 Well, good morning everybody. Since the room is already full, which I take as a fantastic sign of just how much interest there is in the topic. And since there is a lot to discuss, I think we might be efficient and actually start a couple of minutes early. And Vishal Sika, who is the CEO of Infosys, can join us when he arrives. I think frankly with just four people on the panel will have quite enough to talk about anyway. My name is Gillian Tett. I'm the US managing editor of the Financial Times and I am absolutely delighted to have a terrific panel of people to talk about something which really, in my view, is the burning issue of the age. Which is how to create inclusive growth in the digital age. Might be subtitled How on Earth do we create enough jobs when the world is full of robots, barcodes and smartphones? Which is the big challenge. I mean, when I look around the world today and think about this issue, I often think we are living, as trial at my say, in the best of times and the worst of times. I was given some statistics. Great, we have a full panel. I haven't yet introduced anyone, so I will introduce the whole group in a minute. We started earlier. Yeah. I think that's one of the points that Davos organisers are trying to make. He will be walking and doing great stuff for our heart and the environment. Yes, exactly. Best of times and worst of times. I mean, I was handed some statistics just before this panel from the web suggesting that there are about 6 billion mobile phones in the world about as many as there are people as soon they will overtake it. Apparently 90% of the world's population will have mobile phones by 2020. 3 billion people are already on the internet. Of course, that still leaves 3 billion who are not, but the numbers are rising all the time. In many ways, we have seen the most extraordinary technological change in a very short space of time that I would argue outstrips anything we've seen before in terms of the agricultural revolution or the industrial revolution. That's the good news. The bad news is that there are estimates that within the next 10 to 20 years 45% 45% of the jobs in America will be replaced by digital machines. And that's just America. One of my favourite statistics is from Brian Arthur from the Palo Alto Research Institute who suggests that if you look at all the economic functions performed by digital networks in America, they will soon be equivalent to the output of the entire American economy. Essentially, you're creating a second, if you like, shadow economy offshore in America. So the really big question is what on earth are those humans going to do who don't have a barcode implanted on their brain? And you only need to look at the statistic to see that you're seeing great job growth for highly skilled workers, you're seeing jobs growth for unskilled workers, you're seeing rising income inequality though, the middle is hollowed out. And those of you who stayed up late to watch President Obama's State of the Union speech and are looking equally haggard like me today will know that income inequality is absolutely the key theme, not just of Davos, but of the political agenda. So we have a fantastic group of panellists to talk about this. I don't think we're necessarily representing such income diversity, but we do have a lot of views here today. A cheap shock. Maybe I'm the bottom 90% of the spectrum. Exactly. Well anyway, on my far left your right is Eric Brynzolsson who is a professor, well known to many of you from MIT, wrote a fantastic book last year on the implications of this, so he will be writing an academic framing to it all. Next to him is Peter Grau, chairman of Bloomberg, which of course is one of the companies at the forefront of change in the financial sphere when it comes to technology. And on my left is another representative of the financial sector, who is very involved in digital transformation, Ajay Banga, CEO of Mastercard. On my right is sorry, I am having a, sorry, Hans Westberg, CEO of Ericsson, I would even try to pronounce the first part of Ericsson's name in Finnish these days. And on my far right, your left is Vishal Sika who is from emphasis from India, and CEO. So I'd like to start with Professor Brynzolsson, Eric. When you hear the gloomy prognoses about job creation or the lack of it, the number of jobs being replaced by robots and bar codes, do you feel depressed? Are you worried that you are eventually going to be outsourced to a bar code yourself? I feel challenged and I think we all should feel challenged. You know the reality is that technology has always been destroying jobs. It's always been creating jobs. But recently we have had kind of a change. For a couple hundred years we were creating jobs as fast or faster as we were destroying them. But recently that has leveled off in the United States and other advanced countries and perhaps even more troubling, median income has stagnated. And that's a pattern we didn't see earlier. You mentioned the industrial revolution was a real inflection point in human history where before that living standards were really pretty stagnant and then in the couple centuries since James Watt invented the steam engine living standards have grown maybe 50 fold or more depending on how you measure it. Today the pie continues to grow bigger. We are at record wealth, record productivity, more billionaires and millionaires than ever before. But the average person in developed countries isn't participating in that growing pie. And the reality is that there's just no economic law that says that everyone is guaranteed to get a piece of this growing pie that technology is bringing. Part of it is because the technologies of what Andy McAfee and I call the second machine age are somewhat different than the first machine age. One thing is that things are happening a lot faster in many ways. We all know that Moore's law doubling of computer power every 18 to 24 months. We went back and looked at the steam engine and it also doubled in power, but it took about every 75 years for it to double. So it's a much different pace of progress there. More importantly the new technologies are digital and networked and you mentioned that. And when you digitize something, a song or news or anything that has three very interesting characteristics. First you can make a copy of that original essentially for nothing, zero cost. Secondly, each of those copies is an exact replica, a perfect copy of the original. And thirdly, each of those copies can be transmitted anywhere in the country or anywhere on the planet almost instantaneously. Now think about it, free, perfect and instant. Those are three adjectives we didn't apply to goods and services throughout most of history and as you can imagine they really upend a lot of economics based on scarcity. They lead to some new kinds of market outcomes. Particularly you tend to see power law distributions of sales, revenues and income. Often winner take all markets. There's not much point in having 300,000 different people writing tax preparation programs even if you had them individually working as tax preparers previously, but a piece of software can replace many of those functions. And so you end up having the potential for the economy to have vastly more wealth but also some individuals to become very wealthy and as I mentioned many billionaires have been created in the past decade and that's great in many ways. But