 We love mobile phones. Can everybody hear me? The mic's on. Great. Thank you very much for coming out to our late afternoon session on global growth. We have two great panelists. Eric Schmidt, CEO of Google, a chairman of Google. What's your latest title now? Executive chairman and former CEO. Executive chairman and former CEO and a dear friend. And Christopher Pissarides, who teaches macroeconomics at the London School of Economics. One of the big issues that I've been thinking about a lot and wrestling with, and it's really going to be the subject of our talk today, so I was so eager to be able to moderate this, is really what happens as we enter this era of hyperconnectivity and the merger of globalization and the IT revolution continue to gather speed. And what does it actually do to jobs? What does it actually do to job growth? Well, we know the internet on balance is a wonderful job, an innovation creator. But the jobs it tends to destroy have been historically jobs that a lot of people with out high school or high school degrees have been able to do and lead a decent and middle class lifestyle in their respective countries. And that's changing now is a wonderful cover story in the Atlantic this month about basically what's happening to jobs and Profile as a Young Woman actually works in a fuel auto parts factory in South Carolina. And the author Adam Davidson, he relates a joke in this piece. It's about how factories in America today become so automated. He said, in fact, there's a joke in the south that today's average cotton processing factory has just two employees, a man and a dog. The man is there to feed the dog and the dog is there to keep the man away from the machines. And so Christopher, I think I'm going to begin with that question to you. Is that the future of work? It's the future of some work, but not the vast quantity of jobs. Otherwise we would all be unemployed except for dog owners. I mean, there's no doubt that the digital revolution is a revolution in the labor markets as well as everywhere else. It's one of the big technology revolutions that we can see in the history of western civilization and the history of industrialization. We can see that everywhere. All jobs do use the internet somewhere or another. They all use computers whereas the mere 20 years ago a small number were using it. Those are very big changes. And when we're talking about globalization and how the location of jobs has moved the size of companies that produce the goods and services that we have has changed. All this agglomeration of economic activity, this movement across the world, the opening up of countries that were closed before like China, they have used the digital revolution, they have used digitalization a lot to achieve that. Now you might say that I understand is the focus of your question. What does this do to labor markets? Now the first thing that we should say is that it certainly changes the structure of employment. It reallocates jobs to other countries, the new types of jobs come to our countries. That's always been the feature of technological revolutions in the history of industrialization. The first one was in the United Kingdom and when machines were first invented to do the jobs that people used to do, you had the Luddites, for example, who were breaking up the machines because they felt that their jobs were being taken away. That was repeated again in the middle of the 20th century with the new industrial revolutions. I did find, in fact, a famous quote from President John Kennedy who said that if our citizens are clever enough to invent machines that can do the job of men, then surely men are clever enough to invent new types of jobs for them to do. And that's really spot on because what machines are doing and what the digital revolution has done is to destroy many jobs. Think of all those booksellers in the high street, in Main Street, if you prefer American English, think of those travel agencies in Main Street selling they've all gone. They were replaced by new types of jobs and that's precisely what it is. There is a process where we're destroying many jobs because of the new technology they become outdated. We are creating a new type of jobs. Now, the examples I've used are rather small examples within the country, but they're the more obvious ones within single markets. If we look at it as part of the global economy, I would claim that the fact that we lost so many manufacturing jobs in the Western industrial societies to countries like China, it depends a lot on our ability to carry on trade between at the speed that we do and that depends on digitalization without computers, without the internet. I doubt whether we have been able to do that. Collecting all the information, of course the manufacturing jobs are not going to come back to our countries despite what some very prominent people may have said recently, but they're being replaced by other types of jobs that are mainly non-traded services. Of course we do still need to produce traded goods. What are some examples of those? Of the non-traded services. Can we all be hairdressers and barbers and masseuses? No, you're more likely to be nurses if you're American. If you want a decent job. This sector in America that created more jobs than any other in the last 20 years is the health sector. It's the provision of personal services. Again, I would give a big role, in fact, to the digital revolution for that because what the digital revolution has done is to increase productivity and increase earnings a lot in certain kind of sectors. I think of finance as the main one, but there are other sectors even, you know, software companies. Those jobs are jobs where the top incomes have really increased a lot and when you work such long hours, when you get all those big incomes, then you expect better services at the personal level. There are many things that you used to be at home, you know, maybe you got the vacuum cleaner and you weren't around the carpet. If you had