Use the hashtag artist places. Fire up your smart phones if you get a chance. I am mark muro, senior fellow at the metropolitan policy program and my privilege to kick off todays auspicious event. I say our event today is auspicious for several reasons. It is always auspicious to welcome and help launch a book into the world, given it is a red letter day for fred bacher whose excellent book the smartest places on earth is just out and if i do say so, rush to pick up a copy, we have some out beyond the back, on the way out please do that. Also two experienced economic observers focusing not on the standard inside the beltway with spin cycles, and at brookings, the most fundamental elements of national wellbeing, r d and stem worker advanced industries from aerospace, Regional Technology clusters, Regional Technology ecosystems, critical, that is part of their focus, and collaborations they accelerate. The fact that cities and regions themselves can become incubators of growth. They traveled the world for decades, now come back to embrace the local, granular and microblooge i find this a welcome directive for the disembodied economic debates we specialize in in washington. None of this gets what is the most auspicious aspect of the session which is the fact that and one Antoine Van Agtmael and fred bakker have good news to deliver. This is a settled brand of good news at a moment many commentators have surveyed the global scene and conclude in that america or at least its industrial tear is done, Antoine Van Agtmael and fred bakker are here to flip the narrative, where conventional wisdom sees crime driven by lowcost mass production in china, Antoine Van Agtmael and fred bakker see reinvention being driven by specialized rust belt cities, increased focus on high technology. Others tracked the collapse of mass production of tires and steel, Antoine Van Agtmael and fred bakker see the center of Polymer Research and all over these growing stature in nanotechnology, others have seen hopelessness, fred bakker and Antoine Van Agtmael have identified a reinvention playbook in which transitioning regions have turned local universities into open innovation hubs and civic alliances built promising new injustice strategies in regions, in short Antoine Van Agtmael and fred bakker have traveled america and europe and returned with an optimistic view the dozens of old places are becoming launch plans for the new. I find that extremely exciting. Clearly this is a welcome counter to the scary decline that is now dominating the president ial campaigns for example. This is especially noteworthy given Antoine Van Agtmael is a man who when working at the world bank in 1981 coined the term emerging markets. In a previous book declared the onset of the emergingmarket century. At that time he wasnt saying it was the beginning of the american century, it was a different century. Now he is back with a different view as you will see. I would like to introduce our two esteemed offers who as you can see from the agenda will also participate in a Panel Discussion that will be moderated by brooking centennial scholar bruce bruce katz who will introduce the panel after Antoine Van Agtmael speaks. Let me introduce Antoine Van Agtmael who will present the books story and then fred bakker, the coauthor, you will meet him shortly. Antoine van agtmael, brookings trustee and senior advisor, policy advisor. Until recently was the rentable founder and ceo of emerging markets Management Llc and investment specializing in emerging markets. He is also a supporter of Metro Program and the office of centennial scholars at brookings. For his part, fred bakker specializes in monetary Financial Affairs with prominent outlook, the financial times, he lives in the wonderful city of amsterdam but enough, we will hear from Antoine Van Agtmael. [applause] thank you, mark, for that wonderful introduction. I am glad my wife is here. Let me start by saying we could not have written this book prepare the presentation, this forum, for the past couple years was really influential in our thinking. Brookings, i am talking about bruce, amy, mark, passed breaking work on all of this. Very good work and we have been standing on your shoulders in making this possible. Thank you for that very much. When you listen, let me take this thing here. When you listen to some of the political candidates on the left and on the right, dont you get depressed . When you listen, it sounds like this country has run out of steam on innovation, that our best times are behind us and all we have is problems. As mike already said, that is not what we found. Start by saying if you look in the rearview mirror, things look bleak. Employment down 7 million people. People dont write about the fact that there are 10 million jobs in hightech injuries industries, 4 million jobs were created in that period. What is good is you can see that line at the end is starting to reverse. It was not just competition from my emerging markets. It was also we were doing is much more productively and the devastating impact of the 2008 crisis we are coming out of. But the bad news we found is not the whole story. This book really started when i went to asia and fred had a similar experience. I went to asia meeting with many and i have been doing this for 30 years, many entrepreneurs, ceos and what do i hear . I hear them complain about american competition. I have not heard that in 30 years. Why were they complaining . Labor costs were going up. Shell gas was cheap, but the most important thing was they couldnt