it also means that many people who were previously doing those more routine kinds of jobs, the ones that can be automated most easily are having a harder time finding new kinds of work whether it's in robots and warehouses and factories or whether it's an even bigger group of people doing information work and knowledge work. And I spent a lot of time visiting the labs at MIT and Silicon Valley and elsewhere and I can tell you that the technologies that are in the pipeline that are coming out in the next decade are even more remarkable than what we've seen already having these big effects over the past decade. We ain't seen nothing yet in terms of the impacts of technology and that means we do need to be very going to happen in terms of jobs and income and ultimately my view on this is that the technology itself does not determine the income distribution. It's the combination of the technology and our institutions, the way we organize work. The industrial revolution that I mentioned earlier not only brought along some amazing technologies but huge tectonic changes in the way say we educate people. Mass public education was something that was introduced in the 1820s and 1830s something that seemed a crazy socialist idea at the time. There were changes in the tax code, social security, corporate organization, many other changes and we will need comparably large changes in our institutions, our organizations and our skills going forward if we're going to have shared prosperity. Well that's a fantastic set of ideas to frame that with. It raises a lot of questions on the policy front not least about whether it's time to talk seriously about the taboo R word or the word that's taboo in America which is redistribution in some form or not whether education alone will be enough but I'd like to ask, I saw Hans nodding enthusiastically there do you think that 45% projection in terms of the jobs that will be replaced by machines is a reasonable projection and what does it mean for a company like yourself? If you start from the beginning what the professor said we are in I would say the fifth technology revolution and you mentioned a couple of them before we've all seen them having two faces and all of them of course have transformed people businesses and society. We are now in the midpoint of the fifth technology revolution which is all about mobility, broadband and cloud. I mean you mentioned some numbers in the beginning where 3 billion mobile broadband subscriptions in the world it took us 100 years to get 1 billion people connected to a fixed the next five years is going to go so much faster so by 2020 8 billion mobile broadband subscriptions that means there were three times as many people on this earth have access to internet the next five years and it took us 25. It's just a mind-boggling speed we're going to have in front of us and of course bringing down the barriers and it will impact us many of you already have a smartphone that you are still a minority in the world the majority of the world's population are on 2G they are still on a non-connected device but the next five years it's just going to be blooming up in the world 85% of the earth's population will have 3G or 4G by 2020 and this we need to think about because first of all we're going to have people being impacted they're going to be connected, the unconnected will be connected businesses will be transformed everything that you can do when you are connected if it's a transport company, if it's a software company logistic company whatever, financial company all of them will have the potential to be transformed and finally the whole society will be transformed because this will be the 21st century's infrastructure citizens will and should have access to education healthcare, we should be able to work with combating CO2 emissions because this infrastructure will be the biggest I would say a tool for society to actually combat some of the biggest challenges and a company like us being in 180 countries basically building all the networks all around the world 50% of all 4G traffic is going through all infrastructure our job is to see that that technology can cater for all these three differences the people, the business and the society and I think that's what we have in front of us and of course it will be becoming some challenges in all technology revolutions you have found challenges but remember the majority is positive development for a planet sustainable development then we need to find the challenges with it security, privacy and of course how we're going to create jobs but in all these five technology revolutions you have always created jobs in technology and we will not and we should not stop this technology revolution and doesn't matter interest before I turn to Fischal Hans when you look at your workforce today is it growing or shrinking are you placing your own workers with robots? No, it's growing. Remember we are a service company as well but we are changing the type of it last year roughly you can say that we hide 19,000 new employees we are 115,000 employees but also 14,000 left the company because we are transforming so fast so that's the only way for us to be relevant for our customers for the industries we are working with different sectors like utilities that need smart grids or mobile operators all around the world so we need to change and of course the gravity has changed as well I mean whole Asia is growing tremendously North America has been in the forefront of technology we need people there historically we had 50% of our employees in Sweden I can tell you we are far from that What are you now in Sweden? Less than 15% That's quite a change I dare say many of them probably are in India now That's the largest workplace we have Fischal what are your perspectives on this because of course you come from a country initially which is seeing very rapid increase of internet penetration where up until now it's been a beneficiary in terms of moving jobs from the western world to India but do you think that trend is going to continue? I mean it has to go through a very fundamental change when we think about robotic jobs and automation the main thing we hear obviously is that the kinds of jobs that companies like mine have done will be replaced by this automation and I have a different perspective on that the traditional sort of downward spiral of cost is not the right way to go it's not the right direction to go a better way is to focus more on automation and to use that to amplify people's ability I think that what Eric was talking about when we look at an industrial revolution or closer to India the green revolution technology always in the long run amplifies people's ability it makes people more productive it makes people do more with less for more as Professor Michelle Kerr once said so my sense is that we can get to a future where people are still at the centre of what we do but we amplify people's abilities with technology with software, with automation so that people can do more with less that to me I studied AI my doctorate is in AI and I don't see for the foreseeable future a situation where people will become completely irrelevant because of AI as far as I can see yes it is true that more and more of the problem solving of doing the things that are prescribed the things that are well defined will continue to be more and more automated but there are always exceptions there are