tv Best of Bloomberg Technology Bloomberg May 13, 2017 6:00am-7:01am EDT
caroline: this is the best of bloomberg technology, coming from boston where we've taken a look at the tech scene here. tech startups in massachusetts and we spoke to who of blade roots across the region. they are expanding the reputation of all things tech. not to mention the prestigious learning institute that are harnessing this.
betting big on boston is general electric. they broke ground in a new world headquarters right here in the city. the ceo talked about the collaboration between the company and the city of boston. jeff: one of the oldest companies has moved its headquarters to one of the country's oldest cities for the purpose of creating this huge, whether it's in renewable energy or life sciences or technology things wen, these the want to bring to the city. these of the things we think we can do together. it is a year when they won the bid for ge. money in tactual he. i sat down with the cfo to discuss why boston was the
topic. jeff: i think boston is unique. you start with a place where there is more research spent in any other place in the world. ideas in a sea of ideas. there is such an entrepreneurial spirit and so many startups in a culture.nology it's the right place for us to start making this transformation. there is no other place on earth where you've got 500,000 of the smartest kids in the world going to schoolnd graduated ever year in the metro boston area. it's really unique in that regard. we are thrilled to be here and be part of this ecosystem. caroline: you have so many areas of power, where do you think will make the most obvious and dent? where we see it be integrated quickly?
jeff: we think it plays across all of our verticals. in health care, there is an enormous market with ai and machine learning and how we think about clinicaouomes around images. our oil and gas business are full steam ahead on improving productivity and efficiency of wells and try to get the breakeven price for a barrel of oil or gas down. for our customers to make our products more competitive. there is not a business in the portfolio that won't benefit dramatically from this digital transformation. at the end of the day, we are trying to make our products perform better for customers and create better outcomes for customers economically. we think there is an enormous amount of productivity in the world of machines and systems of machines. caroline: we have seen you make acquisition activity, especially in robotics and three printing. they have targeted largely european companies.
what about the east coast area? jeff: the added manufacturing is an enormous opportunity for the company and the world. and thebe revolutionary digital transformation. we absolutely believe that. laserght two big concept printing companies in europe last year. we didn't start there. we started with a company called morris tech knowledge he about five years ago. we've been investing and doing research run 3-d printing or added manufacturing over that time. we didn't start with these acquisitions. they ge new modalities of technology that allow you to make parts differently and different kinds of parts. we will leverage off that. it will remake how people think about designing products or parts or finish roddick's and
how they bldt. the great thing about additive, it's a constructive process. you only use the material you need to make the product and you camake it in a fidelity you could never do with today's machine technology. greatest machines in the world today won't let you make things is accurately as three printing. the design space it never existed. caroline: do you finish with those acquisitions? jeff: we will really evaluate how we put this puzzle together. where there are possibilities to accelerate, we are wide open. if boston fits that way, we have partrsps with robotics and m.i.t. labs and northeastern labs with the research going on. there is a real ecosystem here to move the practice forward. caroline: you're talking about
investment and money spending. i know you've got to look at cost-cutting at the same time. how you able to square that circle? you been asked to take $2 billion out of operations. jeff: we have to continue investing the future. this is where the company is going for the next two decades. in the long run, these investments we have to make. e have to run our own company as efficiently as possible. we can do this. we can walk and chew gum. one doesn't have to be at the expense of the other. i think running the company more efficiently gives us the opportunity to invest in these tech colleges that are the future of the company are in caroline: as you make these big commitments, it's a time of political change. how do you field the political environment fits into this area and you talked about what austin brings to you. there are worries about
immigration and funding going into biotechnology. what do you think about the trump administration? perspective, we are a ob company. we serve global customers. we have a global workforce. that is the company we are and that is the compy are going to run. our supply chain and our manufacturing and technology capability looks like places and the customers we serve and that's how we have to run the company. we are going to remain a global company. i think anything we do policy wise that makes the u.s. more attractive for investment, taxes, i think it's great for ge and great for other companies. than 50% of what we do and sell we do outside the u.s. we have to be able to play broadly. up, we bringing
