 The official language at the World Economic Forum is English, but, of course, But, of course, I want to welcome all the Spanish speakers and to all my colleagues from Mexico. We will begin, if you will, those of us that are here. Each of the very impressive lives of John and Pablo. Let me just share with you that John is currently something that I'm sure that was not there some years ago. The Global Chief Innovation Officer of Deloitte. When was that title established? We invented that title four years ago. It didn't exist in our firm before then. So Pablo is the managing partner at NXTP Labs, the most active acceleration and early stage fund in Latin America. Pablo, bienvenido John. Let us jump directly into the subject of this meeting. Let me thank the organizers and the World Economic Forum for having me here and for open the discussion around something that we need to be very aware would be the next wave of globalization. John and I got here earlier and we were talking about this. So let me directly ask you, John, what is going on in terms of your practice that you had to name somebody like you, the Global Innovation Officer? Well, in our practice and our firm, the recognition that digital is the future economy in any place around the world. It is the foundation for future growth. And for a professional services firm like Deloitte, which operates around the world, which provides services to a variety of clients, large and small, which works in ranges of things like auditing and tax all the way through consulting and other advisory types of services. Having an effort focused on making sure that we're innovative, that we are bringing the most innovative solutions to our clients who cover the full range of the economy is important. Because at the end of the day, digital is the future as it relates to economic growth. I think that's pretty clear. Thank you so much. Pablo, you have been in one of the most forward-looking companies in Mexico, nothing more ancient than cement. Basically it hasn't changed since the Romans started making the roads. Nevertheless, CEMEX and the CEMEX way and the space in which you practice your MBA were capable of changing this. Why don't you share with us what is it that you do at the labs and how are you accelerating innovation in Latin America? And Mexico, of course. And cement is always a good example about how you can use innovation to change an industry. Good morning. What we do at Next CP Labs is we fund entrepreneurs. We create and we try to foster ecosystems around entrepreneurs for them to grow their companies and get funded in order to create services and products that change economies. So far we have been able to invest in around 160 companies from seven countries. And those are companies that are born in Latin America with a global ambition. And what we have seen in the three years that we have been operating is that the innovation base in Latin America, mostly the entrepreneurs and the funding, is growing rapidly. And we believe that today is one of the best moments for the region to create new solutions and to innovate. I agree with you. We have a lot of opportunities and the improvement has been largely attributable to a revision of the mobile telephony and data tariff. Let's give you to the reforms. And in a sense, Mexico in the Network Readiness Index has leapfrog 89 places, 89 in the affordability pillar which tells you where we were before. But nevertheless, there are some other figures and facts that talk about the challenges. And that's what we're going to do. I'm going to throw some factoids to you. But let's talk about the challenges for a second. John, what is it that you find most challenging in Latin America? Well, I think there's two categories of challenges to economic growth through innovation. One of them is the need for a greater strength of infrastructure that fosters innovation. And not just technical infrastructure. We're talking about policies. We're talking about guidelines. We're talking about efforts between public and private sectors to create an economy and a set of ecosystems that really drive economic growth through innovation. The second type of challenge is all around education, ensuring that there are sufficient numbers of properly educated people who can take their place in a new and innovative and digital economy. Consistency of education at all levels, the ability to move across borders with that education, focus on STEM, science, technology, engineering, mathematics. All of those are challenges that Latin America needs to overcome to take its rightful place leading the world's economy through digital. Let me put some numbers to that. Chile has grown three places and leads Latin America and the Caribbean. The region's worst performer, no surprise there. Haiti is number 137. But Mexico in terms of education and I acknowledge the efforts made by many that have chosen that noble career here. But we are an unflattering 92 in the skills pillar. That's the worst showing among the 10 pillars of this network readiness index that was started by the way by Sumit Riduta, whose wife is sitting with us here, Lourdes Casanova. Pablo, there's also something that tells me that you will have a hard time. The ICT adoption by businesses. What is your largest challenge? We believe that one of the largest challenges today in the region is to help the different entities within the ecosystem to connect with each other. Because in the last years we have seen governments creating programs, enterprises creating their programs, universities creating solutions and entrepreneurs by themselves creating value. But now the next wave and the next responsibility that we have is to connect those entities for them to cooperate. And it's happening now. It's happening you see entities like Technological and Monetary building bridges with funds, funds building bridges with governments, governments starting entrepreneur gear programs. So for me that's a challenge. Why? Because if we do not connect the dots we will still wasting the talent of our entrepreneurs. They will still creating solutions that nobody needs or they will be creating solutions that do not have clients or do not have funding. So that disconnection between the need that normally comes from companies or government and the talent needs to be reduced. Let me go back in time and talk about Fernando Flores and this idea of connecting the dots. Fernando Flores was one of the, I would say the minds at accompanying Lorenzo Zambrano from Samax