built zero one dot a I in China where there is large enough a population to make an easy business case. So normal investors private investors invested in me. But I kind of take what I do and project it to other countries. It's going to be much harder to make that business case. So I think I would encourage more countries and sovereign funds to think about you know what are the big technological trends. What are things that they can't depend on other countries. Because the national needs are different or the usage cases are different and how to encourage what might initially look like a not the great investment. But it will lead to a big ecosystem as well as building a brain trust that really makes all the difference in the long term. And Scott your view on that division of labor between public investors and private investors. What are some of those big areas where public investment should go versus private and particularly in the American context. Well it's notable in the U.S. context I think most of the pension funds are relatively passive investors in private equity. But as I feel he said there are there are countries where that has progressed from fund of funds to fund of funds plus direct investment. And ultimately if you look at Tomasa can Singapore for example you know that's they make they lead direct investments and and have done it very well. So I think it depends a little bit on what the situation of the country is. You know if you're if you're trying to jump start a new ecosystem you're going to have to be much more aggressive. That's what I described China having done. But even a country like Australia has set up the future fund. I don't know 20 years ago. We are you know they invested in any a started making direct investments in our company. And you can look at their results. I think it's public record. They've done incredibly well for the citizens of that country without necessarily having the goal of supporting an ecosystem. So to me it really depends what you're trying to do. And I think it's it's fascinating to hear what the models are that have been tried around the world. But it seems like there's a lot to learn from. Can I just add something about venture capital because it keeps coming up as this like good thing. It depends. And I mean I I think venture capital has had a hugely dysfunctional role in many parts of the world including the U.S. that we should learn from in order to create functional venture capital. So the fact that it's so exit driven. And sometimes that exit is kind of three to say seven year cycles. That's not patient finance. So that's fine for gadgets. But it doesn't get you. You know the kind of revolutionary change that we need in different sectors like the ones that you were talking about. So in the biotech sector for example exit driven V.C. got us a lot of plipos. It sounds like a disease but it's productless IPOs. The venture capital sector in the U.S. also played a hugely dysfunctional role in terms of tax policy. The ones that lobbied initially at least for capital gains tax to fall by 40 percent in five years. And a lot of the capital gains tax reductions globally don't differentiate long term investments from short term investments. So I think especially in a panel on innovation let's learn from the mistakes that have been applied or how do you say designed into the way that venture capital is structured. And also in terms of sharing risks and rewards the whole to 20 model itself could be you know questioned on whether you know it's fair. And if you look at the health sector I mean I just know this because it's sort of obsessive about looking at sectors properly over there kind of 50 to 100 year cycles in the U.S. for example it was the National Institutes of Health that recently are spending about 40 billion a year that have invested in the early stage high risk drug innovation with V.C. almost always coming in later. That's fine. Not a problem. But then let's admit that that's the division of innovative labor and ask what does that mean for the division of the rewards. And that's going to get a smarter policy. Thank you. And President Armin if I can come to you with both that question around divisional but also is this really about crowding in and out long term short term or is this about partnership. Well I think with today's new industrial policies particularly the largest industrial policy experiments underway today. The risk is not so much about crowding out private capital. The risk is of crowding out other countries. And in fact the motivation for these industrial policies have been twofold. Part of it is good which is driving down the costs of low carbon or zero carbon technologies. You know accelerating that shift in the cost abatement curves. That's all good. But the other motivation which is not disguised is geopolitical. It's about achieving a lead over someone else. And it goes together with other policies which are in WTO terms straightforwardly protectionist. So it's a complicated game. And the real risk is of countries with the deepest pockets or the ability to borrow the largest amounts of money without suffering a credit rating loss being at an advantage over the rest. The reason is because this generation of industrial policies works by offering subsidies, large subsidies and the deeper your pockets the more you're able to offer. Now if you think about it compared to countries which are adopting what economists would call first best policies which is carbon taxes or carbon pricing and you hope that that will incentivise low carbon technologies over fossil fuels. The country that offers subsidies is at an advantage because it's also just lowering the overall cost of energy. It's not just slanting subsidies towards low carbon. It's also lowering the cost of energy compared to the country that's going for the first best policies of pricing where you're not only encouraging low cost carbon, you're also raising the cost of energy and encouraging energy conservation. And that's really what's happening globally today. The country with the deepest pockets is crowding out other countries. It's going to be a situation where, well first the jury's out as to how well you succeed in the long term when you mix up those strategies. But second it's ultimately going to be a path in which you slow down the rate of innovation globally. You slow down the rate of investment in innovation globally. And our experience has been that in all leading industries getting competition globally and investing globally and having global supply chains that come from all sources. I mean if you look at ASML for instance, ASML is actually a very complicated global network leading to those lithography, those very advanced lithography machines. But it's a very advanced global network with everyone investing at the frontier within that network. Once you start nationalizing the process, there's a very high chance over time of a slow down in the rate of innovation. Some countries might be up, some countries might be down, but the global rate of innovation goes down. So I'd say we've got to have a care for how we mix up strategies to be realistic. Countries do want to be ahead, but it's got to be, if it's got to be in 80%, I put in the effort to develop my capabilities. 