I think this is one of the, hopefully, one of the most debatable and interesting sessions that we're going to have here in Panama. This is one in which I profoundly believe that it's going to help Latin America become a different region into the future. And in a way, what we're going to talk about is how innovation can actually increase the level of competitiveness that Latin America has today in the different countries. To start the session, let me make a quick introduction in terms of, you know, who are the panelists that we have today. We have a very interesting set of panelists today with us. Let me start with Gary Coleman, who's a managing director for global industries at Deloitte. Gary is responsible for creating a series of strategies that allow companies to increase revenue, brand, and equity, which is very, very important nowadays. Yeah. So thanks so much for being with us, Gary. You bet. Welcome. We have our interesting experts from Silicon Valley, who is David Frixtad. David, you know, has a tremendous amount of expertise in terms of creating new ventures in Silicon Valley, having created your own. And you are like the very important expert that we have on these panels, since you're going to be, you know, giving us a lot of highlights as to what is done in Silicon Valley that can potentially, you know, help us in Latin America. We also have Minister Diego Molano, who is the Minister of Information and Technologies and Communications in Colombia, one of the countries that has seen innovation become a key part of the growth strategy that President Santos has today. So thanks so much for being with us, Minister. We also have a very important person in the, I would say, innovation and information technology space, Sergio Rosenhaus, who is the Chairman and CEO of Keo Networks, one of the most dynamic and compelling companies in the region. I think he's one of the key examples of many companies, hopefully, that will create it into the future, you know, looking into information technology data centers and managed services, which is, you know, the core businesses that Sergio attends. And finally, the entrepreneurship part of the panel, who's Nicolas Chia, who has been, you know, founder and a key developer of Startup Chile, a very interesting model that we think that we can replicate across the region in terms of how to bring, you know, the expertise that you can have in Silicon Valley but have a hands-on experience into Latin America. To start the, and sorry, I'm Alfredo Capote, managing director from Citibank. More importantly, young global leader, participating with the forum in different initiatives. The key, I would say, our most compelling question that we have to answer today is how innovation can foster entrepreneurship in Latin America, you know. And as part of that, as we have discussed, there are three major areas that I think are important to address this particular question, which is, A, developing and deploying human and financial resources to new companies, B, rethinking governance schemes on how to, you know, manage the companies that you have around, and three, creating a culture of innovation, which traditionally in Latin America is something that we have lacked in many, many ways. But before I give you your three minutes to answer, you know, your views on these particular items, I would like to ask the audience if you can give me two burning questions that you think are very, very relevant for this panel to answer, and I'll promise you to incorporate them into the discussion. So if you would allow to come up and say your name, your organization and the questions that you think is very, very important for the panel, that will be, you know, very interesting. Don't be shy, we're among friends. So...anyone? Yes, please. Can you use the microphone, Manoli, please? The question I will have for the panel eventually, it's if an environment like a business accelerator can exist in a country in Latin America without government support, we have all the ingredients needed to make it successful and relevant at the end. Okay, thank you. Second question. Good luck. Los Meri Guerrero, Sergio Andrega, Empresarlo. Multilatina Logistics. Globalization and virtualization brings us to very prompt responses in logistics related to payment means or means of payment. Global companies are coming into a region through organic growth, which makes them a bit slow, or through acquisitions. Which strategies can we use for multi-Latin enterprises and many more, which are not interesting in selling the companies, but we are interesting in developing collaborative models with transnational companies? You know, I had the opportunity to listen into English. The question is how existing companies in Latin America can grow faster, whether it is via organic growth or it is via acquisitions. We'll come back to that. So, to start with the questions, and I will start with you, Minister, you know, if you can give us each of you an overview in three minutes of the following questions, how would Latin America really foster innovation-driven entrepreneurship to ensure long-term competitiveness? Thank you, Alfredo. Thank you so much to the World Economic Forum for the invitation today to discuss this very, very interesting topic. You know, in Colombia, President Santos said we have to transform the economy and it has to be through innovation. And he always says one thing. In the public sector, you express love with budget. And what we did at the union of the government, we went to Congress, transformed the constitution and the legal framework, and now 10% of all the export of commodities go to an innovation fund, a research and innovation fund. So the problem in Colombia is not the money. We do have the money. But then, of course, we realized that in order to have innovation, we need to create ecosystems, innovation ecosystems. And we found out around the world that there are some key success factors of those ecosystems. The first one is that the leadership has to be in the private sector, not in the government. Second key success factor, the ones that innovate are the ones in the private sector, not in the government. Third key success factor, the ecosystems are local, not nationwide. So today you see the Silicon Valley competing with Boston or Boulder in Colorado, or Shenzhen, or Shanghai, or Tel Aviv, but not the United States competing with China. So the ecosystems are local. And the other key success factor is talent. So we have to align many issues, many elements, to create those local ecosystems. First, we have to get that private sector leadership, and we lack of that. It is very, very weak in terms of innovation. Secondly, talent. And in the next room, they are discussing talent. There is today in Latin America a huge talent gap. We have the demographic dividend. We have the young people. But we are training those people in the wrong way. Jobs are there, but people do not have the skills and the knowledge to take those jobs in this innovation era. In order to do that, we have to also work with another element of this ecosystem, which is the academia, universities, research centers. And they are not ready, in general terms, to innovate. Why is that? Because you have to put them together. And the piece missing is trust among them. We've done a lot of exercises in Colombia to prove that. But we need to create that trust. And of course, to create that trust, to create those ecosystems, we need to encourage people to jump into innovation. But in order to do it, we cannot copy morals. We cannot copy what happens in the US, in the Silicon Valley, into Latin America, or what happens in the rest of the world. We have an expression in Colombia. We have to, of course, take a look at what happens in the rest of the world. But we have to platanizar the action that we have to take. Because the drivers of innovation in Latin America are completely different from the drivers of innovation in the US or other economies. So we have to take that into account. So those are the elements. And we always think, we always ask ourselves, what is the role of the government there? Going to that first question is, what is the role of the government? Because if you go to the most successful innovation ecosystems, the government basically doesn't play any role in the world. But I think in Latin America, the government should play a role to promote innovation, to make sure that the rest of the elements of that ecosystem, they have enough resources to do that. And it has to really promote with financing, with creating tools for those elements of the ecosystem to match and grow. Perfect. Thank you very much. Gary. Let me follow up a little bit. It's interesting. When you look at innovation, you look at entrepreneurship, they stand on their own legs. They're not really necessarily dependent upon each other. But when you combine them, which is the purpose of this session here, you've got innovation-driven entrepreneurship. And so you have to ask yourself, why is that? And basically, it's because the belief is that there's higher quality of growth when you have innovation-driven entrepreneurship as opposed to just one or the other. So the other question you ask is, well, if you believe in that theory, then what are the elements or what are the factors that really will drive the success of innovation-driven entrepreneurship? And I agree, talent is one of them. And maybe one way to look at that is what are the millennials thinking about how to work and where to work? And if you look at the research around what millennials want, in order to be an employer of choice, they want to work for a company that has behavioral traits related to innovation. So that's perhaps a hint to the second question a little bit that was brought up before we started in terms of how do you are successful around that. But in addition to talent, there is the infrastructure piece as a factor. So if you look at companies that are noted for their great competitiveness or innovation, Singapore, Switzerland come to my mind, they have great infrastructure. Not only the fundamentals of bridges and water and power and ports and airports, but also the more sophisticated infrastructure like communications and information technology. And then lastly, I think another factor that sometimes goes unnoticed is the public policy piece. And you ask a very good question, what is the role of government in not only innovation, but innovation-driven, small business or innovation-driven entrepreneurship? And they're the ones that are in place to help create pro-business public policy. And for those of you that had the pleasure of being in the opening session today, you heard from the president of Panama as well as Costa Rica talking about their challenges with red tape and the level of effort that they do, whether that is to reform labor law. That's not to get rid of labor law, it's to strike a balance between workers' rights, protection rights, and that of making business efficient. But simple things, being able to start a business, the registration process, to be able to get power and water, the ability to buy property, the ability to protect your intellectual property, those are things that in some sense, government has the ability to streamline their regulation. And so when I think of how to be successful and how to jumpstart innovation-driven entrepreneurship, I agree, I look at talent, I look at infrastructure in terms of investment requirements, and I look at trying to create a pro-business public policy. Perfect. Thank you, Gary. Xi. Hi. Thank you very much for the invitation. Yesterday we had a discussion with EYDLs and so I'm gonna bring some of the conclusions to the discussion. And the question was how can we accelerate innovation in Latin America? And basically it came down to education, culture, immigration, and regulation. What we did in going back to your point and the importance of talent, of course, you know, if you want to have talent, either you can breed it within your country, so there you education and fix the education, or you could also import talent. I think there's a great opportunity today because developed countries are struggling with economic growth and they're losing jobs and there's an amazing amount of talent available