always things that require human judgement and oversight and then beyond that there is a problem solving there is a great new frontier of problem finding and techniques like design thinking help us to become better at problem finding so these are things that people will continue to do technology creates a displacement and there is a temporary replacement of jobs but it also creates a tremendous new set of opportunities I see a world right now where there are 18 million cloud computing jobs that are open 8 million are just in China so there is a great need for next generation kinds of technologies and to bring people into these kinds of opportunities so we should all be putting our kids straight into the cloud I think that that is a software literacy is a very fundamental thing that is why we have the Infosys US Foundation which Sandeep who is sitting here somewhere he was working on my wife who is sitting here she is running the US foundation they are working on bringing computing literacy software development skills to everyone from children as well as people who are being displaced my own daughter is a very keen coder I live in fear that one day I will wake up and discover she is hacked into the FT or NSA or something or Bloomberg just very briefly before I turn to Ajay how many people do you employ? 170,000 and what was it say 5 years ago? 10 years ago it was one tenth of this so that is job creation tremendous job creation we recruited 40,000 people last year so my sense is if you look at the green revolution 80% of India when I was a young kid Ajay probably remembers this were in farming in agriculture and despite that India had a food shortage and then the green revolution happened and board laws, germ free seeds and so forth and people became more productive the farmers became more productive so even though the absolute number of farmers has still increased their productivity has increased dramatically and India is self-sufficient now it's the largest exporter of wheat one of the largest exporters of rice even milk is exported so that is the point I think that if we can convert continually technology as a creator of jobs as an amplifier of people's abilities we will be okay well that's a reason to be cheerful which is always good at the start of Davos Ajay how do you see it from your perspective? so I guess we've got a lot of ground here I'm actually a little bit where Eric is that first of all I think you should stop trying to figure out whether technology will or will not alter the job landscape and whether you can hold that back it will, it just will and there's no question of holding it back so given that the question is what do you then do about it as civil society and as people in companies and my belief that the single big thing I can do is to put investment into education and infrastructure and the question of young people is not faced with the same mismatch of skills versus requirements that today's generation is working its way through so be it coding like your daughter who one day will probably hack into the chip that you're going to embed in your forehead right or then direct you in a different direction don't give her any ideas or it be any form of such knowledge I think that's going to be an important role for governments to play secondly technology is transforming everything I mean all of you are carrying smartphones around and my friend Boody there is using his iPhone if you had, he's got an iPhone if you had a Samsung of the latest type that one has the computing power of he's got that too this guy is a problem but there you go he's got a television screen you always wonder why there's more mobile phones in the world than people is because we are collectively represented at least half of them Peter thinks he's looking at Bloomberg on that screen anyway so the fact is that that phone, that Samsung phone has the computing power that is 11 times the computing power of the computers that guided Apollo 11 to the moon that phone forget the cloud which only makes it multiples of that just that instrument has 11 times the computing power so you go back to the time when encyclopedias and book and printing took away the control of knowledge dissemination from the churches and priests and temples and those guys and gave it to people to read well now that is taking away everything all arbitrage and giving it to the individual who's walking around on the street now if you have that in your pocket and you have the amount of data that's being generated from that in your pocket and going elsewhere how can that not be an unbelievable opportunity to connect people and I believe that the reason that jobs aren't there or that people face difficulties is that they're missing from a network so if you aren't connected to the education network you've got a problem if you aren't connected to a social network to help you find a job and you're a young person you're screwed if you aren't connected into a network that allows you to get financing and you're dead so all the things that are happening right now are about networking and networks and so if governments invest in technology and education and infrastructure and if we as the others can use the power of that phone that booty is carrying around to help network people then I think you have a real chance to talk about a future that'll be very different from this current gloomy prognosis of 45% of the people won't have a job but technology is not going to stop and it's got so much usefulness out there Well I want to return to that in a minute and particularly look at the question about whether education alone is going to be the answer I might do take your... I've got some other thoughts on that but I'll let you finish You've got to give Peter a chance to say what he has to say Okay well Peter you are in the hotspot Do you think that first of all do you believe the 45% number? Do you think that's a realistic assessment of what's happening in the American economy? I mean does it apply to bankers? Or financial services people? Well we've certainly seen it in terms of the contraction in the financial services industry and I expect as technology continues we're going to see more and more of that but I want to just underscore what Ajay said I think the pace of technological change is immutable it's just not going to stop so the issue that we as a group should be debating and thinking about and I hope we'll spend some time talking about and that is how do we deal with current institutions that exist whether it's education and the union situation in the United States whether it's tenured professors and colleges and universities some of the fundamental issues that basically we have to change to be able to take advantage of what's been going on from a technological renaissance that we're all in the midst of right now and I think those kind of... there's a lack of symmetry between the pace of change from a technology point of view and the institutions that we have today not only in virtually every country in the world and the political leadership that exists that has to have the will to change some of the fundamental premises that these institutions have been built on so that we create an environment where we can leverage technology create jobs and obviously this issue around income disparity and try and minimize that to the extent possible so I think there's some very fundamental issues underlying all of this that