in their quest to become a technological as well as a cement company. And ask about the family owned businesses. We have generations, different generations in Latin America. And I would say by the cover of the recent cover of the economist around the world, dynasties are part and parcel of the private enterprises. So what about families and innovation John? You know, I think family owned businesses are a perfect example of a kind of innovation we call adjacent innovation. And adjacent innovation isn't what we often think about. We think about innovation, we think of product innovation, we think of some new technology. But adjacent innovation acknowledges that a good product can be moved to different marketplaces or you can introduce new products into established marketplaces. And family businesses are perfect at that. As new generations come up, they have the same entrepreneurial spirit, they have a foundation of success in one market. They can shift and move into other markets and or they can introduce new products through a next generation of leaders or a sibling into an established marketplace without creating an inherent family conflict or without going through the disruptive sort of culture that has to happen when a corporation disrupts itself by introducing a new technology that replaces its old business with a new business. And I think there's huge opportunities in family businesses just following that adjacent innovation model. And also let's address something that, excuse my French, but there's been these nights, Pablo was talking about, you know, the nights that I referred to the nights. Go ahead, talk to us about if you don't move to a different country and you do something with F in your own. How is it that we leave failure and why do we have the fuck up nights? Well, that movement is very interesting. Just to touch a little bit on the families, what we see is that the last couple of generations worked very hard to professionalize businesses. So family businesses, family run businesses in Latin America are very professionalized and the latest generation is working on professionalizing the wealth. So you see the emergence of family offices currently run by fund managers and those families are getting, not only on their core businesses, but also getting very active on the funding of entrepreneurs and innovation. And that's for us a very positive movement in Latin America that's happening in Mexico, in Brazil, Argentina, Colombia and Peru, mostly in Chile. So these fuck up nights have been very successful in Latin America. That's how they are called. For those of you that don't know what happens there, it's a meeting that happens every month where people get together to talk about their lack of success or their biggest failures. And that is something so simple, yet so powerful in terms of a culture because one of our cultural barriers to entrepreneurship in Latin America is the fear of failure. And now people are being much more open to discuss about what they learned about failure. And now we are seeing entrepreneurs coming back from bankrupt and starting other companies. In our Accelerator we have had two success stories that were big failures at the beginning. Entrepreneurs that started something, they went bankrupt and then they came back to our program with some of the money that was left and then started something new. One of them is called iBillionaire. It's a company that does investment advice on a mobile platform that's just launched a special vehicle in the New York Stock Exchange that has raised more than 40 millions. It's a company that before, that's an entrepreneur that before had a failure with us. So now we are embracing failure and that's part of the magic and the formula of successful entrepreneurs. Lots of changes. We were talking about something that was not there, some of us that are old enough to have seen NAFTA negotiated. There were spaces of the Latin American economy and specifically the Mexican economy that were not there before NAFTA. What spaces are you foreseeing will open with this wave of globalization that you were referring to in services and innovation? Well I think pretty clearly that innovation brings about new opportunities in most parts of the economy. But consumer driven sectors, health sectors, telecommunications, technology sectors, energy sectors all typically have a big burst of activity when innovation is permitted to exist. All of them are right for innovative entrepreneurship. There's opportunities for disruption in just about any stage of the value chain of those businesses. And most of the larger organizations in those sectors have a preponderance to want to invest and see innovation come forth. And as a result you see the willingness and the funding to be available to that. And I think that's the foundation for what we'll see. We're seeing in this country and in every country we're seeing still this bridge on the possibility of double exclusion in terms of the digital services. We were talking before about the tariffs going down but nevertheless 5 to 8% of the content is in Spanish and only 5% of us in Mexico. And I think 3% in the region can speak English and are able to communicate fully with the internet. Some spaces of innovation are coming from Africa for the 90% of the population. Pablo let's think for a while what is it that you have in your incubator that is for the bottom of the pyramid? And what is it that you're telling families to do for the largest consumer base in Latin America which is the low income population? What is happening now is that low income population has much more access to devices and to services. Both the physical part of the communications and the digital part of it have been lowering their prices and coming up with much more better services. Entrepreneurs are starting to look at that opportunity. For example we have a company based in Guatemala called Ayalo that uses last generation mobile phones which do not have browsers but have internet to generate leads for jobs and for basic products. So entrepreneurs are today understanding that there is a huge base of consumers that were not connected before and for them is the first time that they get connected to the internet to the web. And they are looking at creating small simple solutions that we might be used to in other sectors that are currently helping those segments. One of the segments and one of the verticals that we have seen that has had huge impact is communication software such as WhatsApp