tv 2016 National Competitiveness Forum Morning Session Part 2 CSPAN January 5, 2017 7:08am-8:32am EST
[applause] >> ladies and gentlemen, please join us for coffee and refreshments. we will resume promptly at 10:20 amen. ladies and gentlemen, welcome back to the stage, council president and ceo of honorable deborah wince-smith. joining her for the policy policy recommendations of 50 years and to help set the agenda for future inside of it the former chairman and ceo of intel corp., dr. craig barrett, president emeritus of georgia tech and the smithsonian institution, the honorable wayne clough. director of the lawrence livermore national laboratory can adapt william goldstein. [applause] >> thank you. i hope you all like to quit
panoply of the last year the council and we couldn't highlight everything, but it gives you a snapshot of where we then do what we been doing for the country. a wonderful guest arrived today and he is going to make a few remarks. senator jerry moran, republican senator from kansas is the cochair with chris carpenter in delaware on the democratic side of the bipartisan headed of congress. senator moran. [applause] >> deborah come to thank you very much. i just came from a squat box interview in which i decided i must not be saying the right things about competitiveness because a minute and a half into the interview, breaking news. there's a new ceo at coca-cola. this is surely they're bringing me back. having said to have my full-time in front of the squat box audience i decided to come visit with you this morning and tell you something i would've said
had i had more airtime this morning. senator koonce tonight are trying to bring members of congress and staff together for the purpose of promoting an agenda that is about competitiveness. as i was at in this morning and that interview, in my view competitiveness is really a nice word for jobs, for better jobs, higher paying jobs, job stability and opportunity to find the policy to create the chance that more americans can achieve the american train. while competitiveness may sound like something technical or policy oriented, is something basic to our country and its economy. let's make the opportunity for every american rail and we cannot the chance to pursue it. thank you for your efforts. we will continue to find ways to work together. i am hopeful. i look at elections is similar to new year's day which we
create our resolution and a sense of opportunity and hope that the m.'s can happen in the future and we are committed to making certain that our colleagues whether republican or democrat find that sweet spot in the agenda that increases the chances the united states of america and its economy remain competitive in a global economy and that means things front and center for the congress and the administration in the future. tax code, repatriation, the regulatory environment, trade, access to world markets, technology, advancements, education and training, it worked for us highly motivated and innovative and those things matter greatly as we try to make certain that good things happen in america today and the future. one of my agenda since i came to congress mostly related to kansas city foundation on entrepreneurship and how he restarted the opportunities for someone who has an idea developed in the back yard or
garage are barred they can take to market and become the country have started businesses that historically has been. the authors of an agenda that will achieve the things to report for our country. thank you for the effort and we look import 22017. [applause] >> i think many of you know that innovation and technological leadership in the nation's position in research and development has really been in the dna of the council at competitiveness since our inception years ago. we did some of the first critical technologies list. we had a great report that her first distinguished fellow who just sadly passed away dead on tape are indeed and the list continues.
i'd want to start up at three tremendous leaders at the forefront of technology throughout their careers. about what really was the genesis for some of the work you love dead but the council to a nice start with you because of their vice chair for industry and even before when you're president of church attack, you are really doing some very innovative things on the regional front and ended up leading one of five major projects. so tell us about that story and the impact for the country. >> thank you, deborah. congratulations. i think when i was president of church attack i knew i had a lot of things to do, but one of the things i felt was lacking was a connection between what we were doing in a context and so a call to some people i thought were friends and mentors and they said the council competitiveness was that they were things really have been and where he brought together industry government,
labor and private industry to do things. so i look forward to that myself. it is a real positive experience for me. i spent a lot of time invested in account on a prebuilt came back to me more than i invested in it and had the wonderful opportunity to work with deborah and the vice chair but it's been a continuing of great leaders who continue to add to our national fabric on competitiveness. at the great honor to cochair the national innovation initiative in early 2000. i think people forget about what led up to that in the late after that i think was a very important part of the work of the council could michael porter who we saw last night on the video work on the cluster study. the cluster study in atlanta and mike cassidy here with the georgia research alliance.
as a seminal study that helps understand the economy and how to redirect to start to get the desired result. the council has been important to me personally important to my institution which is obviously actively involved in these issues and very important to all of georgia and that region about making a successful and anticipating what's coming down the road. >> i think of that study also, you really massaged a lot of the current leadership plan to have friendly cheesesteaks of from logistics of course moving into by attack and mandolin so many others. did you think at the time we had a vision into the future to your city was going to be the dynamic global city it is today in this critical sectors of the economy that were just beginning?
