Eastern, here on cspan2. Thursday a talk on security challenges in the middle east. Former president of the American University in cairo Lisa Anderson delivered remarks at the center for strategic and international studies. That is live at 10 a. M. Eastern here on cspan2. In both iraq and afghanistan, i helped both countries with their constitutions being sort of facilitator of agreement on key issues among afghans. The influence is considerable and has the government anxious to meet with you. Sunday night on q a. Former u. S. Ambassador to afghanistan, iraq and the United Nations discusses this journey. We saw the extremist and how we corrected it toward the end of the period i was there by the surge and reaching out to the sunnis and building up iraqi forces and establishing a government to bring about security and violence was down. But unfortunately we left and the vacuum was filled by rival regional powers. A discussion on the book, the smartest places on earth, looks at innovations and policies and how cities in u. S. And europe revitalized their economy when manufacturing jobs moved overseas. This is an hour and 20 minutes. Morning, everyone. Hoping you are well. I am delighted to be here. This is being web cast and we will be taking questions later and they can cstart coming in now. It is my privilege to kick off the very a suspicious. This new book, the smartest places on earth, is just out and if i say so you should all rush to pick out a copy and i think we have come out beyond the back. On the way out, please do that. Also, it finds two experienced economic observers focusing not on the standards of the usual spin cycle but some of us think at brookings there are elements of national wellbeing. I find this a welcome corrective to the disembodied economic debates we specialize on here in washington. Yet none of this gets at the most auspicious aspect, the fact that antoine and fred have actual good news to deliver, imagine that. Good news. I think it is absolutely true, thoughtful, subtle brand of good news. At a moment when many commentators have surveyed the global scenic included america or its industrial tier is done, and tuan and fred are here to flip the narrative. Conventional wisdom seems declined, and tuan and fred c reinvention being driven by specialized rust belt cities increased focus on high technology. And tuan and fred chronicle the reemergence of the center of Polymer Research and were visiting helplessness fred anand one of the imagining a reinvention playbook in which transitioning regions of turned local universities and the open innovation hubs and business of appliances have built promising new industrial strategies. They have traveled america and europe and return the optimistic view that dozens of all places of becoming launch pads for the new. This is a welcome counter to a scary decline is him that is now dominating the president ial campaign, for example. Indeed, this is especially noteworthy. While working at the world bank in 1981 the term emerging markets and in a previous book to clear the onset of the emerging market it was not the beginning of the american century. So with that ii would like to introduce her to esteemed authors write moderated by my colleagues. Youll meet him shortly. A brookings trustee as Senior Advisor of the Public Policy advisory firm. Until recently the principal founder and ceo emerging markets management and investment firm. A supporter both the Metro Program an office of centennial scholar. For his part he was a prominent european journalist specializing in monetary Financial Affairs with a prominent outlook of the Financial Times of holland. He lives in the wonderful city of amsterdam, but enough. Lets here from antoine. [applause] well, thank you for that introduction. Let me start by saying that we could not have written this book without brookings. Brookings not only helped us prepare the presentation to get to this forum, but for the past couple of years was influential in our thinking. Brookings and im talking about bruce, amy, mark really did the task breaking work on all of this. And there has been very good work, and we have been standing on your shoulders in making this possible. Thank you for that very much. Now, when you listen, when you listen to the to some of the political candidates on the left and on the right , dont you get depressed . I mean, when you listen, it sounds like this country has run out of steam on innovation and our best times are behind us and that all we have is problems. As mike already said, slowly found. Let me start, if you look in the Rearview Mirror things look bleak. Employment down, although people dont write about the fact that there are 2 million jobs now in Hightech Industries and 4 million jobs were created during this exact period. Then as good as you can see that line at the end, its starting to reverse. And it was not just competition from my emerging markets. It was also doing things more productively and it is the devastating impact of this. This bad news we found is not the whole story, and the book really started when i went over to asia, and fred and his travels had similar experience. I went to asia meeting with many, and i have been doing this for many years, many ceos, and what do i hear . I hear them complain about american competition. I have not heard that in 30 years. And why were they complaining . Labor costs were going out, offshore gas was cheap, but they could not keep up. American innovation. And so, we ask the district in which we visited a dozen cities all over Northern Europe and particularly the us and there is my daughter we came to a very different conclusion, the american and Northern European companies are not on the decline, no. They are in fact regaining competitiveness. Why