we as a society have to address otherwise there are going to be some potentially some significant challenges that we haven't thought about right so I connected thought on that one which is more in the specific space that we're trying to do at our company is that two and a half billion adults don't have access to any form of financial services so just translate that into lost productivity for a second and think of having to go pay a bill and stand in a queue because you've got to pay it and you can't do it the way you and I are used to it or think about not getting access to credit at a reasonable price or think about not being able to send money to your mother or your brother without some unbelievable cost involved when you put all those together that's a pretty unproductive group of people that's half the world's adults the other way to look at it is that half the world's population is female there's something wrong with the way that job opportunities and compensation for them flows through so if you look at President Obama's State of the Union address yesterday he's talking about childcare and equal pay the fact is women have the same level of education as women in the Nordics and yet the participation in the workforce of women in the Nordics is way higher than that of women in the US and the difference is caused by the absence of capabilities and facilities for them to be active participants childcare is one of them maternity leave, paid maternity and by the way, paternity leave which you need if you're going to be supportive is a problem in the US and then you come to the issue of paying women differently for the same job done and you put all those three things together you've got half the world's population being unproductive you've got half the world's adults being unproductive because they don't have a basic financial account that's a pretty crappy situation now technology can change that because every device will be a connected device every device will be a device of commerce we can change that but you need a public-private partnership which is the point about education infrastructure and the like from government governments need to certify identity if governments don't certify a digital identity no corporation will take on the risk in today's regulatory environment of opening an account for an individual if you don't know that that person is Peter Grau who lives at this address and these are his fingerprints and his irises and they need to create a regulatory box for everyone to play in so there's a lot of stuff we can talk about in that space what I'm trying to say is that technology actually can help in all of those it can help transform this whole idea of making half the world's population whether women or people who don't have an account become productive contributors and that's what we're looking at in a positive way as compared to the jobs that may go away which is a problem we got to deal with we got to deal with cyber security as Hans mentioned we got to deal with privacy the internet was formed in a way where today everybody's information is public you can google me and you'll get to know the apartment my daughter bought and lived downtown why the hell should that be in public spaces it is because there is no privacy for an individual in today's form maybe there will be in tomorrow's form and maybe there should be I don't know but that's a debate worth having it's done but there's an opportunity I'm keen to come back to the question about how you actually deal with the education issue and the institutional issue in a moment but before we do that the underlying premise of this panel is that the internet just keeps spreading and spreading technology keeps spreading and spreading in an upward line like that and it always reminds me of 2006 and 2007 at Davos when everyone thought that financial innovation would keep going like that and liquidification of the markets would go like that in one straight upward line it always makes me concerned when everyone assumes that the water came over our heads exactly and I just moderated a fascinating panel with Fade from ICANN and Akleitner which basically said what happened to bankers could easily happen to the tech sector in terms of the reputational collapse are any of you concerned about that that actually this premise underlying this panel that technology is just going to get better and better could actually be disrupted by a serious cyber attack cyber collapse but it did I mean we went through this in 2001-2002 which was the dotcom bubble burst so we have been through it and it's probably naive to think that there won't be a cycle of some kind we don't know necessarily what that cycle may be but it certainly my guess is it will happen at some point and it will be unpleasant but as is always the case we'll figure out a way to recover and move back forward my sense on that is that that's actually a great example of exactly the thing that we are talking about if you look at the financial crisis it was a great example of deeply technical techniques quantitative techniques basically taking over decision making and I read this fascinating set of articles around how this happened and of course Michael Lewis wrote a great book about this as well the unknown risks were just put away in a corner never to be looked at again and those are the kinds of places where the human rationality, the human judgment can be that exceptional cover that guides our abilities around automation so unchecked automation will inevitably lead to situations like this where what we think of as a black swan event will happen and that is why we need this technology in the context of human empowerment to have that outer frame of judgment and rationality guiding us so I do see that it is crashes like that or collapses like that are inevitable but they bring us back to our ability to keep things sane by bringing the human judgment into the mix of these things so if nothing else we have job creation for risk officers yes that makes the lawyers in the room very happy anyway sorry Eric I would fundamentally distinguish at least three different ways that the tech sector is affecting the economy I mean you refer to the kinds of crashes in the dot com bubble but that's really just a very surface kind of thing that's happening with the stock market and it's going to affect the fortunes of a lot of people maybe a lot of people in this room but it doesn't have as much of an impact on the fundamental changes that we were just hearing about from really all of the panellists in terms of connecting the world's people that I think is pretty inexorable that's going to continue the underlying technological capabilities once people are connected and then the third level is that beyond that the real changes are the reinvention of economic institutions work practices, the skills I would venture that even if somehow and it's not going to happen but even if somehow the technology froze there would be a few decades of reinvention of our economy that would have to continue just based on the technologies that we all have available right now so I'm not the least bit worried about those more fundamental and pervasive and really tectonic trends changing or slowing down I'm quite confident they will actually accelerate over the next few decades Right I'm going to actually employ a bit of innovation myself and rip up the normal order and turn to questions in