The fastest growing continent in the world is Africa, also the youngest, and we have a great panel to discuss the opportunities, but also the challenges. To my left, Her Majesty, Queen Maxima of the Netherlands, then we also have the newly re-elected President of Botswana, President Massisi. Let's give them a warm applause and a welcome. We're also waiting for the President of Senegal. He's unfortunately stuck in traffic. You should maybe think that was not possible in Davos, but as we know, the safest thing is to walk in this small alpine village. As I already mentioned, Africa has huge opportunities. Seven out of the 10 fastest growing economies in the world is in Africa. In a few years, Africa will have the largest workforce in the world, and 60 percent of the population in Africa is under 25 years old. So imagine all the jobs and skills that have to be developed in the years to come. But we also know that the young workforce, entrepreneurial spirit, if you have access to education, if there's financial inclusion, it can also create necessary growth, and it can lead to prosperity. But there is also a fact that in Africa, you have pockets where you're very far from being on track on the sustainable development goals. And we know the overall goal by 2030 is to eradicate all extreme poverty. African leaders are taking new steps to also make Africa more competitive. One of them is to establish also a free trade area in Africa. It will be really, really quite remarkable. The combined GDP is more than 2.3 trillion already in Africa and a population of 1.2 billion. So let me start with you, Mr. President. This customs union or the free trade market in Africa, how powerful is it going to be? Is it also a reflection of a new leadership thinking in Africa that trade is more important than aid, and is there such a win-win thinking, and when will we see this, how big will it be, and what are the obstacles? Thank you very much, and I'm pleased to be here. But getting right into the subject matter, all you've said about Africa is true. What I would add to it is that we perceive, we, I mean the leadership of Africa, the people of Africa, we perceive these numbers as opportunities, and we want to turn around whatever challenges are associated with these into opportunities to propel growth and spread wealth and success. There is a new leadership emerging in a number of countries in Africa that have either to not been known for some of the stellar works that are being undertaken now. If you look what's happening in Ethiopia with President Abbey, and by extension his influence in the region, you know the peace deal he had with Eritrea and the net benefits that we derive out of that. We all hope that it would spread to Somalia and the Horn of Africa and the peace dividend would yield the growth that we want. Africa not only is it a young, vibrant continent, it has, it's a repository of most of the world's resources, natural resources. And those need to be exploited responsibly and with a prime intention of having the Africans benefit out of those. So there's some level of responsibility that we'd expect from venture capitalists who want to make a return on their investment in such countries. Generally, when you look at the fact that 60% of our population is under 25 years old, and generally fairly well educated or educated enough to be retooled and retrained with digitization going, the rate is going, and the governance ecosystems that support it, wow. This continent potentially presents the most powerful workforce there's been in our lifetime. And so if we take a very optimistic look at that, we feel a certain sense of urgency and come into WF and engaging with those who have the where and the means to help us unlock this wealth so we realize our global goals are stated in the SDGs, including our continental goals are stated in Agenda 2030. So I'm here to confirm, though I'm President of Botswana, on behalf of the other African countries including President Marquisal, we're here. We subscribe to the African continental free trade area, and we have full confidence that when we increase the intra-Africa trade, it would be a means by which we grow and reach the world. In the same way, we also want the world to reach us. So trade would be a means by which we grow our wealth and we improve the lot of our people. Thank you. Thank you. I think clarifications for Africa, also for your country that is one of the most successful ones when it comes to the economy coming back to that. Queen Maxima, in 2009, you were appointed the UN Secretary General's Special Advocate for Inclusive Finance for Development. And I think we all know that if you don't have access to financial institutions and if you don't have access to banking, it is also very hard to see real developments happening. The past few years, we have seen also positive development in the African region when it comes to connecting people to formal financial services. In many ways, I have to say when I looked at the numbers last night, you have been extremely successful in your job. I have seen that Africa has almost doubled the amount that have been connected to financial services from 23% to 43% between 2011 and 2018. So what steps should be no taken to even accelerate this because we are on the right track? First of all, thank you for having us on this issue here at this panel and also talk about Africa because I think it is the continent we should be looking at going forward. The growth of financial inclusion has been amazing. Since 2011, we have actually given more access to more than 1.2 billion people globally to financial services. This has, of course, been driven by mobile banking, the potential that you can actually with your handheld be able to have access to payments, savings, credit, microinsurance, even having budgeting systems when you have a little more of a smartphone. So that has been really revolutionary. This has not only created growth in GDP, but it also has been helping us to reduce inequality. So we know the financial inclusion is not only pro-growth, but also pro-pore. It gives people above all women agency and control, which I think is something that we need to say and we know we are investing women, we are going to be investing in the development of a continent. We had an analysis that in Ethiopia, if mobile money really takes off by 2025, we could increase GDP by 10% and create 3 million additional jobs if we have digital financial inclusion. And there's one thing if you tell me about all the figures of this new youth coming in into the workforce, the one thing I would be saying, oh my God, we have to create jobs, jobs, jobs. We will not be able to create those jobs if we do not have the infrastructure of an inclusive digital financial system. How do we build upon this? First of all, we've got many strides, but still from that 43% is the global financial inclusion. Now, if we look into the mobile money side, only 21% of adults actually have a mobile banking account in the total of Africa. So we really need to grow. We need to do a lot more work. And actually, the ones that are actually lagging behind are the poorest percentiles, women and the rural. So those are the three probably groups that will have to be looking a lot more in the future. What do I need? I need better connectivity because even if everybody thinks everybody has a mobile phone, well, it's not really true. The 4G coverage in Africa is 7% of total connections, 7%. Only one fourth of the whole African population uses mobile internet. And only 44% of the population has mobile subscriptions. So it's not only having that mobile phone and having the connectivity, but the reliability of the connectivity is also very important because I'm going to be sending money back to my mother in the rural areas. The moment I'm sending that money and the connection is gone, you know, the trust of that system is going to be gone. So the reliability needs also to be there. So connectivity is a very big issue. The other big issue is that we're working very close together with the World Bank in a system that's called ID4D, which is basically promoting national, unique, biometrical digital IDs. Without that, because of KYC issues, we cannot open bank accounts. We cannot facilitate for your governments to actually do proper government to people payments in the form of subsidies, in the form of sort of, you know, stipends. So we need to really have these national IDs. Today, 1 billion people around the world do not have any ID and half of them are in Africa. So if you look about sort of 1.2 billion people right now in Africa and 500 million do not have an ID. So these are types of, you know, public goods that we really need to have going forward for us to make this come true. And of course we need to have to make the regulatory changes for us to allow these innovations to happen. And for that, we'll be working very closely with many other central banks and ministers of finance to actually make those new innovations. Very important issue, we will need to invest a lot of women and focus a lot of women, what their needs are, and also on the small-holder farmers in Africa, which need at least $55 billion additional of financing yearly from now on. Thank you. Thank you. I think this is such a good progress that we need a great applause for that. I was thinking, listening to the Queen Her Majesty, Mr. President, where does Botswana stand on this financial inclusion? Are you happy where you stand? What is your, what are you going to deliver in the next period as president? Well, Botswana is progressing at a fairly rapid pace. We have a national broadband strategy that's in place. We have internet connectivity. The optic and the backbone is spread enough to cover the whole country. But we are lacking in covering the individual homes and businesses, which is the last mile. And that's what's going on now. We are committed to ensuring there is connectivity, irrespective of geography and gender. And we are also committed to making sure that we bring the price down, because there's no use in having all this, and people can't afford it and don't use it. We are also committed to the innovation and providing local solutions by the development of apps and that are relevant to what we do. But in terms of our progress, we are accelerating it by putting money in the right places. As of this financially, this is my first real term, you know, the last little bit I was inheriting. And we just went to an election. We have a manifesto. We have a mid-term review of our development plan. And we are re-aligning it because our quest and determination is to increasingly move away from the resource base of our economy to a knowledge-based economy. And so we're building the ecosystem to enable that. And connectivity, access, cost are major issues. Fortunately, there isn't such a big divide between men and women or male and female with respect to access to connectivity and or technology such as mobile telephony. But we do have a problem with rural urban. Particularly that Botswana is quite vast and sparsely populated. But these are challenges that we're quite determined to face head-on and watch the space. So your Majesty, Harry, know also what the President said about his vision. It's his first full term. Looking at also the fact that, as you said, 1.2 billion people have during the last years been connected. And they're included in also being financially connected. But there are still big challenges moving forward. I think there's only 7% in Africa that are connected. I think mobile internet users. Mobile internet users, which is a classification. That is then also prerequisite for doing financial transactions and et cetera. Well, you can still do the USSD, I mean an analog phone. But then the variety of things that you can do is much more limited. So my point is if you're going to reach the ambitious goals and the sustainable development goals, we can mobilize governments. But I guess we also have to have the powerful private sector on board here.  