keep up with american innovation. And so we, after this trip in which we visited a dozen cities all over Northern Europe and particularly the United States, and there is my daughter, we came to a very different conclusion. The american and Northern European economies 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 compete on the basis of making things is cheap as possible, losing battles. Certainly against china and other emerging markets. We have learned particularly after the 2008 crisis that it is much better to compete on making things as smart as possible and here we are really good, we have great universities, we have this freedom of thinking that promotes thinking out of the box that is the basis for all real innovation. We have a great legal system and so smart innovation is beginning to replace cheap labor as the key competitive edge. This rests on two pillars. The first is what we call sharing brainpower. This is collaboration among university departments, universities climbing out of their ivory towers, and small startups and old legacy businesses and we have seen this all over the country. In the past, things were done on a very hierarchical basis, not very efficient. We learned this from the whippersnappers in Silicon Valley and cambridge, but it is limited to that. We learned to do things in a collegial way. It is no longer close innovation, your own thing but open innovation. It is no longer sideload. Todays problems require multidisciplinary solutions. The trustees of brookings, i went to see shirley jackson, from polytechnic institute, she said nothing is invented anymore within academic departments. It is all invented between economic departments. An important lesson. It is no longer topdown. It is bottom up. No longer alone in your garage. It is some collaborative. And finally it is no longer done in isolated research centers, it is done in vibrant innovation districts. That is where young researchers like to work as we have seen. The second pillar, we are creating a whole new branch of the economy. Had this Old Industrial expertise. We added new production methods, new discoveries. On top of that, the stuff you are really good at. And while this Information Technology and the ability, didnt have that ability before to use big data and analyze the big data to help us, and it is connected through a tiny little chip and that is the sensor. That makes various things possible that were never possible before. And future is all about connecting and connectedness. Take self driving car. This will be a revolution in transportation. My picture here disappeared. Self driving car. Wearable devices. This will be incredibly important to the future of healthcare. You will wear them. You can even ingest them. The smart grid, fred can tell you a lot about it. All of this was impossible before. This is the smart economy. The combination of the physical and digital economy. You might think okay, this is nice. We have lost all these industries. Think again. We have new production methods. We have robots. Robbie brooks for example of mit with a secondgeneration robot and North Carolina, invented a way to make 3d printing 1000 times faster so they could not just use that in production, doctor chang of mit who found a new way to make batteries. All of these will make it possible to bring back Industries Like socks, shirts, shoes. Phil knight said they are already making olympic shoes with robots. This is one thing. The other interesting thing we found is this innovation we talked about, Collaborative Innovation is no longer limited to places like Silicon Valley and cambridge. It has spread all around the country. To more than 30 brain belts we call them, in the United States. To 15 brain belts in europe. Let me illustrate with one example. You have heard of akron. Would you have thought this was one of the smartest places on earth . Maybe not. What did we find . You had four old Tire Companies gone, practically overnight with the loss of a lot of jobs. A lifethreatening challenge. All of what you see is based on a lifethreatening challenge. Then you get the second element, a connector, the president of university, who got people together, to collaborate because they had no other choice. What stayed in akron didnt disappear, was worldclass Polymer Research that gave us contact lenses that change color when you have diabetes, tires that drive on all kinds of Road Conditions and i needed for the self driving cars and i can give you hundreds more inventions, they have 1000 little Polymer Companies that have more people working for them than before old Tire Companies. So you have a lifethreatening situation in universities. It is always university centered. Each of these rust belts that are becoming brain belts have universities with worldclass research dealing with problems of our century, no longer simple problems. They are complex expensive challenges that require multidisciplinary approaches. There is an openness forced by reality and necessity to share brainpower. They have a connector and an infrastructure that retains talent and the infrastructure includes Affordable Housing. That is why people move from Silicon Valley to other places like akron or whatever. Finally of course you need access to capital. These are the key characteristics. Albany, new york, did you know in albany, new york, outside the nanotechnology complex and leadership of the former christian fighter from lebanon who became a great physicist, they are at the forefront of Silicon Valley research. Global foundries have