or those kind of applications that get adopted very fast. People in those sectors are very, very smart and they do need solutions so whenever a good solution comes in then it spreads like fire. If you look at WhatsApp and who uses it in Latin America mostly it's based on pyramid or middle sectors rather than upper ones. And born digital demographics has been one of our forces. We're young and forcefully in many senses. What about the Latin Americans on the other side of the border? What about the Hispanic market and innovation? What is it that you're seeing on that side of the border? Well I think what you're seeing is a homogeneity around what is expected, what is needed. For example, the next generation of young people regardless of where they are in the world believe that the world can be accessed through their smart device. Everything that they need, their education, their communication, the ability to order food, the ability to live, all the things are anchored out of the device. And so any economy needs to sort of grasp that and make sure that we are building that kind of support infrastructure around that set of expectations. And it doesn't matter what part of the world we're talking about here. Whether this is in Latin America, whether this is in Asia, whether this is in Africa, that's really the foundation on which all interactions between an individual and the world that surrounds him or her are going to happen. I have sort of a problem with one side of that which is that they want access but they have always a problem with paying for something. I come from a media career and if you ask the young people or the born digital would you pay for your information they say no. So what is the challenge there and what can you do? And I'm talking about media but the same thing for education. Another vertical, what do you recommend your clients? Well I think what we see is the role of the value generated in media, the value generated in education has shifted from content creation to content validation. So when we see things on Wikipedia, I have three teenage boys, they believe Wikipedia is absolutely accurate. And it's as true and as valid as anything else out there. And that may or may not be the case on any one of the topics. I'm sure all of us have found something on Wikipedia they go, I'm not sure that's right. But someone and some groups of people need to validate it. Same in media, we see it's so easy to see a YouTube clip of something that might suggest one case of facts or one image of the truth that someone else might have a different perspective. And so I kind of believe that the shift moves from creating content, creating knowledge and the value added comes into validating that that is in fact true or as true as possible and that we can then consume that and make decisions in our lives from that. And so Pablo what is it that you're seeing in terms of this movement of validation? Do you see that in Latin America we're seeing as a reference is there anything that has been presented to you in terms of an application or an innovation that is along those lines? Or are we just receiving validation from the northern side of the planet? No, I think that we are seeing validation and content and user content creation in Latin America as well. We have a couple of companies that deal with that with information exchange and creation. One is called Murali which is a replication of a mural that you can use within the computer to put the notes and sketches of things. And people are creating content within that application and they're sharing it. When you mentioned before that most of the content is in English, it's correct but that was mostly before when the internet was top-bottom in terms of content. Content used to come from some sources and then get distributed. Today content is being created by users and we have become minimalistic in terms of content. The new generations think about Twitter and that's the way they are sharing information today. So we are not generating that much content but we are generating ways to share small thoughts, small ideas. And those are generated by the public so I don't fear that people will have lack of content because content is created by ourselves. Let me open with that note, yes. My name is Pablo Jenkins. I am a white ale like Pablo from 2015 from Costa Rica. And I work on innovation in non-hierarchic structures so only through collaboration that requires no money and requires not being in the same organization. So I think a lot about in the digital world the role of not just validation but curating. What is worth seeing the world economic forum is maybe one of the best places ever more getting into the digital space. So I just wanted to see how do you innovate in the way you create as exponential technologies make it so, so cheap that someone else has to do the work. So one of the challenges with so much information whether it's validation curation is how do you accomplish that at the volumes and scale that's expected. And I think one of the things that we would observe is that there's a power in crowds. A simple example if you take TripAdvisor or any of those other crowd based information sources to guide you. You tend to start thinking about what's the majority of people saying. There's always outliers. There's always some who thought some trip was extremely good and some who thought it was awful. And by the way there's a sort of statistical bias that more people complain about things and they credit it. So as you go through that you have to sort of understand if that's a vehicle for curating or validating by virtue of what crowds feel about something. How do you understand the statistical sort of balance around what you're seeing. And I think that's a real challenge that we have because there is so much of everything. What do you cure what do you validate and so forth. Yeah. Context is also something that you have to consider. You were raising your hand over the. I know you're just. No. OK. Here. Hi my name is Rina. I'm a young global leader based in New York originally from Venezuela. Twenty years ago I moved to Switzerland to study and stay. I went into private equity and then two years ago I decided to be an entrepreneur in tech. So everybody told me not to do it first because I was Latin and second because I was a woman. And I welcome to the pack exactly. So and I did it. And then two years later my company is very successful. I'm on Wall Street. I have a financial technology company and I have been