time, you don't have time to do that anymore, you have someone to do it. More importantly, you get childcare services for all elderly parents, you hire top-qualified nursing staff to look after them. That creates a lot of jobs. It also creates a kind of segregation or bifurcation, again, translated into American English, of jobs. I think that's inevitable and that's where our governments could help to make all jobs look good and meet the expectations of people, but it's that type of job that is being created now that we've lost the manufacturing jobs. Eric, how do you see this? You've had just a unique perch of having really presided over the emergence of this. How many employees at Google today? More than 30,000. You sort of literally go from zero to 30,000, basically. I mean, from two to 30,000. What have you learned from that experience and what are you learning today from what Google's doing in the world? The story that Chris has been talking about is one that's been going on for hundreds of years. And it's important not to fear technological innovation and revolution. These kinds of changes are what caused us to have clean water, high quality of life, invention of new law, new legal theories and so forth. And it's natural for people to fear such changes, but most of the arguments that I hear are fear-based arguments rather than fact-based arguments. And at Google, we have a pledge we asked in America, the politicians to give, and we asked them to say, in God we trust, and they say, in God we trust, and then we say, everyone else has to bring some data to the conversation. And the fact of the matter is that what the professor has said is not only correct, but it's true in many, many countries. And the fact of the matter is that McKinsey, for example, released a report today that indicated that in 30 emerging countries, roughly the interesting ones that we like to talk about at Davos, there's roughly 3.5 jobs created for every one lost. So the phenomenon that you're talking about, about job creation from technology innovation, is in fact net positive. There's no question that people who are not as educated, not as disciplined, not exposed to the markets as much are affected negatively. This is no different from the loom when it was invented and the impact that it had. And I don't think any of us would want to go and somehow delete the loom from the world. And furthermore, I think if you look over the next decade or two, this rate of technological innovation is not slowing down. In the article that you talked about in the Atlantic and in many other surveys, what's happening, by the way, is that there's an evidence of a resurgence of manufacturing. Now we thought manufacturing and classic economists say that manufacturing is just declining as a percentage in modern Western societies in the same way that the farm has, because it was automated. Well, it turns out that that's true in aggregate, but there's also a huge labor shortage for highly skilled manufacturing people, because it's simply straightforward to use sophisticated machinery tools and so forth. The next generation in manufacturing is called the Maker Society, where we can actually manufacture a product that's distinctly for you and do that with automated tools. So what I would say is that at first I would not fear this and I would understand that there's sociological and societal dislocations from it, but this is how the world gets better. This is how the way the GDP grows. This is ultimately how we leave the world in a better place for our children. Well, let me push back on that a little for the sake of our discussion. No question, this is the history of the world. Technology, whether it's the cotton gin or the steam engine, so planting. If horses could vote, there never would have been cars. We know that. So this is always going on, but the question I want to ask you both is, is this a difference of degree that's a difference in kind? Let me put this example, and will this difference of degree end up actually being the true crisis of capitalism? I live in Bethesda, Maryland, outside of Washington, D.C., 40, 50 miles from Baltimore. The biggest employer in Baltimore 50 years ago was Bethlehem Steel Company. Now, in those days as a male, I could drop out of high school, join the steel union, get a job at the steel plant, earn an average wage, do an average job, buy an average house with an average yard, have an average number of kids, lead an average lifestyle, go to an average baseball game in the summer, and retire on an average pension. Average was... And have 2.2 children. Right, I said, yeah. Average could actually lead to a decent lifestyle. The biggest employer in Baltimore today is Johns Hopkins University Medical Center. They do not let you cut the grass at Johns Hopkins without a BA. And so the real question I'm asking is what you said, Eric, and I... Of course, I share everything you say. This is a net positive. This is good for the world. But it feels like this time. By the way, when you're living through it, it's always different from the guys before. When the buggy went out, they had the same conversation at the pre-davos. Yeah, I'm going to push back on that. There are two things that are different. The first is that one of the histories in the last 100 years has been that time is compressed. If you go back and you look at what's happened, the amount of... And this has a lot to do with information networks. The amount of time that you have to think and anticipate and so forth. And it's true because of the development of radio and the development of television. There are people who've studied this and have said that with each expansion of network and contraction of time, you have a bubble because of the expectations of an opportunism that it creates. So that's one thing. And the second is the true exposure of markets to globalized forces, which was not true until 20 or 30 years ago. And you go back there to the gold standard and the changes that our predecessors put