and willing to go elsewhere in the US and Europe, mainly. So what we did in government, I was in government a couple of years ago, we said why don't we try and let's invite entrepreneurs from all around the world to come to Chile and we boosted really. So there's an example before that, I would say that government should step out and the best thing that government could do to boost innovation is just get out of the way and do nothing. After being in government for two years, I would suggest that we draw up ideology and let's see every different project and let's bring in whoever can help. In the case of start of Chile, the role of government has been amazing and three years we've attracted almost 2,000 entrepreneurs from 100 different countries to Chile. So that's been huge. Now going back to the point of what's role in government, I would add to this that I think protect entrepreneurs. There's a friend of mine actually, I heard that there's a saying in Chile that it's actually from a very well-known businessman that said you should kill the entrepreneurs before they grow while they're small. And that's part of our culture and it's very sad. And when you see the concentration of wealth, today we're listening to David Rubinstein, we stand really high on concentration of wealth, there's a part of it. So everyone talks about innovation, but not in my backyard. So that comes to regulation. I think that the biggest challenge today for government is to really embrace innovation, make it easy, protect the entrepreneurs while they're small. Because when they start in our region, we are in such a huge advantage with incumbent. That's something very, very concrete governments could do. Perfect, thank you. Sergio. Thank you Alfredo. I think that coming from the private side of looking at things and this debate of how much the government involves itself into putting public policy in place to promote innovation has always been in the table. And we can gather all sorts of reactions here, I'm sure, in the crowd. But I think that more so and before the public policy goes through, I think that the ecosystems are really able to deploy capital to foster innovation. It's kind of a key piece, the initial piece of building companies. And the US and some other places have done this very well. But so kind of the risk tolerance of building companies where I think a lot of these things started. And the experience is that the risk tolerance in Mexico for startups is very, very, very shallow. And it's very punished. And so the promoting people to go into entrepreneurship, maybe as Chile has some of these social conditions, is punished initially. And I think that's part of the culture. But on the other side, I think what government has really helped to promote, like we've seen that in the last couple of years, is we're together with the private industry, which has the leadership of doing this innovation and pushing that through. And promoting kind of the initial ventures sides. And together with the same risk tolerance, both the government and private, start promoting this. So I think that unlocking that initial piece of the puzzle to be able to fund these initial ventures and innovation. And then innovation is not only startups. I think innovation can be incremental in companies that are established. But that's more difficult, even. It's a tougher job that when we talk about innovation, everybody thinks about just starting everything from scratch. And this is just initial startups. And mainly also innovation today is seen only in the technology sector, the software, the application, ecosystems, and communications. But I think there's a lot of innovation that can be done in bringing efficiency to established companies that are huge. And their impact in economies can be tremendous to foster innovation within the corporations. And unlocking that initially from the corporate side or from the government side, it's very important. And I think that the public policy works well. Initially, I think that they should be as far away from it as possible. But in this joint effort and building it together, I think that eventually it works very well and can deploy a lot of resources considering that the talent is there. No, Mexico produces a lot of engineering talent. Every year they have grow and grow consistently throughout the years in schooling, at least math and sciences skills, which eventually are, I think, part of the key component of fostering innovation. And that together with the initial part of having venture capital and restorations could eventually deploy these much faster. Perfect, thank you very much. David, your remarks. Well, first I wanted to say thank you for having me. I think it's a really timely topic because as we look at the future, I think the next battlefield is gonna be all about employability, economic development, and the key driver of that is indeed innovation. And I live in Silicon Valley and every month another government is in Silicon Valley with their economic development team trying to figure out whatever happened, what's the magic, what's the formula. And I agree with Diego, it's not a model to be copied, but I think it's very important to look at best practices and economic development and innovation. Just like I think what Nicholas is doing is a mind-blowing best practice that's never been done on the planet before. I think that will spread what Diego is doing in terms of making connectivity a human right is the best practice that's gonna spread across the world I believe like a virus because it does have such a profound potential. So some of the, last month I was hosting a panel called the Legends of Silicon Valley and I had 10 recently made billionaires on the panel and they were getting questions from the audience and there were some surprising things that came up on the models that they saw that worked in Silicon Valley. One was the tolerance for dysfunctional individuals.  And that was a bit of a surprise for most of us. Another surprise was the whole role of intellectual property, better intellectual property laws because what happens that kills and stifles most innovation efforts on the planet is the protection of intellectual property.  And all the historic evidence shows that protecting your ideas doesn't spur innovation. In Steve Jobs' earlier days, he talked about how proud he was of shamelessly stealing other people's ideas. He didn't talk about that in the last 10 years but I think it's really part of that open, I think, as Silicon Valley is ripe for people leaving your company and starting new startups. Obviously, I think another part of the model is a full spectrum or rainbow of capital meaning that whether you're a startup or a private equity stage or an IPO stage, there's a full range of capital available, there's a high tolerance for risk as well as there's a full range of industries. I see some of the governments say we're gonna focus on software, we're gonna focus on IT. What I think happens in Silicon Valley is whether it's aerospace defense or biotech, software, test and measurement equipment, healthcare, they're all covered and that's an important element because it sparks serendipity. And I think 75% of all the great innovative breakthroughs have been through pure serendipity. So I think as Nicholas works in Chile on his projects, I'm sure there's a lot of serendipitous connections between applications, technologies, business models that that's where the next big things are gonna be coming. I think the other big surprise from this panel we were hosting was the role of government. Every single one of these billionaires stood up, pounded their fist on the table, said the government has no role in Silicon Valley, it never has, it never should, it never will and they were absolutely wrong because Stanford University wouldn't be there without the transcontinental railroad that was funded by the government. The internet was funded by the government. Bell Labs created the transistor, lasers, I think GPS, all were supported by the US government. So NASA, the aerospace was all there. So the government has, I think, two big roles. One is to take more risk and fund bigger visionary projects. The other role I think it's very important for governments to have and I see it in Columbia and that is visionary leadership. You have to have some Kennedy-like goals of putting a man on the moon or connecting your entire populace. Most governments today are very focused on getting re-elected or even the US government is focused on making more railroad systems, which is from the 1860s, should be looking at fully autonomous integrated mobility systems. And I think that's missing from the government's support. I'm certainly not saying where I come from, we have it right in many ways we don't. But I think all of these elements are things that spark the innovation that's needed around the world. I think the other thing that's changing is what I would call virtual innovation. You could see it at the World Economic Forum as the forum rotates around the world, the global leaders, the shapers, all of these groups are doing quite a bit of what might happen in Silicon Valley. I think we're all part of that. Perfect. Thank you so much, David. Well, I think these are, it's a perfect setting to set up a series of interesting debates where I will ask you to try to not to concentrate so much on the government piece because I think that we have covered that very well. I started with Minister Molano. But let me ask you something, Gary. In terms of framing the issue, aside from the government, what are from your point of view like the three major items that Latin America would need to focus on to really foster innovation on the technology space? Because innovation sometimes is misunderstood as being creative and being great on a new part of steel, but really, really focus on the technology piece of it alluding to the comment that was made that we have a very young population and they're looking for jobs that are not at city, for example, or other entities, but they really want to create their own. So from that perspective, what are the three items that we really, really need to focus on in the region? Let me just touch on another element of talent and then I'll touch on David's business model which you raised as a topic. On talents, it's a little bit like building a brand. Brands aren't built by advertisements at Heathrow Airport. Brands are built by 100% of the employees behaving in a way and interacting in a way with vendors and customers and their peers that exemplifies the brand that's trying to be built.  Clearly, forget who said it, but that vision is very, very important but it's really everybody needs to get on board with all that. So somehow within the organization, driving the innovation agenda all the way down to the bottom of the organization I think is critically important or otherwise I'm just not sure you're gonna get the pace of change and get the pace of success that you're after. Let me touch on the business model side of things and this might apply a little bit to large companies who have lost that entrepreneurial-ship type of environment. Typically when you are in a large business that has mature products, you have metrics that sometimes don't lend itself to innovation-driven entrepreneurship. Large corporations, even if they do create multiple new products and are innovative in their own way, when you get to a certain size the metrics tend to be a little bit about efficiency and that will, that's certainly not the kind of metric that's necessary for all of your experiences in some of the examples that you've said. So one of the elements is how do you create this innovation-driven entrepreneurship if you happen to be in a larger organization? And there was a panel, I believe it was in 2013 at Davos, Christensen happened to be on it and one of the agreements that everybody came to is that in order for innovation to be successful it has to go by a different set of metrics and whether it's a different legal structure or something like that that could be determined but you can't necessarily build it in the same organization.  