>> not really. i don't think anybody can anticipate these changes. they had good civic leadership and i think we describe the council works on national policies and sasser of the framework that allows you to succeed him out for the federal government's role is. innovation is local. innovation is regional. we are fortunate to be building something called technology square, which we thought would be appropriate for corporations and government and industry working with the institution and with the city. with the help of god people over and my successor has done a terrific job with that in that area is full of not only started companies come up with major companies locating their health care retail. it doesn't matter. the just exile they are and they really has been a court to develop into the plant had been to technology innovation sector as it's called.
the council you are there many times. i think the idea that everyone could work together was just not really understood until the council got involved. >> we were so fortunate to have great leadership with duane ackerman is chairman of the council when he was the chairman and ceo is your partner in all of that. craig, of course you've been in technology through your whole life. having come out of stanford and then going on to the one of our greatest high-tech companies in the world, intel. richard also been passionate about the investments of basic research and people instead and everything. we were so honored when you and bill brody when he was the johns hopkins took on the leadership to move our national agenda on innovation forward. share with us a little bit about the history and why you think back in 2004, 2006 we had a moment where we could jumpstart
and lead to the america competes legislation on innovation capacity. >> two things came together in that timeframe, deborah. congratulations on 30 years. the beauty of the council is a continuing entity. a lot of these programs and national reports, we talk about they appear, but then there's not a whole lot of follow-up. the council gives follow-up. the innovation in my mind has always been driven by a couple of key things and some of them are in your report card. but it's really driving basic r&d budget, federal r&d budget. i will paraphrase kind of my assessment on where we are in each of these is to go along. federal r&d budget we've been trying to -- forever.
it doesn't score very highly on your report card. to put them in it, the companies to work for, r&d and probably the department of energy combined. one company. so it's critically important we've been pushing that. the other one is education and you've heard a group of people talked earlier today for eloquently about education. i have a simple model player which is earning power per capita gdp of the u.s. is going to depend on the average level of education and the workforce. these are results of our k-12 education came out this week. we are mediocre to bad in all three categories and even though we have the best research universities in the world, the fraction of our folks with postgraduate -- postsecondary
schooling or now something like 15 from the relatively used to be number one. and then, the government environments that to promote innovation and you heard today talking about tax rates and thanks. sometimes i think it's important to look at the big picture on all of these, which is what we try to do in the council. don't get excited about little line items where you have success, but if you're failing at the overall mission. maybe we'll get a corporate tax simplification and sent it to do thanks to the united states under this administration. we've had disincentives. in so those massive manufacturing plant and that present value of one of those plants in the united states or
in a low tax environment is well in excess of a billion dollars difference. as a man anything to do with labor rates. everything to do with u.s. tax code. it's very difficult to explain to shareholders to take a dollars away from them just to put the plant in the united states. we haven't succeeded in that area at all. i look at those three categories. education we are not succeeding, folks. building up federal r&d. the infrastructure to do things in the united states were not succeeding. it's good message to get in the next president. >> i want to come back in a minute and talk about the infrastructure and advanced manufacturing. on the education front, in europe co-ceo that an intel, you've done some amazing things and doing some innovative pilots around the education in the state of arizona.
she thinks that, you know, some of these new ideas and opportunities are incubating can scale up or do we need to be thinking more at the local state level to get a handle on some of these education challenges. >> look at this whole issue of raising standards and common core when the backlash of the federal government, education has to go on at the local level and driven at the local level. but there's some very key aspects. take washington d.c. for example. in the middle has historically had the worst k-12 education system in the united states, maybe in the world. it is now the fastest improving the educational system in the united states. the reason is half of the kids are now an alternative education charter schools and not public schools and have been competitive, innovative. but actually raise the level of the public schools up without the competition d.c. would still
be zero and education. so i'm a big fan of competition wherever you might be and it makes the whole system better. we've got some results of charter schools and they're absolutely scalable as long as the local state government inside this alternative competition in and supports it. there's still eight or nine states in the u.s. that don't allow charter schools. >> we are seeing arizona as an innovative state on many fronts in terms of innovation. >> arizona, an early adopter of competition at the public school system. roughly 16, 18% of the kids in arizona right of standard public schools and public charter schools in the public charter schools are like the top 20 schools in the state. so competition works in that space. the entrenched bureaucracy doesn't like that concept, but
it works. >> so bill, you are a physicist, so i know if we were having a glass of wine i wouldn't understand three fourths of what's going on in your mind as the defense is assessed, but i do know do of course have they been one of our great national laboratories in an unrivaled system of flats in the department of energy but also another federal agency. innovation and rapid technology, development, and buddy are also leading that the four friend in advance computation and supercomputing. how do you really see in your role as a laughter that or the value of your participation with all of us here in the council and what are some of the top you want to share on this critical component of the national labs in america's innovation ecosystem. >> thank you, deborah.
the first thing i'll share is your doing better than me at understanding what's going on in my mind. [laughter] just note that the distinguished members of the panel and the only one without a former mayor disassociated without their names so i am more a historical good on this than others. i would like to add my congratulations on 30 years of exceptional service to the nation at the council on competitiveness. for the point of view at the national laboratories, it's notable that the council is the only forum that i'm aware of that brings together the system of national labs with industry, with labor and academia. the only organization. i can't think of another place where that happens. in doing so, the council of
has-been to common cause, and the system of innovation in this country for knowledge creation two applications to scale up to commercialization. a remarkable accomplishment. in fact, in some case the council is a bipartisan of silicon valley in that sense if you will. national labs are a critical ingredient. in fact, earlier there was talk about capitalizing on the nations competitive advantage. the system of national labs that exist in this country is without question one of the competitive it into just that exist here and can be brought to bear. in fact, we find it increasingly other nations looking to the
national labs system here in the u.s. as an exemplar and looking for ways to reproduce it and it seemed not personally in places ranging from brazil where there is an initiative under the council that we've been participating and am also including china which is looking explicitly for how to adapt or how to develop a national labs have said that is so successful here. the national laboratories and not to mention the 25,000 scientists and engineers is to perform long-term research and develop and in the national interest driven by applications and energy of national security and environmental stewardship. it complements and they said that academia is more driven approach and a potential acid
realized commercialized about innovation. as you have noted, national labs being government-owned contractor entities also bring the public to her explicitly into the nixon opened the door to a much richer set of public private partnerships than are possible otherwise. the capabilities offered by the laboratories are publicly funded during national science and technology needs. for example, my laboratory as its primary mission to provide the technical basis for ensuring the nuclear stockpile remains safe, secure and reliable in the
absence of nuclear testing. however, the facilities the know-how required to do that the most powerful lasers in the world and computers in the world are available for a range of national league admissions and next less of a bomb on them is the mission of transitioning and national laboratories to the private sector and actually enhancing national well-being and increasing national competitiveness. this role is explicitly recognized the department of energy is one of the missions department. they have remarkable success over the years in the national
labs into its dark all. examples include the initiative on high-performance which was so successful and here an example by the way of where i think the council on the laboratory played an important role, but also what the initiative did for the laboratories themselves and for us with advanced manufacturing where a very productive leadership has been fined between the council of the department of energy and the national laboratories to make available the most advanced new developments in advanced manufacturing. in particular to the private sector and in particular to the entrepreneurial sector.
