Clearly, when you have someone who's a PhD in English who works in an engineering department who has done all kinds of things from games to international development as it intersects with information and communication technologies to about 10 other careers that Beth has had in her short time at the University of Washington and here at Berkman, no surprise that she would attract such an interesting group of folks. We first came to know Beth maybe 10 years ago or something like 10 years ago, Wyssus Geneva in my particular case and immediately identified a kindred spirit, someone that we were able to entice to come and spend a good deal of time at Berkman and so we're absolutely thrilled to have her back and it's just what we're going to see today. I don't actually know, I haven't been able to get through these 68 pages of book that she has. It's mostly pictures. What I would just say is that it's a remarkable testament to what happens when you have a vision, you identify something that's interesting, you're not quite sure where it fits with your scholarship perhaps or even that it fits in a university setting and you follow it anyway recognizing that there is something important in there and you may not be able to immediately translate how these worlds intersect and I think Beth, I don't know whether it's consciously or unconsciously but has clearly found that path and I'm just thrilled that she's going to share some of that journey with us today. I'm just guessing. So with that, please. Thank you Colin. That was a lovely intro. You could also call me a dilettante while those different things but yes, I think actually that's a really good characterization of what I'm going to do today, share with you a journey that I've been on. You could also call it the freedom of having been promoted and so the university can give me no more promotions ever so I'm kind of do what I want which is fun. So I am really excited to be here today. It's been I think three years since I've been to Berkman and in those years I've kind of had my head down and I've been contemplating a lot of things but one of the things for at least for the purposes of today's talk is that I've been thinking about hackers and makers and what they represent culturally and I've been doing it in a very meditative way rather than a formalistic research way. I came to this topic through my daily life not as a researcher but because I'm an academic it turned into research so that's why I'm here today and mostly I was curious. I was curious about activity that I saw when I spent time with hackers and makers in my local communities. It's been about six years of that and I was curious about the excitement of other people that I saw namely we're specifically rather people who have been wanting to harness the energy of the whole do-it-yourself movement and for educational reform and also thinking about general conversations about civic engagement and hackers and DIY and I'm looking at this room and all the places that people come from and I'm not really sure how to gauge the familiarity level and with the notion of hacker spaces and makers and DIY so if those things are familiar to you can you just indicate a little bit great okay so I'm not going to spend time on definitions and if you have questions at any point please feel free to interrupt if you want definitions or clarifications just let me know but basically I decided I was going to try to make sense of what I was seeing and what others were also clearly seeing and reacting to and so that's that's what this presentation is about part of that sense-making was setting out to write a book based on interviews with members of both communities hackers and makers in an attempt to better understand the nature of their activity and what might connect the groups so today I'm going to give you a talk in three parts I always like giving talks in three parts and in the first one I'm going to talk about hackers and makers and students especially undergrads as innovators and I'm going to pull both from interviews I've done for the book as well as a project I've been running at my university called academia in the second part of the talk I'm going to extract from patterns I've seen within these non-expert communities these communities that I am calling non-expert so let me give you a few words of what I mean by that basically people who are not formally trained okay who are not credentials and so keep in mind that I'm coming at this from someone who's been in academia quite a while and that's the that's the analytic lens in part and there's so for people who are not recognized as an expert there's an important distinction between self and society so you may see yourself as an expert but you may not be recognized as such by those around you and so an individual who may have skills that are internally recognized is not necessarily the person that someone with resources might go to to solve a problem okay so if I have resources and I want a problem solve where am I going to go am I going to go to these so-called non-experts so as I mentioned those first two parts are drawn from the book I'm also I'm going to give you a little piece of some of the international development stuff that that Colin mentioned in part because it was my travel in the developing world that first got me really interested in the kind of creativity that you see at the grassroots level in terms of problem-solving okay so the second part extracting those patterns from the across non-expert communities and then thinking about things that we can do as a society or as educators to scaffold and maximize those contributions and then the third I'm gonna talk a little bit about how and why I would want to make more of this stuff if you think of stuff as non-expert innovation and one of the reasons to identify the patterns within those communities to try to drive my academia project a little more effectively so there's also a surprise ending to the talk it's not really a part for it's more of an epilogue but there is suspense so an important caveat before I start talking about some of these innovations is I'm not driving this from innovation theory that's not where I started which is as an academic kind of a weird thing instead I'm taking a grounded theory approach to understanding the cultural production of hackers and makers so that's sort of where all this comes from so again those non-experts as innovators what exactly do I mean because again trying to make sense of those communities so lots of the excitement and noise about hacker spaces as a source of educational reform the idea of using making as a part as a way to address curriculum thinking about make magazine museum spaces I was at a meeting in New York two weeks ago I think the New York Hall of Science about learn make play and the White House Office of Science and Technology Policy is involved as well trying to figure out how to get reinvigorate education using DIY and maker approaches and more and more museums are having maker spaces and having hands-on activities but there's not a whole lot of concrete guidance on how to do that at least within post-secondary within institutional within university settings so when I get to the later part of my talk and I discuss academia I'm going to lay out those concrete steps that can be taken to bring a little bit of the hacker space into the academy okay so this is what I