there is a new paradigm, for the last 25 years we have been trying to complete compete on the basis of making things as cheap as possible. We have learned it is much better to compete on making things as smart as possible, and here we are good. Great universities. They have this freedom of thinking that promotes, thinking out of the box that is the basis for all real innovation. And so smart innovation is beginning to replace cheap labor as the key competitive edge. Now, the 1st is what we call sharing green power. What is that . This is collaboration among University Departments but also among universities that are climbing out of their ivory towers and in small startups and all legacy businesses, and we have seen this all over the country. What is it mean . Well, in the past, things were done on a very hierarchical basis, not very efficient. We learned this from what i call the whippersnappers in Silicon Valley. We have learned to do things in a collegial way. It is no longer closed innovation, kind of your own frame, but open innovation. It is no longer silent, no. Todays problems require multidisciplinary solutions. One of the trustees of brookings taught me an important lesson. I went to see shirley jackson, the president of rennes where polytechnic, and she said nothing is being invented anymore with an academic in part academic departments. An important lesson. It is no longer topdown, topdown, it is bottom up. It is no longer alone in your garage and collaborative. Finally, it is no longer done an isolated Research Centers of corporations with the government. It is done in vibrant urban innovation district. That is where young researchers like to work, as we have seen. That is one pillar. The 2nd pillar is, we are creating a whole new branch of economy. We have this Old Industrial expertise of the base. Now we have added new production methods, new materials, new, new discoveries, and on top of that we combine this, we integrate with the stuff we are good at, information technology, wireless information technology, and the ability and we did not have that ability before , to use big data and analyze big data to help us, and all that is connected through a tiny little chip, the sensor. Now, that makes various things possible that were not possible before. The future is all about connecting and connectedness. Take the self driving car. This will be a revolution and transportation. What . My picture here disappeared. The self driving car. Wearable devices. This will be incredibly important to the future of healthcare. You will where them and can ingest them. The smart grid, Smart Farming death. All of this is now possible and was not possible before. This is the smart economy, the combination of physical and digital economy. Now, you might think okay, this is nice. They have lost all these industries. We now have knew production methods. Mit with the 2nd generation. From North Carolina who invented a way to make 3 d printing a thousand times plus faster so that it can be used in production. All of this will make it possible to bring back Industries Like socks, shirts, shoes. He said we are already making shoes with robots. So this is one thing. The other, the really interesting thing we found is that the innovation that we talked about, this Collaborative Innovation is no longer limited to places like Silicon Valley in cambridge. It is spread all around the country, to be exact more than 30 brain belts. The meals for that was one example. You have heard of background. One of the smartest places on earth . Maybe not. What did we find . For old Tire Companies gone practically overnight. That is the loss of a lot of jobs. A lifethreatening challenge, and all of what we see is based on a lifethreatening challenge. And yet the 2nd element that you find everywhere, the connector. Because they had no other choice. And what stayed in akron, what did not disappear was the worldclass Polymer Research that has given us things like contact lenses that change color when you have diabetes, tires that can drive on all kind of road conditions, and i can give you hundreds more inventions. They now have a thousand little Polymer Companies that have more people working for them them before old Tire Companies. That is what, i mean, by changes. And so you have a lifethreatening situation. Universities. It is always university centers. The spells that are becoming brain belts have universities with worldclass research. They are dealing with the problems of our century. No longer simple. Complex challenges that require multidisciplinary approaches. There is anthere is an openness forced by reality and necessity to share brainpower. They have a connector command i have an infrastructure that attracts and retains in the infrastructure includes Affordable Housing. That is why people move from Silicon Valley to other places. So and finally, of course, you need access to capitol. These are the key characteristics. We have albany, new york. Just outside, the nanotechnology complex and leadership, a former christian militia fighter from lebanon, by the way, who became a great physicist. They are at the forefront of Semi Conductor research. Global foundries with thousands of employees. Here you see a machine. I was in that clean room with the white hat on. That machine costs a billion dollars. It is the most modern machine to make Semi Conductors in albany, new york. The research triangle. Let me tell you a story on the sidelines, the old factory, no more cigarettes being made. Now it is an incubator, and a very lively place. Portland, oregon, the old waterfront, brought together the university with intel i was already there and together they could do things they could not do alone. And now you have basically the university