thousands of employees working in one of the most modern plants in the world. I was in the clean room, that Little Machine cost 1 billion. The most modern machine to make semi conductors in albany, new york. The Research Triangle is here. Let me tell you a story on the sidelines, the old rookie strike factory, no more secrets being made there. Now it is an incubator in a very lively place. Portland, oregon, the old waterfront, phil knight gave 500 million and brought together the university with intel that was already there and together they do things they couldnt rule on and now you have basically the university brought back from the mountain to the city, to make my dutch heart warm, bicycles. From light bulbs to the worlds smartest cities, the old phillips and now you have Technical University that became really an open innovation platform. 30 places from all over the world, two thirds of them former rust belts and in europe 15 as well. We describe in detail ten of those in our book, rust belts, building on forgotten strength. You couldnt be at brookings without some policies so lets go through them. There are a whole bunch more. The first is this. We are measuring it with 20th century statistics. We have to stop doing this. We are miss measuring our productivity. Google search is not one of the statistics. We have to find a better way to do this. Second point is terribly important. Why is there all this anger in the country . A number of people cannot find jobs after they lose them in this new world. We have to develop programs of training for jobs based on a really good model which is the german workstudy model. It is a great model. We could do it. We probably will. We have to reward sharing brainpower through the grants we give. Support and build innovation districts, build Political Support for more basic research. The United States does two thirds of basic research but we have to keep doing it or we lose out. Finally Venture Capital has the leeway not to make profits the next day because they invest in social media. More leeway to invest for the long term. In conclusion as you can see, fred and i are optimistic. We think the United States and Northern Europe has a very good future. Innovation is not dead. Competitiveness is not dead. In fact we are regaining it. Maybe the best way to sum it up is if you look outside it is no longer winter in america. Spring is coming back. Thank you. [applause] could i get a welcome for polly . I am bruce katz from brookings. How does that work . I am just playing around here. Absolute pleasure to moderate the 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. Fred bakker and Antoine Van Agtmael have done all of us a great service. Almost like it is a hopeful book. It takes two dutchmen to come to america and remind us what we have. Very very helpful. Two other people on the panel i will give a brief introduction. They are two of the Top Economic Development thinkers and practitioners in the United States. Rebecca bagley is vice chancellor for economic partnerships at the university of pittsburgh. She took us on a tour last week. If you want to feel optimistic about america, go on a tour with rebecca bagley. She worked for nor attack, northeast ohio, Pennsylvania State government. I may have a question about that. Really the iconic science park in the United States prior to that, worked with clemson, North Carolina state. These folks are at the cutting edge. I want to start with fred bakker. Four years ago, mark and i took a trip to the netherlands, you took up i never heard of that before. Neither had mark. We had a remarkable day. We saw a turnaround story, electronics at the heart of the city had lost tens of thousands of jobs to asia. 15 years, this is a city that voted one of the most innovative cities in the world. What happened . The short version is a long story. Originally was built around the one you mentioned. Now a subsidiary of the portland base. They came in the 1990s. Phillips announced they would ship their manufacturing across country. And have 30,000 jobs. In the same year, they went broke. There was a horrible scenario. For the netherlands. Phillips is a phenomenon. We are proud of them. We are critical. Dutchmen are always critical. They are also proud. It was a trauma. There were people who went quietly. They thought of a very ambitious plan. To make from that region hightech hotspot on a specific item that is building hightech machinery. How do they do it . Technology is too complex so people knew you had to collaborate. In sharing brainpower you need collegial teams but there was a problem at the time, the companies and the university, and nearby communities were all side load, hierarchically organized and if you want to build the multidisciplinary teams you had to break them and there was not one connector. Early this century, the ceo of philips took the greatest step to open up the silo, the research lab, it was similar to bell labs and there was much resistance from people around phillips, but he offered it up and did something more. He invested a lot of money in building an open hightech campus. He put his own research on that campus, opened up facilities for startups and invited companies to put part of their research. And all over the world working on campus. With Technical University, and to the companies. What are the skills our students need to pass those jobs. So with the information from those enterprises, able to break out of those silos that were inside those universities and the first step was taken by the mayor, it was not