want to learn about I want to learn about imagination and when it comes into play and the kind of game-changing inventions that can come from those uncredentialed experts so I did these interviews with people that I saw as creative problem solvers who bring their imagination to bear on problems and who really lack credentials that we recognize in the academy and I wanted to know how are they going about solving problems and one of the other things that I do is I define them as rule breakers and I think that was in the blurb for the talk and so let me tell you why I call them rule breakers in part because of their lack of official expertise all right so they break the rules of the academy but they also do break the law I mean there's actual law breaking that happens in those communities particularly hacker communities you know but I rule breaking is not necessarily a bad thing so you can think about some of the traditions of things like phone freaking and the stealing that happened but what came out of that what were some of the valuable innovations that have come out of that so reevaluating that notion of rule breaking and also rule breaking in business and thinking about disruptive technology which I use as a framing mechanism despite I understand that there are flaws with that but still a useful frame so the other question is why do I position hackers and makers together so this is definitely I'll be interested to see whether this is an issue in the room here but it is an issue of contention with some people about how do you put them in the same pot like why would you do that and there's an overlap in sort of physical membership if you've looked at the people who participate in those communities in some cities but it's certainly not a complete overlap but basically I had a hypothesis that that drove me in trying to put them together I would say that happily my hypothesis has been borne out and that's some of what I'll share the last element of the rule breaking is thinking of it as a power play because of the cultural and economic power associated with being technical trying not to cough into the mic so in this distance it's because it's a matter of people claiming the ability to do things that formal expertise models exclude all right and they're doing this work in the service of technical innovation so my colleagues and I have been working with a six themed categorization of being technical that definition that draws from learning theory informal science education literature as well as cultural theories of agency and there are six elements that we I'll talk about these later in the talk in more detail but basically thinking about self-efficacy as well as material technical practice identity conception motivation and social capital and what's powerful here is that people who don't have the credentials to call themselves technical can choose to do so because of skills and that culturally that's a powerful move because of the way we value technical expertise as well as you know how that plays out in terms of jobs if i say this to a group of hackers by the way they just stare at me blankly but you know not from within academia and so part of my goal is to identify and hopefully replicate these alternate pathways of becoming technical and the way that i want to do that is this notion of functional engineers so counterposing the idea of functional versus a credit engineer so keep in mind that i teach in a college of engineering and so there are certain expectations of what engineers are and it is a little bit of a rule-breaking this idea of a functional engineer again that'll get picked up later but the distinction is a driving force for the overall discussion because this is my dirty little secret i don't actually care about formal STEM education so science technology engineering and math stem i don't okay i care a little bit but that's not what i'm trying to do with this project there's a lot of energy and funding and really great researchers that are figuring out how to get more students to major in STEM fields and how to keep them in STEM fields but that's not my goal with this work i want people to be STEM literate okay to be STEM facile they don't have to go to work as engineers or mathematical modelers and in fact if they don't go to work in those fields i think it might be better because they might be able to approach future problems in more creative ways because their solutions are not going to be defined by what engineers think is possible okay so despite appearances this is not a hatchet job on academia that's important i i value the academy but i want to make this distinction about really just looking at what happens when expertise isn't what leads to innovation all right so now i'm going to give you some examples so can you ask me that question again at the end of the talk because i'm when i talk about the academia project which is something i'm really trying to create as a sustainable model within higher education i'm hoping that it'll bring the two things together is your distinction that hackers work primarily on software and makers work primarily on physical objects um not necessarily no and i actually avoid any kind of outside definition of those communities i'm much more interested in letting them define themselves okay i just didn't know if that's the distinction that that's not the line you're going to okay i don't draw any firm lines which is why i'm more interested in figuring out ways to clump them together and i refer to habits of mind across the two communities um i was in in risdy in november and jun made a made a topic he was talking about steam rather than stamp where he says science technology engineering arts and mathematics and they are actually um they have some support from the legislative their legislative community to try and get the feds to start recognizing steam rather than stamp so that's interesting i heard that i've heard that acronym a couple times it also came up in the museum community that was at this meeting which would make sense so and i think that that's also a push to be more explicit in the interdisciplinarity that's increasingly important for problem-solving so mccarthur along with the institute for museum and library studies um in dc so they which is a federal agency has funded an initiative to do just that um and you can see it as sort of the next step from having put computers into libraries following on from that okay so there's way too many people in the room for me to actually do this so instead it's going to be a thought experiment so this is something that came up in the workshop that i attended uh or the meeting that i attended a couple weeks ago and it was a workshop led by a guy whose name i forget from my believe a museum in minnesota and he put a rope on the table a circle and he laid out cards that had numbers i think it was one through 17 and there were a group of i believe five of us and he said your task is to touch the numbers in order as quickly as you can and there are three rules um uh when you begin when you hit go on the timer you have to be three feet away everyone has to be three feet away from the circle um you everyone has to participate and there can only be one touch in the circle at a time and what unfolded over the next 15 or 15 or 20 minutes as we worked on this uh was incredibly instructive for thinking about the constraints we put on ourselves