in general the laboratories have enhanced i believe and played roma continue to do so in the future. they might thank you. one of the things i've committed going forward in the council is to really deep in the between our labs. there's some congressional barriers to how monies appropriated and that's something we want to work on. you product manufacturing and of course the georgia tech in under the leadership the early universities have a major manufacturing of nanotechnology in the frontiers. it has been the innovator and continues to do so. let's talk from your perspective about the future about. i want to talk a little bit about that advanced manufacturing enterprise and
what they need for a competitiveness from the transformation underway. and then have you all think about what we should be doing in the next 30 years. talk about the cost of the scale and scope and infrastructure intel had image generation. there is a concern right now that perhaps we don't have enough of the next generation in america. tell us about how critical to the nation's competitiveness. >> well, it's critical. ultimately if the u.s. wants to have an economy and growing economy and growing jobs, unique manufacturing in the u.s. the facebook said google's are great, but you don't employ many
people are not and you don't google making a few things. they are creating jobs and so the whole concept of it as manufacturing. i do want to turn the tables on you a little bit. they spend their monies on what i believe is the national labs mandated which is big science. there's no place in the livermore said berkeley's agenda forward these such things are not the natural resource that everybody can come in years. quite frankly i'd like to see it grow dramatically. today i happened to be on the berkeley is there a board. if you want to upgrade their photon light source which is
critical for pharmaceutical development, chemical reactions, all sorts of things. it's a tenured post processed to say i want to do this. i went to get the d.o.e. i want to get the $800 million to get to this. i come from a back ground where you want to build a $5 billion manufacturing plant in greenfield output in two years. and i can't stand to see a $500 million project spanned 10 years. it's not competitive. but it's not love salt they got hamstrung by the bureaucracy that he says here in washington d.c. i would love to see loud squirrel. i would but see them grow and what i think is their great capability, which is big science, big computing, stuff
that georgia tech can't afford, stanford can afford because he just cap at those facilities and individual universities. these guys are natural resource from that standpoint. >> i think you give us a great topic for a session next year to look at that challenge of how to reduce the time to get this large-scale facility is going and implemented in the project. >> i think one of the examples that relate to bill's work and others in this room was a high-performance computing initiative that was done in conjunction with d.o.e. and the council. it was hugely successful endeavor. it created an infrastructure which universities can use relatively easily and access to tremendous capabilities they really can't afford to operate. they can afford the cooling systems and all the things necessary. they came back to me when i was at the smithsonian.
this moment on trains for sunday's 500 phd scientist. craig has get this out to them to do a lot of work in genomics and that to give our friend a hard time. you were only worried about one per the smithsonian's were worried about 2 million. so tackling not in fortune #-number-sign at amodeo and the smithsonian has direct access to the capability to help the smithsonian get in to a new set of facilities it needs than you think that is just pure science because 70% of the diseases are coming from nature and all of these diseases. understanding the genomes of all these other species is critical to the health of the human species. it was scary and sad all for the council on d.o.e. to set up a
system that works. i think there is a missing component and all of this and that is coming back to the local idea called douglas georgette and the very southern part of the state of georgia. they have assisted in committed to it. a win science competitions in the state of georgia and i go back and speak to students and they get as many as we can become to georgia tech. there is a gap between all the things we can do here at these big organizations and universities have lapsed the responsibility to reach out to help youngsters in a small communities get the education but it's a great opportunity with the digital capability and digital printing for all of this happened back there in those schools. we are missing a link fair, and exciting part to reach a part of the population we are not
reaching. >> may be at a disappointed that you're not going to get an argument from me on anything you gentlemen have brought a period in fact, i would sad one of the issues that dance in the way of better utilizing the laboratories and making them more as an engine for innovation and for growth frankly has to do with the regulatory environment that we all live in turn elements of the federal system has to deal with. i'd be interested in the policy of that kind of a dialogue going on. i did want to just pick up on something you talked about this idea and bringing in schools and education was the nature and and one that really struck a chord. it's something the laboratories
can do more of them playable but the other components of the council. we started over the last three years hosting under presidential initiative by brothers keepers at the laboratory for the first year we brought in 70 students come and middle-school students and i think over 150 middle schools and just last year from the surrounded school districts reaching all the way to oakland and san francisco and watching the student, many of whom, almost all of said had never experienced the kind of big science that we could show them, watching them react to that. i have to say the inspiration that just spending a single day at the laboratory watching that sort of thing and becoming aware of it gave me tremendous feeling