a water last year as one of the 10 women in tech in New York City from Newsweek. So my question to you is what is what is need to happen for women to enter the technology world to be more innovative and to have the support system. And especially because in Latin America and women have a role in the family but also in the economy. So I just want to know from your perspective what needs to change for women actually to enter and be more successful in the technology world. So I'm happy but Pablo I think you really should also sort of respond on this. What we are seeing in the women entrepreneur entrepreneurs area is is something that happened with the failure. It's a cultural change in terms of first of all believing that women can participate and should participate and must participate. Then creating the culture through simple things like events. We run an event called we exchange once a year in Miami with the with the Fomin IDV. And this event is to put together mentors with women entrepreneurs. And it's as simple as that. And it's very interesting that from the mentor side we have both men and women helping each other. It's about creating success cases. And we have seen many success cases in Latin America now with women entrepreneurs. And it's about again spreading the culture and showing the world that it can be possible. So if you are a successful entrepreneur and you're a woman today in Latin America you have two roles. You have to be successful in business and you have to become a role model for other women to do this. I'm going to add on to that if that's OK because I think there's another important part of that is the effort we need to go through to make sure that more young women get a STEM based education. The statistics around the difference in populations around women entering STEM science technology engineering and mathematics programs at high school and college levels compared to young men. And even worse those that don't continue and complete those degrees is really is really a tragedy. And that really has to be fixed. We need role models. We need institutions to work more at ensuring that women see that as an opportunity for them and that as a career. And we need education programs that are designed to to bring about a higher quality. With those two things together I think we we see a lot more of your success. And let me just bring a name here. Blanca Treviño was able to change something that was called Consejo Mexicano de Hombres de Negocios just last year. It has been around for decades and she was she was she was invited to it. It's an invitation club. And of course they had to change the name because it's Consejo Mexicano de Hombres de Negocios. And there she was sitting. She's the head of a tech company. You should get to know her if you don't. She's around today actually. Yeah I saw her. I saw her outside. Mario we're we come from the same university so I'm going to peek on him. He's the CISC. He's are you still working with Cisco. Okay. You want to share with us some thoughts about innovation in Mexico. They have invested I don't know five hundred million dollars in Guadalajara. Excuse me Monterey but it's Guadalajara I think. Hi everybody Mario de la Cruz I'm head of government affairs for Cisco in Mexico and we do still invest 1.3 billion dollars in Mexico. Every year in a significant manufacturing footprint mainly in Jalisco but also in Ciudad Juarez Chihuahua. And well one of the challenges that we have here Rosana is how do we improve the ecosystem in Mexico. We truly believe that Mexico can be as competitive in high tech manufacturing as it is in airspace or in automobile industry. We have most of the pieces together. Actually we are working very closely with the Mexican government to put the missing pieces together because Mexico can definitely be. And what are those missing pieces. Talent for sure is one of them. We have advanced a lot in terms of developing the technical capabilities of the human capital required. But still for instance it could be very simple but just speaking in English. It's a huge challenge. The other day I was with undersecretary Sergio Alcácer from North America. He was telling me that only 850,000 people in Mexico speak English from a 120 million population. So for us that we just opened a new global services center in Mexico City. One of our biggest challenge hiring 400 engineers with a 10 year experience is to have the proper level of English. So there are still a few pieces missing. Of course infrastructure, security, state of law, another significant part of this. But I think definitely Mexico can move forward towards not just be a maquilla manufacturer but a high tech innovative country to increase the percentage of integration of technology built in Mexico. So I think we are moving forward to that. Thank you. Let's send this conversation with the final thought from our guests. John I would like very much for you to share with us. What is it that you would like to achieve in the next let's say five years to use the regular time framework? So I think as it relates to innovation Latin America next five years I'd love to see a greater cooperation between public and private interests to overcome the challenges some of which we've talked about today so that Latin America can take its rightful place in the global economy on a foundation of innovative and entrepreneurial growth. Pablo? We would like to see more capital going to entrepreneurs, more entities getting to the funding of it and much more connection between the entities in the ecosystem around entrepreneurs. For us are the drivers of innovation. Now we are seeing that our entrepreneurs in Latin America are very competitive in a global scene and we would like to see much more capital coming in. We have to balance the ecosystem. The ecosystem today is not balanced. There is much more entrepreneurs than capital. So we need to channel that capital through smart organizations like funds to reach those ideas and those talented entrepreneurs. Thank you very much to you both and yes for me it will be working along the lines in this Mexico lab to regain our proper space in this digital sphere which I think it's larger than what we do now and there's a lot of upside for innovation in our regions and specifically in Mexico and I look forward to working with you both and with you thank you for being with us here and we look forward to seeing you in conversations outside the room. Please because they are going to use this. Thank you so much.