in terms of what are the rules so the amount of work it took that group to go through and there was another group doing it concurrently and they actually had never they never got to this point to think well can we what can we actually do can we can we move the the numbers can do they have to be in this order because they were not in uh numerical order can we change the shape of the circle what does it mean for everyone to participate does everyone have to touch the numbers or can just one person do it to reduce time and everyone else shouts go and just sort of deconstructing what those expectations of the rules were was really instructive and that's i think it was an incredible lesson in how significantly our tacit assumptions which we rarely articulate constrain and um those constraints define our behavior but they're not actually real they're just internalized and so we constrain ourselves and thinking about what's possible so this is a really good example there might be someone in the room who knows more about this story than i do because i have not yet talked to these people but uh this was last summer there was a independent inventor in detroit who came up with a new way to harden steel so he designed a flash heating process so instead of heating it at a certain temperature for a long period of time you heat it very quickly for a short period of time and so it saves energy and it makes it i believe seven percent stronger that was that was the claim and he eventually found his way to the university of Ohio there's a center for metallurgy and they're now working together to verify and and um do all those good things with nsf money but there's a great quote from the director of that center who says you know um steel is what we would consider a mature science that people never actually would have thought about trying to make it better we just figured as much had been done as could be done there's a similar approach uh in seattle wiki speed group of people trying to build a car together um this is an example uh logos electromechanical so these i'm giving you some starting with some make examples here uh i just really like saying the name of that company too so a lot logos electromechanical is a small company it's based in seattle and the the uh the owner of it he has a bachelor's degree in e so he's you know he's got some some official chops and he had a job before he moved to seattle building rockets in the desert he's working on rockets and he wanted some components for his work and for other projects but they were really expensive all that was available were these commercial components uh where he would have been paying for lots of gold plating or hardening things that he didn't need and there were no options for kind of lightweight things and at that point he didn't have the electronics knowledge or the competence to build those things himself so he tells the story of after he moved to seattle and he started hanging out at a at a maker slash hacker space and talking to other people that the social process there made it easy for him to gain the knowledge that he needed pretty quickly in fact so i think it was 2008 towards the end of 2008 when he moved to seattle and by 2010 he had his first product he says i experimented and i burned my fingers a lot i learned how to use eagle to to do the boards um learning from other people watching them and um getting advice from them so this is another um well this leads into the example this is a there's a party trick i've never done it maybe someone here has where you can get a wine cork out of a bottle without breaking the bottle has anyone ever done this you can go watch this video on youtube if you want without destroying the cork or the bottle so what you do is you put a plastic bag in the bottle you get it wrapped around the cork and you blow a little air into it and then you yank it and perhaps counter intuitively the cork comes out of the bottle so there was an auto mechanic uh named adon i believe in argentina sitting around a shop one afternoon watching videos with his friends and he saw this and i don't know why this is where his mind went but he thought this would be a great way to get a baby out when you have abstracted labor so the adon device currently in trial now works very similarly you have a thing you you put a suction cup on the baby's head when you have see those definitions they overlap and uh you slide a plastic bag over the baby's head and you blow air and then you can pull the baby out and it does less damage than using forceps it's incredibly inexpensive to produce and the fact is most women in the developing world give birth at home and if there are complications if you have abstracted labor the like there's a likely very high likelihood that either you or your baby is going to die so this is the kind of thing where it's if it works as promised it's inexpensive enough that you can put it into the safe birthing kits that they often give women to take home it's something that midwives could carry uh it potentially it has the potential to make a real difference in the world all from watching youtube videos so all that wasted time in the afternoon could be uh useful um so now i'll talk about some more conventional hacker stuff so the movie war games 1980s classic i'm assuming most of you have seen it um so there's a the scene where matthew broderick takes his takes the phone and puts it into that cradle runs a program and it starts dialing numbers and so it's randomly dialing was known as war dialing and came from the counts differ about who uh authored who first authored the the actual war dial war dialer that built upon something called a demon dialer device which would redial busy phone numbers until it got a ring but basically uh war dialing has been incorporated into business processes it became more driving with wi-fi networks so you can see well-established companies using it to detect rogue access points within their uh within their enterprising another version of it is with cell phones and there's uh so this sort of hackery tradition has been adapted for use in military situations with software that randomly call cell phones in a so it'll call every cell phone number in a given area at at randomized time so for example if you're making an explosive device that relies on cell phones and your cell phone will ring at unexpected times then that somewhat disincentivizes you from using that cell phone as part of your um explosive device there's a a guy who talks about this very eloquently peters lakko he's a he's from boston so there may be people in the room who know him he is currently a program officer at darpa and he's done this amazing thing where he he has revolutionized how he's giving out money recognizing that hackers independent hackers people who work together in hacker spaces have great ideas and he's created a funding mechanism where if even if you're an independent researcher you fill out a very limited amount of paperwork and from when you submit it to when you get your check assuming it's approved is five days you get an answer within five days which is sort of unheard of in a in a u.s government agency and what he's trying to do is similar to what i'm advocating here is leveraging the expertise of uh of hackers uh password crackers that um again uh accounts are going to vary certainly from the people that i've talked to accounts very