First of all, my title is Financial Inclusion for Development. And when I say development, this is something that I need to empower people to increase their income for themselves. So it's not only the big private sector that is sitting here in Davos. When we are actually giving people, or we financially include them, it's good for their own businesses, though all small sort of little sector. So for example, in Tanzania, farmers when they've actually given mobile money-based insurance, they increase their income by 16% by reducing a lot of the financial losses they actually had. The same thing, we've actually seen a mobile health provision. I mean, right now in Nigeria and in Kenya, we've been able to give health insurance to people that before never had it. Most then also SME credit to a lot of clinics. They were very small by increasing their efficiencies. So in the whole continent, we need to have this as a way of increasing efficiencies of small businesses. And that also I call the private sector. Because those are going to be the ones that are going to be creating the jobs and the employment that I know in your country of birth and in my country of birth in the Netherlands, 70% of employment is created by the SMEs. It's not created by the very big firms. So that is one thing. We need to increase efficiency and the potential to productivity of all the firms in the future in Africa. That's one thing. At the same time, there's a big role for the very big firms to play. Because they're key to improve the use cases. There's no, in the sense that, for example, a very big bank or a telecom mobile operator are a very good ally for me to actually start learning. And what does a woman need from a bank account? They don't need the same saving services that I need in the Netherlands. They will need a completely different saving services. Or the same thing goes for insurances or the same thing for credit. So we need to really look at the customer needs to be much more customer centric. So I need private sector to be very observant about, you know, whichever their customers and actually try to translate that in good services. Two years ago, here in Davos, we formed a group of 10 CEOs or 10 big companies, mobile telecom operators, consumer companies, banks, internet companies. And what we did is, you know, none of them could actually do it by themselves. And all of them have presence in Africa, in Asia, et cetera. So we said, you know, how can we actually team up and partner to really do the things at the scale that we need? Because each one was doing something and, you know, one reached 20,000 farmers here, the other one reached 10,000 merchants here. But actually, that's really not going to make the change. So a company, for example, Rabobank, which is a Dutch corporate farming bank, together with MasterCard are now teaming up together to basically bank rise the whole value chain in six different countries in Africa. I mean, reaching a million farmers. In November, I was in Pakistan, and there's Unilever and PepsiCo with Tel-Enor, from your home country. And what they're going to be doing is they're going to be digitizing all the merchants in which PepsiCo and Unilever touches upon. Of course, for Unilever and PepsiCo, that means, you know, better income, because that means they will actually have better inventory management with all these merchants that actually have to sell to. But at the same time, and one these micro merchants have access to these transactional digital accounts, you can actually see how much they're actually transacting, and they will actually have access to credit. Well, in turn, will actually mean it's more capacity of buying their product. So it has to be commercially viable. This is not a CSR issue anymore. We really need to bring the insights to these big firms and also for them to lead by example and by partnering, being able to help each other to really make these customer-centered products that actually would actually deliver the, you know, or actually cater for people's needs, change their lives, and actually increase, of course, the business potential of these firms. So I would say it's extremely important. We need a lot of the leadership of the CEOs and the local CEOs, because sometimes they get to the countries, yes, that's what my global CEO sort of said that I should do, for me it's a little bit more difficult. Well, we need a lot of long-term vision, and I think we need to know this is not CSR, this has to be commercially sustainable. Otherwise, we will not be able to reach the scalability we need. Thank you. Mr. President, I will let you comment on what your Majesty just said, but I would also add a question to you because we know that national resource mobilization is also very important. We have to mobilize the private sector more, but it has to also be commercial, interesting, but we know that if you look at the taxes and the VAT that is collected in Africa and you look at the amount compared to GDP, it's pretty low. Any reflections from your side, because now you're constructing this African internal market, but are you looking at also how you can mobilize more resources locally in different countries that can then be invested in making Africa more ready on the skills, better education, and also better infrastructure? You know, there's a whole raft of things that we need to do and do better. One of them I'll really admit is to maximize on our efficiencies of revenue management and generation. Aside the obvious, I mean, there are some cases where there's obvious leakages that take place. Those are given. They've got to stop. Tax collection, you know, the determination of the amount of tax, the type of tax, public education so that people are willing to pay tax and people appreciate the benefits of paying tax because they actually see the benefits that accrue out of resources raised through tax by the road being built, the infrastructure being put up. And so there are a whole lot of variables of efficiency that we need to get to, including on the delivery side and the part of government. I mean, when you cut out a whole lot of challenges that many countries face, we would yield better and faster development. Now, with respect to our commitment to the African continental free trade system, the first thing we've demonstrated and which I hope we would stick to is the political resolve and leadership required to attain that. The next would be the political will and resolve to create the ecosystem for it to occur. You know, the legislative government governance required, including the relations between countries in terms of, you know, permitting and enabling such trade. Many of our borders are totally artificial. And if many of us perceive tariffs as a means to generate your own development without being creative and innovative, it will fall flat. Africa hardly trades with itself, and yet there's so many goods and services required. We also need to ensure that we utilize digital technology, digitization to promote efficiencies within firms which will raise their revenue base and they would use to invest in doing other things. And so I can completely align with what the queen is saying and can confirm that, at least speaking for my government, you will not find as wanting in terms of our commitment to use our tax revenue to create the infrastructure necessary to attain the SDGs. I think I very much agree on what the president said, but we've been always talking about the resource, national resource mobilizations and certainly from a physical perspective, I think one of the most difficult conversations I've been having with a lot of ministers of finance around the world is just that, is the process of formalization, of merchants, of businesses, of doctors. I mean, it's really a very tough nut to crack and I don't wanna say this lightly, we've actually just written a report from the World Bank for one of the G20 meetings and these process, first of all, you have to give them manners for them to pay that are actually formal, right? So in that sense, having a backbone of a digital financial system is key. Without that, we will not be able to have a good process of formalization. Number two, there has to be something in it for them. I'm not gonna pay those taxes if I don't have anything in return because maybe they brought it and passed right through his area. So he needs to have some kind of access to credit by formalizing of some kind of other attractive thing for him to have for him to say, yes, I want to be formalized or he basically, he gets much better sales to a big company because he's been able to produce that and if he doesn't do it formally, he will not be able to access that market. I think we have to start thinking in the sort of, what does a micro, micro of a farmer or micro merchant or a small industry need, finds it attractive to be formalized? And the other big issue is, and this is something that has been also very tough in my whole work, I have to say, is that whatever saying digital financial services and it seems so technical, so sexy, we have to compete with cash. And competing with cash is quite a difficult thing. You have to be extremely seemingly cheap even though we know that cash is not cheap for people and does have a cost, but they don't realize it. We need to be fearless. We need to be extremely private. You have the cash, nobody sees it, so it needs to be pretty private. So there's a lot of characteristics that actually cash has been having. So also all the regulatory and all the laws have to facilitate digital financial services in a way that we can compete with cash. I think these are the issues that, if you have governments that actually have a vision on this front, we can really come up with ways of actually doing that. But if we do not have that holistic approach, it would be very difficult to have a successful criminalization process. No worry, good points. When I was Foreign Minister in the country you mentioned Norway, we launched a development program that was called Tax for Development. So we put some of the smartest tax lawyers and tax developers in Norway to do deals in developing countries, especially in Africa, and build a better tax collecting system. And what you saw is when people start, even with small taxes, they're also much more conscious about how the government uses the money.  And what we also saw, and this was one of the paradoxes, is that in many places you see that there are exceptions from paying taxes. And for example, big landowners didn't have to pay tax on their land, but small farmers had to do. And these are also paradoxes that of course have to be addressed. Another topic that is of course a critical one is related to better governance. Because if you see the World Bank's numbers, we see that in many African countries, and also in many developing countries, and some developed countries even, we see that corruption and bad governance is really stealing money from the people. In some countries its numbers are like 10, 20%. So Mr. President, do you feel that Africa is on the right course here? I think also with more financial inclusion, less cash, and more money that are wired through the system. Its corruption is also harder. How big do you think corruption is, you is? And is there a real willingness to deal with this upfront? Because it's really about stealing money from people. Yes, I can speak best for Botswana, but even in the interactions that one has with their colleagues, at a rhetorical level there is absolute commitment to have no corruption. But in reality we do know that it persists, and I couldn't agree with you more that corruption is basically thuggery. It's stealing, I mean that's what it is. And there's an opportunity cost to it. But there's also a very real risk of making it endemic. Because if people lose faith in the system and they know the only way out is to pay or be paid, they will do it. So the hopelessness that people feel and loss of faith in the system of governance will promote and sustain corruption. Now because we are developing continent, I think it's important that we take responsibility for our actions and ensure that we eliminate corruption and promote transparency. Democracy, as in the case of Botswana, is viewed very positively because with all its