of hope and the idea that any of these junior high schools and who maybe never would've thought about becoming quantitatively adept in going into stanfield. just doing that could have such a tremendous impact. think about how much more we could do, how much more impact we could do by coordinating among the price of the council. it would work tremendous things for laboratories and for the missions here. >> go from a retiree who raised as cattle and bison in montana to come to the stage and talk about innovation is kind of interest to you. i would really like you guys to take one think to hard and that was what michael crow said this morning that she got to bring everybody in the system along. and so the average education system in the u.s. is world-class, you've got a of a
job in front of you. we danced around that. you know, results showing mediocre results in the headlines for one day and then they disappear and nobody picks data. nobody takes response ability, but it's the achilles heel of this country. we are not going to increase the number of workers of postsecondary schooling and so we fixed the primary and secondary school system that the u.s. k-12. that is physically broken today on average. right examples but it's broken. until you get that when fixed, the job of the council is going to be increasingly difficult. >> the last two minutes and of course we heard this morning from jim clifton at gallup a drag on productivity from our education system apart from the
social issues, that is clearly one would need a whole new type of innovation and also the relations tips between and is greatat academia and also labor very importantly. a few other ratios. john young last night in their video i had the wonderful honor and pleasure to go out and interview ahead of an august. one of the things we were laughing, created the council on competitiveness. we thought it was going to be around a few years and now it's obviously sustainable and contributing. as the nexus of innovation, sustainability and you are moving into training. the genomics, loss of things we could do but at the end of the day you theater is contributed so much. talked about the criticality.
i want to ask that we will wrap this up. remember your king for a day here. >> i found the discussion about the gdp to be fascinating. it's also in line with an argument of a recent book that argues ph of innovation was really basically the same. i talked about this morning 1850 to 1950 and over the last 70 years or so of the product because this admin and that's because the kind does revolutionary changes in the automobile, that thinks it at that incredible impact, but
despite the digitization revolution the question is what is the thing that's going to have that incredible impact. 3-d printing beyond the law. all of these innovations are clearly going to be important and having them had paid with the next electrification, global electrification. solving world hunger, moving off the earth colonizing the moon. using did large-scale computing to preserve the biodiversity we are losing every day. this really big problems that we should be thinking about for the next 30 years. it seems to me that the council does in but cannot but it's
evolving today. it would be interesting to take a 30 year view of the interesting doubling the life expectancy of everybody on earth. >> thank you. in this discussion is access. we all appreciate those of us here. school tuition is very low. the very small tuitions to my education. there is this great fear of leaving people behind. there's so many applying. there's that scene and in another here but don't financially afford their education. that assesses the problem of
people being left behind. i teach part time again and i'm stunned by how bright the students are, how excited they are. they want to be motivated to provide them with the education they get them excited. in the technological field is the help i think the students brought in their view. i love the concept of bill gates for debate history. i love history and i think as you get into history you learn an awful lot about becoming something bigger than yourself. i think new approaches to education, georgia tech to his credit starting the first degree program and mastered in the computer engineering online. the whole degree program. not a course for a whole degree program in its enormously successful. 5000 students are taking this course of half the cost of what they have to pay.
they need to find the best practices and make sure we married them in a way that inspires and reaches the third-graders so they get inspired and want to work. we have mismatched ourselves in terms of being able to do that. >> thank you offer common in helping us celebrate their 30th anniversary of the very importantly. these three gentlemen how todd the current leadership role. there used to be saying what is good for america is good for all americans. we need to reverse this and think of what's good for all americans is good for americans.
>> ladies and gentlemen, please welcome the assistant secretary for energy efficiency and renewable energy, dr. david freed and -- freed men. >> hi, everybody. thank you for that introduction. thank you to the council on competitiveness and especially to deborah wince-smith in particular. under your leadership the council has been incredible collaborator within our american energy. the reason all dialogue that held across the country were truly a great way to directly engage stakeholders included many of the folks here in this room. this is a great way on how we can unlock the leadership admitted they should, science
and technology. that's what it takes to ensure competitiveness. leadership in technology. leadership and innovation, especially when it comes to manufacturing. nations around the world of their own ways of working for its competitiveness in manufacturing. given the great nation, we have her own way which includes using public or the partnerships to drive innovation in jobs right here at home. i am really excited to have the opportunity today to announce the selection of the late for our latest manufacturing is to good the u.s.a. initiative. but i'm not going to tell you quite yet.
i'm going to see going to save you in suspense for a little while longer because i want to talk to you about the natural outcome of innovation and that is revolution. innovation is at the heart of everything we do and my offices at d.o.e. in fact, when it comes to making america more competitive with nations that china, germany, we at the office of energy efficiency and renewable energy or the solutions people appeared by mission is as simple as it is ambitious to create and sustain the leadership in the transition to a global. this is a transition as we save money and create jobs and how we generate across the country.