as to who's first to the punch but uh first consensus definitely that first password cracking tools were authored by hackers um they're the kind of thing that then spun into uh part of a business process it's one of my interviewees said um you can't swing a cat online without finding a handful of companies that offer password cracking as a service um if you think about exploit mitigations generally um most of those things uh you go to a hacker con you look at the the talks um those are the initial ideas coming out that later get integrated into uh commercial software so now i'm going to give you an example from my students they're the third category of uh non-experts coming up with ideas that can be interesting so this is i've been working with this team for about two years a little over two years actually um to design a low-cost portable ultrasound system and the a colleague of mine in radiology came to me uh maybe actually probably close to three years ago now and he was starting a project he was working with an institute in kampala in Uganda to train midwives um to use portable ultrasound machines and they wanted to diagnose they're doing a clinical trial diagnose three conditions that contribute to the majority of a maternal mortality infection and um and death so he approached me and originally because he was like oh well i someone told me i was going to need some cross-cultural expertise and they said i should talk to you it's like well yeah you might and then what happened is they started training the midwives other issues emerged so here in the u.s if you are trained to be a sonographer you will go to school for two years that's the normal training they were running this program with a fantastic training with a fantastic organization based in kampala they were training the midwives for anywhere from two to six weeks and they were finding that it was challenging for them to learn the theory of sonography as well as using the machine effectively and so i'm gonna i'm gonna a little bit unfair but uh so this is a commercial portable ultrasound machine and you can see the complexity there so it's got lots of user interface elements um and lots of features to help you diagnose conditions and multiple types of domains and these midwives are only doing obstetric obviously you can see uh a row of soft buttons you can see sliders off to the side uh there's a keyboard as well as a trackball there's some extra buttons there's a scroll wheel and then over here um below i guess you're right you can see labels that were added by hospital staff so if you go into a sonography room often you'll see little labels remind so that the sonographers used to remind themselves about what they what buttons are for sometimes they'll put tape over buttons to remind themselves not to use those buttons because there's just way too much going on than they actually need so the question posed to us was can you come up with a simpler solution and that's what that's what the students came up with so that probe is made by a company called inner son it uses older technology it uses its mechanical sector ultrasound the image quality is much poorer than what you would get uh in a in a contemporary machine the question was is it good enough to diagnose those three conditions uh and then they just used off the shelf uh they used off the shelf uh netbook you eventually upgraded to um a laptop and then they worked on the ui so the the back end software had been developed by um the signal processing and all that stuff had been done by researchers at washington university not university washington um but we worked on the user interface and what the students did was they were like well what do we actually need to do and so they had the idea well let's go talk to the midwives and ask them what they need to do um and let's test some things out with them and let's look at the context of care that they're working in and then they got really crazy and they said let's go talk to the midwives or the mothers let's actually talk to the patients who will be on the other side of that device and see whether there are misconceptions whether there's fears of the technology like what can we learn from them to help us design a better machine so they did some of that work they had them do some design ethnography activities and then one of the things that they came up with was a help system which uh is different than what you will find in most i can't say all because i have not looked at every commercial ultrasound machine but most of the help systems within ultrasound machines are about using it okay and what we learned is that these midwives they're working in these clinics and they're often the only practitioner so if you go to a hospital here and you go to a radiology reading room the radiologist will be there and then maybe the referring physician will come in to look at the images and if it's a teaching hospital there will be some fellows and some residents but there's a lot of people in the context of care and so if there's something that you're not sure of it's very easy to turn and ask someone well what do you think about this what are you seeing here contrast that with the working conditions of the midwives they were sort of out there uh no access to internet spotty cell phone connection and often the only midwife on shift and so the idea behind the help system they built was well let's simplify things so reduce the sliders down to what's only necessary but then let's also create an in context help system that is also a learning system so defining things um creating uh step by step sort of guidelines um having it so that you can listen to things uh you can listen to the help text instead of reading it if you care to um there's playback so you can take videos and then there's also side-by-side image comparison so this is what you're trying to capture this is what your scan currently looks like you know work on getting them to match so what i would say is that whoops not understanding the boundaries of the problem space allowed the students to come up with a new solution okay never occurred to them that you couldn't build that learning system into the portable machine that the midwives would be using and so they did it which was pretty innovative so as i mentioned i spent a lot of time researching in different parts of the world this is somewhere in central asia and uh i came to see just an increasing pattern of people coming up with sometimes super really simple solutions like how do you use a technology you know group sharing a technology sometimes things they're slightly more complicated uh recreating a public phone system and i just have been fascinated by this for years so that's what i'm trying to look at those those uh resonances across the different communities so the second thing that i'm going to talk about is patterns that i've seen across these non-expert communities then what enables hackers and makers to do their innovative work and are there things that we can do to scaffold and maximize those contributions so i started by saying well let's look at habits of mind across these these four areas so hacker spaces and maker spaces and i'm not drawing firm distinctions between those two there are really interesting gender issues that come up when you try to try to go there going to hacker conferences going to a few maker fairs and i and also doing the interviews