attributes together, democracy abhors corruption. The more you make things transparent, the more the population enrolls, and if you don't listen, they react and they boot you out. A good thing. But because we're developing and we dependent on others, we would hope that systems and opportunities like we would have at the WEF and the UN, and other international bodies and institutions would help us to also ensure that the big corporates that engage with us are also committed to not promoting corruption. Because the two way stream, some of the most documented case of corruption have certainly been a pain to note that a number of very, very big firms were involved in that. I've been intrigued in my time as president, which is just under two years. Way upon when I visit some developed countries, the expectation is that every CEO or senior executive or some big company has to see me. And in seeing me, everything is done. I'm totally shocked by that behavior. And I'm at pains to try and be polite and decline and ask them to go and see the minister or the ministry or some official because we really want to make sure we stick to a transparent route. So corruption is a problem. Corruption needs to be dealt with effectively. In Botswana and my country, we're doing our very best. It's not that we don't have corruption. It's there, but we're committed to dealing with it effectively. Thank you. This is a warm applause on your commitment there, Mr. President. Just two reflections, and then we're going to go into wrapping up. I think the traffic jam has to be very bad. So, but we're also very privileged to have the two of you and you delivered amazingly well. So I think also the audience agree with that. I was two things, Mr. President. One, you mentioned this in your first answer related to the peace dividend. Because even if we see a lot of positive developments in Africa, we still have conflicts and we have wars. But then we also have very ambitious and leaders that also go for peace. And you mentioned Prime Minister of Ethiopia, where there was no deal with Eritrea. There's also big transformation going on in Sudan. Do you feel that the international community really is conscious enough and have a proactive policy when it comes to also creating then a peace dividend? When there is peace, there should also see results of this. So we don't get back into conflict. And I think many of us are now following Ethiopia, this large, very important country, if you can reflect on that. And then second question, last time we met, and that was before your elections, we met in Cape Town, South Africa. And we also see that, of course, there's increased inter-regional and intra-African trade. We also see that our people from different African countries that do work in other African countries. And we have been quite surprised with xenophobia even happening in Africa. If you can reflect shortly on that, it would be appreciated. Thank you very much. Well, you know, the positives coming out of Africa and its leadership are slightly broader than just Ethiopia. I mean, there's some laudable work taking place in Kenya and Nigeria. I mean, part of the Nigeria magic was the re-election of President Buhari and the expression of confidence by his own people, most of whom, a bore corruption, you know? And the opportunities that are in there are incredible, but we are convinced that Africa can do much more with much more help, not in the financial sense of giving aid, like we traditionally do, but the world can step up and tolerate less the indiscretions that take place in Africa, whether by Africans themselves or by Africans assisted by others. I mean, I find it totally bamboozling that the problems of the DRC continue to this day in such a civilized world. And yet, those who reap from the DRC are able to succeed through that maze of trouble to extract what they want from the DRC and use it. I think we need to address these things head-on. It's important that we do that, because the DRC's resources alone are more than enough for a lot of the world, certainly more than enough for Africa. I mean, talk of clean water. The DRC could be a solution provided to more than half of Africa with its clean water, because when you look out from the sky, the clean water going to the ocean, draining from the Congo River, is about 70 kilometers in depth, length. You know, that's a huge amount. And associated with that would be the par generation from, you know, the hydro generation that we would get out of the DRC. Now, we have a number of worlds in Africa. And the country you mentioned, which is my neighbor in South Africa, is no exception. Part of it may be historical, but it's still a development challenge that you'll find anywhere else. There are many people who have migrated to the urban centers of South Africa. And it's a mixture of both South Africans and non-South Africans. And as desperation sets in, particularly for locals, it's so much easier to be motivated to believe, sometimes falsely, that it's the foreigners who are taking your jobs. And South Africa being such a diverse society, you have a whole mix of people who hold opinions and sway the beliefs of people into promoting what has been called xenophobia. And I don't know if it really is xenophobia or criminality. And so we need to step back and really look at this very carefully to make sure that it is properly analyzed and understood. But yes, we do have people who migrate from a not-so-well-off country to a better country in search of a better quality of life. And that's a phenomenon that occurs everywhere in the world. We have to make sure that we promote equitable distribution of opportunity, a bottom line. And it's all about governance. And we need the support of small businesses, big businesses, governments, NGOs. And a real commitment to ensuring that even if we disagreed with the policies of some countries, let us not harm the economy to the extent that that will be so. In this case, I speak of my neighbor Zimbabwe. I mean, it's been going through debilitating sanctions as a country state for many years. We in the neighborhood believe sincerely the region, the country would be held better if those sanctions were lifted. Because we are the first to witness the experiences and ferocity of the effects of sanctions on ordinary people, women and girls. Now, if you have a situation like that, what hope do you have of accessing financial inclusion at the very least? Thank you, Mr. President. I see the conversation has been flowing so well that we're really coming to the close. But at the end, your Majesty, financial inclusion, you have had this role now for 11 years, listening to the president, listening to also the prospects now with the SDGs. Any reflections at the end from your side? I guess you will keep on doing this until we have reached all the SDGs in 2030? Not all of them. Nobody, as I said before, nobody can do it alone. It's just to say financial inclusion is a means to an end. It's not an end in itself. It's just one of the railways, I would say, public goods that we need to have. And if I'm hearing everything that's been saying today, but also in all my visits, the potential is there.  And we can actually turn around things. I've actually seen countries that, you know, not knowing what a bank was, all of a sudden, you know, banking through mobile phones, they don't call it a bank. So we can leapfrog in many countries and use them because I think you talk about resources in terms of mining. I want to talk about the resources of all these youth girls and boys actually being entrepreneurs, entrepreneurial, and having themselves a solution for their countries. But they need to have the space and their regulatory space and to have some kind of backbone and infrastructure they can rely on. I think that if we have the leadership from these African countries to permit this, and, you know, myself and all the partners will be helping and assisting to make those changes and to really bring in the private sector to help accordingly, I think that, you know, we might actually have a very good success story. Wow. On that optimistic note, thank you so much to our Majesty, Mr. President. I'm very thankful for your contributions. I think also everyone really enjoyed listening to you. Thank you so much.


Predator one, Predator one, this is Predator two. Any station, any station, Predator forward, radio check over. Public station be advised. We're gonna teach you how to be a communicator in a jungle environment. The jungle in and of itself has three main aspects.  Every single one of those has a direct impact on radio communications. It's literally the entire jungle versus your radio, and you're pretty much working against everything that's around you. The limit to a field expedient antenna is really your imagination. We push out to the jungle, start sending up reports, nine lines, and moving locations. Nine seven, air panels. Nine eight, one U.S. military. Nine nine, uneven terrain, jungle. You don't know how deep you're gonna be into the jungle until you're there. You could be trying to talk to someone that's really high up, and you're talking to someone down low and you can't get them because they don't have their antenna high enough. Predator one, Predator one, this is Predator two, radio check over. Learning how to communicate in vegetation as thick as this, pushing out through these dense jungles, down trails, down mountains, out into this valley is unlike anything I've ever done before.


This is a really brief overview of this whole project mixing prezzies and YouTube videos and some blog posts and a few other things. So the overall picture as I see it right now looks roughly like this. The yellow circle on the left, the brighter yellow circle, is the prezzy that I'm currently working on and I'm currently publishing. It's all about consumerization. How did we get there? What does it mean? The fact that the language of advertising is the language of war that we're really in the middle of a stalker economy or surveillance capitalism.  That will then later connect to a whole thesis about the relationship economy. How not only have we consumerized everything but there are solutions everywhere for each sector that tie back to the principles of the relationship economy. That we used to be wise. That we're busy missing invisible value. All sorts of things. It will turn into some workshops and exercises on the right called Roots of Innovation and Building a Economy. The general thesis here is down on the left there. What if we trusted you? There will be a lot of work on trust because trust is really pivotal to this idea. Things like design from trust becoming a trusted ally and all of this turns into advice suggestions for companies like what to do. So all of this is part of the relationship economy. A map. How to work it and then structurally there are four layers here. There will be some essays in medium that will look a lot like blog posts. Medium is a beautiful publishing vehicle for this.  So hopefully three to maximum seven or eight minutes. Any of which might be forwarded or whatever but all of which link back to these prezzies to the larger set of issues.  And then behind everything is my brain. A piece of software called The Brain. I've been publishing my brain for a very long time. Been using it for 18 and a half years. So all the topics, the videos, the points of view, the editorials, the articles, all the books that these ideas are based on are all in my brain. Each nugget is freestanding. They're all woven in context. And I'm working here off of lots of great inspirations like Hank and John Green, The Vlogbrothers by Hart, the mathematician who does such great videos. Lawrence Lessig who does sort of one word speeches that are fantastic. C.G.P. Gray, Samantha Bee, The Young Turks, the RSA's Illustrated Speeches. These are all really my motivations. But this is an experiment in four layers. But really I'm interested in this whole picture and how do we play it out? How do we make a rich experience of exploring these ideas? Don't know if it's gonna work. Let me know what you think. Subscribe if you like this. And let's talk.