And I was on a panel with a gentleman who worked at Nokia, I don't know if anybody in the audience is from Nokia if you are, let us hear from you, but this gentleman was actually the executive that was in charge of Nokia Capital Markets. I may have the name exactly a little bit wrong but it was basically predominantly a Nokia-sponsored private equity firm but it had a separate legal entity, it had a separate board of directors, it had a separate management structure, had a separate ownership structure so that mother Nokia did not necessarily drive it but had influence over it and that PEI firm was at a mission statement to acquire technologies that could ultimately be useful to Nokia so this PEI firm went through multiple, multiple evaluations and acquisitions and the parent Nokia was able to pick and choose based upon its affiliated relationship but it allowed those technologies to grow in a way and those products to grow in a way to get to be a certain size before mother Nokia took it over. So I think your concept of, David's concept of business models is not only something that applies to small business because you tend to be unencumbered but as we all know we have innovative companies in the FG 500 like Apple as you mentioned but something I think has to happen from a business model perspective in order to make them successful. Perfect, thank you Gary. Going back to you, Minister Molano, you know what, it's very clear and I think that your presentation that ecosystems need to be created in a partnership by government and private individuals but let me ask you, as you try to go forward and it's a difficult question to answer, I must say but if you were to prioritize the investments that you have to make other than there are many necessities across Latin America on social issues, infrastructure issues and so on. If you were allowed to invest in three specific areas that you would say well if I make this investment I managed to do the leaf frogging that David was saying with respect to if I invest in a new internet in Colombia just to use an example that were allowed to interconnect all of the rural areas in Colombia. That type of change is something that may trigger true revolution across the region. Any thoughts on what would those three items mean? You know, I could think that the first thing is infrastructure but in the case of Colombia that's already checked. I mean that's what you're saying, that you know connecting rural areas that's already done and we deploy five or all over. Yeah, I'm talking about the next way. So I would invest in three areas. The first one is talent. Talent. And I would say talent, talent and talent. Because basically business and innovation are looking for talent everywhere in the world. I see the key element is talent. However, one's talent is, and regarding talent you have to focus on of course improving knowledge but also developing skills. We have to change the way we educate our people to make people more innovative. And I think some people mentioned here before that we have a culture problem which is that we kill innovation from even our own homes. The typical Latin American mother, it's like my mother used to say, don't do that, don't do that, don't take risks. Don't take risks. So we have to work hard on that. But besides talent, I would invest on creating those serendipities. Putting people with different skills, knowledge together. And that's the challenge we have in Colombia. In our entrepreneurship program, in the government one we have 55,000 entrepreneurs. Great kids with technology.  So we have to put together the people from agriculture with them, people from health with them. And then those serendipities happen. And the third one is encouraging companies, big companies, current companies, to innovate with those entrepreneurs, you know? And that takes me to the question of the lady back there. It's like what they would do. They should work with entrepreneurs externally, as you said, to grow those companies as well. Okay, perfect, thank you. Nico, back to you. I think that one of the key considerations the region has is the lack of, I would say, courage to say, you know, I'm gonna leave my family business or I'm gonna leave the job that I got because I managed to get a relatively good education to come and create a new company, you know? And going back to the question that went on by Manuel with respect to, you know, do accelerators work? Is that the question that we need? Or do we need, you know, true entrepreneurship injected into people's minds some way along the change of the education path that we have in Latin America? And this combination of having good education and accelerators with infrastructure that Minister Molano was talking about, are those the key elements that we need to create a new key or the new decompress or, you know, whatever example you want to use that is very successful on a regional basis? In three minutes? No, no, now we have more time. So, I'm tired. Let me go back to Schoenpeter. He said that innovation is about the creative destruction. Come on, in Latin America, there's no creative destruction. All the innovation. Or disruption, you might want to call it. Well, I know for that. I'm going to speak when I see in Chile. Sure. When we see the great innovations, our marginal innovations, our niches in industries that no one really saw them coming. But I think what we're really missing in Latin America is great innovations in the core industries. We need to bring down food prices. We need to bring down energy prices. We need to bring interest rates. My God. In Chile, average cost of capital for small and business companies, 43% average cost of capital for, I'm a libertarian, by the way. So I'm not, you know, I'm coming from freedom. I'm not, but how do you compete when we know that cost of capital for big companies is 4%? We say that we have this DNA problem that we risk, we're afraid of failure. Let me tell you, failing in Latin America is not funny. You go to jail.  You'll never get a consumer loan again.  That's why your mothers tell us not to be entrepreneurs. It's dangerous to start companies in Latin America. So, you know, again, we need more creative destruction, but there's no destruction really. You know, there's no evolution happening. Let me give you some facts. Sure. 80% small and medium business SMEs, PIMEs in Chile employ almost 80% of the labor force. 80%. Do you know how much that 80% of labor force accounts for total GDP? Pick a number. Pleasant. It's nine. Okay. Almost single digit. So how does it work?  So that's the problem. Again, governments, regulators, you need to protect entrepreneurs because I think that, you know, kill them when they're small doesn't only apply for Chile. I know it applies for Chile. And that's bad for our continent, you know, because when you have that concentration of wealth again, with those costs of capital, it's just impossible. There's no business that sustains that level of costs. So yes, of course, education, of course, culture, but that's like, yeah, you know, world peace. Everyone wants world peace. But let's really go to the objective things. What's blocking it, you know, entrepreneurs?  Why isn't PayPal operating in Chile? You know why? Because the vice president was threatened that if he put his foot in Chile, you know, they would prosecute him. Think about it. So it's just, it's really sad. So I think we really need to take these things serious in financial inclusion. It's not just microlending. It's not, today we're having a discussion in the financial inclusion. A guy from Brazil was telling that he's someone that works for him was indebted at an 1,000% consumer loan. You know, in Chile, a quarter of Chileans are paying, I'm sorry, I could go on, but, you know, I think if you want capitalism, let capital flow freely. It's not. Yeah, but let me interrupt you. Aside from, you know, all of the liberties, let me put it that way, that are not exist in Latin America because of what you're saying, you know, going to the models of accelerators and trying to import some of the technology that we have around the world into situations of the companies that you co-found, you know, what are the one or two things that in your experience have worked or do we need to create a new model for entrepreneurship in Latin America? I'm an expert, I have no idea, but I'm skeptical of accelerators, as a good friend of mine says, I'd rather have a monkey from a jungle than a lion from a zoo. Okay. So, I think that, you know, makes the point. I love the Darwinian approach, but do them all. Have accelerators, have incubators, you know, bet on some core technology, but bring immigrants, issue visas, just collaborate. And if the government are not governed, I have no idea, let's leave ideology. Outside of innovation, that's what's really cool about innovation. And copy what you see that works and improve it and fail, but I think, again, I think what we're missing in Latin America, if we don't bring the costs of failing, there's not DNA, legal, you know, economics, financial costs, we will continue on the self-destroy destructive pattern, which is have much better resetting mechanisms. Exactly, perfect. Thank you so much, Sergio. You, I mean, I haven't known you for many, many years and I'm very proud of all the things that you have done, but one of the things that Kio can really show the rest of the region is how you can blossom from being, I don't know, a $25,000 company to, you know, the company that you are today, going through, you know, all of the, I would say, obstacles that government may have, not being able to have the liberties that you have in place being disruptive in any way or shape that you can, you know, focusing on the equity creation that you want to have. So if you were to replicate your model from your own personal experience, you know, how would you just do it again, time and time again across Latin America? Well, I think that going back to what Diego just said, I think that initially are one of the key components that we were able to put together was some talent. Now, even though the capital was not there or some of the other infrastructure conditions were not there, no, in these Latin American economies, we are lacking a lot of things that in other countries are taken for granted, no? I mean, starting from security to some other things. But so when you don't have the capital side of it, and first, the thing you have to have is at least the talent, and I think the talent is there. It's well-trained, it's agreeable. At least Mexico, we have such a big influence from the United States, no? We basically, we're an hour and a half away by plane to get to the United States, a little Mexico city, and we just turn up and we see them all over the place. We have the American companies, the first thing that they think when they want to go outside, they look down and say, well, let's go to Mexico, no? They're right there. So we have a lot of influence, and we try to copy some of these models. We've thought about that, and people go back and forth to Silicon Valley and try to see what have been done and what works. But I think that building the talent base initially, no? And eventually, when you have a talent base and you have a business plan that eventually is solving a real problem, no? Because we see all over the place, the entrepreneurs and the accelerators is a good example that, as was said, that there's things that being done that eventually reach to nothing. They don't solve any issues. They don't really serve anything to the infrastructure. When we started and we tried to analyze what problem we were solving, we understood that it was an infrastructure issue, a digital infrastructure problem that was compelling into our country and that eventually it was gonna require much more money that we initially had to start this with. But at least we had the right idea, the right approach, and eventually what we did initially is try to stay away from government regulations, because initially we could have started into getting into a complaint if you needed a concession. So keeping away from that initially was done. And further down the line, we started gathering traction within the same economy because when we were able to come into these other countries and as it was stated, some of these countries leap rock from technologies to technology because you can go to a country where