with individual hackers and makers and so three patterns emerged just a punchline right now the importance of actual space the idea of apprenticeship so some kind of scaffolded learning and then finally reputation building opportunities which take the form of contests across both communities so in terms of community spaces just really having that physical gathering space and so most of you raised your hand when you said you were familiar with the hacker space and maker space stuff so i'm not gonna i'm not gonna go ahead and spend any time defining that but basically some place um they're not all open some are closed communities but having that physical gathering space so you can have that opportunistic gathering and learning that physical physicality is important in terms of apprenticeship with an emphasis on education this takes the place of it can take the place rather of workshops sort of formal stuff it can also be like the story of the logos electromechanical where someone shows up into a community they don't really know what they need to know they start hanging out helping other people with their projects and through that process learning and then the final is ways contests or other ways to build reputation so if you go to say defcon capture the flag is a hugely important contest but there are many many many other contests at defcon including lockpicking it's a huge conference and the talks fill up you got to line up like 20 minutes ahead of time to get into a talk so what else are you going to do take part in one of these contests or we're drinking there's a lot of drinking it is vagus but it's really just there's just a ton going on and the educational components of it are so some of the interviews that i did some of the sort of hackers who've been around for a long time really pinpointed defcon is one of the transitional moments they were sort of the first con to really start doing workshops and having a focus on education and and that kind of thing so from the maker side you can go to the instructables website which is one of the places where people put up their projects and they are constantly have have contests there but what happens in both of these sites is if you participate in a contest and you do something awesome you get reputation that's identified by the community so in that in terms of defcon if you win capture the flag you get a black badge gives you free entry i think for life i'm not really sure but you have the your black badge to wear at the next defcon and people know you won that contest in instructables your your id on the site reflects the fact that you have earned badges either honorable mentions or won contests and so you get that reputation built across both of the community so you can have recognition so what also became apparent to me um is that both communities or research communities right but the work was under different kinds of constraints than what i see in academic or industry research environments and again framing this coming from an academic perspective the issue of constraints was really interesting to me so i thought about what are the multiple research communities that produce innovations there's universities there's industry labs there's independent researchers but i would say before you get too attached to this model as correct or incorrect you know it might be this one it could also be this one i don't really know and that someone else's research to figure out that's not what i'm trying to do here because i do know about this and i know that the world of nsf dominates that kind of work but i really want to focus on these independent researchers and learn about the kind of work that they're doing which seemed different to me so if we go back to that ultrasound example i gave you a few minutes ago i was really deep into that project before someone tossed the term disruptive technology at me and that's when i started thinking and going back over what i'd learned about hacker and maker communities and puzzled over what at that point i was calling habits of mind okay across these two communities how do i bring them together and so i did a little bit of reading and i looked at some of the sort of very kind of simple definitions of disruptive technologies in terms of having less functionality and being less expensive and appealing to new user communities and i thought about the constraints that academic researchers face and i'd spent a little bit of time at an industry research lab and thinking about some of some of what happened there and it became particularly acute to me and thinking about that less functionality within an academic research community so there is there are very substantive disincentives to doing things that are disruptive in academia from a research perspective so if you do something that is not new research or new knowledge you're not going to get a grant to it and no one is going to get a phd dissertation out of it i mean it's a structural disincentive from an industry perspective if you're trying to make something that's less expensive how do you justify your r&d dollars one of the lessons that we've learned from the ultrasound project and talking to many different ultrasound manufacturers is that cheaper technologies there's a disincentive to produce them because they don't necessarily fit into existing sales structures so sales is a component of what makes what what goes feeds into the cost of a certain technology and so there there's all these great ideas that just kind of languish and if i go to conferences and the ict and development space there's lots of really great ideas that never really go anywhere or don't necessarily scale up and then thinking about new user communities what do you do about and advertising works really differently and i'm thinking globally here i'm thinking about sort of traditional bottom of the pyramid marketing how do you come up with different manufacturing and distribution strategies that would be necessary to reach those communities in a cost-effective way and then all the difficulties with high volume and low margin being challenging so this is a framework that i'm starting with and i i actually really hope to get some feedback here because again it's me trying to make sense of those patterns coming out of the interviews as well as fieldwork and and educational experiments so one of my um one of my interviewees defined a hacker so that a hacker is a person who's immune to frustration but that's the definition it just doesn't bother some people to be frustrated they just keep looking at a problem and i really i like that definition thinking about how that can drive a new perspective so part of coming out of that what i just showed in thinking about ultrasound and some of the other stuff is this idea of a technology remix because you're not going to get necessarily sort of cutting-edge research in a traditional sense coming out of something that's not well funded right new nanomaterials are going to come out of academic or industry labs there's lots that can be done now where you have sort of cheaper research tools biohacking is a really good example but what about the innovations of using older technology in in new ways to solve problems in new ways and that's sort of where things are and i think about some of the projects that um some of the folks i've worked with as well as other communities with which i'm familiar and