From Boston, Massachusetts, it's theCUBE. Covering LiveWorks 18, brought to you by PTC. Welcome back to Boston, everybody. This is the LiveWorks show hosted by PTC, and you're watching theCUBE, the leader in live tech coverage. I'm Dave Vellante with my co-host, Stu Minerman, covering IoT, blockchain, AI, the edge, the cloud, the core, all kinds of crazy stuff going on. Kevin Ashton is here, he's the inventor of the term IoT and the creator of the Wemo home automation platform. You may be familiar with that, the smart plugs. He's also the co-founder and CEO of Zensi, which is a clean tech startup. Kevin, thanks for coming on theCUBE. Thank you for having me. You're very welcome. So impressions of LiveWorks so far. Oh wow, I've been to a few of these and this is the biggest one so far, I think. I mean, it's day one and the place is hopping. It's like, it's really good energy here. It's hard to believe it's a Monday. Well, it's interesting, right?  What do you mean by that? The manufacturing world was stayed in the 1900s, but in the 21st century, it's kind of the thing to be doing. So yeah, and this, I guess this is, you're right. This is not what people think of when they think of manufacturing, but this is really what it looks like now. It's a digital, energetic, young, exciting, innovative space. Very hip and a lot of virtual reality, augmented reality. Okay, so this term IOT, you're accredited.  Where'd it come from? Oh, so IOT is the Internet of Things and back in the 1990s, I was a junior manager at Troctron Gamble, consumer goods company. And we were having trouble keeping some products on the shelves in the stores and I had this idea of putting this new technology called RFID tax, little microchips into all products. Product Gamble makes like two billion products a year or something and putting it into all of them and connecting it to this other new thing called the Internet so we would know where our stuff was. And the challenge I faced as a young executive with the crazy idea was how to explain that to senior management. These were guys who in those days, like they didn't even do email. You sent them an email, they'd like have their secretary printed out and they'd hand write their reply. It would come back to you in the internal mail. I'm really not kidding. And so, I would have put chips in everything. Well, the good news was about 1998, they'd heard of the Internet and they'd heard that the Internet was a thing you were supposed to be doing. They didn't know what it was. So I literally retitled my PowerPoint presentation which was previously called Smart Packaging to find a way to get the word Internet in. And the way I did it was I wrote Internet of Things. And I got my money and I found it at a research center with Procter & Gamble's money at MIT, just up the road here. And basically took the PowerPoint presentation with me all over the world to convince other people to get on board. And somehow the name stuck. So that's the story. Yeah, it's fascinating. I remember back, I mean RFID was a big deal. We went through, you know, my background, I studied mechanical engineering, some manufacturing. You saw the promise of it, but like the Internet back in the 90s, it was like, this seems really cool. What are you going to do with it? Exactly, and it kind of worked. Now it's everywhere. But yeah, you're exactly right. So I've just, you know, wanting to, you know, when you think back to those times and where we are in IoT, which I think most of us still say we're still relatively early in IoT, the industrial Internet. What you hear when people talks about it, does it still hearken back to some of the things that you thought? What's different? What's the same? I mean, so some of the big picture stuff is very much the same, I think. We had this, the fundamental idea behind the MIT research, behind the Internet of Things was get computers to gather their own information. If we can do that, we have this whole powerful new paradigm in computing. Because it's not about keyboards anymore. And in places like manufacturing, I mean, Prochran Gamble is a manufacturing company. They make things and they sell them. The problem in manufacturing is keyboards just don't scale as an information capture technology. You can't sit in a warehouse and type everything you have and something goes out the door and type it again. And so, you know, in the 90s barcodes came and then we realized that we could do much better. And that was the Internet of Things. So that big picture, wouldn't it be great if we knew where everything was automatically? That's come true at times a million, right? Some of the technologies that are doing it are very unexpected. Like in the 1990s, we were very excited about RFID, partly because vision technology, you know, cameras connected to computers was not working at all. It looked very unpromising with people have been trying for decades to do machine vision. And it didn't work. And now it does. And so a lot of things we thought we needed RFID for, we can now do with vision as an example. Now, the recent vision works, by the way, is an interesting one. And I think it's important for the future of the Internet of Things. Vision works because suddenly we had digital cameras connected to networks, mainly in smartphones, that were unable to create this vast data set that could then be used to train the algorithms, right? So when it was, I've scanned in 100 images in my lab at MIT and I'm trying to write an algorithm. Machine vision was very hard to do. When you've got hundreds of millions of images available to you easily because phones and digital cameras are uploading all the time, then suddenly you can make the software sing and dance. So a lot of the analytical stuff we've already seen in machine vision, we'll start to see in manufacturing supply chains, for example, as the data accumulates. Did, if you go back to that time, when you were doing that PowerPoint, which was probably less than a megabyte, when you saved it, did you have any inkling of the data explosion? And were you even able to envision how data models would change to a company? Did you realize at the time that the data model, the data pipeline, the ability to store all this distributed data would have to change? Or were you not thinking that way? So it's interesting because I was the craziest guy in the room when it came to internet bandwidth and storage ability and how, I mean, I was thinking in, maybe I was thinking in gigabytes when everyone else was thinking in kilobytes, right? That was kind of, but I was wrong, I wasn't too crazy, I was not crazy enough. So sort of, I would quite go so far as to call it a regret, but my lesson for the next generation of innovators coming up is you actually can't let kind of the average opinion in the room limit how extreme your views are. Because if it seems to make sense to you, that's all that matters, right? So I didn't envision it as the answer to your question, even though I was envisioning stuff that seemed crazy to a lot of other people. And I wasn't the only crazy one, but I was one of the few. And so we underestimated, even in our wildest dreams, we underestimated the bandwidth and memory innovations that we've seen in the last 25 years. I don't know, Stu, you're a technologist, I'm not, but based on what you see today, you feel like the technology infrastructure is there to support these great visions, or do we have to completely out, quantum computing and blockchain, are we at the doorstep or are we decades away? Oh, we're at the doorstep. I mean, I think the interesting thing is, a lot of internet of things stuff in particular is invisible for a number of reasons, right? It's invisible because the sensors and chips are embedded in things and you don't see them. That's one, I mean, there is a billion more RFID tags made in the world than smartphones every year. But you don't see them, right? You see the smartphones, everyone's always looking at the smartphone. So you don't realize that's there. So that's one reason. But the other reason is, the internet of things is happening in places and in companies that don't have open doors and windows, they're not on the high street, right? They are, it's warehouses, it's factories, it's behind the scenes. It's companies that have no reason to talk about what they're doing because it's a trade secret or it's just not something people want to write about or read about, right? So I just gave a talk here and one of the examples I gave was a company called Heidelberger. Heidelberger makes 60% of the offset printing presses in the world. They're one of the first internet of things pioneers. Most people haven't heard of them. Most people don't see offset printers every day. So the hundreds of sensors they have in their hundreds of printing presses are completely invisible to most of us, right? So it's definitely here now. Will the infrastructure continue to improve? Yes. Will we see things that are unimaginable today, 20 years from today? Yes. But I don't see any massive limitations now in what the internet of things can become. It's just curious, the use case for that offset printing is predictive maintenance or it's optimization. It was initially like, it was in the 1990s, like when the customer calls it says my printing process isn't working health, instead of sending the guy to look at the diagnostics, have the diagnostics get sent to the guy. That was the first thing. But then gradually that evolves to real-time monitoring predictive maintenance. Your machine seems to be less efficient than the average of all the machines. Maybe we can help you optimize. And that's the other thing about all internet of things applications. You start with one sensor telling you one thing for one reason and it works. You add two and you find four things you can do and you add three and you find nine things you can do.  