through. Those make the crisis very real and every day. Right. So the bankers used to be able to bank in the morning, play golf, bank in the afternoon. They can't do it anymore. They're just as stressed as the people in the online world because they're in 24-hour businesses. Now, you say, is that a loss of their lifestyle? They can't play as much golf. On the other hand, it draws a different kind of person. Ultimately, I think the policy answer goes back to governments have to do something which is hard. They actually have to do what they say with respect to investing in human capital. All of us, and I suspect all of you who've looked at this, the core argument here is one of education. Investing in education, especially in needed areas. Because that's ultimately the resource that we have before us to solve these problems. There's no other solution. And that's born up by the statistics. The latest Bureau of Labor Department statistics say if you have not graduated from college, unemployment rate in America is 13%. If you've graduated from high school, if you graduate from high school, the unemployment rate is about 8.7%. If you've graduated from high school and have a little post-secondary education, it's 7.1%. And if you have a four-year post-secondary degree in any realm, it's now 4.1%. There are plenty of companies in the United States and some of the other countries I've visited that are very short, highly skilled workers. That's a public policy failure to have anticipated that. To get those people, we can use them, we can hire them. In America, we further don't let them in the country. And if we do educate in the country, we kick them out. Brilliant strategy. Could I come in? You're saying it's a public policy failure. Why isn't it a failure of the private company that hasn't gone to the university and say what kind of training they really want to see? We do this all the time. We do this every day. So why don't universities respond? Well, first of all, as universities are, we are a huge hire of the top people. I was making a more generic point. Graduation rates in most Western countries are 25% to one third of the eligible population that can go to college. This is a huge issue. There are technological solutions, so you have a curious person who didn't go to college. We can now, through YouTube and Facebook and other technologies, get them the information that they need, but they have to be motivated to do that. And there's evidence that people are. Eric, I want to think of giving up this journalism thing and trying to get a job at Google. And so I want to go back to school. I'm really curious from an HR point of view, what is Google looking for in an employee today? Now, besides the normal metric of being a whiz at computing or math or whatever, is there something new from when you graduated from college and got your first engineering job? It's interesting that the people we hire today are, in many ways, more used to working in teams. So we select for that. There are people who are so bizarrely antisocial that even we won't hire them. Even if they're just like this totally genius. And it's sort of a terrible loss to humanity that we can't get them in, but we just can't really quite work with them. But as a general statement, this set of graduates is more socially concerned, more used to working in teams, and that's good, because virtually all the problems that are going to be facing businesses, politicians and so forth going forward, will be solved by teams. There's relatively few loan practitioners these days. What we look for is the kind of creative intelligence that can allow people to solve a new and unanticipated problem. If you look at the sort of literature about education, the best and deepest education occurs when the student can solve a problem in a new way, and the professor, gifted professors can say, and get them to think about, here's another approach, here's another approach. And one of the results of the fact that there's no time in globalization is you're always pivoting. And much of the complaint that I hear from industries is that they are unable to pivot, either because their shareholders won't let them, or their regulators won't let them, or so forth. And I think the reality is that the globalization forces you to confront changes to your business model every day, and unfortunately or fortunately, that's reality. I think people would be just curious, and I want to follow up with a question on Europe for Christopher. What is the hiring process? That is, do I take a test? Do I take a test online, then do I get it in? How does it actually work? We have many, many thousands of applications every day. We used to interview people for days, and we had to put in a pile, we tested the quality of our interviewing, and we initially restricted it to eight interviews, and now we've actually reduced it to five interviews. We found statistically that five interviews were a pretty accurate predictor of higher success or not. We have essentially no turnover once we're hired, so we're sort of stuck with the people, so we need to make the decision right. And we give everybody a test. If you're a programmer, we give you tests that are, they're like IQ tests, and they're problem-solving tests. If you're a marketing person, we give you a sort of a task to market something. A salesperson has to do a sales job. An executive has to write a little essay about what they're going to do. What we don't tell them, by the way, is that at the end we read the essay and then throw it away, because what we're really looking for is critical thinking. Do they understand the problem at hand? Can they articulate what they might do? We're more interested, as I said, in the ability to think of how the problem is going to, because it's going to change again. And the internet in particular presents new opportunities every day. The internet in my time at Google has gone from relatively a static model of information to this much, much more dynamic model around