a minute because we do have a lot of people in the audience who frankly are extremely knowledgeable about the issue but the one thing I want to ask you first though is this I'm often told in America by very wealthy people who dislike the idea of talking about redistribution or talking about income inequality who are worried about class warfare I'm often told by them that actually the key solution is education if only you can just educate everyone then all these problems of income inequality will go away Do you believe that or do you think that's simply a rather convenient fig leaf for avoiding talking about the other issues? I don't think the problem will go away in the sense that if you look at the gap between the haves and the have nots it's widened. I mean at the industrial revolution the gap between the per capita income of the world's richest and poorest nations was like 10-12 times it's now over 100 times so I think that gap isn't going to go away just by education there are aspects in life one is do you take money physically and redistribute it to the others and the other is do you enable those people to have a productive life it will not all be equal in earning but if you get the right levels of education be it education and community colleges and vocational schools for the right kind of job opportunities or be it as doctors and lawyers and engineers or be it as PhDs in artificial intelligence or guys like you and me who barely have intelligence let alone artificial intelligence that kind of stuff that kind of stuff is that's why I'm a journalist that's true and I just run a company so if you go through that I don't know that that will go away but I do believe you create a better and more level playing field by giving people the opportunity to participate productively that's why I was talking about the aspect of giving women an opportunity to participate productively I think that civil society and government doesn't have to focus on punitive redistribution as much as giving people opportunities by creating the right infrastructure and the right ability for them to succeed that's the point I was making one of the things that I spend a significant amount of my time on is an organization that's involved in low income access to higher education and it's vocational education it's community colleges and it's four year colleges and universities and we have over the last nine years affected the lives of a half a million students that otherwise would not have gone on to higher education and the data I should have these numbers off the top of my head I don't but if you look at the income and earning power based on each level of education certainly in the United States and my guess is it's the same elsewhere it is quite dramatic and so part of the mission is getting more people with higher education better develop skills whether they're skills that are based on technology or otherwise and I'm very much in Ajay's camp and that is I think that the inclusiveness created by that and the aspirations that education will in turn support for those people is really powerful in terms of economic growth going forward and gets us away from some of the issues around redistribution of wealth which I think are politically very incendiary maybe I can say one my view of course there are different angles of education and I think that we all understand that education and people understanding challenges will of course have a much better chance to grow and prosper so I think that's no debate about that I of course think about a big proportion on the world's population that doesn't get the education today I think that's where where I of course are rolling out networks and getting people connected in rural places which for the first time in their life get a device in their hands and I can tell you they don't call their grandmother and tell them they're good they're googling, they go into the internet, they get the information that of course is an enormous important thing for transforming the world and think about that maybe we can say that governments hasn't thought about it but today 140 countries in the world has a broadband plan they start to think that this is an infrastructure they need for rolling out education for getting citizens information or doing healthcare and I think that what we're going to see the next year and I fully agree with Eric this technology will just continue to roll and we're going to get a platform that is so big when it comes to mobility and broadband and it's just how we're going to be able to use that by 2020 it's still going to be 1.7 billion people that doesn't have connections 1.7 out of them 300 million will not have coverage so it's still 1.4 billion they will have coverage but they cannot afford to get connectivity so our job is new business models private public partnerships how can we get them to be included in it because all in all they will get the information they will have a possibility to prosper and I think that's of course you can think about the US education system it's extremely important but think about the words that is not getting education at all and girls that has to stop after the first grade or something that is important for our society my point is I think education especially lifelong education we have to think about education is not something that is confined to the first 21 16 out of the first 21 years of our lives 4 years in a college that is in a particular place but instead it is something that we do for our entire lifetimes and we do wherever we are that comes to your point about connectivity so rethinking education in a way that it is something that we do wherever we are and that we do for our entire lifetime is something that I believe is extremely necessary as the rate of change on these technologies continually increases I mean Eric do you think it's time to rethink say the way that American universities are organized say the 10 year system no question I think so I think that just a building on what Hans and Vishal just said I think education needs to reach more people it needs to people need to go lifelong and be connected more ways and universities are being reinvented they may be on the lagging edge of the digital revolution I don't know that the 10 year system makes a big difference in what's going on here but I think one of the things that we're seeing is the use of new technologies like massive online open courseware and it helps reach all those people of course we taught at MIT that went to a few hundred thousand people on circuits one of the kids in Mongolia took this course he got a perfect score we admitted him to MIT shortly thereafter he was like 16 years old but that's an example of somebody who wouldn't have previously gotten access to it but more fundamentally it's not just using these digital technologies to have free perfect and instant access to content that they didn't get previously and reaching more people it's also another aspect of it which is when you digitize things you tend to data-fy them much better and we found that the biggest change when we started putting our courses in digital form was we got much more detailed feedback about what was happening how people were using the course on a hour by hour, minute by minute even second by second and we were surprised by some of the things we saw that for instance we found that many people did not look at the lectures before they started