things had not happened and the last five years it didn't took any action within technology, but you're there. You're there today and you're with the state of the art technology that through communications, you're able to have the same technology today in any of the region's smaller countries. The big ones are, it's obvious, but the smaller ones, a city is in the middle of Silicon Valley, you can have cloud information and state of the art computing power and telcos and all those key components and ingredients are there today. So a lot of them, if you are always bringing this type of technology and instead of the art, I mean, not underestimating what the region can absorb in terms of the solutions, but just bringing the one that's available there to the other very mature economies. I think this is very well taken. And I think that's something that has to be done. Sometimes technology is brought to smaller countries underestimating that they can digest older technology, while new technology is being developed in more mature economies. And that's not the truth today, no? I think today, everywhere is well connected, everywhere is well informed. There's intelligent people all over the world and in every country. And when you go there and you bring something that's not compelling to what it's, you have to compete in any other of these countries, then there won't be acceptance for that and then the traction will not be there and so I think that that's key component of what we did, just always being kind of the technology that has always been accessible and up to the same standards as in any mature economies. The talent is there and eventually capital starts, the third component, it just arrives when that happened. The traction is there, the talent is there and the capital brings the growth of the company starts gathering traction on that, no? And then the one on the other side is trying to, I think that fostering innovation within companies which was the thing that I was thought of, it's very difficult, no? It's a tremendous challenge for leadership to foster that because it's an attitude issue. It's a character issue. It's mainly it's attitude and character. It's very difficult to train innovation or entrepreneurship, it's more in the core of the people that drive that. So being able to select the talent with those characteristics and you can basically retain that talent, eventually innovation will, the only innovation that's valuable is when it comes from the curiosity of finding new and better ways to do things, no? And that's difficult to train so it has to be a very, the process of selecting the talent with those type of conditions. I think it's a key seed to really being able to drive innovation in corporations. Perfect, thanks so much. David, one of the things that you mentioned is that certain DPT plays a very critical role with respect to creating disruptive technologies the ones that Nico was alluding to. Some of the things that I think we're missing in Latin America is the right incentives for people to come and join the other disruptive companies as the ones that Nico is saying because they say, oh, I want to be the next Facebook, Google, what have you, no? Could you talk about what are the, I would say, in addition to obviously the economic benefits, what are the three major drivers that you see in people's minds whenever they come and join a technology company in Silicon Valley and see, and then I will open the floor to see the reaction from all of you to see how that can resonate or not in Latin America. I think one of the, I don't always think the incentives are just financial, they're certainly not from the government. One thing we all understand about North Americans is there's a high element of ego, and it's really cool to be on the front page of Fortune Magazine or Wired or something like that. So a lot of the culture of Americans, I think, is very much about being an individual, doing something unique. And you don't see that same culture around the world, you see it in Israel, you see it in some other places where a lot of entrepreneurship is stimulated. And so I think that's a lot of the incentive, I think one of the things about Silicon Valley that's unique is there's, we work to live, we don't live to work, the opposite of what goes on the rest of the world. So there's a great passion, I hate to use the word, but a sense of greed, that people wanna be rich, they wanna be, when I got out of college, it would always be a millionaire, now if you're not a billionaire you don't get invited anywhere. It's a strange environment, I don't say it's great, I wouldn't tell you to copy that model. But I think a lot of the incentives are what you wanna do with your life. I think the other thing that I just wanted to mention is this whole concept about failure. 95% of what starts in Silicon Valley has a miserable death. 19 out of 20 investments die, there's constant turnover in the buildings, and they've come up with a new title for people called a Serial Entrepreneur, which means you failed a whole bunch of times. Yes. And you skip all that on your resume and you just write Serial Entrepreneur, and it's a way of celebrating failure. And a lot of people will say, I wanna invest in somebody that's failed because they know how painful it is to go through that process. And I think that's a very unique perspective that we don't see elsewhere. Okay, I would like to go deeper into this serendipity issue because one of the things that we have seen in Mexico, for example, as well as in Chile, is that there are companies that are trying to create disruptive technologies that go against the established system. Just to give you an example, there are a small company in Mexico that's trying to cut down the waiting time when you call a bank and try to get a person to answer you. And that creates a whole system to say, okay, no, I wanna just skip that and try to make it work as much as I can. So from your perspective, could you mention, and I'll go around the table, what are the most disruptive technologies that you see that we can create in Latin America for your day to day? Stepping aside from the serendipity policy, three items that you think, well, if there were a technological solution for this, I think that Latin America can really make some progress. Look, I don't care about new technologies. I care about the use of technology. I think we all have the right tools now. And the markets are there locally in Latin America entrepreneurs should look at the potential markets locally because they are huge growing everywhere in every single industry. So I think it is not about technology, it is about the use of the current technology in a smart way to satisfy our local markets. Perfect, thank you. So I look at disruptive technology and I think if you can find a disruptive technology that not only solves one of society's largest and biggest most challenging problems, but at the same time creates wealth for the risk takers, that's a home run. And so in the context of today's session, if you look at youth unemployment, we have a society issue with youth unemployment. And if you look at where youth unemployment is the highest, it tends to have public school systems that teach and have a curriculum of developing skills that have nothing to do with business. And if you look at countries and nations where youth unemployment is the lowest, there's a high correlation with the integration between public school curriculum and what is required by business for skill sets. And so if there's a way to create or utilize to your point disruption, a digital disruption or some kind of disruptive technology that allows a greater connection between curriculums that are generated by public schools and the skill sets that are taught with what business needs today and with what business needs tomorrow, you can not only create wealth for the risk takers, but you also satisfy that ego concept that David brought up because you're helping solve one of society's largest problems. Perfect, and Nicole. There's so many, you work in Citibank? Yes. Are you ready for what's going to happen at least? I'm, there's so many in every industry, they're just fascinating things, but I really see it coming crowdfunding and all the collaboration among financial, not just banks, by the way, and you're not the worst guys. I mean, they're really... Thank you. I know. You're the least... We're the least I want to deal with. But I know, but seriously, I think it's all the crowdfunding, European lending, that's just fascinating. And the other thing, the other area that I'm curious to see what's going to happen is politics. There's some good examples of digital parties, I think in Sweden they already have like 10% pirates, the pirates party in Sweden and Germany, and I think we're going to see a lot of that here. I mean, think about this intermediating, a terribly bad, intermediated industry, Latin American politics. So, very curious. That would be interesting, Sergio. I think that I agree with Diego in some part of it because, I mean, doing true innovation in core industries requires a tremendous amount of capital, effort, talent, and a bunch of other things that we may not have today in the ecosystem of Latin America. There may be some small pockets of it somewhere, but it's not the general kind. So, really the application of technology in each of our markets that's really upfront in different industries is kind of the way I think innovation can be brought into our economies, into our markets, and I think that's key, and that's, I mean, that's talking from my own experience. That's basically what we have done in the past, and basically the innovation comes from bringing very upcoming technology and applying it to the needs of our country and of our markets as soon as possible to be able to use it in promoting efficiencies in all sorts of things. I think that financial systems is de-frictionizing the financial systems in Latin America and which will reduce substantially the cost of doing anything financial. It's a major pocket of efficiency that's there and digital technology just, it's ripe for putting that into effect, but doing so what eventually would have to be done is using technologies that are available and applying it to our markets which because of incumbencies, it's a very difficult work to do, but we need to keep trying. Yeah, David? I think what's really fascinating is probably 3,000 different disruptive technologies out there that are all worth watching, but what's really interesting is how they start to converge, combine, and attack new applications, but the most fascinating ones is what's going on with digital sensors, increasing bandwidth in the cloud which now gives us big data which disrupts every industry on the planet and you can, as you start to go through all those applications, you can start to see that. I think the other really disruptive thing when it comes to serendipity is new business models. We're starting to see that big investment returns like seven to one are coming from new business models, they're not coming from new technology so crowd sourcing, C2C models, sharing models, things like that are really screwing the planet up in terms of market sizes, investors, established players, wealth models, things like that. So one of the things that I think is really important when you look at serendipity is really spend more time investing in the future, trying to figure out what the future of mobility will look like, the future of energy with grids and sharing and clean technologies, the future of healthcare. We look a lot at the integrated mobility systems and you start to realize that if cars don't collide, you don't need safety equipment if you're in a car and it's automatically going from point to point, suddenly your car could be in office, it could be a healthcare center, it could be exercising, it could be a romance car, the whole game changes. And that's the kind of interacting business models, technologies that are creating totally new innovation opportunities. So I like to say that when we look at innovation, when we look at innovation as futuristic, meaning we've thought through what the next 10 years are gonna do like you're doing in Columbia and say let's work backwards from that scenario that we see might happen and try and figure out what we should be doing today with healthcare, health sensors, things like that. Because every, you know, this is what I study every day and every day I fall farther behind. And the last one I learned about was that there's some scientists working on infinite life that through genetics they think they can solve the problem of death, which will give the World Economic Forum a whole new host of problems to work on. Perfect, thanks so much. I think that we, exactly at the time that we can open the floor for questions from the audience, so please be as interactive as possible, please. Thank you. Can you stand up please, say your name and your organization, please. My name's Don Ratliff, I'm from Georgia Tech University in the States. It seems to me that in Latin America in many cases there are no role models, no anything. So you're not accelerating from something, you're accelerating from zero. So what do you do when there's nothing to start with already? No history of innovative entrepreneurship, no venture money, no successful startups. What do you do then? Thank you. Nico, you wanna start? Yeah.  