people and the generation of information. They're various statistics, but over a couple of days now we generate as much information on the internet as we did between the Dawn of Man and the year 2000. So the growth rate of the connectedness and what people are doing is a staggering number. And people are wandering around with these phones and phone equivalents generating an enormous number of things that you're interested in. Christopher, in this kind of world, global, driven by the IT revolution, will all the kind of cultural differences get arbitraged out? That is, will Europe produce a Google now very soon? Or this kind of hyper-competitive, hyper-connected capitalism? Do you see it appear in the Middle East, Africa, Asia? Is this going to become universal now? It's becoming a lot more universal than it used to. I mean, it's not going to produce a Google because we already have one. Europe has produced Skype, that's the equivalent you're saying. And I'm astonished sometimes that I visit countries in Europe and they say, you know, we invented such and such. Skype is the only one I can remember right now, but there are others. And it's true, I mean, there are people working in giving new, innovating solutions to problems that were pointed out. That's correct. Now, what I wanted to ask, though, that you said five interviews and you want them to have certain qualifications, but how many of the 30,000 of your employees have gone through that procedure before being hired? Everyone. Except for the two founders. Except for the man and the dog. Well, the two founders got it right. Because that, I mean, that's correct, but at the very top end of the employment distribution I would claim, you know, when you look at the whole spectrum of jobs being paid. We actually, we review every hire in the company and Larry, now CEO and before us, and just his founder role, personally reviews every hire. That's the level of commitment. If you want to build a company that's built on intelligent people of a particular kind, you have to be ruthless with respect to your adoption of processes that will produce such people. There are plenty of other companies that have done this, not just Google, but ours works well for us. One of the frightening things though, you know, when you think about it, if you take Google, Facebook, Twitter, Zynga, LinkedIn, some of the five of the sort of hottest, even Apple to some extent, I think you could probably fit all their employees in the LA Coliseum. But let's not reason from specific examples. Each of the companies that you're describing has generated enormous platform ecosystems of companies. Trillions of dollars of wealth, commerce and so forth are enabled by these scalable network platforms. They've affected, in my view, mostly positively education, financial markets, distribution of media and so forth. So picking the lever point to make the general point is probably not correct. A reasonable expectation is that the access to the internet, this time pressure I'm discussing, the globalization of markets, will in fact produce some very large and strategic companies, but also a very large number of smaller companies, because the barrier to entry for being an entrepreneur and entering a small company is much lower. Mathematically, if you look at this, they tend to follow something which is known as Zipf's Law, which says that you tend to get, because of network concentration, you tend to get a small number of flagship corporations, such as in this industry, and then a very, very large tail of corporations that build and add value in that. And I think that's probably the true of all networked economies. So Christopher, this is the world we're going into. What are the three most important public policy initiatives any government has to think about? Okay, let me backtrack a little bit. In terms of value added, in terms of GDP, wealth creation, there's no doubt that this is correct, that these companies generated enormous wealth much more than we had before the network revolution has done. In terms of actual jobs, they created high-profile jobs, but whichever way you count them, they don't come up even up to 10% of employment in any country. They don't come up to 10% of jobs that we're creating in any country. The large number of jobs that have been created, that jobs that are created, essentially to serve the demands that the people who are at the top end with the incomes have, the kind of services they described before. So you do get this segregation or bifurcation. In fact, you started, I thought you started wanting to ask that question, but you were sidetracked that the average blah blah blah blah, it doesn't exist. And I agree with you entirely that even though you still have the average to some extent, it's certainly not the way it was when you were doing it in Baltimore when you started there a year ago. Now the kind of jobs that we see and hear about are the highly-paid jobs at one and the mass of labor-intensive kind of activities at the other. So coming back to what are the public policy challenges, I think public policy challenge number one is how do you deal with the inequalities that arise in such a system because we know that inequality, and especially increasing inequality of the kind we've seen in industrialised economies in the end, are not popular. They cost politicians votes. They might lead to demonstrations of riots in the street from the lower-paid people against wealth. They have occupied Wall Street. I think that's the biggest challenge that we're facing, that public policy is facing now. And I leave the other two challenges to you to come up with. Eric, what would be your list? What would you like to see, particularly this election year, but what are the key policy initiatives if you could wave a magic wand in America you'd like to see? Well, each country is different. In the United States, eight or nine percent of the employment was tied to this incredibly inexpensive credit boom which caused overbuilding in both