time. one investor helping keep the industryolng is none other than boston celtics co-owner and bain capital manager steve /agliuca the life lab opened its door last november. it is a shared laboratory space for high potential lifscnces and biotech startups founded i harvard faculty, alumni, and students. i spoke with him about the significance of the lab. steve: the story started several years ago when i was running for the senate. one of my campaign promises was to protect biotech here. i wrote an editorial saying keep the lead and infrastructure here. we have the best universities and hospitals. through theisn of dean
faust, they came up with the idea of building a facility that while the arps to stay here instead of leave and be cost-effective. caroline: were you worried about a brain drain? steve: we had seen it in the tech industry. 25 years ago when i went to business school, we had digital equipment. many of them went to california. we didn't want that to happen here. the mayor and governor got involved. they promoted the life sciences. you can see the result of it now. caroline: intense competition when you're looking globally, are there areas you feel you can harness the crown away from or fight off? is it written up in the united states? talent pool is the richest in the country here in boston because of the groundbreaking research in the hospital complex and the
technology. i think we have the crown. we don't want to lose the crown. the life lab can really promote that. it gives easy access to companies. there are eight schools from harvard and 15 businesses. you've just seen one that is very exciting with vaccination. there are projects going on. when you have that kind of vitality that can start here and stay here. they will move to another facility. caroline: you know you're investing well. s biotech and area you would not only want to see for future innovation for our health, but also as a reward? biotechhere are many companies. we actually are announcing a
large fund that will focus on the area of later stage. there is ecosystem financially developed as well so these companies can get capital and moved to venture capital. caroline: the local ecosystem is supporting from a private point of view. what about the public point o view? we might see the taps turned off or biotech funding. wt out longer-term? steve: hopefully they will see this is good for america and the economy. they certainly ran on that platform. we have been supporting locally our governor and mayor. the mayor was here at the opening. the entire administration of boston help get this fali up in record time. a lot of times these buildings take seven years. mayor and governor and community, he came tetr very rapidly. 15 businesses are already up and running. caroline: what about the
diversity in terms of the pool of people you see here? is that something you have been able to prioritize? eve: my wife was heavily involved. she is an investor. my daughter-in-law is a cofounder of a biotech company. they work the university to make it very family-friendly. we have rooms for women and rooms for kids, breast-feeding, all the things to make it a very friendly and easy environment. caroline: that was steve pagliuca . faceboofausly started in a harvard dorm room, is considered as the one that got away. headquartered in california, facebook quietly returned to cambridge in 2013 to open an engineering office. the company is taking advantage
of the talent. kendall square in cambridge is the heart of austin's tech community. west coast software giants of taken note. facebook is looking for opportunities i the best town. boston is a combination of senior engineers and great universities. caroline: he helped facebook open the office nine years after mark zuckerberg developed a social network at harvard. it has grown to 18,000 square feet and employs 100 engineers that tackle some of the toughest challenges. >> most of what we are working on his infrastructure. they are working on the technology that is the underpinning for the products people see on a regular basis. caroline: compilers, storage, security, networking. these systems needed to develop the applications that reach
facebook's users. the team also supports some of these social networks most visible projects like facebook live. anyone who is looking at that video will see that comment in real time. caroline: location by product like the live video map and marketplace that helps you buy and sell things locally. the global company with the market cap of $425biion has even more ambitious plans in its tenure outlook. >> we can give more people a voice. caroline: along with the engineering teams, the cambridge team will play its part, ptilarly in connectivity. >> had a we get connectivity to the next billion people? we build up technology that can work in a greater ecosystem to make cellular and wi-fi technology cheaper.
are trying to change the cost curve so we can vep networks to the world today that don't have network availability. caroline: it is social networking on a local and global scale. we will have more from boston after the break. common up, we bring you a discussion on how biotech companies are responding to trump administration policy changes from health care to pieces. we will introduce you to mass robotics, the nonprofit bringing bocs to life. this is bloombe. ♪
local companies are posing some of the other initiatives such as the affordable care act -- health care act and the typing of visa restrictions. we look at how some companies are responding. they've invested in more than 400 startups, including local success stories. >> i think some of the central companies here are her tech, some of the largest companies in i/o tech. they are based here. so many tiny companies spring up around the universities during i think some of the trends we look at our the move toward rare diseases. we talk so much about pricing in the industry and there has been so much pressure on pricing. some of the people who of been resistant have been those that vocus on rare diseases. less willing to fight back against high prices.