working on the problem sets as the way you expected so we changed things around we'll give you the problem first and then we'll give you the tools for solving the problem and that seemed to be a much more way effective way of engaging people and we learned a lot of other things and ultimately this means we're not just going to have education reaching more people for a longer time but also I think that the quality of education is going to be on an improving level much as we've seen in other areas Bloomberg and lots of other companies are constantly testing their products with consumers, AB testing for universities to sort of adopt that experimental rapid innovation improving kind of mindset ultimately every industry is going to have to do that but if we do it with education we can help close some of this skills gap that has been emerging right and it's one quick question and this is a straight yes no from all of you who thinks that income inequality is going to decline over the next five years let's say the western world yes or no well maybe you'd like a few moments to think about it income inequality is going to decline it's not going to decline in my view okay no thinking? yeah I'm thinking I hope not I hope not but I hope not I'll go for that I'm optimistic I hope not so I would say it's not going to decline although I wish it would change okay no it's a trick question it's our choice but the problem can help decide whether or not that happens so you're basically voting he's the professor that is the professor that's so disappointing okay I'm going to quickly ask the audience that and then turn to questions who thinks income inequality is going to decline over the next five years let's say the western world because that's where okay well and you all have to vote okay who thinks it's going to increase wow okay well that is a very good counterpoint to the optimism about technology so who would like to ask the first question don't ask it once okay alright let's start with Laura over here all comments and listen because we are there's a lot of you waving hands please keep them short to the point and it's not compulsory to identify yourself but it would be courteous I'm going to be very short I'm Laura Tyson and I'm a professor University of California Berkeley the posing of the question redistribution versus something else I think is not the right posing of the question if we everyone agrees there's massive support here for educational reform historically speaking the public sector has been a major force behind spending on public education education is not free we can call it free it's not free if governments are going to do all this of investments they need revenue if they need revenue where are they going to get it so I actually think we need to discuss if we are going to revolutionize education the cost to the public sector how you can have the private sector do it instead of the public sector which is a little bit what's happening with income inequality what you see is a massive amount bydd o bwysig edrych yn cyfnodd yn wirfodd iawn. Ond mae'r rhefwng yn dweud. Gwниwch ymddangos wedi ysgrifennu arall i edrych yn ddegwyd, mae'r rhefwng yn ddegwyd yn ddegwyd, a'r rhagwm yn ddegwyd yn ddegwyd ysgrifennu arall, yma'r cyfeirio cyllidol yma o'r cyfleoedd, ac mae'r rhefwng yn ddegwyd yn y cyfleoedd, ac yn ymdyn nhw'n ddegwyd, ac rwy'n ddaeth ei wneud o'r ddeud, because it's wonderful to talk about the need to get rid of tenure or the need to go after elite universities. But all of the wonderful research we're talking about, much of those ideas came from government support of the building of a research base in the United States. do we want to not have that for the public sector any more? Great point. Wel I'm going to take a few more quicklying questions I'm going to take a few more questions as part of the crowdsourcing. so why don't I go across the room and sweep there? Yn ymgyrch yn ei wneud. Yn ymgyrch yn ymgyrch yn Llyfrgelladell Cymru, rydyn ni'n ddod yn fawr a'r bydd fawr yn ymgyrch. Yn ymgyrch yn unig ar y rai cyfnod, mae'n dda i'r hynny. Yn ymgyrch yn cael ei gweithio, mae'n gweithio yn ymgyrch yn ymgyrch yng Nghymru. Mae yma'n ddweud yma yn ymgyrch yn ymgyrch yn ymgyrch yn ymgyrch. Mae'n ddweud yma'n dyfynig ymgyrch yn eich cyfnod. yn ymwneud am y cyllidio'r cyfan sydd wedi gweithio'r gweithio'r gweithio ymwneud ac yn rhoi'r gweithio y mae gennym eu chyfnodau'r gweithio ar gyfer hynny. Nid yw'r cyffredin sydd yn ymddangos i'r bandd y maith yma yn y gyfrifio'r gweithio. Rwy'n gweithio'r gweithio. Rwy'n gweithio'r gweithio'r gweithio. Mae'n gweithio'r gweithio'r gweithio, ond mae'n dweud i'r gweithio. Mae'n gweithio'r gweithio. Mae'r hollau a gofyn i ddim o bwysig, ond mae'r bobl yn ydiwydoli. Roedd hwnnw i ddim yn oedd ehongol i ddim yn fywyd o'r holl. Felly mae'r hollau yn fawr o'r hollau i ddim yn hi ddim yn ei ddim yn y ddim yn y rhan. Mae'r siwr, Andrew, yn ei pofwng gydag ymach, ym mwy fferddiol yw hwnnw i ddim yn edrych wrth â sefydig os ydych yn y dyfodol. Felly yn digwyddau i'w hefyd yma diwyddiolol a hollwch i ddim yn ei ddim neu gwelio,wr olwch i chi oedd gondol hefyd yn jei'r oedlweddau ecaddigion, a greddwyd i ddau'r pechydigion. Fel Gweinidol. Roedd, ddod. A might be just conent on that, I think the con is excellent, on the proposed right now for the new restigies, there are 17 proposed and which are all big challenge as enough. And only four of them have some ICT in of them and all of that. There are four of the targets, but there are 148 targets. Yeah, then there are more targets. So there are even less. Mae'n meddwl, mae'r cyfnodd yn ymwyfyrdd ymweld yn ddechrau'r ddechrau, ond mae'n ddweud gwirionedd yn eu ddechrau'r ddechrau. Felly, ydych chi'n dechrau ddefnyddio ar hyn o'r ddechrau, gweithio, lleolau, rhai allan wedi'i ddweud yn ysgrifennu. A'r hyn yn rhaid iddyn nhw mae eu ffwrdd. Yn ymdodd Creslwy Peserid yw'r profesor o economiaid, mae'r ddechrau a'r ddechrau'r ddechrau o economiaid yw'n ddechrau? The advantages of technology and education are undisputed, but there is no escaping the fact that the vast majority of jobs that will be created to replace the ones lost to technology will be in low-skill services that cannot be mechanized, that are demanded by the people who are making all the money. We are already seeing in the United States, we are beginning to see it in the United Kingdom on financial times. Yes, they reported that most of the jobs created in the United Kingdom were in low-skill services like retailing, house cleaning, dog walking, healthcare especially. In the 1950s we thought we were on to a revolution because we mechanized house cleaning. In the 2000s we recruited people and passed those machines on to them. So we created the new jobs like they used to be before these machines. So the inequality challenge is how do you make sure that the pay for those people is sufficiently high to close the gap between them and the people that you've been talking about, the ones who are getting all the education at MIT and Berkeley and LSE and all that. And the reason I raised my hand that I see inequality rising is that I just don't see any institutions of mechanisms in the United States in the United Kingdom and increasingly in continental Europe with the exception of Scandinavia, I should say, where there is a mechanism that ensures that those jobs are well-paid jobs. Question over here. If we look at the world today, the US is