They're coming to Chile, I mean think about it, if they come to Chile they would come to so many other countries in the world. So that's an idea. That's an idea. What the government would do to open up to start from zero, which Colombia is not the case. I think of course, creating quick wins and show them as creating role models that's critical here. I think in the region we have a lot of role models already and we have to kind of show them more openly, more actively. And I think that is happening today. Look at it, when you take young people today in Latin America, you see that there is a huge crisis with education. That's all over the world, but in Latin America we had a very strong case in Chile a couple of years ago and also in Colombia and in many other countries. And what we are seeing is that those young kids that are in college today, they realize that their future is not being an employee.  And we have to take advantage of that. Absolutely. Gary? Yeah, I was gonna steal something from a working session similar when I was in Myanmar. And the question was how do you leapfrog? How do you prevent some place like Myanmar who is very far behind having to go through the same steps and that the panelists talked about taking a look at the best practices. And so if a country outside of Latin America is finding ways to free up capital for financing and channeling that into the highest and best use of that capital for projects, take that model. If there's models for streamlining public policy that allows businesses to start quicker, do that. So I think it's, you don't have to create everything on your own. Be worldly, take a look at what's happening outside of Latin America and find out what's applicable to you and take advantage of it. Steal it, use it, learn from it and do those best practice things. Sergio, this applies specifically. I think that they, as they also said, there's really good examples in Latin America from the entrepreneurial side and innovation side. The role models are there. There may be few of our part, but they're there. And they've done, they have success going through maybe much bigger hurdles than people in other economies which have better serving infrastructure on all sorts of finance, technology-wise. So I think that, I think that in America, and going back to Gary, has done that, has always looked into the world and say, what's happening in very advanced economies? What technologies are being used? How can we bring them down there? The markets are there, the markets are ready. Are there telecommunications for putting them in service? I mean, all these components that we lack in sometimes we need to complement them before we can use some of these things. But I think that good examples are there. Meet two examples of doing disruptive business plans or business models that are very differentiated in the way they serve in other countries and bringing them down to Mexico. I mean, Latin America, sorry for that, but have proven very successful. For many years, I go from the early web days to today. And I think it's gonna continue going so. Society in Latin America responds in the younger generations, very similar to the rest of the world. The Millennials Act almost uniformly in any country that you go to, which is incredible to see that we talk about society being so different. But when you get to this level of younger generations, they act almost identical anywhere in the world that you have them. So that just gives you a completely scalable way of doing things and understanding how things will react in your country. And I think that's part of what we have done in Latin America, perfect. I know that for you, David, it's something that is not as applicable to Latin America, but one or two success factors to grade something from zero to be highly disruptive and successful. The first one is, I think the education system that the whole world suffers from doesn't spur innovation. You know, everybody goes at the same speed. The teachers that know it all. I think we're ready now to make totally customized education that's more in serendipitous, meaning you follow your passion a little bit the way Steve Jobs did. And it's a continuous lifelong learning process and it's more based on online learning, finding the world's experts to be inspired from. So I think education's a key one. The other one is really about benchmarking. And I don't, as Diego said, there's no one model that works. When I meet government people in economic development or foreign direct investment, I always recommend going a world tour of innovation, start with Israel, then go to Silicon Valley, see what Ireland, Ireland's been incredibly successful. Japan was wildly successful in the 1960s and 1970s. Then there was Taiwan, now there's China, and then we've got Chile coming out from nowhere. These are fabulously inspiring elements that can quickly be copied. Perfect, thank you. Another question please from Williams. Thank you very much. Armin Ovanesoff from the Accenture Institute for High Performance. There was some very interesting comments there around collaboration and openness between businesses and government, between business and academia. Some of our research shows that there may also be a problem in Latin America around businesses actually being open to collaborating with one another, whether that's large companies with small companies, start-ups with larger companies, et cetera. What do you think might be behind that? Gary Orsini. Yeah, I think that's a very, very good point. And what I've seen happening a little bit on a practical basis is that in the last 10 years, when you introduce yourself, you know, the person says, well, I'm in the automotive business. Or they say, I'm in the big pharma business, or I'm in the high tech business. But I think sectors now are really converging. And I think that there's an opportunity for, say, pharma companies to get together with consumer companies, because of all of the advanced self-evaluation and diagnosis and online healthcare that you get in diagnosis, big pharma companies, and I don't know if anybody's in big pharma, but typically they don't have that consumerism orientation that a packaged good company has. And so I think that's a great idea. And I think the collaboration can start with companies that are in sectors that are not necessarily competing with each other. But yet I think to David's point, if you're looking at the future, how is consumerism and big pharma gonna really collaborate in the future? I have a good example about Columbia. You know, three years ago, just 5% of small companies were connected to internet. Today, more than 60% of them. The way we did it was just working together with big companies. So we called them up and said, let's create this co-petition, collaborate and compete together. So basically we funded the development of applications for different supply chains, for different industries that with those applications, they forced the small companies in those industries to join internet. And it's been very, very successful. We put together a lot of big companies that really transformed the value chains and those value chains, of course, involved those small companies. And it's been very, very, very successful. And so now we're developing more applications with big companies that really help small companies to be more productive because they have to be, I mean, the whole value chain has to be efficient. And that was the main driver. If we align everybody with the same objective, then we can easily put big companies to cooperate and compete at the same time. Perfect. Nico, how have you accomplished this in Chile, the collaboration among all the constituencies? You know, I think Michael Porter is partly guilty for all this. And business schools, like we bought in the whole Porter thing and I was taught in business school, the economy teachers would tell you, free market and bringing in everyone and prices to go down. And then in the afternoon, the strategy, I will tell you, no, no, you need to block competitors, capture clients and just chase substitutes and very paranoid, which is, yeah, so I think, but he's now talking about clusters, maybe he wants to, anyway. But I think we go back to competition. I mean, today in this day and age, the real risk is not to innovate. So if someone is not taking innovation seriously, if someone is not collaborating seriously, almost by definition, I would say that he is not facing any competition. Because if he were, he would be innovating. So if you don't see innovation, you know, you go again. There's not enough competition. We didn't buy in enough to the importance of competition, opening the gates. We see more competitive competition, at least in Chile, more collaboration in exporting companies that are looking the world than service companies or companies that serve the local market. Again, there isn't that urge to compete, but that will come. And by the way, I'm so optimistic about the next years in Latin America because I really think that the technology, what's going to happen in this region and the world, but at least in Chile again, in the next five to 10 years, it just looks so much better than what it looks today. Perfect. I think we're getting close respect to time. Before I give my humble views in terms of the conclusions of this panel, I want to go around with each of you. And if you can say one word that summarizes the challenge or the opportunity that we have in Latin America with respect to innovation, that we very appreciate it. So one word. Just one word. I think, again, just two. If possible. Okay. Talent. Talent. Gary. Millennials. Millennials. Nico. Just do it. I was thinking millennials, so. Millennials. David. Say empowerment. Empowerment. Okay. Very good. I think this has been a very interesting session and a hope for the audience as well in terms of the interaction that we have had. Some of the key conclusions I can draw and then we can discuss them afterwards is that we need to create more ecosystems in the countries. We have to create more partnerships among the different constituencies in each of the players. I think that Latin America is willing to become much more disruptive. We need to have more liberties in place. We have the talent. We have the willingness of the government to come in and participate. We have the capital to invest and it seems like we have the ideas that we need to work on. Some of the items that we need to avoid is definitely kill the application that kills the SMEs, no? Try to increase the risk tolerance that we have, which is something that we have not done very, very well. And to the example that Colombia has done is remove some of the barriers that exist in order to generate and foster the cooperation among people and companies. I think the idea of defroxenizing services and try to eliminate all of the inefficiencies that you mentioned, Sergio, I think is very, very important. I think one of the items that was very, I would say, encouraging is that we have to envision the future thinking about being how to create certain DPT and be very, very disruptive. And at the end of the day, I think that as big data, Latin America can be the most disruptive region in the world. So thanks so much for your time. Thank you.