they treat cystic fibrosis. they charge hundreds of thousands of dollars here. biogenic came out with a new drug for a deadly muscle disease. the first year of treatment costs $750,000. these are areas that local companies are pushing into across the country. caroline: enou are helping to cure such crucial areas, there are money for fuin how much of the ecosystem,ow does it grow? >> the ecosystem is coming. boston is the absolute epicenter of biotechnology. every major company has r&d centers here. we've got 50 colleges. there are 200,000 students here. we convinced them to move from
around the world to a place with rate whether and they stay. and they join pharma companies and that makes them -- for tile ground. talk to us about some of the concerns of have come in. they seem to have kept the money flowing for the short term. the short-term budget have kept it going. there is worry about affordable care act changes and the trump administration and their viewpoint on health care in general. >> i had concerns around some of the trump immigration orders. attracting people means attracting people from all over the world. if there are problems because of religion or which country you are coming from, that's going to be an issue for some the innovation around the area. that's what a lot of the companies have said. when it comes to pricing, some of the concern around the changes to obamacare in this act that just passed the house stil
meets to go to the senate. in that case, there are concerns we could get lifetime limits back. these are limits on how mh insurers will pay for care. when you're talking about a drug year,he cost $350,000 a that adds a pretty quickly. i think that's a major concern for some of the companies moving into these rare diseases. if those limits are back, they will face major struggles when people hit their caps. caroline: when you have a how much perspective, can you factor in the day-to-day swing of the pendulum? feels health-care funding like boston. the top for funded hospitals are all in boston. this could ba od thing. when the funding does try up, people who are entrepreneurs and do want to srtompanies will think about driving funding.
we're there to fill that gap. caroline: how much are we seeing the vc community expand in boston? many feel that silicon valley is a big brother. are you seeing the seas, or from their? is there a buildup of money? technology,ional silicon valley is the big rather. it might be the grandfather in many ways. in biotech, this is the center of excellence. you see venture capitalists from the bay area swarm here. we've got the three ingredients. we've got the universities. we've got big pharma. that builds up clusters of entrepreneurs. we've got radically decreasing costs. that means if you are a young researcher for these companies and you've got an idea, it doesn't require $50 million to see if it works. caroline: isntnational money coming in should mark -- coming
in? technology, editing all three of the big crisper companies all have their r&d centers in cambridge. that is because you have that clustering effect going on. caroline: when you are looking at the investments you make, where are you looking in terof exits? to receive see money getting refueled back into the system? are angels exiting? ipo market has been muted. we see an opening of a window in biotech. in biotech, it has been wide open. capitalistshnology moving into biotech. there used to be health care on one side and tech knowledge he on another.
now with the powers of machine learning in artificial intelligence, you see the converging of those spaces. caroline: you are in a number of companies. you have exited half of them. which should we look at? >> i think pill pack is one you have focused on a lot. they are making fundamental changes to the way prescriptions are delivered. we are changing people's access to doctors reports in booking. we use the power of big data. the theme is the convergence of traditional technology with health care. it's incredibly exciting. coming up, we speak with the harvard university president and discuss how boston is synonymous with higher education and what the university is doing to engage its students. all episodes of "bloomberg
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of the billboard music awards just by using your voice. the billboard music awards. sunday, may 21st eight seven central only on abc. ♪ look back to the best of bloomberg technology. i'calyn hyde. what if the areas that we visited digging into the boston tech field. here the zuckerberg came up with the idea for facebook. we sat down with the harvard president and discussed how this institution fosters innovation amongst students.
>> have a vibrant community here. it is exciting to see and growing. mark exciting to see zuckerberg coming back. we remind ourselves of the many happens.what it caroline: looking at the way it is innovative is i love. playong has that been in and how is that helped build companies? 2011 withfounded in the notion of providing people a space and support in terms of experts and venture funding and building companies into the commercial world. students toble follow their ideas and dreams and make tangible realities.
so it has turned out to be a success beyond our further streams as people have flocked to it. we have had companies come out of the i love. challenge which i sponsor, and groups of students compete for the funding move their ideas to the next phase. and that is always exciting. to see the things they have dreamed up. caroline: you are a historian, by trade. how do you see the multidisciplinary focus of harvard helps the varied groups of technology companies? >> i do think they are closely linked. i understand that things have been different, it enables you to think that it can be different, and again. if you just accept the status
quo, you are inhibited in your the newto figure out directions we may go in the future. so science history -- but more generally -- i think liberal arts and broad gauged education, it stimulates ideas. it gets people out of the comfortable zones and if you shift this per spec of, what could you do differently? we have seen this in many of the teams that to come together. someone with the law school together with the kennedy center the policy with questions. but maybe the product they think about is a scientific project so that someone from the science department will be part of that team. so i believe that this wide-ranging approach enables
people to thin more ambitiously. >> we are talking about diversity. of ethnic diversity origin and women? this is something that particularly text giants are struggling with. how to get enough women and diversity into their doors. is this something that you think is coming through the ranks? a great growth and interest in education here at harvard over the last decade or so. we have established our school of engineering as a school outright with a tripling and people who want to concentrate and major in that area. women make up 35% of the engineering concentrators now. we think they should make up half and we will keep striving or that.