a poor analog of the world today as was said, but the fundamental difference in equality in the world is not that we're all participating in the company and the CEO makes so much money than the workers at the bottom. It's that in some parts of the world productivity is 10 times 100 times, 400 times higher than in other parts of the world. And the reason why it's so low is because as Al-Jay say, people are disconnected from the networks that will make them productive. They are disconnected from the electricity network, from the water network, from the road network, from the urban transport network, from the education network, from the labor market network and so on. All of these networks involve some fixed cost of connecting. Once you are connected, variable cost collapse, right? So, you know, if you are not connected to a water network, you have to go and fetch water. But if you are connected, an additional liter of water is very cheap. Now what we know, say, from India is that there is 2% of the population has landlines, 75% of the population has cell phones, and the median Indian person doesn't have piped water. Now what does that tell us? That tells us that if technology allows us to reduce fixed costs, networks expand massively. But the reason why a water, piped water, has not diffused in India is not that it started later than cell phones. It's that it faces larger fixed costs. So there are some things where technology cannot help, and as Eric was saying, maybe policy has to help. And I want to bring in just one example. In 1775, one year before the US independence, the Continental Congress created the US Postal Service. And the US Postal Service was supposed to connect every single incorporated city to the postal network at a fixed cost. So it was the idea at the time that if you are going to be in the US, you are part of this network. And the US Postal Service is a part of the network. Do we want to make, say, broadband follow that philosophy? Do we want to make other things? I mean the universal access to some networks as being a fundamental empowering aspect to allow inclusive growth. I'm going to stop there for a second and actually ask the panel that. I think that's a great question. It really picks up on what Professor Tyson was saying in terms of is it time to simply say that governments should be investing in education, investing in infrastructure, but then who should pay for that? Should it be taxes to pay for governments or should private sector be paying directly or companies? My sense is that the private sector has to contribute to that. Today we live in times where the corporations, including my own, have a disproportionate amount of resources and wealth. So therefore we must contribute to that. And I think one of the fundamental reasons that a lot of people including us on the panel raised our hands on the inequality question is just the inertia of the amount of wealth that gets accumulated. Unfortunately it grows faster than the rate of growth overall that we see in the economy around us. And that is something that momentum is difficult to turn around. However, in these kinds of high fixed cost types of areas, and I see that in India all the time, roads in India, I mean all of you have travelled within India, trains, the infrastructure, this requires investments and I don't believe that government alone can enable that. They have to contribute, they have to initiate and coordinate. However, the private sector has to contribute to this. So are you willing to make a large contribution to it yourself? We do it already. We do a huge amount of work in this area in smart cities and things like this. We have to, we have to. So should companies all be paying say 5% tax or something towards this fund? Would you like to be willing, coming from Sweden, would you be ready to pay more tax? I think that different schools and education models, I think the US is very different from Sweden. We have to be very clear on that. I mean, I think that many countries in the world will actually reduce their cost by using digital education. Like digital as the content locally. If the infrastructure is there, the broader will there, if you listen to me now, that will be there. So it's going to be cheaper for a country long term, GDP development and possibility to give a really good education material that is digital. Today many poor people cannot get education and they need to have printed books and getting them out. This is going to be cheaper for government finally. Of course public sector and private sector should be part of it. And private should show what we can do with technology and our skilled people. So that's no debate about it. But we need to understand that different education systems when we talk about revenues, which is for the US in the rest of the world, in many places at least, it's actually going to reduce the cost by using the digital platform to get education out. Peter, what about America? Do you think that it's time for American companies to pay more for improving the education system for individuals or infrastructure? I think we pay that cost anyhow just because of the supply demand equation that exists. But I do think that it has to be a partnership between the private sector and the public sector. And whether that's a function of the public sector creating incentives for the private sector to do it through tax credits or whatever it may be, I think it has to be joint because I don't think the public sector, particularly with elected officials who run through cycles and terms and so forth and have different objectives with regard to what they do, they can't do it on their own. There has to be really a partnership going forward. Other viewers should comment. Well, I think it's bizarre and scandalous that we've cut our public investment so much in the United States. On the order of 6% of GDP for R&D, for instance, down to 3%, at an era of record low interest rates, it's a strange time to be not investing, to reinvesting so much less. That said, I want to stress what was said several times here, the bigger gains are going to come from reinventing education and reinventing the way we do things. Certainly we can spend more money, but let's not take our eye off the ball that we have an opportunity to fundamentally rethink the way education is done using some of these datafication digital techniques to understand better what works and what doesn't work. Just as companies and industries are being reinvented, we have to reinvent education, we have to reinvent the research process. That's ultimately where some of the biggest gains are going to become from. But that doesn't excuse this bizarre cut in public investment. I started out by talking about the network angle and the infrastructure and investment in education and infrastructure. That's still where I am. I believe that has to come with a great deal of public sector involvement. You won't get those fixed costs set up by private sector companies alone. Frankly, roads in India need improvement. Roads in Manhattan suck. That's the world's... So is cell connectivity. It's like being in a third world country. So we've got infrastructure investment around the world. I do empty a can every day, but it's continuous. I want to make sure we don't take this out as being only investing in telecommunication technology. That's just an example of what can come out from the investments that will go into