commercial and residential markets. The problem of the private housing market and the collapse there is not a solved problem. I've always assumed that if enough smart people get in the room and argue it out, we could come up with a system which was a shared-paying model. So I agree with the professor that the aggregate employment is not high-tech. High-tech is somewhere between three and five percent by most of the numbers, so that's roughly correct. So the 95 percent are in more traditional industries, but they can be served by innovation as well. So let's hear a new way to solve that problem. In Europe, the issues, as we all know, have to do with have more flexible labor markets, structural reforms, and so forth, which are the core topic of Davos. It's important to remember when I first started coming to Davos almost 20 years ago, there was a perception that there was going to be a permanent 20 percent unemployment level, because France at the time was 13, and heading up, this is in the early to mid-90s, because the system was so rigid and then of course the changes occurred with the euro and now we're facing a similar set of concerns in the southern part of Europe. Ultimately the answer is that governments need to get their act together with respect to supporting the parts of their economy that create jobs. Jobs are created, at least in America, by two groups. Export-oriented large multinationals and small businesses. The export-oriented multinationals tend to have a global footprint, they benefit from globalization, they benefit from scale. This is true by the way in Europe as well. Small businesses benefit from specialization, and there's no better tool for a small business to use than to use the internet to find that market, to find that market and reach their customers, because it's so inexpensive to do one now. We have a few minutes. I want to open it up to the audience for questions. There are some people with microphones that will be circulating, and if you would raise your hand if you'd like the microphone. Our mics are in the rows here, and identify yourself. The lights have gone up. And do we have any takers? There's a question over there. One there, and then one here. Thank you. Right down here. God, I trust, but where did the statistic about 3.5 jobs created for everyone lost come from? It's a McKinsey report released today. You can read the report on the McKinsey.com website. Thank you. You get another question that was so short. It's like the White House. We got a question up right up here on the front row. And somebody back there? Was there somebody over here? I'm sorry. It's a little bright. Back there, we've got some too. So we'll just let you move around. All right. Drew from Dropbox. My question is, what do we do when we have all these BAs and people with advanced degrees who learn about all this stuff but then are confined to cutting grass or different things that maybe don't exercise what they might not feel like it exercises their potential? What do you do with the kind of, what kinds of cultural issues arise from this? I'm sorry. So which PhDs and which subjects? Just asking in general, what happens when you have all these kids. Are you talking about the present now? Are you describing the present? In the future. Why do you assume that's the future? I'm sure. Let me just use your example of the BA cutting grass. I mean the question is, to paraphrase slightly, but I think what is that, now that the structure of employment is changing so rapidly, you have many BAs coming out of university or other certain kind of training that may have been well suited to the employment that we had five or ten years ago but not anymore and there might be disappointment in their expectations. The only solution to that that I would suggest actually is that universities themselves and schools when training they should mold the expectations of their students in such a way that they would be more flexible to face the new realities that we have with globalization. I mean there's no point in the university saying I'm going to teach you this kind of skill and make sure you do it because if you don't it's the fault of those big companies that go off and do other things. I mean universities are there to serve the companies in the sense of giving them solutions of where to go next given the possibilities and constraints that the global economy is giving you. So there shouldn't be any expectations. There should be people thinking that what they are learning is more of a springboard to jump into new types of jobs and enhance their learning in other ways and move forward. And good universities should be doing that. Does that mean should we get rid of the tenure system? For professors? Yeah. Of course not. There's a couple more. A couple over here and there's a cover there. If you see a hand just give them the mic. Hi, thanks very much. Peter Goodman of the Huffington Post. I just want to ask isn't the job retraining argument really just a red herring for lack of progressive taxation I mean particularly in the United States where you could take all of the people who have officially been unemployed for six months or longer and you could magically send them to associate degree programs a lot of those people are never going to get jobs they're not going to get jobs in five years, ten years whereas if you were to address the inequality which you've already addressed in this conversation but address it in an active way and move some of the money around you'd probably create underlying demand that would generate jobs even for people of lower skills. What am I missing? Can I ask you so what you're asking because there is this interesting argument there really is no structural jobs problem it's an aggregate demand problem. There's clearly some people or there are some companies always throughout the history of capitalism who can't find enough high skilled people for the jobs at any given moment but that's not the big picture according to the data and so I'm