this is um this is setting a balloon up into near space and there's a panorama of cameras there that someone's working on so then they're sitting in that little phone box then they go up and then you know you end up with a picture like this um of the earth from near space there's nothing actually new there's not technology development happening there but there's some interesting remixing happening certainly on the photography side but you also set the stage for someone to learn the skills that they need to then go do something like logos electromechanical which is producing components that other people can then use to build things like a balanced spot or other kinds of things yes balloon photography for informal mapping of informal communities principally i believe in latin america i think i've heard of that and then i don't know if they're working in conjunction with some of the people in seattle but they're also coming up with a kind of a balloon wi-fi disaster kit where you can send it up and have coverage using some of that technology okay so the last part and this is where i may or may not answer your question we'll see about academia why it's not a hatchet job it might be i'm willing to entertain that thought um but i want to create more pathways to innovation by creating pathways for people to gain functional engineering skills right so what i've done is uh in in driving towards this notion of a functional engineer created what i'm calling a semi-formal learning environment so it's not formal it's not a traditional classroom setting it's also not informal it's not an after-school setting uh it's it's a room so basically i have a room we started out by squatting for a year and then we got kicked out and then someone gave us a room and so it's we i've got a desk i got some chairs i took the chairs out of my own office and put them in there which keeps my meetings really short because everyone has to stand which is really great uh and it's stocked with stuff that i've scavenged um so i had a little bit of money for a while left over from something bought some arduinos and things like that and now it's self-funded which is um makes scavenging very important and um so i tell the students just to find a project figure out something they want to do and then learn the skills keep track of how they learn they blog about it um i provide uh so i don't provide any instruction in terms of the skills what i do is i give them uh i help them scope their projects i help them manage leadership roles and i help point them to the resources that can guide them but i'm not doing formal instruction um and what i also do is i create those um apprenticeship models from within the group so i figure out who knows what and pair them up that way so you know for your first task to do this you want to work with this person right here i haven't done anything yet with the sort of reputation building in terms of contests but uh that'll be the next step so i know that we need to give people basic skills we need to give them some knowledge so they can have that different perspective and potentially be an innovator and so i see academia as about creating that potential um creating potentially awesome innovators where people have the ability to make awesome contributions um not i don't expect um some fantastic innovation to come out of a 10 week project maybe someday it will but that's not actually what i'm trying to do i'm trying to give people that kind of technical literacy and create pathways both for community engagement and lifelong learning so that was our very first group and that first group what they did is we bought a maker bot which was an early 3d well uh early 3d printer and it was a kit and i said put it together and then keep track of how you put it together because i didn't know how to do it and it was all on a wiki and so they they figured it out very slowly they came from different backgrounds um and they kept track of how they learned these are some of the research methods that we used in that because again so i've spent two years 10 weeks 10 weeks 10 weeks i think there have been seven groups now and um i kind of let them twist in the wind a little bit see where things go wrong but that's part of me figuring out how to do it better and they they know what they're signing up for this is from just a random quote from the blog that they kept that first group but so they said this is the true story of six strangers picked to inhabit a windowless room and have their life's tape to find out what happens when people stop being polite and start building a maker bot and so we had a some interesting project outcomes there i mean also some lovely anecdotes uh like when the when the when the kit first arrived and we were we were doing the unboxing and there was a young woman in that class and we're in the group and and i said well do you do you want to help and she had picked up the camera and she said no i don't want to touch it i'll break it i'll just take pictures and so she just she took pictures then about three weeks later some people can build these in seven hours we took our time we spit it out over weeks about three weeks later i guess we're working on something and uh there were four of the same piece that you had to put together and so she's working on like the second and i go to work on the third and she she literally slaps my hand away and she's like no no i got it so that was that was nice and um and there was another woman in the group who uh actually she'd signed up for the group not because she wanted to participate in that she actually wanted to work with me on my global health stuff but i didn't know that so she ended up in the makerbot group and uh so she was not technical at all but at the end she was very proud of the fact that she was going to build her own computer and had fixed her own vacuum cleaner and that correlates to some of those pilot project outcomes that we identified so reporting increased confidence when faced with technical problems again taking these non-technical learners and trying to give them basic technical skills but and so they you know the idea of the hands-on experience rather than formal instruction that was important but the third one is one of the things that i found most interesting is that they no longer perceive themselves this idea of being inherently technical or non-technical broke down for them so they would say when we sort of didn't exit interviews like well before i would think that someone who was in say EE or ME um uh tool engineer and mechanical engineering that they were somehow born that way that they were technical you know from the outset but it turns out no i mean i could do this too i just actually don't want to i want to do this other stuff but the the breakdown of that sense of inherent nature was really interesting to see they also started articulating their own identity and their access to social capital differently recognizing those as in particularly the social capital piece as an important element to gaining technical skills for me that's a really promising in terms of lifelong learning so connecting them up to resources in the community outside of the institution is a big component of what i do so i'm not again i'm trying to work with university students not k-12 and one of the things that that's really interesting to me at least at my unit i've taught at three