You're never meant to be. But that's how it goes. It's a little bit like viral or addictive. Well, it's interesting to see the re-emergence, the new ascendancy of PTC. Yeah. I mean, there's a company in 2003 was bouncing along the ocean's floor and then the confluence of all these trends, some acquisitions and all of a sudden they're like, the new kid in the hot, new kid in the hot. Some of that smart management, by the way. No doubt. And I don't work for PTC, but navigating the change is important. And I want to say one of the other things I just talked about in my talk, but is we think about these tools that companies like PTC make as design tools, but they're very quickly transitioning to mass production tools, right? So it used to be, you imagined a thing on your screen and you made a blueprint of it and somebody made it in a shop. And then it was, you didn't make it in a shop, you had a 3D printer and you could make a little model of it and show management, everyone was very excited about that. Well, you know, what's happening now and what will happen more is that design on the screen will be plugged right into the production line and you'll push a button and you make a million. Or your customer will go to a website and tweak it a little bit, make it a different color or a different shape or something and you'll make one on your production line that makes a million. So there's this seamless transition happening from imagining things using software to actually manufacturing them using software which is very much the core of what the Internet of Things is about and is a really exciting part of the current wave of the Industrial Revolution. Yeah, so Kevin, you wrote a book which follows some of those themes, I believe. It's How to Fly a Horse. I've read plenty of books where it talks about people think that innovation is, you know, some guy sitting under a tray, it hits him in the head and he does things, but we know that, first of all, almost everybody is building on the shoulders of those before us. Talk a little bit about creativity, innovation, your thoughts on that. So, I mean, I was just like, I have an undergraduate degree in Scandinavian studies. I studied Ibsen in 19th century Norwegian at university. And then I went to Procter & Gamble and I made, I did marketing for Color Cosmetics. And then the next thing that happened to me was I'm at MIT, right? I'm an executive director of this prestigious lab at MIT. And I did this at the same time that the Harry Potter books were becoming popular, right? So I really felt like, oh my God, I've gone to wizard school, but nobody realizes that I'm not a wizard. I was scared of getting found out, right? I didn't feel like a wizard because anything I managed to create was like the thousandth thing I did after 999 mistakes. You know, I was like banging my head against the wall and I didn't know what I was doing. And occasionally I got lucky. And I was like, oh, they're going to figure out that like I'm not like them, right? I don't have the magic. And actually what happened to me at MIT over four years, I figured out nobody had the magic. There is no magic, right? There are those of us who would like believe this story about geniuses and magic. And there are other people who were just getting on with creating. And the people at MIT were the second group. So that was my revelation that I, but I wasn't an imposter. I was doing things the way everybody, I'd ever heard of, did them. And so I did some startups and then I wanted to write a book like kind of correcting the record, I guess, because it's frustrating to me. Like now I'm like, I'm called the inventor of the internet of things. I'm not the inventor of the internet of things. I wrote three words on a PowerPoint slide. I'm one of a hundred thousand people that all chipped away at this problem. And probably my chips were not as big as a lot of other people's, right? So it was really important to me to talk about that because I meet so many people who want to create something, but if it doesn't happen instantly or they don't have the brilliant idea in the shower, they think they must be bad at it. And the reality is all creating is a series of steps. And as I was writing the book, I researched famous stories like Newton and then less famous stories like the African slave kid who discovered how to farm vanilla, right? And found that everybody was doing it the same way. And in every discipline, it doesn't matter if it's Kandinsky painting a painting or some scientist curing cancer, everybody is struggling. They're struggling to be heard. They're struggling to be understood. They're struggling to figure out what to do next. But the ones that succeed just keep going. And the title, How to Fly a Horse, is because of the Wright brothers. Because that's how they characterized the problem they were trying to solve. They're a classic example of, I mean literally everybody else was jumping off mountains with wings on their back and dying. And the Wright brothers took this gradual step-by-step approach and they were the ones to solve the problem of how to fly. With no money and no resources and Samuel Piermont Langley gave up. Yeah, exactly. The Wright brothers were bicycle guys and they just figured out how to convert what they knew into something else. So that's how you create. And we're surrounded by people who know how to do that. But that's the story of How to Fly a Horse. So what do we make of Steve Jobs? Is he an anomaly? Or is he just surrounded by people who, was he just surrounded by people who know how to create? I talk about Steve Jobs in the book actually. And I think the interesting thing about Jobs is defining characteristic as I see it. And I follow the story of Apple since I was a kid. One of the first computers I ever saw was an Apple. Jobs was never satisfied. He always believed things have been made better. And he was laser focused on trying to make them better. Sometimes the detriment of the people around him. But that focus on making things better enabled him, yes, to surround himself with people who were good at doing what they did, but also then driving them to achieve things. I mean, the interesting about Apple now is Apple are sadly becoming kind of just another computer company now without somebody there who is not. He'd stand up on stage and say I've made this great thing. But what was going on in his head often was, but I wish that curve was slightly different. Or I wish, the next one I'm going to fix this problem, right? And so the minute you get satisfied with always making billions of dollars, everything's great, that's when your innovation starts to plummet, right? So that was, to me Jobs was a classic example of an innovator because he just kept going. He kept wanting to make things better. Persistence. All right, we got to go. Thank you so much. Thank you guys, great to meet you Kevin. All right, keep it right there, buddy, Stu and I will be back with our next guest. This is theCUBE, we're live from LiveWorks in Boston. We'll be right back.


I mean, Wednesday again, I jumped the Friday. So, Mitch Ewan, I'm here with my co-host, Jay Fidel, and it's Hawaii, the state of clean energy. And today, we have a special treat for everyone, a really long-term friend of mine, I think I've known Toby for about 28 years. Toby Kincaid, beaming in from the West Coast of the United States, and Toby is an entrepreneur. He actually has a company called Solardyne, which specializes in solar systems. He's not like a PV installer. They do all sorts of solar-related systems, plus renewable energy systems. He's an inventor in the clean energy space. They're actually a very prolific inventor. He has numerous patents, and he's still going at it full bore. He's an author extraordinaire, and he's published several books, which are available on Amazon for download. I've read most of them, and they're really interesting books, a really interesting slant on things. And we're gonna talk about his latest book. It's called Why the Green New Deal is Good for America, Focus on Facts, Not on Fears. And we'll see his unique take on this. And tell us, Toby, why is the New Green Deal good for America? Well, Aloha from Portland. Thank you for having me on. You're two of my favorite people, because you talk about real things, and this is a time in life when we need to get real. So thank you for having me. The Green New Deal came up three or four months ago, and there was so much disinformation putting out in the world that I thought, I'm gonna write a book about this and try and set the record straight. How energy is the cornerstone to everything that we've done, everything that we're going to do. And if we get energy right, everything can be very good. But if energy is wrong and you don't have access to energy, then we're all in big trouble. So the premise of this book was to look at how can we decarbonize the world? How can we actually evolve away from burning things, which is causing so much disruption and so much problems with toxicity? How can we get away from that paradigm and enter something that's truly sustainable and approaches the biggest question that we have, not only the preservation of our earth and other species, but how we can actually obsolete human poverty. You know, there's no law of nature that says that people have to be impoverished. And I've seen it in my own career, where you take a small solar panel sterilizer unit and the water is potable.  I think this is the cornerstone of how important energy is and how we can use it to move forward for a 21st century, which is stable and affluent for everyone. There's more than enough energy. And so that's what this book is focusing on is if you have energy independence, you have a greater chance at political independence. Excellent. You know, Toby though, what about the money? What about the economics?  Yes, now that's a great point because that's part of the propaganda. You've probably heard, well, this will cost a trillion dollars. I've heard that. But if you only say, what you only say half of it, what about the other half of the question? Not just how much does it cost, but how much does it make? And so here's the real thing. If I use equipment lease financing, then the customers are happy because they get to charge up for less cost. So it's a profit to them. The vendors and the installers, the contractors, they're happy because they get paid. It's the underwriter that comes up with the capital and the underwriter is happy because if they put up capital in an equipment lease financing package, then we pay a monthly payment, which not only pays back the principal, but over five years, 50% in profit on top of the principal. So that turns out to be a 10% levelized rate of return. So the question is, who does this cost? It doesn't really cost anyone. It makes money. It's profitable for the user, profitable for the vendors and the jobs that we can create. And it's profitable for the underwriter. This is where capital can be applied and actually earn a return. So I think the question isn't how much does it cost. The real question is, how much does it make? That's a great point, Tobian. Here, this legislative session, the legislature passed and the governor just signed today, new legislation that allows the county governments to actually get into what's a new thing. I don't think it's done at anywhere else in the U.S. or the world. I think this is world-beating technology or a concept that Hawaii came out with to finance energy infrastructure. So an example is on the Big Island, they're looking at bringing in private companies to have a public-private partnership with the county. The private company provides the vehicles, all the infrastructure, all the maintenance, the whole nine yards, and charges the county on a cents per mile, passenger mile basis.  