diversityhink that relates to what you spoke about trying toeason for say that engineering is a liberal arts field. engineering could have a place in that. if you are a citizen of the 21st entry, you need to be a citizen of technology. so i think we challenge people by saying that if you're not going b einstein, you don't belong here, and we will flood everybody out and the like it impossible -- we have a completely opposite attitude. try this out. want to give you a path to succeeding because we think it is important. out.has helped us i think it does include ethnicity as well. >> what about wisdom of the things you have learned over the years of building up diversity
that he would give to business leaders that perhaps are still struggling and are looking for ways in which to become more diverse? givingink rather than by wisdom, i think partnership. career to understand choices and pathways that do make this attractive. to see if a career in science or -- so how we recruit and organize individuals. can have a lot of conversations about the shared commitments to the diversity. how much you think the administration understands an ovation and how do you feel
optimistic or pessimistic about the talent pool coming your way? fax we have them working hard to explain what we do to people in washington. i've spent a lot of time working with individuals in a congress trying to make the case for how research operates and how universities are dependent on a long-standing partnership with federal government. we have also been concerned about immigration issues and the free flow of talent. the greatest advantage of our country has been the attraction that we can pull people with. the united states. and we benefit enormously from that. so many of the young companies that we ever for two are founded by people from overseas. we find that individuals who want to come into our graduate programs are extraordinary and the opportunity for them to stay here after they are educated at a place like harvard or m.i.t. is to a great advantage as a country.
do need are things we to explain and advocate for. making their importance to national strengths clear. do you think it already has been dented? >> we are waiting to see how many international students wait to accept that their admission. and maybe then we get a sense of how it has been affected. we've been trying to make it clear to how dedicated we are to students to giving them a special experience. >> what you think about boston in terms of its role within education and leadership of that? the athens ofbeen america for centuries. it has been a beacon of learning and scholarship.
and i think now it has taken that into a new form. where learning and innovation and science and invention has become so vibrant a part of everything in our lives. boston has the traditional leadership role but it also has a new kind of leadership role, as we see the kinds of discovery that harvard and m.i.t. and our other partners in this area -- the university of massachusetts -- others can contribute to making a new kind of city on a hill out of boston. a new era. >> here is the harvard innovation lab, and it is open to students across the college with an idea at any stage. every semester, teams apply to participate in the 12 week program that combines mentorship, introduio to funding to help move startups faster.
select teams move on to the launch lab which is a co-working program of funded alumni ventures. the harvard i lab help students grow their startup. launched in 2011, it is a 12 week intubation program that aovides mentorship and community to move ventures further, faster. one of them is shields ai. >> in afghanistan, it led me to found shields ai. it was basically a recognition that technology could prove useful on the battlefield. >> he founded shields ai in 2015. frome is earning his mba hvard, the business school. >> this drone is different from the others you see on the commercial market.
ec drones advertise themselves as autonomous drones and what they're doing is they're following gps baselines. but ours is not required gps. mapping,simultaneous the technology we see in driverless cars, it is able to find its environment with operators. $10.5 company has raised million in funding. >> harvard's network is incredibly powerful. it allows assets to people with capital. >> it has a contract with the department of defense and the department of homeland security. but shields ai exists in a fast-growing market for competitors. the applications for drone technology, $2 billion in 2016, .ill bloom shields ai plans to deploy the first product later this year. the mission is far from
complete. >> down the road, their other acquisitions. search and rescue, law enforcement, there other applications that are interesting. we are focused on our mission of detecting service members and infant -- and innocent civilians with these systems. >> biotech executives and the l institutesnational and dud of health met with mike pence. donald trump's administration proposed cutting billions of dollars from the nih budget this fiscal year. and $5.8 billion next year. the meeting was also attended by ivanka trump. it talked about the relationship between governments and industry. coming up, we hear from the boston mayor on his mission to expand boston interpretation as
>> welcome back to a special edition of the best of bloomberg technology from boston. this week, we have been speakin with ceos, investors and innovators across the city. we sat down with the boston mayor to discuss bost's role as a tech innovation hub. and how it stacks up to silicon valley. >> the day we officially announce ge's move tboon, th gave us a check for 50 -- for $50 million, $21 million for drug training and health care stuff. so we do see the benefits of having ge here already. the thing that people are
critical of was the muddy with tax incentives, that is to get the building going. next 30 years, we will get over 67 million dla in real estate taxes from that deal. which is that mean in terms of continuing the growth of the tech and biotech sectors? >> it is so important. boston has always done well in that space. city,ou think about our people think about our city as a great medical city, a great tech city. there was a time in the 1980's when boston was the tech capital of the world and we lost that to silicon valley and san francisco. and what a seven now is almost a rejuvenation of at people coming back to our city. we are excited about what is happening. theirneral electric at whole new level of curiosity about boston. we have one or 250,000 students
a year that go to school in our city and many of them will stay here for the summers and when they graduate. we grow every year. we have college and universities within the boston area. there is a want of information -- a lot of innovation. and ge can help us with that. you say you have lost this to silicon valley. can you win this back? it back and we are doing that now. massachusetts went through a because ofime political decisions that set us back a bit. and i think what is happening now is that you have a climate where everyone is looking to move our economy forward. and also to be elevated. the world innovation is on the tip of everyone's tongue recently. sports, ge or other typeof business.