wondering whether we're just missing the real question which is if we had a taxation structure so we didn't have all this capital that is the result of highly successful wealth creating companies like Google concentrated in too few hands there'd be more consumer power and there'd be more employment, is that wrong? I think you're picking one part of a very complex political argument if I were to follow that argument then the US has a trillion dollar deficit every year which the politicians argue over who gets that they're spending money that they don't have why is that number not two trillion just give the one trillion to the group that you're describing to have them create aggregate demand if you follow the reasoning to me the question without the context is sort of not really well formed there is a problem of demand demand comes from a set of factors including confidence a feeling that my money that I invest in the bank will be secure that my currency is strong and so forth there is not agreement even between for example Europeans in the United States over whether a policy of massive massive stimulation of the economy which might result in inflation at some point in the future is desirable over the contraction that Europe seems to have sort of self done if you will by virtue of its processes in the last few months I don't think you can answer the question you're asking without looking at all those other variables at the end of the day the productivity of the world comes from automating and investing and dealing new products and new services and that's how the lot of the humanity improves so for every job that was sort of lost in manual work replaced by an automated job with somebody operating it their quality if you go to Hawaii they become a tourist industry and they replace pineapple picking jobs well the pineapple picking jobs were much harder than working in the tourism industry and the wages are higher too so there's an example after that I don't think it's just about wealth and concentration and so forth let's go over to this side of the room if we can but please yeah yeah hi it's following on from this line of conversation particularly for Eric Schmidt but I'd like to hear from the other panelists as well we know that there is a growing jobs crisis we're hearing more and more leaders talk about unemployment but we know there's not a work crisis in the sense there's still loads of work to be done and so what's just happened is there's a shrinkage in the amount of money in the economy for people to be working for each other so I was wondering in that context and in the context where governments, some governments don't want to go further into debt could Google create a currency to get the world back to work I think that currency is information I think it's up to you as to how you use that use that information our part in helping is we believe and we're very proud of the many many many businesses that are enabled by the advertising platform that we power and I'm sure other tech companies would say the same thing whoever's got the hand up just feel free to go ahead please yeah can you identify yourself just nice to know who's out there Ron Freeman Atlantic Council Washington DC I wonder if Google database of candidates who have been turned down for a job by Google could be the source of information fed back into the education system about what we need to do more we have pretty strict privacy policies and I would certainly not want to violate the privacy of any of those people not intended but we do in fact talk to our suppliers if you will our human suppliers about the kinds of people we need I was trying to make a more this is not a converse about Google recruiting the way we solve the problems in our society is by having more educated people who don't react with foolishness and lack of data and without analytical thinking the way wars happen is people get upset and they start shooting each other rather than reasoning and conversation it's actually really understand are the universities of the world in particular the leading universities that we source from have done an enormous gift to give us people who can engage in this kind of abstract reasoning and thinking the thing that separates us from for example the middle ages is the development of that and so forth there is some evidence for example in economic theory that there is a sort of a trap that many countries get to it's called the middle income trap and that above that those countries have to have developed the kind of extraordinarily sophisticated governance and educational systems that are exemplified by some of the very fine countries here in Europe, United States and a number in Asia it's dangerous actually to think of someone applying for a job and not getting it that he or she is a failure first of all for each job that is advertised at all levels in the market there are many many more applications people applied to many jobs and that in fact if I might say is the foundation of what's known as the theory of matching in labor markets which was at the beginning I mean people have different kinds of skills which might be differentiated horizontally you might say it's not that one person is better than another but one person is more suited to one type of job than another it doesn't mean that the school or the university has trained the one who succeeded to get a job at Google and the other one that either Google or the person herself decided that they are better suited to some other job and applying some other job it doesn't mean that one is say the university has made a success of one of them and they failure of another it's very very difficult to identify failures in labor markets and since we're talking about jobs what's striking to me is that the jobless problem for whatever we want to call it and this explosion in young people is a problem that's throughout the world so we talk about it in an American context or European context but virtually every government is dealing with this