The county's really happy because they don't have to go and raise like 30 or 40 million dollars to buy a whole fleet of new buses and all the infrastructure. And of course, the most important thing is the local residents of the Big Island are happy because they're gonna get a great bus service and particularly with low-income people who rely on transportation to get from where they live to where they work on the Big Island. The Big Island is big and they gotta travel long distances. So you have people traveling from Hilo all the way over to Kokona to the big hotels on the quote, gold coast. And you know, it's a major, major draw on their income and they don't make that much. So if we have a really great bus service so that your first option is, oh, I'm gonna take the bus and then it's all paid for by the private industry, that's a great thing. And it totally mirrors what the main theme is in your book, you know, that we're talking about today. So, well, I've talked before about reality. And I just wanna add one other point about reality because reality comes crashing through when you talk about spending all that money. I totally agree, Mitch, and what happened in the Big Island is a fabulous event because it demonstrates what Toby is saying that you can find financing arrangements to soften the blow of what it costs. And that's the secret, you know, I always ask people, how are you gonna pay for this? Great idea, but how are you gonna pay for it? And you've actually found a way on the Big Island deal with the buses, that's really fabulous. And I think Toby's talking about the same thing. So the key, at least one of the keys to moving ahead with clean energy is financing arrangements. It's like those solar companies that bring in banks and lease companies and all that and make it happen. But the other part, okay, is political will. And I just wanna take one moment, then I'll get off to subject to the game. Political will, there is a case that was on 60 minutes, you know, 60 minutes on Sunday, called Giuliana versus the United States. It emanates from the federal district court in Eugene, Oregon, interestingly enough, and a judge there by the name of Ann Aiken, A-I-K-E-N.  And their argument in this case is that the United States government has not done enough. And they want the courts to intercede, they want the district court in Eugene, Oregon to make a national order telling the federal government what it needs to do. And that's the other part of the solution. What I mean is political will. There's somewhere in the government something is happening, something is going on. And this case in the concept is unprecedented, really.  So this case has been opposed in motion to dismiss have been filed several times. It emanated at the time of the Obama administration, the Trump administration trying to stop it. It may get to Supreme Court, that'll be good. But you know, the Supreme Court is not likely to give it the political will that it needs. So my point, though, and you can answer this, Toby, is, okay, we may find the financing arrangements. We may find that we have found the technology. We understand the connection of this kind of, you know, new energy, revolutionary energy technology such as you're working on, but we still need the political will. What's your answer to that? Well, it's in the children. It's their life. We have a constitution and our preamble says to promote the general welfare. I think they have every constitutional right to expect the natural inheritance of our earth. That means the species, the diversity, the quality of human life. And the political will can follow the economic will because once we take away all of these bugaboos, all of this disinformation, we can package the finance and package the technology together. That's what Mitch is talking about. That's just good capitalism. And capitalism is an extraordinarily efficient tool if it's directed properly. Now, to your point, Jay, about political will, you know, we have the political will because we're human beings. And if you take away any economic interest of fossil fuels or any other interests and we get down to the reality of people that two of the scariest words in the English language are toxicity and bioaccumulation. Frankly speaking, we're trashing the earth. And maybe we could bring up slide number one and we can get to the point. And this is what's behind the political will that is growing for everyone. First, we have to state the problem. What is the problem? Well, if you burn carbon, all of these problems occur. You get greenhouse gases, partially consumed hydrocarbons, endocrine disruptors. There it goes on, nox, socks, ocean acidification.  I'm not saying the sky is falling. I'm saying your pH is falling. And that is a concern. You know, toxicity has inertia. It accumulates. And we've been spewing enormous amounts of toxicity into our environment for 300 years.  Now we're to the point where we're dumping something on the order of 30 to 40 billion metric tons per year of greenhouse gases and these other trace elements. And the problem is if you add CO2 to the atmosphere in the oceans, you will form a weak carbonic acid. And this is the basis of acid rain and the ocean acidification. Look, if the base of the food chain can't form shells, we're in trouble because we eat these things. 70% of humanity gets their protein from the ocean. If we don't get this right, and in the next 10 years in my estimation, that's what the numbers reveal to me, you may not be able to change this because of inertia. So the political will has to be, how can we do what no one imagines possible? How can we get the right equipment to people? And once they tap into clean energy, there's no balance of payments. You don't have all of the struggles and economic stress. If you can become energy independent and clean, use as much as you want. You know, have you ever heard a fossil fuel company say, well, you know, you have to use fossil fuels or you're going to live in a cave? Well, that's silly. You know, the truth is, and maybe we can go on to the other slides, the fact of the matter is you don't need the carbon at all. So it's kind of the best kept industrial secret. So here's a little shot. You see that, you know, we've had in history five mass extinction events. Four of them were from volcanoes and volcanism. The last one was from an asteroid. Are we becoming the sixth extinction event? Because we're behaving like a super volcano. We're putting out massive amounts of heat, massive amounts of knocks and socks and greenhouse gases. And we're dumping this into the atmosphere and into our system at the level of a super volcano. Now, we can make a choice. And I believe that choice is to find a path through profit. That if you can demonstrate profitability, then you can release the enormous power of capital. There's a tremendous amount of capital just looking to go to work. And if we use that capital the way Mitch is talking about by solving problems and packaging it so that the rate of return is there for all of the players, I think that's the way to go. And that's how you can gain- Wait, wait, wait, wait. You said rate of return. Rate of return has to be at least as good as for fossil fuels in order for an investor to invest in renewables. Okay, isn't as good? Yes. Or will I do better if I invest my money in old fashioned oil? If it's not- You'll do better? I can't do better with renewables. I'm gonna stick with the oil as an investor driven by self-interest. Exactly. And therefore the challenge is to package this finance and package the technology so that we make a healthy rate of return. Now, I remember that the equipment lease financing, if you do a lease term over five years, you can use a factor called 0.025. That's the lease factor. And what you do is multiply that number by the capital expense and that'll tell you the monthly payment. So if I have a large capital that I need to place, I look at the CapEx, which has all of the guarantees and warranties. So we protect the capital, making sure they get their return. But moreover, they own title to the equipment until they're paid. So it's actually self-collateralizing. And so the idea is exactly to your point, the more money I make my shareholders and my underwriters, the more they keep pushing money at me. Hey, can you place 20 million? Can you place 50 million? Well, yes. And this is how we'll do it. But I have to demonstrate to capital exactly how much they're gonna make. Now, at over the five year term, if they make 50% over five years, that's a 10% annualized levelized rate of return. Now 10% is a lot better than anything I've seen at a bank or a treasury note. Plus you have the title to it, so it's collateralized. It's the way to go. So we need to go for a break right now. I'm gonna interrupt you in mid-stride here. And we're gonna go to a quick one minute break and we'll see you in another minute. I know you're all fascinated and wanna hear more. Aloha, my name is Mark Shklav. I am the host of Think Tech Hawaii's Law Across the Sea. Law Across the Sea is on Think Tech Hawaii every other Monday at 11 a.m. Please join me where my guests talk about law topics and ideas and music and Hawaii Ana all across the sea from Hawaii and back again. Aloha. Aloha, I'm Jane Sugimura, our host here at Think Tech Hawaii, a digital media company serving the people of Hawaii. We provide a video platform for citizen journalists to raise public awareness in Hawaii. We are a Hawaii nonprofit that depends on the generosity of its supporters to keep on going. We'd be grateful if you'd go to thinktechhawaii.com and make a donation to support us now. Thank you so much. Well, we're back and are we all ready for round two? Here I am with Jay Fidel and Toby Kincaid, all beaming us in from Portland.  