you try to be innovative here in the city of boston to attract esgreat companies here. in the last three years in boston, we have added 60,000 new jobs to the economy in boston alone. we did that before ge came but with ge here it will help us grow. >> attack about a political environment that helps with jobs. do you think the administration is helping with that? >> no. i'm hoping they will just get to the job of governing. i would like to see them be successful. some folkse to watch on governing and stop folks in on other issues. i'm afraid of what it will do to our economy. it hasn't had any yet. i am concerned about therefore it will care act and the actions that congress took last week. it isn't a good bill.
it is ever peel. , urban cities around america, it is going to hurt hospitals. whath they would focus on they talk about, moving the country forward, and not repealing health care and defunding nih funding. think we need to do more than that and better than that. >> boston has thrived from nih funding. it is the number one city in terms of spending. are you worried about the recession development area? up until the congress passed the short-term budget through september. in that budget it seems like everything is ok. i think it is important today. when you look at the research and in boston and cambridge, there are a lot of
discoveries, things are happening here in our city and it helps us keep young people and talent in the city. i am a cancer survivor and i was treated at the cancer institute and the children's hospital and the pretty woman's -- and the brigham woman's. so knowing that what i had is cancer 40 years ago, today the cure rate is a lot higher than when i had it. >> talking of you and your , you're the son of immigrants. there are concerns about the trav b. what does that mean for talent? do you feel there is a concern for talent coming into your academic institutions? next it was a concern before hand. because there wasn't enough eases being given out to people
-- there were not enough visas being given out. i had the college universities in this room. i had the tech writers in this room. every single one of them have the same concerns about the fear of people not being a was a come to the united states of america to get education or to start a business. and i think congress has been six or seven years or maybe longer, they really should focus on immigration. our system is not working. we have 11 million undocumented people in the country. what we do to put them on a pathway to citizenship or to figure out what u with them here? and we have a work visa program, these come for a year but that is not good enough.
we're not going to keep their brainpower here. we're going to send them back home? i don't think that makes sense to a lot of people. >> that was marty walsh, the mayor of boston. up, the robotics industry has emerged as a major player in the tech scene. and if you like bloomberg news, check us out on the radio. you can listen on the bloomberg radio mobile app. this is bloomberg. ♪
is growing and so are the resources. facilitytics opened a earlier this year in the seaport district and are dedicated to fostering young robotic-based startups and keeping them in town. belongs tomous drone the american robotics, one of the handful of startups based here at mass robotics. >> the name is double meaning. mass because it started in massachusetts but also, mass over body. facility to the help startups get off the ground. explains, it is an escalator. >> it is a new concept. incubators have been around for
sometime. and the model has been effective in starting a business. but when it comes to hardware, there is no organization there. >> products in the works include drones for commercial agriculture and 3-d printers. and according to the director, that number will grow. >> we have six companies and two more moving in. we can grow more companies in this space. and that we will be looking house over 100 companies. >> founded by leaders in the robotics industries such as amazon robotics type brady, they mentorship and help with funding. >> we don't fund ourselves but --work with a lot of local we know which ones are investing in robotics. 50% more than 2015.
nearly $1 billion of that when two companies in california. boston companies is growing and it is attracting sponsors and partners for massachusetts and outside the state. >> they're looking for investment. >> where robotics going? all sorts of things. boston robotics community, they are reaching new heights. oft does it for this edition best of bloomberg technology from boston. we will bring youhe latest through the week. remember, all of the episodes of bloomberg technology are live
>> welcome to bloomberg businessweek. i am oliver read it. we will talk about cyprus. thhoed for laundering. and by 2017 is shaping up to be the biggest year yet for the u.s. heroin industry. and finally, what a murder in kansas tells us about race, immigration and the future of america. all of that is right ahead on bloomberg. >> we are here