Oh everybody forced here up in nine boxes for Larry there all 2023 Bowman University best football delights Good luck Larry Actually didn't make it so what it had I didn't make the playoffs because I Demolished the first-place team and the dude that was ahead some miracle happened where he had lost and I had a tiebreaker I had tiebreaker wins and points everybody I would have finished like fourth in league and gone to the playoffs, and I would have done well to my players kept doing well But this dude choked against somebody like collapsed Yeah, so it's whatever Someone that's not super annoying one. It's that's good That is good. I would have preferred him over like most people than the playoffs right It's the same person. We just put the championship last year But the more Hamlin thing we had to split our game was way too close. Yeah. All right. Good luck Larry Let's see some monsters here.  Will Howard gold MacArthur to 50 Grant Wells the 150 will Howard to 100 now and Mike Williams at it Mike.  I think the Bruins are good. I think the Bruins could to be fair I'm all all doomsday saying but they could Start Sam Hartman and Audric estimated a 25 dual auto nice one Larry Pretty give me some thin sleeves. I can talk with somebody There's some of these Nice Hartman SMA Emmett Moorhead on the auto to 25 nice to 25 there Emmett Moorhead and A Joe Milton autograph good first box here Wanted gunslingers at a 50 Dante Moore. Yeah, I think the Rangers a little better I think Caroline is even a little better and the devils are also there too Bruins are in the mix 100% but I feel like that the depth for the Bruins is gonna really be the issue in the playoffs unless they can I mean, I don't know man Dice don't feel it, you know the 15 Cooper Legas Cooper Legas the 15 But they got the goalkeeping they got the first two lines really well the defense is better For the most part Not counting on it But still very happy that Bruce Cassidy won a one a cup as soon as he left Boston as soon as he left That's a pretty plate coming up So I can sit in an auto spot to or in service thought maybe I will see we'll see refractor Harold Perkins Red to 10 Dorian Singer I Think so too Vaughn they feel like a very good playoff series type team They'll have the best keeper on the ice no matter who they play Maybe outside of Tampa Bay, but they're dead. They're better team in Tampa Bay So 100 JJ McCarthy It's 150 Malik Benson Plus they can score on the first three lines pretty well and a 75 Drake May Into the autos I think that is gonna be pretty plate on coming up All right Victor Rosa on the auto oh Troy Franklin and Bo Nick's dual auto to 25 two boxes two dual autos Larry you're doing very well so far. Let's go Larry There's also a pretty plate auto here of Tyler new bin One of one that black printing plate auto of Tyler new bin Hello Dude you can hit Sam with that stick Blunt you probably know who Newman is Do you totally go on Netflix and watch all of Seinfeld on Netflix right now? You just go watch it all that is a wanted bandit of Andrew McCuba Cuba Matata In a gold Xavier worthy at a 50 Tyler van Dyke number to 150 is Parrish Jones out of 75 Caleb Downs to 100 CJ Donaldson And the 99 Michael Penex these Penex 13 of 99 Another dual auto every box of dual auto so far. This is Kool-Aid McKinsey and Dallas Turner to 25 Vaughn you think they renamed the trophy after a Bergeron not trying to be like a Very biased person but they could there's a case for it. There's a case for it Drake May and it's 25 on the auto Big one dude Larry is crushing it right now man three dual autos now a Drake May there was a pretty plate one of one auto as well To get nuts. He's still going six boxes to go. Yeah. Yeah nuts Brock Bowers Jersey auto, too That's an awesome hit that guy's a potential top five pick has a tight answer. You know, he's legit fusion jacquory Brooks and Malik Benson gold Drake May number to 50 Shipe sent me a Blumen Brands gift card. I'm gonna go spend it all at a The Outback Steakhouse bar tomorrow. There you go Call y'all got peacock We're already got a may still a good chance of hitting a Caleb here still a very good chance. Oh Man refractor Trey Benson to 100 bucky Irving. It's a 99 key on Keely Gold to 50 Dylan Gabriel better than Donald right there Did it to Oklahoma too? I see you It's 150 Kendall Milton And I'm just gonna hold this one still for you so you can get a good look at it. That's fire This is this is whole off the rails Larry Holy cow, man Yeah, it's a super fracter bow Nick's auto run running out of running out of Vagictives Larry that's awesome, man. Mom get the camera Larry Larry dude Larry has five boxes left She's Larry has five boxes left. He said a May orange three dual autos a Brock Bowers Jersey auto and that That's huge. That's a huge card. That's sick, man Larry get a lot of ticket tonight lotto Larry. There's a red Braylon Trice auto to 10 now Red Braylon Trice, I think he might be a first-round talent there really good defensive Lineman for Washington is still lying back or lineman. You know what I mean?  This is so ridiculous It will it won't at this point the mojo is gonna keep going Gold bow Nick's auto It's like the second best bow Nick's auto of the box gold to 50 will Rogers and then a quench on Judkins the 25 Yeah, a hundred percent Vaughan ripping this stuff was the same feeling as ripping 2022 Guilded collection baseball when it first came out It felt like a cheat code like you couldn't miss like at the price you almost cannot miss And even if you don't hit like a monster, you're kind of like oh the floor is up like way up there The value on the hits like that hold up to like the values on the names hold up the big names Just get stuff and guilty got crazy guilty got expensive overnight though It was affordable for like four hours for Mars And then it went up to it like doubled in price literally by like the afternoon of release day refractum Aguca 250 is em at moorhead 75 KC Thompson and 100 Malik Benson It even released at like an okay price this year too. I thought for what was in it I just jumped up again secondary marketers was like bam Drake made a 99 on the green mini diamond Wanted gunslingers drew a lot of the 75. We are we are drew a lot. Let's take chain of wall flowers tomorrow Braylon Allen auto out of 50 50 50 Braylon Freakin do it Nick Singleton Jersey auto See that damn game Calling every bar in the area. Yeah, masterpieces Brock Bowers Red to 10 gram mertz a place like that one. It's like your best bet. Yeah Or get on your phone I know Keep it going here for you later Let's pick it back up here. Dallin Hayden. It's been like a whole box without a super factor 200 Dante Moore to 99 Bronson Barron Gold to 50 Justice Haynes and a Marvin Harrison to 150 Antonio Gage junior on the auto man Kyle Cartler Kyle Cartler Jordan Travis three of ten elements of the game auto knows nice Travis You can get that leg right.  He's talented enough to There's Travey Brock Bowers Jersey auto dude, this is cool. That's definitely a cop card fear the spear Fear the spear signs of the times Johnny Wilson Jordan Travis and Trey Benson. I got the The Penns 13 of 25 on this too Like the extra actor look I got the Penn State one of these the 25 the drill are this as we are pretty sick These are these are so cool. Yeah, and a gold John Reese Plumlee at a 50. You know that was Felt bad, but it was also kind of funny watching that when Jake was watching that game here at the shop that afternoon Cleveland McKincher your frac there to 150 Trey Benson 75 as a rock you to 25 Mario Williams to 150 Devin Leary Say Taylor green auto two of only five Taylor green Jacob Cowan gold auto number 250 Yep, yep, and an ogre digga drop that injured to a Jordan Travis gold auto at a 50 wanted Gunslinger of Jackson Arnold and an orange Cooper Legos to 25 Frank Gore fractured 150 Malik Benson 75 Bucky Irving To 100 Keon Keely, that's right Vaughn. That's true. It's a 99 Jordan Travis Victor Rosa on the gold auto 15 to 50 That is a Ty Simpson autograph And Jersey auto will Rogers masterpieces Colleen McKinch tree and three of five Graham Mertz Return oh boy. He plays everybody look out Mark Andrews You're saying I told you this was this would uh? I was saying I think it was Kyle You don't want to see Frank Gore, Jr. What about Antonio Gates, Jr? Will Rogers refractor at a 150 drill are 75 Dallin Hayden to 99 Damian Martinez into 150 of Malik Benson Another elements of the game. This is Jordan Travis auto here number to 25 tail and green auto at a 15 tail and green 15 Jackson Arnold Jersey auto here Nice Jackson Arnold Arnold Wanted Gunslinger Joe Milton and a gold to 50 Mason Smith Congrats Larry Damn, dude. Yeah, you killed it bro super super sick I know you got insurance you can add more I think if you wanted to get more insurance than what you got But what you got was pretty good. I appreciate you sir. We'll get these out to you


So let's start with the flaw of averages. There's a mathematical name for it. It's called Jensen's inequality. And we don't have to do a poll. Three of you have heard about it. And of those, maybe one of them knows what it means. But I'll explain it in Laman's terms. So Jensen's inequality, I call the flaw of averages. Why? Because I want people to understand it. It says that plans based on average assumptions are wrong on average.  This is worse. This is worse than that. So for example, consider the statistician who drowns in the river that is on average three feet deep. That's a classic case of the flaw of averages. It explains why so many projects are behind schedule, beyond budget, and below projection. Now, to understand the flaw of averages, well, oh, where does it come from? What causes it? What causes it is when you are dealing with uncertainty, like rolling a die, for example. This is uncertain, right? It is. When I roll that thing, it's uncertain.    By the way, these flat dice are available. I don't know, get me an address over there.  So this is no joke, and yet we almost all do it. So you have to understand the arithmetic of uncertainty. Now, let me just define it for you. And by the way, there are definitions of all these things in mathematical terms, which I do not use because they tend to trigger PTSD. So arithmetic tells us that x plus y equals z. Easy enough, you've all done it. The arithmetic of uncertainty says, what do you want z to be? Here are your chances. Right, I'm sure all your organizations have standard protocols for estimating the chances of achieving your goals or avoiding risk. No, you don't. At probabilitymanage.org, we are trying to develop such standards. So again, I don't assume any statistical knowledge. I can repair the damage. It's called PTSD. I want to give you an example of how I try to cure PTSD in people. Because even if you don't have it and judging from the statistics looks like maybe 80% of you do have it, let's take the 16 per whatever it was that didn't have it. Well, I don't want you to induce it in others. So I'm going to give you a little constant building exercise I use to get people across PTSD. So I'm going to show you how to solve the following equations. We do it right now. Oh my god, that reminds me of my statistics course.  