We're ready to go for round two, Toby. So I want to start off quickly. You made a really great point towards the last end of what we're talking about is that the investors still own the capital equipment. And so if you look at how government uses their vehicles, so first of all, they're not open on the weekends and they only work from like eight in the morning to five at night. So basically your capital is only being used 30% of the time or that device. So as the investor, I'm saying, God, I'm only getting 30% utilization. So one of the ideas that they've come up with is, okay, for that 70% that we're shut down, we're not using the equipment, the owner of the equipment can be released to go ahead and rent it out to somebody else during the weekends or in the off hours and really get some more return on his investment and make it even better. So he has guaranteed non-recurring revenue coming from a government, plus he can go out there and utilize the assets for earning more money. And it might be even a better deal than what we talked about. And so we talked about political will. There's nothing easier for a politician than to do something good, which basically they all want to do something good, but they have the resources to do something good with and they're not getting beat up for higher taxes and what are you spending your money, our money on that for? Well, you're not spending their money, you're investing, you know, investor money in this thing and we're giving you a better life. I mean, I really want to do that as a politician. This is going to help me get elected. So I'm going to be thinking of even more innovative programs to make everybody's life better. So back to you. Bravo, yeah, Bravo, I completely agree. And that goes right into this ride share economy. You know, things are changing. In the old days, you bought a car, but it's turning into the point where now cars are available soon autonomously and you can just ride share. And this is very attractive because you don't have to personally go into debt to buy the car, buy the insurance, buy the fuel. In this way, you just use it when you need it. And what you're talking about is how the entire economy of the world is beginning to move into shared resources in many of these fields. And the bottom line of it is, you know, energy environment and the economy are intimately linked.  If you base that on carbon, you're really in trouble because you have to keep buying the fuel. It's toxic. This causes trouble for the environment and the fossil fuel companies, you know, they didn't make it and they don't have to pay for it being used, all of the toxicity released. All they pay for is extraction. But it's that, you know, I wanna go back for a moment to this economic question. Jay, we talk about how much do things cost? How much is the state of Hawaii paying now for fossil fuels? I was looking for the number at somewhere between three and $6 billion a year. Now, from a balance of payments standpoint, that's just being sucked right out of your economy. If you go to clean energy and with gusto in the way that Mitch is talking about, by bringing capital to bear, then you don't have this enormous cost for fuel costs and even liability for the toxicity. So Hawaii is- I think you've hit it right on the head. You've hit it right on the head, Toby. Let's say $6 billion. That's my recollection. $6 billion. $6 billion. And if you could save that would be, we'd all have part of $6 billion. Wow, what'd be fabulous. Why don't we do that? Well, it's not that people don't realize we have climate change. It's not that they don't realize that $6 billion are leaving the state. But the decision makers, the public officials, are being not only affected by their notion of doing good for people, they're also being affected by those with the checkbooks who come around. And there are a lot of people with checkbooks that want the status quo. They want that $6 billion to go offshore. And this exists in many other ways, in many other states. And in fact, it's dreadfully worse in some other states. So the problem is developing political will in the face of those who would oppose, actually, affirmatively oppose political will. And to me, I'd like to hear you talk about this. How do you deal with that? Because democracy is tumultuous. It's messy.  So you can't just go and say, let's all be idealistic because there are those, I don't wanna tell you anything you don't know, there are those who are not idealistic who would affirmatively oppose the principles you are espousing. Yes, and they have every economic reason to do that. Let's face it, 15% of the world economy is going into just a few people's pockets. I mean, let's be real. Holds in the ground surrounded by men with guns. Is that really any way to run a world? No, no, all of this causes disruption. In fact, if you go to the next slide, maybe we'll go through what some of this problem is. And I agree, the path is through profit. So the big lie is that for 120 years, we've been told that we have to burn carbon. We always will burn carbon. And the fact is it's just not true. And this slide kind of gets to it. When we think of fossil fuels, we think of hydrocarbons. Well, that means hydrogen and carbon. So if we look at coal, oil, natural gas, and then hydrogen, let's look at coal. It has the most carbon and the least hydrogen and the lowest energy density, 30 megajoules per kilogram. Then we go to oil, we see that, oh, we have even less carbon, more hydrogen, and it has a higher energy density, about 40. Then we look at natural gas, which has even less carbon and more hydrogen. And here we see now we're going up into 50 megajoules going up. And then when you compare that to hydrogen, which has no carbon, you have 140 megajoules. So what do we see here? We see that it has nothing to do with the carbon. If everyone wants to frack and strip mine and drill and railroad and pipeline and process and fuel depot and refineries and super tankers and gas trucks, it's all to sell you something. The carbon is what the hydrogen is stuck to. So everyone has made for last 120 years since the evil genius of John D. Rockefeller, where he realized, wait a second, and you know what, this is telling. In 1892, he had made a 25-year career of selling kerosene. Kerosene was the lighting fluid. We didn't have electric lights, but in 1892, when Tesla and Westinghouse electrified the Chicago World's Fair, the whole world saw an electric light and went, oh my goodness. Well, Rockefeller saw that too. And he realized his business is over because no one's gonna haul around a volatile fuel if they can flip a switch. So in perhaps the most brilliant pivot in the history of economics, John D. Rockefeller said, well, we're not gonna make kerosene anymore. We're gonna go for this new fangled internal combustion and we're gonna make gasoline. And when he made that decision and applied all of his very nefarious methods, look, if you were in his way, it really wouldn't matter if your legs get broken and you can't feed your kids. That's not his concern. So let's have no romance about John D. Rockefeller. He was a tough guy. He was also a brilliant man in terms of his organization. But all this did was set the world on a path which is confined to carbon. And in the last century, we've had two world wars and how many skirmishes. The whole concept of carbon means I control the source, the holes in the ground. And with my thugs, I'm gonna make sure you pay. And this has been the case for 120 years. But now in the 21st century, we have all these incredible technologies. We have fuel cells, electrolyzers. We have all of the equipment we need to actually not use carbon at all. It has nothing to do with the energy anyway. So by jumping and making this, by getting this clear, I think the political will can rally around the economic benefit of putting solar everywhere and using hydrogen as the battery. You know, we can, what a world, we live underwater, fly to the moon, have a new heart. But you know what's missing in the entire world? We don't have a standardized industrial battery. That doesn't exist. People want to go pump hydro, but then why you don't have pump hydro? So that's not an option. And everyone else is saying, okay, go lithium. But again, this is why Mitch and General Stan Osman are national treasures, because they're pointing out the physics. That if you use hydrogen as the battery, then we have everything we need. You have solar panels, wind turbines, a battery, so that whenever you need potent energy, you can get it. And that's the key. That really is the key. And it's wonderful in Hawaii that you are spearheading this against all of those interests, against all of the winds that would love to shut you down. But we have people of integrity. Mitch, Stan, Jay, you too.  Because from a toxicology standpoint, we are going down.  Low terrain, pull up. We're in a situation where we're going to crash.  And I don't know what it takes. Maybe their door has to get blown over by a hurricane before they kind of go, maybe we have a problem. No, no. We have a problem. So, Toby, thank you for giving us hope. And we have a solution. And we just have to implement it. And let's pull up the last slide in the slide deck. And if you want to know more about Toby's ideas, please dial into amazon.com and download his book. I tell you it is awesome, a great book. And he has his own unique way of drawing pictures, which are so simple, but so effective, as you saw in some of the slides we have here. So, Toby, thank you very much. A handshake across the water. Thank you, Toby. We're going to bring you back. We have to bring you back. We've got to bring you back. When you come back, you can tell us how you really feel. Yeah, exactly. We'd love to join you. Get emotional about it, instead of being so low-key, okay? So this brings us to the end of Hawaii, the state of clean energy. I hope you all enjoyed the show. And we'll be back in next week with a canned presentation. We're going to show you a video of us presenting some of these concepts to the County Council on the Big Island, and while I'm in Houston. So I'll be beaming in from Houston, and we'll show you some more of this. Solutions. That's what we deal in. Solutions. Aloha, aloha. Thank you. Aloha.