the electric vehicle is a rapidly spreading across the country as they drop a 40% and 90% angst of innovation. around the world, global investment have quadrupled between 2005 in 2016. i would argue within the next decade, those investments are going to reach the trillions when it comes to the opportunity before us. such a paraphrase, we say we want a revolution. we are changing the world it is incredible the pace of change. as this technology is face a fundamental question of who's going to make them. if you look around the country, we have two options. we can see the mantle of
manufacturing and innovation leadership to germany, japan, china and others around the world or we can step up and lead. i guess looking around the room, you all have the exact same as that president obama has had. step up and lead and that is exactly what is done. i think that's pretty clear. after all, manufacturing plays such a critical role when you look across our economy. you all know the sector's supporters over 12 million u.s. jobs across the country and contribute to more than $2 trillion when it comes to a gdp. these are well-paying jobs with an average manufacturing worker earning over $80,000 a year. these jobs create incredible domino effects. the economic policy is bound for every single person directly employed in manufacturing,
another 1.5 jobs is created elsewhere across our economy. that is exactly why we've been working hard to create a lot more of them. because i've gone around the country and talk to leader after leader in industry and government and around communities. i've seen a growing awareness that if we are going to play to win on the global stage, many, many more than energy technologies need to be made in the u.s.a. the entire manufacturing process needs to be here. whether it's clean energy or not, all of our manufacturing studies need to get a lot more efficient so they can become a lot more competitive. they are making a significant investment. germany, japan, singapore, just
a few examples of the folks working hard to challenge us and to challenge our leadership every single day. we need to do the same. in fact, we need to do more and we need to do better. that's why president obama launched in manufacturing u.s.a. initiative. this effort has been a great partnership route together industry, academia, other federal agencies including commerce and defense in order to create a growing network of advanced manufacturing is to choose, each one bringing in focus has one bringing and focuses, different ideas, different innovations to enhance their competitiveness and revolutionize. the department of energy we played a key role by standing up is to choose an emergency site powering about comics and advanced composite. the goal at the department of
energy here is to help manufacturers of all sizes, margins law to save money, to save energy by adopting new technologies and by providing workers with the skills they need for the manufacturing job not just that today, but if tomorrow. if you look back over the four years since this effort has begun, the administration has already committed over $700 million in investment and riccardi tightened so much for that investment. in fact, we have leveraged more than double that, more than one point for billion dollars in private another nongovernment investments from our partners because that's what we can do. that could have much greater commerce around the country and as a nation we have road from one institute the 65 members to
an entire network that now includes 10 institute is andover 1300 participants. so on that note, i'm going to add this suspense. so today, i'm incredibly pleased to make the announcement of their nations tend to manufacturing u.s.a. institute called rapid. the rapid advancement of intensification deployment. there's a new institute led by the american chemical engineers. they will be serving as key drivers of cutting-edge work with great intensification. common household. karen fletcher is here in the house paint are you out there
somewhere? karen is now an incredibly impressive career. she is now moving from industry to tackle this greater challenge to serve as ceo of the institute and that goodness coordinated effort. i'd love for you and several members of your team here as well. i would love for you to stand and never went to give a loud applause. [applause] that's a lot of folks do not begin at about the folks who will make great things happen in because there's over 130 partners across industries that are part of the rapid manufacturing u.s.a. institute did thank you on congratulations. it was a great proposal and i look forward to the amazing work you are going to do. when we look at this new manufacturing u.s.a. institute, it could leverage up to
$70 million in federal aid with another 70 million in commitments from partners already in hand and in just five years, the institute will be standing on it to driven by industry and other shape holders holders -- stakeholders to be completely self-sustaining. we'll focus on new technologies on the manufacturing floor from improving energy efficiency and cutting operating costs to reducing waste and cutting the amount of equipment needed. the chemical industry allowed, these technologies have the potential to save more than $9 billion in costs every single year and on top of that there can be huge benefit for a variety of other industries including oil and gas and the paper industry.
the growth of our customized factories where more and more vocal manufacturing across every corner of our country should make greater use out while treating workers in advance sales in the next generation of manufacturing. this institute is just the latest example of how the department of energy continues to invest in the technologies of tomorrow. high-performance computing and the next generation machines as well as 3-d printing just to name a few. the salsa scene exciting steps forward with major u.s. manufacturing plant in the works of ported to the department of energy including tesla's been doing ray bourque and batteries, solar city and solar modules. 1366 technologies and solar waivers with high-efficiency led. i love the fact there's no
debate over an essence. leds are cheaper over there life, better quality of life is incredible and making them here in the u.s.a. on top of all of that, if you look across our government and across our nation, the u.s. manufacturing sector as a whole has added over 800,000 new jobs since february of 2010. of course that doesn't change the reality that manufacturing challenges and will continue to do so. ..
the clean energy revolution while real and revving up still hasn't been felt in every region, at least not yet. and that's why we at the department of energy must continue to accelerate our efforts to invest in innovation. innovation that will continue to advance america's manufacturing competitiveness. innovation that will bring more good jobs and innovation that will strengthen our economy as the clean energy revolution expands around the u.s. and around the world. and that's what every single one of us in the room need to help. because this challenge of ensuring the revolution -- excuse me, this challenge of ensuring that that revelation is spread across our great nation is way too big for any one person or any one sector to solve alone. so one last quote from the beatles.