and we should study from some of the success models in particular the German model which did very hard work and people forget that Germany roughly five years ago actually in an agreement with the labor unions lowered wage rates to make things more competitive decided to increase their investment in they have a technical set of training programs for technicians that have produced enormously productive workers who are not suited or choose not to go to college and they took a national identity around becoming an export manufacturer for some categories of exports it's worked remarkably for them so there's every reason to believe that if the political leadership the business leadership in a country deals with this they can do it one way the thing about it is that the disconnect that you're hearing is that the national politicians want to rule the nation hopefully in a democracy but they're being affected by globalization and globalization keeps winning against their theory if globalization didn't occur in our little country say the three of us we could just say well they're the best we have everything we have everything we need but globalization gives you a metric it keeps you competitive it gives you more information but the sum of globalization is the world is better off and for all the people who are globalization critics and I assume almost everybody here agrees that globalization is wonderful the fact that globalization has brought a couple billion people from absolute poverty to what we would define as a lower middle class to middle class existence and what they would argue as a middle class existence to an upper middle class existence is a huge a huge accomplishment in our lifetimes before we close you've just come from Tunisia and Libya and we have a lot of people here from the Middle East and talking about the Arab Spring all of these post Arab awakening societies we now have huge youth unemployment 25 30 40 percent where do countries like that do you think start to tackle this problem what I particularly like about your question is the answer is it's not America's fault okay it's not Europe's fault and all my and there's this tendency for the western world in particular America to say well let's go in we want to fix it and so forth and so on the wonderful thing that's going on in the Arab world is the conversation is within the citizens of the country now the challenge is I was in Libya for a few days and imagine a situation where you had a terrible dictator who imprisoned people and tortured people and so forth and so on you had a civil war you had 85 percent of the people in the country work for essentially one company in the civil industry there's not a lot of local competition they don't trust the judges so they push them to the side they don't trust the police so they push them to the side there's 80 militias running around inside the country it was a leaderless revolution with a transition council and they're trying to decide right now what their constitution looks like oh and I forgot everyone I spoke with owned a gun the great thing about that scenario is you're the nicest people in the world every one of them welcoming friendly I cannot say enough nice things and we should help them the way we help them is let them work on their own problems and help them understand what the best of governance the best strategic approaches and so forth I was going to say and especially with you since you really are an expert and I'm just a tourist in this stuff if you have an opportunity to build a country that's much today because of a bad dictator who was exiled or killed or what have you I think you would conclude that one of the components of your constitution is you would write in a statement about the importance of having an uncensored internet and here's why if your citizens are connected together and if you have a rule for example let's say we have a rule most of these countries have the biggest problem is in fact corruption politicians as part of running have to disclose their assets you know the houses and cars and horses and so forth and so on and furthermore that citizens can keep their eye on the real number and that it's a crime to mislead that you might discover that half the politicians aren't running anymore but the politicians that you get are the ones that are really committed to serving the leaders another thing that you might discover as long as you have a ballot box in fact communicate with each other and discover that their government has gone awry the thing I learned the most about the Arab Spring was that we take the internet for granted here and all of us live in certainly the majority of people here in Davos live in worlds which are not heavily censored when you live in a country where censorship is the norm and you assume the phones are tapped the televisions are completely censored the radios are completely censored and everybody's kind of afraid to say stuff but the internet is your only communications mechanism it's fundamental to your political expression I think we should just to go on we should celebrate the rise of these Arab democracies as democracy moves throughout the globe terrific Chris do you want to say anything in closing just to sum up your thoughts I agree entirely with the big pictures now the smaller picture of how do you deal with mass unemployment in these countries I would begin by completely liberalizing their labour markets and telling everyone that public sector employment has ended because what has really helped these North African and Middle Eastern countries down is that the public sector has always offered the best jobs they're all queuing to get into the public sector that should end just liberalize the labour markets find what you are best at doing and do it and export to Europe or even Africa itself as well that's what they should begin with the job this is a great discussion if I don't close it I will lose my job so thank you all for coming out and thank the two of you thank you Chris