20% I try and make sure someone doesn't catch up rather than the other way around. Thank you. Unfortunately 45 minutes goes by really fast with such an incredible panel. And so I'd like to just do one final round and I'll start with you, Scott. Your outlook for innovation, public or private sector led, do you think there is that risk of a global slow down in innovation? And that will be the final round, final question that I'll ask the full group. Starting with you, Scott. Well, I think there's an enormous amount of innovation underway, probably more than any time in my 30 year career doing this. There's also, you know, a huge aversion to risk and capital going into the startup ecosystem went from 700 billion to 300 last year, you know, span of two years. So, but I actually think that's healthy. And I think the right kinds of innovations will largely survive. And the kinds of technology that is coming along today, most notably artificial intelligence will create unbelievably good things. So I'm not, I'm not that worried about it, although I think there will be a lot of casualties. Thank you, Mariana. So the opportunities are there, but they won't bear fruit unless we make massive changes to how we do capitalism. So the first thing would be to de-financialize our corporate sector, as I already mentioned, 7 trillion. That's huge in terms of share buybacks. That's the same financial gap, by the way that people argue is around the SDGs. Second, we need proper purpose oriented partnerships. I've been arguing for mission oriented government working with purpose oriented business together and big problems. But again, designing those partnerships contractually right ex ante so we don't pick up the mess. Exposed. And third, I'm sorry, I keep studying my books, but my latest book, the big con was how the consulting sector, so the McKinsey's and PWC's, it's not even their fault, but governments have outsourced a lot of their capacity to the consultants. So we need to insource that capacity. There's definitely a role for consultancy, but not instead of investing and training the civil service and also making them happy again, and calling them at best lenders of last resort or market fixers or facilitators is not a good way to insource top talent and then to also train the civil service to help create value, not just to redistribute, regulate, administer, and you want to kind of fall asleep by the end of that paragraph. Thank you, Kai-Fu Lee. Yeah, I'll follow suit and sell my book too. In my book AI 2041 talks about all the technologies in the future from AI to biotech to quantum computing to drug discovery. And I think the opportunities are just so so large. And I predict actually that we will reach within the next 20 years the age of plenitude when AI and technologies do work for us, and we will be able to liberate ourselves from having to do routine work and do what we as humans really want to do. So with that, it shows a huge amount of optimism. We face some challenges in the capital market. A lot of ECs and investors want to see cash flow and make money. And that's not the way you invest in the early stage, but I have faith in the entrepreneurs in the world that we will make these technologies happen. Thank you, and ministry. I have a book to sell, but I think Saudi has a playbook that everybody is looking into. And this playbook is all about bold movement, like Mariana said, and learning by doing. It's about global collaboration and partnership. I don't think it's always competition, although competition is good. I think the state of innovation, if we really put our heads together and if we say it's not either or. I mean, every country wants to be resilient, especially today. And it wants to be a co-author of the future of many of these sectors and technologies. And it's only fair that it wants to take a lead, but that doesn't mean it can't collaborate and kind of put forces together. The green energy transition won't succeed without true collaboration, investing in accelerating innovation and technology. And I really think, you know, impatient capital doesn't go against thinking long-term. In Saudi, we wanted to accelerate our diversification fast. We went in. We created the environment in several sectors. We prioritized 13 that created the conditions for profitability for private sector. And PIF has the largest fresh capital deployed in 2023 at $35 plus billion. That's not patient capital. At the same time, PIF in 2022 crowded in $60 billion of private sector investment. So these two things can work together. And I believe truly that this is the time where collaboration can lead to acceleration and innovation. Thank you. President Harman, you got three optimists about the future of innovation, and one, it depends. What's your view? Give us the final word. Well, I think we should just keep in mind that we are way behind. We are way behind in the race against climate change and a broader crisis in biodiversity. And the way to tackle this is to rely on superior technologies and innovations wherever they come from and scale them up. Guard against unfair competition, unfair subsidies and the like, which many countries are guilty of. But choose the most superior technologies and scale them up regardless of which country they came from. That's going to give us the best chances of tackling a problem that we are still way behind in tackling. Thank you, President Harman. Thank you, Minister Ali Brahim. Thank you, Kaiful Lee. Thank you, Marianna Mazzucato. And thank you, Scott Sandel. Big round of applause.