education and infrastructure. Telecommunications and connectivity are a very important aspect, but it's not the only aspect. You need a whole village to make this happen. So that's one part of it. The second part of it is that I believe that governments are extremely inefficient in the way they currently spend their money. So I'll give you a small example from my own life about financial inclusion. We participate with governments around the world to intervene in their payment of subsidies to their citizens. Over the last two years, we are doing 500 programs in 53 countries that today are reaching 100 million people who didn't have an account before we started this work three years ago. You can make a difference. I'm actually doing it with Hans as one of them, with Boody as another partner, with my friends and Visa as another partner. So you've got to do this in a collaborative way as compared to me versus you. The issue is the wastage, the average wastage, what's called leakage in the emerging world, which basically is translated into theft, is between 35 and 42% of every dollar that governments pay to their citizenry for a subsidy. So to give you an example, the public distribution system in the state of Punjab in India, which buys $8 billion of wheat a year from the farmers to provide it to the other parts of the country which may not have access to that quality of wheat. That's an $8 billion program. When we intervened in the way they were paying the farmer, they were going through agents. The agent was in the driver's seat and the farmer was watching on the roadside. Now I have a card in the way they found 39% saving of $8 billion in a country where $4 billion is a big lot of money to change education and infrastructure. So my plea here is don't make it only about taxes and don't make it only about contributions. Make it about governments carrying their weight by being caring about productivity, efficiency and killing corruption because they are the biggest source of corruption in the system. That needs to change. Right. I think we have a question over here. I'll have time for perhaps one or two comments or questions quickly. One or two more. Hi. I'm Naveen Manonati, Connie. I was going to say actually something along the lines of what Ajay was saying. It's not just a technology issue, infrastructure issue. I do some work with the forum on data for development or tech for humanity. We found some very interesting facts like data is everywhere. It's like water. It's everywhere but it doesn't get to the people that need it the most. One example which I found particularly insightful was around how mapping data exists. If you go to Manhattan or any of these developed cities you can pinpoint to the nearest meter certain pieces of information. The algorithms that sit behind the mapping infrastructure are now reading road signs that exist on the road. But if you go to villages in Africa or even Palawan in the Philippines where I was recently, there are no roads, there are no road signs. In order for technology to really make an impact and equalize or even redistribute you have to leapfrog. The point is you can't leapfrog now because you don't have all the other parts of the ecosystem working together. OK, we have time for one more comment or question. I want to stand in silence. Ricardo, I just think you didn't talk about data and the use of data for transforming things. He's one of the world's experts on that space. He's sitting there so maybe give us a little bit of insight on that. I think people, stuff is done with information and know-how. That's how we make things. Other things we think it's made with money and effort. But it's really money and effort without information and know-how doesn't get you where you want. Connecting people to that information and to that know-how into those possibilities is where things are at. My view of development is the accumulation of know-how, more social know-how in society. But you cannot go from making coffee to making airplanes in one fell swoop because you cannot bridge that know-how gap so quickly. So you actually move from the things you do now to things that are somewhat in your adjacent possible, in your cognitive neighbourhood. To make that more explicit we've developed these tools that I'm going to present Friday at 3pm in a beta zone thing. So you'll have 45 minutes of those tools and those attempts at sharing them. Eric, I'm just curious. When you look at the world today, given that you look at technology for a living, do you feel more optimistic about the next say three, five years than you did three, four, five years ago? Well, I'm extremely optimistic, more optimistic about what's happening with technology. I've spent some more time with people and I thought we were a little aggressive in some of the predictions we made in the book about what technology is doing. But now I feel like we were actually not aggressive enough. What's happening say, we started with talking about the self-driving car and how surprised we were. Now they're doing much more advanced things, not using LiDAR and pre-mapping, but with vision systems because deep learning has progressed to the point where we can recognize objects much better and that same technology is being used for voice and language, it's for using for credit scoring and lots of other types of problem solving. So that has advanced much more rapidly. I continue to be as concerned or maybe even more concerned about what we're doing in terms of the economy and our institutions and our ability or our willingness to respond to it. And I want to stress picking up on what I said maybe a little glibly earlier about what's going to happen with inequality. The real key to understand is that we shouldn't think about technology doing these things to us or what's going to happen to us. We have more powerful tools than we've ever had in history and tools can be used by us to shape the world. So the question is, what do we want to do with these tools? And we have to change the mindset to not be sitting here and think, what's going to happen? What's going to happen? It's not like these things just happen to us. We decide and once we realize that and we realize that we have these incredibly powerful tools, we can shape the world to create shared prosperity. I have no doubt we can do that. We've done it before with earlier revolutions. It's a matter of deciding to do it. Well, that's a wonderful clarion call for action and a good point on which to end. I mean, I found this a fascinating discussion and thank you to all of you for being such lively participants. I take away really three key points. Firstly, that collectively we're all wildly optimistic about the ability of technology to allow us to do more and more things, irrespective of the threat of cyber attacks and things like that. Collectively, we're pretty pessimistic about the outlook for income inequality. Piketty was right, we seem to think, even though probably none of us have actually read the whole of his book. And the real question is, in my mind, if we are going to address these issues as Eric says, by taking control of the situation, how are we going to build the infrastructure, how are we going to build the education and above all else, who is going to pay for it? That, to my mind, is one of the key questions. So thank you to the fantastic panel, thank you to all of you and best of luck in sorting out the answers.