we all need to, together right now. i know if we work together across industries, across sectors and we can create more prosperity and many, many more jobs and a much stronger economy. but to do that we need to face the reality of the market. where the trends in clean energy are crystal clear. the choice is not whether or not there's going to be a clean energy revolution. it's happening. the choice is whether or not we as a nation are going to continue to lead it. i encourage all of you to take the opportunity you have as leaders to keep focus on progress. because i have no doubt in my mind that we can boost u.s. competitiveness across the board and our manufacturing sector and beyond. and we can ensure that the united states leads in the global manufacturing marketplace if, if we continue to innovate
and fight to win the clean energy race. thank you. [applause] >> ladies and gentlemen, please welcome mr. christopher crane, president and ceo of exelon corporation and dr. peter littlewood, director of argonne national laboratory for a conversation with mr. steve levine. >> good morning. in a time of great change in the world in the united states come in the world, it says that the transformation that is going on in electrification in electricity in transportation
and in our electric grid is bigger and more profound than any. today were going to try to take that apart. i want to open up right away. chris, i'm going to start with you. when we're talking about a transformation of the grid, the grit of the 21st first century which is the mantra that we hear is going to be much different from now now, what are we talkig about? what is the problem and what kind of a solution are we looking for? >> let me say where we've come from in the very short period. technology is morphing and changing a becoming available faster than it ever has in our industry. up to a couple of years ago we did know if your power was on unless you called us. monitoring on a distribution
system was very limited. it was based off of previous engineering calculations, on land size, load, what the demand would be, peaks. so it was not a very intelligent system. in the last couple of years, at about 1,010,000,000 utility customers, we put over seven and half million smart meters on. now we're starting to see other system operates, the demands of the system, what our customers are looking for. there's a lot more intelligence that we can put on fault detection, fault isolation. but the customers now are becoming much more engaged in what they want, how do you want to control their energy consumption and i want to manage their cost. so as the technology becomes available, the customer gets more control, how do reintegrate that in maintaining the premise that it has to be reliable. it has to be clean that it has
to be affordable. so as a look towards the future, significant amount of distributed generation. how do you control the grid with that? this potential desire that one neighbor want to sell his soul out to the other neighbor, and now do you manage that? so energy storage systems, energy management systems, intelligent operating systems and trading businesses are going to be a big part of the future as we go forward. >> and we need more electricity, right? 27% more electricity forecast i 2040. >> that's the estimate. >> peter, do you want to unpack about? >> it's interesting to see this transformation from the outside. i thought i might warn people about putting up a slide, if we could just have a slide coming up. if you go back a century we had a discussion earlier about is the disappearance of productivity growth due to the fact that all of the big things
were already invented and it's all been done? so beginning with this, what you're looking at is telecommunications and the electric grid in 1915. if you look at those two pictures, aside from the fact one is cleared in new york and the other is in california, there's new york in -- snow in new york and california they look like they just had a vehicle accident. you may not be able to tell which of that was electric power, which is that was telepathy. if you look forward, click again on the slide, you see why that's gone. so those two things in 1915 were in many ways very similar. what you are just doing is pushing electrons out in one direction, in one case producing power and the advocate sending information. by the time we got the 2015, at least for telecommunications everything has changed. there are not any wires. the information is going around
true protons -- true photons. what actually happened on electric grid, him and it's got bigger and have been many changes with the net but fundamentally as chris just said, the mechanism of what we're trying to do as been until recently the same. so a bit of my own history, i used to work for the phone company. that was when it was a small bell, at&t. when i started working for bell labs in 1980 the model for telepathy was the same as was in 1915. it was universal service at the lowest possible price. the assumption was that you had a regulated monopoly which had come to deliver just that and it was delivered by cost, by price, whereas everything changed after that. one of the effects of that is my phone bill is now an order of magnitude higher than women
under the old model. the reason i'm happy to do that is i get more stuff. and the question is, is that going the same way with energy? and i think it is, and chris has already pointed out that you begin having more smart on the grid, you know what's going on. we are no longer in the central push out where you regulate by price. there's real value and if you ask how much a people prepared to pay for energy? maybe 6 cents a kilowatt hour but the best price i heard was if you go to a rock concert it's been going for a few days, everybody's phone is run down and there's a business model, people go out and charger phone for 10 bucks. you're not paying 6 cents a kilowatt hour to do that so there's a very different model which may emerge with that. spirit chris, just playing directly off of that, you've established what the problem is in the system and how how, in se
ways it sounds primitive when pr describes it. you have as a bridge to getting there you formed a relationship with mit, northwestern and with argonne internally whatever means of intellectual bridging that gap. and you describe what are you lacking and what is this relationship all about? >> as a publicly traded company that provides energy delivery services and energy, there's not a lot of capability or balance sheet space for r&d. so it is, the jewel of our competitiveness going forward is the work that is being done at the national labs, the work that is being done at the universities. and how we can support the last of the universities is a much
more efficient model that as being a utility company or a competitive generating company tietried to come up with our own bell labs type design. the work that we're trying to do, the partnership that we're trying to do is we know the practical on how the system operates. we have some insight into what customers want and what customers at this point i willing to pay so we have a practical knowledge where the theoretical, deep theoretical knowledge within the labs and universities, and how we can help commercialize that in a very affordable way but a more expeditious way is what we are looking for with partnerships, with the labs and the universities. >> but peter, the labs are research facilities. chris seems to be describing a think tank operation, right?