Those are the differential equations of motion of a bicycle. So you already know how to solve those things. Not through the seats of your intellect, but through the seats of your pants. I'm deadly serious here. Steve Jobs referred to the computer as a bicycle for the mind. It's a beautiful metaphor. Computers are so fast that we can now actually solve statistical problems with the seats of our pants instead of the seats of our intellects. But the best thing is when you connect the two together. I don't know if there are any pilots of small planes out there or sail planes that used to fly gliders. It was wonderful. You could not learn to do that either by reading a book or by just jumping in the airplane. Either would have led to death. But by connecting the seat of the intellect to the seat of the pants, you achieve what I call limbic analytics. The name of my blog is limbic analytics. That means the limbic system is that part of the brain that connects the reptilian brain to the rest of the stuff between your ears. Once you engage the limbic system, you have just tens, hundreds of millions of evolution on your side. And I want to give you a nice metaphor of limbic analytics. I want you to think about this. There's a wonderful scene in Jurassic Park where Sam Neill is communicating with a tyrannosaurus. And he grabs a railroad flare, and he waves it back and forth, and the tyrannosaurus follows it with its eyes, and he throws it off into the jungle. So when you're explaining one of these things to a layperson or your boss or whatever, think of them as the tyrannosaurus. And what are you going to do to get their attention and keep their attention and keep from getting eaten? OK, so let me give you an example here of the flaw of averages. Let's look at a scheduling example. Your organization is releasing a website and 10 pages. I don't know, it's got some sort of date on it. And you need to get all 10 pages done. I don't know, there's a legal page and this page and different kinds of data page. And on average, it takes six weeks to complete each page. These are done in parallel. It's the simplest kind of task in the world, because I got team one doing page one, team two doing page two. There is uncertainty. And I want to point out that the way to view that is that could happen, or that could happen, or that could happen, right? Do I have the attention of the tyrannosaurus in the audience? Something moved, triggered something deep down in the limbic system. All right, notice you can't finish the project until the final task is done. So you don't go live until all 10 are done. And they're all uncertain. Yes, but the average is six weeks. So your boss comes to you and says, when do we go live? And you say, I don't know, boss, because I don't know how long team one will take, or team two, or team three. And because you said you didn't know, the boss says, give me a number. I don't know, do we only say that in the US? Has anyone in this group heard the term saying, give me a number when you're uncertain about something? That is the fork in the road to hell, right there. That's when you say, oh, well, OK, if you need a number, it's 3 and 1 half. Right. By the way, these are not totally useless. They're actually coasters. So you can get a set of these and put your beer on there. All right, well, so we're going to ask a little question here. And this is going to be another poll question. So what's the chance that will actually be done in six weeks? Oh, because what happened when the boss, by the way, hold on, hold on, the boss said, give me a number, right? And you responded with, would you accept an average? And the boss said, sure, if it's all you can do. And then you said, oh, well, on average, we'll be done in six weeks. Because if I put all the averages in here, I'll get the average of six weeks out, OK? So what are the chances we'll be done in six weeks? You want to pop that up, Charlotte? Hey, I want to presence this by saying, none of these are right. Poor lesson here. When it comes to estimating chances, it's like horseshoes and hand grenades, close counts. It's one of the first things we sort of have to teach in limbic analytics and in dealing with uncertainty. So yeah, one of these is a lot closer than all the rest. I love these polls. See, when I teach at Stanford, right? If I do this with a show of hands, everyone's looking around the room at everyone else, I never get clean results. I'll just leave a few more seconds. We've got 67% of people responded. So. Yes, it's always interesting to see how many don't respond to that. That gives you another piece of information about the question. The lowest answer at 2% is one in four. And the highest is at 26%, one in 10. Can you display the graph for us? There we go. Well, this is good. This is good. So in the US, this is a profound study for some graduate students out there. In the US, 50%, at least the audience that I've been doing, 50% is usually the winner. And in the UK, the winner is one in 10. Great. OK, the right answer is one in 1,000. And it's not enough to know that. You've got to be able to explain it to a 10-year-old or the Tyrannosaurus or whatever. But it's really simple to see that it's one in 1,000. So let's remember that could happen, or that could happen, or that could happen. Imagine, and I didn't tell you. And so you've got each team. Did we get this far? That could happen, or that could happen, right? Every team is uncertain. I didn't tell you anything about the distribution of these times. But I'm not going to, because nature doesn't always tell you that. But suppose there are 50-50 chance of each team being over or under six weeks. Then it's like every team is flipping a coin. Heads it's under six weeks, tails it's over six weeks. And the only way you're done in six weeks is if all 10 teams flip ahead on a coin. Can you do the math? That's 1 half to the 10th. 10-24, actually very close to 1 in 1,000. OK, so there we are. So that was the flow of averages. It is insidious. It is everywhere. Let me give you a more sobering example of the flow of averages, so you grasp it right away. You saw the statistician in the river. But here's a more sobering example. Consider a drunk wandering back and forth along a busy highway. His average position is the centerline. This means that the state of the drunk at his average position is alive, but on average, he's dead. In the US, we say that that's not close enough even for government work. I don't know if you have a similar saying in the UK. Now, the flow of averages has been understood since the Danish mathematician Jensen came up with it in 1906, published a paper.  And anyway, he was going to remember that.  But I started my career in OR. It's what the British would call operational research. Is that something anyone? Do I see any nods of heads? Operational research? OR, in the US, we call it operations research. And I started there, but if you just increment the first letter by one, this is easy to see here. Does this show up? Oh, R. Kind of tiny, isn't it? But even there, you can see what would happen if I incremented the first letter by just one. I get PR, Public Relations, which is my current field. And so as a public relations guy, Jensen's Inequality is my anchor tenant. Here's the book, the flow of averages. And I want to bring you now the audio logo. So when you're promoting something, let's see. Here's an audio logo. Oops, come on. Don't tell me my audio logo isn't working. There we go. Did you guys hear that? Do you know what that audio logo is? Did that ring a bell? No one knows. Recognize it, but couldn't tell you what it was. OK, OK. That was Intel. Here's the flow of averages audio logo. All right, now let me show you a little about how we're actually solving this problem and performing the arithmetic of uncertainty. So I'm going to do it with dice. And the way we're going to represent dice, remember what we need to do here. We need to represent this as data, which obeys both the laws of arithmetic and probability. So I've got to be able to answer questions like, what's the chance that something happened here, right? So the way I represent the dice is with arrays of Monte Carlo simulations of the dice. So I rolled three dice 10,000 times. And I stored the results in arrays. Now, the arrays are called SIPs. I'll explain that in a sec. Now, by the way, everything you're looking at is native Excel. This is kind of important because not that you shouldn't be using R and Python and all those things, but if you can get dashboards in native Excel that don't require any other software, then you immediately have 1.2 billion users, which is useful. So there is a formula in Excel called the index formula. And that's pointing down into these arrays. So there's roll 1, roll 2, roll 9,876 is 3 ones. Well, oops, it isn't. Oh, 9,000. No, it's 9,765. There it is, 3 ones. So I haven't memorized them all 10,000, but it's auditable. It's just data. And now there is a formula in Excel. There's a command called it's under what if analysis. It's called the data table. And let me just show you what happens. This is now buried on another sheet here. All this stuff is available on our website. But it's just really interesting to notice what happens now. I can, if I want to roll one of the dice, I just say show me what that die does. I hit the Enter key. And that's 10,000 Monte Carlo trials for the die. And then what happens if I add two dice together? They're more seven than anything else. And then you probably never heard of unsimulating, but here, Control Z minus 10,000, Control Y plus 10,000. So now we have simulation readily available. It's just a native Excel file. You can share it with 1.2 billion of your closest friends. And it's interactive. So you can do limbic analytics with it. The nonprofit has been building standards to do this cross-platform our Python Excel because we suddenly now have this capability to do interactive simulation. Now, let me do an environmental example. So let's take, say, sea level rise. We've got a little town here. And I think I need to adjust this a little. So I have a river. The river has dice around it. I have a potential flood. What if I know the statistics of the flood? The statistics are that the average is 2.4 meters. And I've got a 95% confidence range of plus or minus 2 meters from that. On the lower left here, over here, I have a little table of damages. So if the flood goes up to 1.82 meters, there's $1 million, $2.8 meters, $5 million, and so on. And the average flood of 2.4 meters, if I plug that in here, 2.4 meters across, then the damage is zero. Sure, but what would happen? Let's look through some of the trials. I have a library, a SIP library of floods in here. So that could happen, or that could happen. You can go, oh, look, we had a flood that time. That could happen. Oh, we had a real bad flood that time. This model is also available on the website. You might ask yourself, what is the average damage? So the damage of the average flood is, over here, zero. The average damage up here is $5.5 million. So you can see this is very central to problems in the environment. And where it comes in is when you have a nonlinear penalty function or a nonlinear reward function. So once the flood goes over the dikes, then, of course, it gets very nonlinear and very bad. Watch what we can do, though. So our average up here is $5.49 million in damage. Let me start cranking up the height of the dikes. What if I pop the dikes up to 3 meters? See, they got taller. Oh, but watch this over here. Watch the average over here. Control Z. I want you to watch that and that. Control Y. Control Z. Waving the railroad flare back and forth. Do something that moves. And again, this is 1,000 trials per keystroke. Hold on. Let me just check my timer. Good. It says I have about three minutes left. So let me now put this in kind of a bigger context in terms of environmental modeling, which seems to be on everyone's mind here. And let's see. I think in this case I'm going to share my screen. All right. So now you should see my whole screen. There we go. So remember, I talked about doing the arithmetic of uncertainty here. And going back to the dice for a minute, first of all, why did I call those elements sips? So I'm trying to replace numbers with uncertainties. I already know that everybody has bit and bite firmly emblazoned in their brains. I need something that's going to remind you of bit and bite. So I knew right away I would need sip and then something else. Sip, like bit, sip, right. So sip is stochastic information packet. And that's why they're called sips. That was easy, but quick. What would correspond to bite? I've got bits and bytes. I've got sips and slurps, obviously. OK. But what does slurp mean for God's sakes? Well, this was tortured. But it's very important. It stands for stochastic library unit with relationships preserved. And I'm going to give you an example of one now. So remember, we have to be able to do math with these. You've got to be able to add them, multiply them. So let's imagine that we have some model of global climate change. And here it is. It turned on my laser pointer. So there's a model here. Actually, people have made more than one model, right? And I don't care how good your model is. Sea level rise is uncertain. We all know that. In fact, one of the key outcomes of these models is that weather systems are more uncertain. And we do see that now. It's one of the early confirmations of the model. So it says I'm out of time, but I'm almost done. So it is uncertain. Now, you're not just interested in sea level rise. By the way, suppose there were no temperature effects, just sea level rise. Let's just ask ourselves what the economic impact of sea level rise is. Oh, well, I have to go to 500,000 coastal regions. I have to model the economic damage at 500,000 coastal regions and add that in to this model up here. Right. This model is already collapsing under its own weight. There is absolutely no way you could add 500,000 more models to it. But you don't need to, because if you're doing sip math, you just publish the sips of sea level rise in the cloud. The local models all take these in. And you see, it's not just the same distribution, everybody. It is the same trials. Once on the trial where sea level goes up two meters, it goes up two meters all around the world. And then when it goes up one meter, it goes up one meter all around the world. And then once you've learned that, you put in local knowledge. But you're adding your local knowledge on top of the coherent sea level rise sips that are coming in. We all get six meters on one trial. We all get two meters on another trial. Then we add in our knowledge of the tidal basins and junk like that down there. And then, oops, wrong direction. Now, these numbers, these sips are a slurp. Why? Because the relationships have been preserved of the global things like sea level rise.  