different universities and and i've seen this at each of them but by the time someone is say 20 or 21 and they've chosen their major and they're on a non-technical pathway there are very few mechanisms at the university for them to gain some technical skills and so what i'm trying to do is create those opportunities in a way in that semi-formal educational way so someone who's not on an engineering track but they're they get to a point in their life like well maybe you know maybe it would be good to be able to solder i don't know why someone gave me something for christmas and i have to solder that this is a pathway it's an alternate pathway for people who don't who've somehow gotten themselves off that track because we have very few ways for them to get back on that track even for that functional literacy so this is the sign on my lab our tagline is creating functional engineers one blinky led at a time because there is something logical about making an led blink it's the first time if you've never ever thought of yourself as having any electronic skills um yeah i should have brought boards and we could have done a little blinky workshop yeah okay so this notion of what does it mean to be technical these let me go back to those six dimensions that i mentioned at the beginning so the self-efficacy this is some of the literature it's not comprehensive but this is some of the literature that we're drawing from again learning theory um informal science education and some social theory as well so building on social and material epistemological frameworks the material technical practice that's coming out of some of the work that the out of the national research council is one of my colleagues in education works on informal science learning and so he partnered with us in putting together helping to put together these these dimensions of being technical and pulls from his nrc book as well so basically you know learning to solder and gaining technical skills and then this notion of identity formation and understanding the back and forth between self and social and that that identity is also malleable that notion of conception so understanding the scope and the practices of technical knowledge so what what even constitutes technical knowledge and this is this has driven another one of the activities that i'm doing with people in the lab which is putting together short videos um introducing concepts and vocabulary and tools again trying to highlight the tacit knowledge so if you don't know i don't know if you don't know what soldering is how do you ever learn what soldering is or if you don't know what a ball peen hammer it's no one to point one out to you really how do we learn those things is right it turns out it's an incredible barrier basic vocabulary so we're trying to do just kind of short videos and then motivation uh that i i could have a future self that's different um and then the social capital which i mentioned so i'd sort of send them out and i make them talk to people outside the university so as i mentioned that the importance of vocabulary we get at that through videos and blogging the hands-on learning reflection as part of our process and then the community collaboration so i'm lucky in seattle there's lots of um hacker and maker spaces for them to go to so just to revisit um also i i'm constitutionally incapable of having a presentation without a lol cat in it but physical space apprenticeship and the opportunities to build reputation um as part of what drives this so again to reiterate i am not trying to turn everyone into a stem or major is not what i'm doing i want those thousand functional engineers to bloom i want people to have the self-efficacy to call themselves technical to create not just consume to be able to sit around a table with people of vastly different backgrounds including people who are much more technical than they are and still participate in a conversation and generate potentially disruptive or game changing technologies that's that's what i'm trying to do with this project and indeed no one knows tomorrow and i will say that so i worked on this book for a few months and i thought well this is really great and it's really wonderful to write about people making things and changing stuff but i'd actually really rather just change stuff so i know i don't have a finished book but i have a company and so that's my surprise ending and it's an engineering and manufacturing company and i'm working exclusively with hackers i'm not working well actually one of the co-founders does have a phd in bioe but i know her through the hacking community and so i would say you know putting money where my scholarship is literally and so we're doing engineering and innovative manufacturing and distribution we're doing low-cost devices starting in the global health space because Seattle's a great place to do that and a bunch of us have experienced in the global health space and doing both in-house r&d we have two prototypes now but also trying to find some of those great innovations that have come up that people have people have created and finding ways to manufacture them using emerging technologies and distribute them in innovative ways so uh yeah that's how my talk ends and who knows where it'll go from there so the acknowledgements are really important and i'm sure i left lots of people out but the you know and again i got to say this did not start as research this was just my life for the last six years but it became so interesting i had to talk about it in other ways so the people at defcon and shmucon and torcon especially have been really helpful the bill and the lina gates foundation supported the midwives ultrasound project that i talked about and then those are some of the people that have helped their colleagues at the u and then i'm going to give a shout out for a guy named neil o'farrell who i've never met but he owned the academia dot com domain and i'd come up with the name in uh i think my friend brie pet has helped me with the name we were brainstorming one night and i emailed so i emailed him out of the blue and i was like um i see you've been sitting on this for 10 years and there's nothing here i'm an academic i don't have a lot of money but maybe i could give you a hundred dollars and he said oh it sounds like what you're doing is great i'll just give it to you so thank you neil so i am uh happy to take questions um including whether you still think this is a hatchet job no i see your point so you have these ossified structures which academia is a part of and you're focusing on something that these ossified structures are very poor at doing but you're not saying that they they're not good at other things yes and so you know that's fun yeah that's but that's exactly right is they academia is really good at some things and i think that i love about being an academic but i just i see this whole other way of knowing and being in the world being ignored by those institutions and you know just because you didn't figure it out when you were 15 that you might want to do something technical doesn't seem like we can't still talk to you you have a back channel question oh okay okay uh it says i think it says so in her experience how would she scale hacking as a cultural practice how to create a culture of hacking that grows and flourishes in parentheses seattle already has a technical culture in its rain