formulating with the future looks like. >> that's what we're trying to do. we have to see how this works. it's certainly not a model whereby chris says i have this problem, i need a widget, would you please design it for me and go back? we do do work like that. many of the labs to come universities do. we're trying to get into a piece of white space and same what actually are the problems? how can you think them through any different way? we can do that from a theoretical perspective but it wouldn't be very useful if we didn't have a partner in exelon to be able to do that because we don't understand the constraints. we certainly don't understand -- are a research lab, so it's not appropriate for us to be doing certain classes of things, but it really is appropriate for us as part of the national endeavor to bring out competitiveness in the system, to be working with very forward thinking companies
like exelon that want to think through this. it's more of a think tank that it is let's design some better widgets. >> all right. let's have a mini think tank here now. of course you only just started, and so what the future looks like is vague, to say the least, but you must have already had had some brainstorming. can both of you give some possible scenarios of what the world looks like in 2040? >> that's a risky proposition. the one thing we know is to stay on path, is we have to stay educated. we have to stay informed. relationships like we have with the labs and universities help inform us as were trying to define what is the utility of the future? it's another overused phrase,
but as i said earlier, the customer desire, the technology advancements, the capability of our grid is getting smarter. that data that we're going to get off of the grid, how to figure out the best way to use that. we do have a big picture vision that there's going to be much more distributed generation on the system so you will have more solar panels on individual houses and how it operated the system and what the customers want to do with that is something that we have to be forward thinking about. we have to ensure it's an equitable process that we go through. we don't see distributed generations serving the industrial load. and so if we overcompensate an individual at a house with a solar panel at the cost of the grid to the industrial customer, the commercial customer or the metropolitan area, it would be
difficult. we have to keep a balance on what we think the future can look like, what the technology evolution is, and how we are able to keep that affordable energy component going so we can continue to drive competitiveness. >> it's never a good idea to try to predict the future because there's a few things that may be out there. there are relatively conservative projections of energy use, but let me offer a nonconservative one which is to note that while we're getting more efficient at using energy, i.t. is no running at about 6% of global energy consumption. if moore's law were to continue and this is one of the arguments that explains it will not continue, running with current technology at 10-14 j per bit, you project that exponential
growth which is continued to go on a by 2040 the whole 2040 the whole of the world energy consumption would be for i.t. that probably will not happen. but it means that, for example, and i think this is referred to in an earlier point, or think about hyper firms competing in the direction that's going to go in the way computing will permeate everything, is going to be a model for computing which will change. one possibility is that the would be much more computing on the edge of things. so rather than the current model we have where the data is kind of centralized, you take it here, you put it in the cloud somewhere come as i'm pointing out the cloud will it is somewhere. it's a northern finland melting the permafrost probably. we won't be able to have that model of just reading stuff around the planet. we left much more intelligent agents which are out there doing computing on the periphery.
so what does that mean for us and how does that connect with the kind of stuff that's happening in this space? it gets to something which is relatively prosaic. in chicago which is putting out about 500 centers called the array of things. these are things which sit out in environment. they have cameras on them. they measure all kinds of things, gases and whether it's raining and whether there's a dog crossing the street and things like this. it has a lot of smarts at the very end of this so to compete with that and make decisions, and then call up sitting on say there's a flood in the street, you need to go and pump out the drains. that requires actually a lot of power. all of this is sitting on light poles and it is being put up by con and engineers. you begin to see how the need to put in power is not just going to be associated with people or with factories.
it's going to be associated with autonomous stuff which is all over the place. that's one piece of the scenario that we're going through. along with the other things that chris is thinking about which is how do you integrate renewables onto the grid? how do you balance having wind and solar, and what other technologies do you need in order to get that to happen, including electrical storage, about which you know what it. >> just throwing in exactly where you left off, let's talk a little bit about politics. in january we have a very different administration coming in in the united states with a very different idea about energy, about the environment. i'm wondering, until now for the last eight years, the themes have been sustainability and green and renewable.
your decisions are 3 30 and 40 years in the making. to what degree we are going to possibly have over the next four and possibly eight years, does that change what you're going to do? >> the last, over decade, has been a frustrating. for our industry. we have environmental policies that are set at a desire to have a reduction in greenhouse gases and have a low carbon future. but that's an environmental policy and in a sense targets specific technologies. it doesn't incense or design and outcome. a low carbon future is the dream of the current, the current policies.
the energy policy over on the other side does not incorporate the desire or the outcome of environmental policy. so the way the markets are designed, it around reliability and affordability. it's not around low carbon. so we had an issue with predictability on making investments. if you were to go out and build a new nuclear plant today, it would cost you $60 million. it would have a 60 year life. the dilution. during construction is about seven years. it's a huge investment. it's not something even with our large balance sheet we could do. and there isn't an energy policy that cisco do that. what we are looking for with whatever administration comes in, is a recognition if you're trying to get to a low-carbon future, it can't just be on the back of renewables. you have to come up with some
market design that says energy, transportation, agriculture, all of the industries together have a carbon footprint and what is the most economical way to get to that low-carbon future? if the new administration changes their mind or changes the policies and the positions at the federal level, and labor to the state level, we are working with the state. but our customers in the majority of the states that we operate in have a desire for a low-carbon future. the confusion over federal policy, the confusion of state policy has got to be what we work out. >> okay. just trying to bring some clarity to what you said. the shale gas has been a big driver in the reduction of co2, and this has happened irrespective of anyone's policy.