And whether or not we get hit by an asteroid or stuff like that. But these then go up to the star of the show, the summation sign, because sips can be added together just like numbers. I have to understand on the dice, when I added two dice together, I just could have summed every element. And then the sum of the sips is the sip of the sum. My god, they're additive. They're multiplicative. Anyway, that gives you your distribution of global impact. We decompose the problem. Why? Because we had arithmetic. We could break into pieces and add them up. Think of the sip as the Hindu Arabic numeral of uncertainty. And hopefully, after all we've been through, maybe that means something to you at the end now. So thank you very much. I ran a couple of minutes over. But I blame that on technical difficulties. Good. Thank you very much, Sam. So we don't have any questions yet. But maybe some of them. I think I'm going to be able to share my screen. Yeah, hold on. I can't unshare my screen. Can someone in charge there try to unshare my screen? This happens occasionally. I think I've done that. There you go. I'm like, Derek, thank you so much. Yeah, I mean, well, people are so thinking. I mean, what would your sort of recommendation for people, Sam, who've never dealt with really probabilities and estimations before, they may be used to doing all their calculations in anything Excel, R, or Python, whatever. But what would your advice for them to get started in terms of? Yeah. So that's a good question. Here's an analogy for you. First of all, they should visit our website and play with some of the models. So everything is just free and fun. Here's probabilitymanagement.org. SipMath. Go to models. And so I mean, we've got, oh, there's very interesting COVID stuff that we're modeling. But let me see. The dice are going to be down here somewhere. Oh, here comes the flood. There are the dice coming up. We have then applications. If you, all of these are just demonstration models. But they're big companies are actually using this stuff.  That's where our little flood model lives, financial management, military readiness. Military readiness is another place where people are unable to add things up. And agriculture is a big one where you and I have been working, Keith. But what I was going to say is this, that there's an analogy with electrification. So the reason, and I'll bet that everyone has heard of computer simulation or monocular simulation. I would bet that 80% of your audience has heard of it. And the problem with monocular simulation is that you have to be a statistical expert to know how to generate the right random numbers to go into it. And let me just define monocular simulation for those who haven't heard of it. It's basically analogous to what you do before you climb on a ladder to paint your house. You shake the ladder. That is, you bombard the ladder with random forces to find out if it's stable. It's a computerized version of that.  Well, that's wrong. When you shake a ladder, the distribution of forces on the ladder is nothing like the distribution of forces when you climb on the ladder.  But let's go back to serious monocular simulations where the input distributions do matter. Most people cannot figure out how to generate the random shakes for their model. But about 25 years ago, I came to the realization that the whole world is using light bulbs and most of them don't know how to generate the electricity. And that was a real eye-opener for me. And I did some research. It turns out they take electrical engineers and they put them in a big building called a power generation plant and then they distribute the electricity over a standard. And in the US, we use a 60 cycle AC current standard. In the UK, you use 50 cycles and I think it's like 200 volts or 220 or something. Anyway, so that's what probabilitymanager.org is doing is developing the current standards for the probability management grid. And here's what I would really recommend. People in your organization who have data that they think is uncertain and they wanna try to quantify should get in touch with us. Our mission in life is to spread the word, right? And we will help you do it. Great, Sam, I got, thanks for that. I got a question, very interesting question for you and here and from the Zepeah Holland. Are there any thematical domain projects curating SIP databases with validation of the SIPs? I guess the question is, do you have any examples of any organizations who actually have created SIP databases and kind of using them at an organizational level or what are they? Yes, yes, here's a very fun one. Very fun and very grassroots. Let's see if I have the file still up. I'm gonna open it. Okay, just a second. This is really, this is so fun. We work with an outfit called the Government Finance Officers Association. It is a, it's a nonprofit of 20,000 chief financial officers of municipalities around the country. And so what they've done is they have created a SIP library of the accuracy of tax forecasts. And now we're able to pass this out to other people in the organization. So for example, you know, you're the CFO of, you know, nowhere Kansas. And, you know, you're expecting a million in business taxes, three million in property taxes, four million in sales taxes adds up to eight million.  And you say, people don't do that. Like that's unheard of. How would we possibly do that? Well, here's how you do it. So we have a, this has not quite been released, but it's all gonna be free. It's a little add in called chance calc. And you're gonna have to learn three keystrokes. So keystroke one is I'm gonna open a SIP library, open the SIP library. And it's gonna be the GFOA Historical Accuracy Library. Accuracy Library. And you saw it flash by for a second. I don't have time to go into the details. This one is actually a virtual SIP library. Instead of millions and millions of trials, this one is something the size of a big tweet. Quite amazing technology. It's now is going from DC direct current to AC current. It's much more efficient to ship. But anyway, there's the library. Okay, it includes little shapes over here. It's cute. But now what I do is I'm gonna put in a column, Historical Accuracy. And so the historical accuracy, I'm going to select those cells and I go to SIP input.  Now, by the way, this is a macro which is free. Let me click the button. Oh boy, there are the distributions. But the model is always native Excel. I could send this off to a billion closest friends. Notice I now have trials in here. So I'm looking at trial one, trial two. Because these are virtual SIPs, you know, I could look at trial eight, seven, six, five, four, three. There it is. But now my simulated revenue is the following. These numbers, think of these as percentages. That is to say on the first trial, I got 79% of my million dollars, I got 100% of my three million, I got 95% of my four million. And so the simulated revenue is that times that. And so there's my total, 762. Oh, but I wanna know what the chance is that that number is greater than or equal to eight million. So you have to, so far, open a library, insert the SIP. There's one more button you have to learn. And I'm hoping that you once played Monopoly as a kid. And so I'm like, hey camera, I'm over here, back here. All right, thanks. So if you played Monopoly as a kid, oh, and also I'm presuming that you somewhere in school learned what greater than or equal to means, right? And we already know, you know what eight million means. So I just go down here and I need one more keystroke for chance of whatever button. And so I'm just gonna ask the chance that that cell bears that relationship to that cell and the answer is 68%. I mean, people like me can do this stuff in our head, but most people require simulation. No, of course I can't do it in my head. And by the way, if you were looking at this, you said, oh yeah, we're gonna hire a bunch of firemen and policemen, I don't want a 68% chance of blowing my budget. How about if I go down to like, you know, 7.75, that's up to 89%. The fact is, however, that these numbers came in from a very rosy economic period. And what if I replace these with numbers from the depths of the 2009, 2010 recession? Let's do that, because I've got, oh my gosh, now I'm down to 54% again over here. So here's the pitch. We are looking for people who wanna do this stuff. We will help them. We've got funding from some large corporate donors. We always need more funding, but we're always looking for exciting things to do. So we start out working with people for free. And if all the tools are free, if you can do it, then we will use you as a poster child to promote our work. All right, that's the thing. Thanks, Sam. I think at times just about that, but I would just also like to point out that there's a couple of things which also make these tools really easy to use. And one that I found particularly useful is that often people get stuck on how to create probability distributions, or you now have integrated the meta log distributions which enable already anyone to say, well, what's the most likely value? What's the chance that it's can't be 10% lower than this value? What's the chance it can't be 10% higher than this value? Or you can get that from your data and then immediately generate your probability distributions. And I think that's a tremendous supplement to these tools. And then, yeah, and I think the other one was how it's a random number generator which standardizes the seeds so that you're always getting the same results and different repetitions. So I think I'll just like to point out those, I think is two really useful supplements. Look, I've shown you the tip of one of three icebergs. I hope you folks will stay in touch. The meta log distribution deserves at least a lecture of its own, the new random number generator. Well, that was invented by Doug Hubbard who you guys saw last week or so, I believe. We've teamed up with some pretty bright people. Doug is one of them and like I named Tom Keel and there's another who's invented the, what I'd call the Taylor series of probability distributions. So I hope that in a group of this size we end up with some permanent friends and collaborators. And... Well, there's plenty of people out there in the network making all kinds of measurements and analysis. So I hope some of them might be tempted to get in touch. So thanks again, Sam. Great to have you online, great privilege to have you and I hope that's been useful for people and I hope to see you again soon, yeah.