Today, we are going to discuss another very important thermodynamic quantity that is entropy. Remember that entropy is connected with spontaneity, all the processes occur in the direction which lead to overall increase in entropy. When I say overall increase in entropy that means I am talking about entropy change in the system, entropy change in the surroundings. This is about entropy change and then you remember in the third law of thermodynamics we also talked about the entropy of a substance. We talked about entropy at absolute 0 and then we also discussed the formal definition of third law of thermodynamics that entropy of each substance is positive which may become 0 at absolute 0 and it does become 0 at absolute 0 for perfectly crystalline substances. Today, we are going to talk about statistical entropy. We are going to derive some formulae connect statistical entropy or entropy with the weight of most probable configuration and then eventually we will establish a relationship between entropy and molecular partition function. Let us get started with that. Our first goal is going to be establishing a relationship between entropy and weight of a configuration. Now how do we go about this derivation? Remember that the definition of change in entropy d s. Remember from the discussion in chemical thermodynamics that d s there we defined as d q irreversible by t. Keep it in mind that d s is not just equal to d q by t. d s is equal to d q reversible by t that means you have to connect the path reversible. Now one usually talks about either constant pressure conditions or constant volume conditions. Let us say since we have been talking so far about constant volume conditions that means at constant volume I will say this is equal to d q volume is equal to d u by t at constant volume. That means in order to connect change in entropy with partition function because remember that we have already derived a relationship between internal energy and molecular partition function. So therefore if I connect the change in entropy with internal energy maybe I can find out some way of eventually connecting entropy with the partition function. So if I am talking about the internal energy that means I am also talking about the total energy because total energy and internal energy are connected with each other. Let us write such a relation. Internal energy is equal to u 0 plus total energy. We know about that that whenever you want to determine the internal energy you find out the total energy and add a constant to this. Can I write this as equal to u 0 plus summation i n i E i. Now I am talking about how many molecules are there in a state of energy E i. Now let there be some change.  What I have just done is I have considered the upper equation u is equal to u 0 plus summation n i d i.  Note down that this is constant u 0 is constant so d u 0 should vanish it should become 0. Now we need to figure out that which other term remains or do both the terms remain. First one is changes in energy d E i. Second is changes in the number of molecules in i th state. To understand this let us take a look at this figure. Let us first concentrate on this figure a. Consider this spread out of energy states or energy levels and the population. Let us supply some heat to the system. We are connecting d s with heat. You heat a system. Once you heat a system what is happening is the population is changing and second is you work on a system working in such a way that you are changing the length you are changing the dimensions of the box. If you do that if you change the dimension or the size of the container the length is affected. And remember that the energy levels are connected with the length and then the energy levels will be affected. But the case that we are discussing you are providing heat that does not alter the energy levels it may alter the population. So therefore what is going to happen now this one is going to vanish and there is no change in the energy states. So d E i that also should vanish d i is equal to 0. The term that will remain is this one summation e i d n i. So in the absence of all changes other than heating this is important to note down what we are talking about here is in the absence of all changes other than heating we just established that d u is equal to summation e i d n i. Important to note over here that we got an expression for d u and we just showed in the beginning that d u is connected to change in entropy that means what is d s d s is equal to simply d u by t. We will make use of this now let us do that. We want to derive an expression which connects entropy with the weight of the most probable configuration of the system that is s is equal to k log w this is our next goal establishing this relationship between entropy and log w. We will get into the derivation soon but if you just look at this expression what does it tell that when the temperature approaches 0 let us say that means all the molecules then you will find that are most are in the ground state. If all the molecules are to be found in the ground state there is only one way that configuration can be achieved that means in that case w is approaching 1 if w approaches 1 log w approaches 0 that means when s approaches 0 as t approaches 0 which is compatible with the third law of thermodynamics that the entropies of all perfect crystals approach the same value as t approaches 0. If you read this statement very carefully it says approach the same value as t approaches 0 and it does become 0 for perfectly crystalline substances. Let us start discussing the derivation. What we have we just wrote that d u is equal to summation i E i d n i and we also showed that d s is equal to d u by t we are putting the constant volume condition that means d s I can write this as 1 upon t summation i E i d n i I am making use of this definition d s is equal to d u by t. Now remember that beta is equal to 1 over k t this means 1 over t is equal to k times beta I can use that. So, what do I have now d s is equal to instead of 1 over t I will write k beta summation i E i d n i you will soon realize that why I am doing these kind of transformations. Let us rearrange this I will keep k outside and I will take beta inside beta E i d n i and just keep in mind that we have to keep most probable configuration in mind and you remember that when we derived Boltzmann distribution we went through certain procedure where we used Lagrange's method of undetermined multipliers to set 1 term equal to 0 and let me write that at that time remember that we derived this kind of expression delta log w delta n i plus alpha minus beta E i we had set this equal to 0 in order to find most probable configuration. And then after that we have worked for obtaining an expression for alpha and obtaining an expression for beta from this expression what I have beta E i is equal to del log w del n i plus alpha and now I can substitute beta E i over there. So, what do I have now d s is equal to k summation i del log w del n i plus alpha and I have d n i let us further expand this I have now d s is equal to k summation i del log w del n i d n i plus k summation i alpha d n i which I can further now simplify I have k del log w del n i with this summation d n i this is first term plus k times alpha summation i d n i now let us carefully examine what we have done we have now two expressions over here first one is k del log w del n i d n i second one is k alpha into summation d n i sum of all the changes has to be 0 because the total number of molecules is constant. So, therefore, this term summation i d n i that has to be 0 because total number of molecules is constant. So, therefore, if the population in the ground state is decreasing it must increase by equal amount in the upper excited states. So, therefore, we can set this equal to 0 after you set that equal to 0 I have the expression d s is equal to k summation i del log w del n i d n i because the other part is set equal to 0 summation i d n i is set equal to 0. Now, let us try to recognize this expression refer back to our previous discussion this was d log w k d log w remember when we discuss that log w as a function of n 0 n 1 n 2 n 3 etcetera then we wrote that expression that d log w is equal to del log w by del n i into d n i summation i. Let us remember this equation what we have done at is that we have come up with an expression d s is equal to k into d log w that is the expression that we have come up with. This upon integration strongly suggest that this expression will take a form s is equal to k log where w is the weight of most probable configuration. If we know the weight of most probable configuration and the value of Boltzmann constant it should be possible to find out the entropy of a system. We talked about that if w approaches a value of 1 log w approaches a value of 0 in that case s approaches a value of 0 and this is possible when temperature approaches a value of 0. When temperature approaches 0 I am again repeating what I just discussed in the previous slides when temperature approaches 0 the molecules are going to be in the ground state. And in how many ways you can arrange that what is the most probable configuration w is going to be only 1 because there is only one way you can have that configuration when all the molecules are in the ground state. So, therefore, when temperature approaches 0 w approaches 1 and if w approaches 1 log w approaches 0 and your entropy approaches 0 and this is true for perfectly crystalline substances. A small comparison with the results that we obtained from chemical thermodynamics can be made. In chemical thermodynamics you remember that this expression d s is equal to d q reversible by t at constant volume or at constant pressure. Let us say we keep constant volume then d s will become d u by t this one is possible at constant volume or I say d s is equal to c v t t by t. Now integrate t i to t f so s at t f is equal to s at t i plus integration t i to t f c v by t d t this is a constant volume. And if you keep constant pressure then instead of c v it will be c v you can compare here how we get the information about the entropy at different temperatures. In order to use the concepts of chemical thermodynamics classical thermodynamics the temperature dependence of the entropy is connected with the heat capacity depending upon whether your constraint is constant volume or your constraint is constant pressure. And whereas, when you talk about the concepts of statistical thermodynamics there you are talking about the weight of a configuration. As the temperature changes the instantaneous configurations will change if the instantaneous configurations change then we have to find out the weight of the most probable configuration. Let us take an example the example of perfectly ordered system H c l why I am saying perfectly ordered system is that in this you can notice that all the hydrazons for example hydrogen and chlorine hydrogen and chlorine hydrogen and chlorine the all the arrangement in a perfectly ordered manner. And let us apply this definition s is equal to k log w when temperature approach is 0 this arrangement which is shown here on the screen is going to give the minimum energy configuration only this arrangement. That means weight of the configuration is 1 that means only one way this is the only one way of arranging H c l in the crystal to obtain minimum energy confirmation. So, when you get w equal to 1 as t is equal to 0 then s is equal to k log 1 which is equal to 0. And the reason that why only this configuration leads to minimum energy confirmation is due to the large electronegativity difference between H and c l. What I mean is that if instead of H c l you make it c l H then the energy of the crystal will change. Similarly if you take another example let us say I take the example of carbon monoxide. And here the molecular dipole moment of c o is very small that means whether in the crystal you have c o or o c you see the orientation is changed. But this change in orientation does not lead to change in the energy of the crystal that is either of the two orientations possible with virtually the same energy. That means c o or o c the molecule can arrange in two possible configurations. There are two orientations which lead to the same energy. So, if there are n molecules then w is equal to 2 raise to the power n. For one molecule w is equal to 2 which leads to the same configuration. For n molecules w is equal to 2 raise to the power n substitute w equal to 2 raise to the power n and solve it you have n k log 2 or n r log 2 which leads to a value of 5.76 joules per Kelvin even at absolute 0. So, by using the definition of statistical thermodynamics you can calculate the entropy at absolute 0. I once again refer back to the definition of third law of thermodynamics it says that entropy of each substance is positive which may become 0 at absolute 0 and it does become 0 for perfectly crystalline substances. This particular example of c o is not of a perfectly crystalline substance because there is a configurational disorder even at absolute 0. And from the knowledge of the weight of a configuration here c o or o c two possible configurations. So, for n molecules the weight is 2 raise to the power n there is some value of entropy even at absolute 0 and this entropy has some meaning which we will discuss later on. For the time being let us remember that s equal to k log w can be used to calculate the entropy of a system provided we know the information on the weight of the configuration or weight of the most probable configuration. We have now connected s with w next we will connect entropy with the molecular partition function in the next lecture. Thank you very much.