and it's resulted in utilities taking coal-fired plants, often putting gas fireplace on. that's a piece of the landscape. are you speaking of nuclear then, of policy that encourage nuclear? and the other thing i wanted to ask is, low carbon, are you saying irrespective of whether the new administration has a goal of, and objective of low carbon, that's going to go on anyway because the states favor it? >> a couple bites there. the current economics of the electric prices of electricity i really set by the marginal producer, which is the natural gas plant. shale gas, the revolution that hathatis, onto our industry, has
greatly reduced the prices of energy. it has made it more competitive in many plants that were, say the eisenhower era, inefficient or less efficient, can't compete with his low natural gas prices. so there are some environmental rules that took coal plants off, and there's just the economics better taken coal plants off. so that's been good for carbon reduction. i gasped lightly 60% of emissions of a coal plant. it has been good for economic growth -- gas plants. there's a positive portion of that in any plant that is in a competitive market, needs to compete against the marginal producer. and if you can't compete against that marginal producer then you need to be shut down or you need to be making a prudent business decision. there's a lot said in that. just everything on one fuel
source is probably not the smartest way to go. so you have to design markets and evolve markets that have fuel diversity. this is not a departmental policy. this is just sound, resilient to make sure you have a reliable system. a couple years ago the polar vortex came in, very cold. our gas plants, our natural gas plants couldn't get gas in top 10 or in the morning because the primary priority for natural gas is home heating. if you let the pressures go to low and you allow the pilot lights to go out in the city of new york, it could take a year to relight those things. there's some dynamics around the way the current system works that yes, natural gas is good, natural gas is competitive that you need diversification for reliability. so that's one thing. on the other side, if you're looking at environmental, we
don't know where this administration is going to come down. we've heard some commentary and then we've heard some retraction, or just dated they will be looking at it. the supreme court has mandated that the epa is to regulate carbon. how that manifests itself we don't know, but there is a court mandate to do it. we can't invest in our systems. we can work within the business models -- we can -- as long as there is predictability are investments in our power generation stack are 30-60 year investments. understanding you will be able to get a return on that investment is very critical. over the next five years we will invest $25 billion into our six utilities. that's a significant investment. half of it is dead on the books and half of it is shareholder equity that jef you have to be e
to pay the debt and you have to be able to give a return on equity. with a level of uncertainty that we have, that's a hard investment. the one thing i will tell you, if we are looking at a low-carbon future, we have to balance the technologies and the capability of the technologies. we think the future, it is a very bright future for energy storage and energy management systems, and that was the cornerstone of our new partnership with the national labs. that's got to be advanced and went to help commercialize that technology. but to do that and to maintain a low carbon environment, you have got to have an all of the above strategy. when california shut down to nuclear plants, all the investment that is been made in renewables in california, that carbon output went up 35%. 35%. germany has invested significant amounts of money into renewable
energy technology and transportation capability. they determined they're going to shut their nuclear fleet down and now they're burning lignite. if you look at the reduction of carbon in germany, it started out, take a back up and up its light. there's some of the highest energy costs in the european union based off of that design. what we are saying is give us an outcome. where do you want to go? then let the market decide how to get there in the most economical way, or give us predictability. that's not what the nations policy is about. then we know how to make investments in now to support these long lead investments going forward. >> let me jump into there. the first thing i should point out from the perspective of the labs, we work for the federal government and, therefore, the federal government suggests, sets the agenda and we deliver on that. but you should understand that the balance between
sustainability and manufacturing has actually tilted over the past few years. i would argue that what's actually happening and parts of the market now particularly about electoral storage with electrical vehicles is that fat fast moving into a situation where people choose this because i want one. because they want one of those, then the technology needs to be there. so it isn't just i think driven by regulation or a view of the market. another point to come back in sort of a historical public-private partnership goes all the way back to the founding of argonne. in 1946 argonne was founded to produce nuclear power, to create all of the first generation of nuclear reactors, several of which are now operating. there was a very clear set of a public agenda which involved the transfusion of the new technology into private industry
for the benefit of the country. and so when you do have that purposeful policy which sticks for a while, then in fact it turns out we can work together very well. we didn't of course put a nuclear power there because we was low carbon. wasn't the reason. too cheap to meter apparently. >> we have one minute left. i want to depose the other big thing that's going on, cyber attacks, cyber war. the german intelligence, british intelligence and u.s. all are describing cyber attacks as a threat to democracy, to our systems. to what degree is protection against these attacks one of the aspects of this research? >> partnership between industry, the national labs, the department of homeland security,
the d.o.e. is very collaborative right now, is very structured. there's an electrical council that we meet on a regular basis. we have live monitoring on 75% of the consumers, electric consumers today. we have monitoring on the systems of intrusion, detection devices. it was with the partnership with the national labs we have been able to develop that technology. the labs developed it and we've been able to commercialize it coming up. there's a significant focus on what we can do and what we have to do going forward, but it is really one of the best public-private partnerships that we have. ..
that's our job. that's something we take very seriously. there is a great partnership with the electric power industry. >> we have to stop right there. thanks very much, for both of you. >> thank you. appreciate it. [applause] >> we're live this morning as a number of foreign policy analysts will discuss the president's national security council and the potential for change during the incoming trump administration. this is hosted by the council on foreign relations in washington. it should get underway in just a moment.