brought back from the mountain to the city with tramways and to make my dutch heart warm bicycles. So, from my pulse to the world smartest cities, old phillips, and now you have the Technical University of became an open innovation platform. We will talk about the later. So, over 3030 places from all over the world, two thirds of the former rust belts, and in europe 50 of them, and we described and detailed ten in our book. Building on forgotten strengths. Now, we could not be of brookings without policy recommendations. So lets go through them. I will talk about two, but there are much more. We have a 21st century economy. We are measuring it with 20th century statistics. We are miss measuring our productivity. Google map or google search, we have to find a better way to do this. Second point is terribly important. Why is all this anger in this country . People cannot find jobs after they lose them in this new world. We have to develop programs of training for jobs that are based, i think, on a really good model, which is the german workstudy model. It is a great model. We have to reward sharing brainpower, support and build innovation districts, build Political Support for more research. The United States does two thirds of the research in the world, but we have to keep doing it. Finally, venture capitalists should have the leeway not to make profits the next day , but more leeway to invest for the longer term. So in conclusion, as you can see, fred and i are optimistic. We think that the United States, Northern Europe, its a very good future. Innovation is not dead. Competitiveness is not dead. In fact all we are regaining it. Maybe the best way to sum it up, it is no longer winter in america. Spring is coming back. Thank you. [applause] i am bruce katz from brookings. I am just playing around. An absolute pleasure to moderate this panel, an absolute pleasure in this season of despair to be optimistic about the future of our country. And the future of many similarly situated cities in europe. You know, fred and antoine have done all of us a great service. It takes to dutchman to come to america and drawing this what we have. So very, very helpful. We have two other people on this panel that i think i will just give a brief introduction. They are two of the Top Economic Development thinkers and practitioners in the United States. Rebecca bagley is by shasta for Economic Partnership with the university of pittsburgh. She takes all of us on a tour last week. If you want to feel optimistic about america, go on a tour with rebecca. Prior to that she worked in ohio. I may have a question about that. And then head of the research triangle, the iconic science part in the United States and prior to that he worked in clemson and North Carolina state. State. These folks are really at the cutting edge, and i want to start with that. To get trip to the netherlands. Take a trip to the netherlands. Have never heard of eindhoven for. We had a remarkable day where we saw charles story, lost tens of thousands of jobs but in about 15 years this is a city that is basically one of the most innovative in the world. Phillips announced they would ship there manufacturing. In the same year the dump trucks went broke. Phillips was a phenomenon in holland. We are critical. There was a trauma for that region. There were people who stood out, and they thought of very ambitious plan. A specific item building hightech machinery. But how do we do it . Technology is too complex. You have to collaborate. And but and sharing brainpower you need collegial teams. The problem at that time because the companies in the city and its nearby communities were also i load , closed. And if you want to build those multidisciplinary teams have to break them also, and there is not one connection. The open it up and did something more. Booked his own research. Facilities the Technical University and so with the information involved though colloquial that was able to break through the silos inside the universities. The 1st of mistaken by the mayor of eindhoven because it was not eindhoven alone anymore that there were 21 other communities are companies are doing the research the side of the mayor would be pressing. One other thing that was remarkable that we didnt see, that took place in the supply chain, all those little companies headquartered in that region it was the initiative early this century task, Semi Conductor machinery maker, the world leading now after they have been Companies Like nikon and canon, but they asked their suppliers over earlier this century still delivering the components on strict prescriptions from personnel and as those companies to put their r d and those components. So that they changed this into a value chain. But let me the questions. Let me changeup. You and i were an eindhoven. At the end of the day we drove back to the airport, a simple airport. This is the story of the dutchman. What can you tell me, what you remember of the ceiling when you left the city and drove with me to the airport . Well, i will tell you two things. On the way and eindhoven, i thought you are not. [laughter] you are not the only one. [laughter] this is a city,a city, how many people in the room have heard of eindhoven . [laughter] my god, that is because you read the book. The city that fred is describing, amsterdam is the airport, rotterdam is the seaport. By the end of the day i have to say what was the biggest take away was we went to see the mayor, want to see the head of the Business Chamber , the top investor, the technical institute, the hightech campus, and everyone was almost completing each other sentences. And it was almost scary. It was almost like a stepford wife kind of moment with everyone saying literally the same thing, unified narrat