yeah that's a that is a good question so if you go to i think it's hacker spaces dot org there's a list of i mean probably close to a thousand now hacker spaces around the world and they do pop up in the strangest of places how you scale i don't have an answer for that one i'm still working on the academic academia thing um but i i think that's one of the ways that i can't believe i'm gonna say this but um some of the sort of distributed knowledge practices of the internet can help so dale dowerty of make magazine is working really hard to if one of the things he really wants to figure out is how you can connect these isolated communities using uh using the internet i mean using distributed resources but i think if you tap in so a lot of this isn't new right so there were always like there were train hobbyists there are always tinkerers popular mechanics so i think if there's a way to sort of tap into that community in these more isolated places that don't have the same kind of tradition that seattle does that that might be a way to grow local culture cool hi uh i was going to ask about motivation i was kind of surprised by the hacker who reported that hackers don't get really frustrated because one of the proverbial maxims is hackers scratch itches and itches are in a sense an irritation you think look at this this is kind of stupid or broken and i could do it better so in fact annoyance and frustration can be one of the key motivations and then translating that into the academic context what seems to motivate students for the most part is not to get a bad grade in fact to get a good grade which makes them very unwilling to experiment makes them very risk averse and so i wondered if you graded your students on their hacker projects and how so because i think that is really the big divide between a hacker space in a classroom the one you're doing for intrinsic motivation the other potentially you do want to put extrinsic motivation and we know that extrinsic tends to inhibit intrinsic so that's a great question then i'm going to do the second part first so that's why it's semi-formal and it's not formal i don't grade them it's pass fail and i i say very specifically all you need to do to get your credit is define something you want to learn learn it and tell me how you learn it like blog about how you learn it and as long as they do that like it doesn't matter if they fail they can fail and still get credit and i have had student projects fail absolutely so i showed a slide of one of those with the it was an ir project that we tried to do then it totally did not come to fruition uh so but i think so i i think that's one of why i like the term semi-formal because i don't think it would work in a formal classroom environment because you're absolutely right about them being risk averse in terms of the hackers that's also a good point i think well from that interview he wasn't talking about i would call that curiosity the sort of seeing something that like well that's really lousy i bet i can make that better that's a kind of it is a frustration on one level but i would also reframe it as curiosity the frustration he was trying to talk about comes like at the level of debugging like i can sit and stare at this problem for many many many many hours days weeks i'm going to figure it out and that's the kind of uh a frustration level he was saying the hackers could tolerate thanks thanks for the great talk it's really inspiring do you have some ideas about or are you interested at all in integration because you get to the point of literacy and literacy for people who come from a non-technical background but is there any space that you're seeing of integration or these two cultures meeting so i would hope so in my in the advertisement blurb that i send out now to students i talk about cp like i think i have a cp snow quote in there about the the two cultures and trying to specifically draw students from the humanities and put them in a room with students who might have more technical background and seeing what happens i sort of need more experiments about that i i also really wanted i want to do things both looking at well gender obviously right anytime you're talking about technical stuff i want to do more with um class race and intergenerational so i had written an nsf proposal that didn't get funded thank god i have to say thank god it's one of those things where it's not where i wanted to go it's not where i would have i would not have found that direction gratifying with the project it would have been scaling up too quickly but one of the things i really liked about it was this notion of outreach so seattle has um some very strong pockets of recent immigrants so working with community centers um i had a partner with a senior center working with them as well and trying to get that kind of cross-cultural um back and forth going i think that would be really interesting yeah but you're really interested to see yeah i am really interested i mean honestly this is a side project for me like all of my real research is in global health so yeah i don't know if you have seen the site there i fixed it dot com yes yeah it has kind of this and each one of us who has at some point uh owned a house found these skills so i should go there for some ideas yeah yeah i mean i can tell you how i spend my vacation so there i fixed it there i fixed it yes so in an earlier version of this talk i had a slide with there i fixed it dot com afregadget and i forget one other link of sites that yeah yeah i mean the the faucet breaking just before the party starts calls for remembering my father who said never throw away every little piece of metal or plastic that comes to you and if he was right is your picture on the website no no i haven't put it it is too embarrassing even for there but one thing i notice is that you're trying to bring some uh respect to this community in academia who have been you know looking for hackers in a kind of more distant way but it reminds me of the way that you know true scientists have been treating engineers for a long time because you know four scientists engineers were those who didn't exactly understand science but they were trying to slap it together and now these hackers are you know present themselves to engineers as those people who don't exactly know how to do it but they try it's an interesting kind of metaphor i think of how things develop that's a great insight because i think that that that technology remix which by the way like i hadn't i got interviewed last week about this project and and they asked a question about hackers and music and stuff and and that was where i thought well maybe this is remix but it's like even more applied you know it's like so the infinite regression of the dirtiness of applied thank you um one thing i noticed about the hope conference in 2010 is that it sort of became a very political event there were still the technical talks but if you sort of were reporting on the conference you the thing you would notice would be the controversy over wiki leaks and whether julie and assange would speak and all of the sort of the political speech from the tour people and everything so i wonder if you see that as a trend in the community or if that's just an anomalous event or if you saw how would that change things i wouldn't say that i see it as a trend across the whole hacker community i think hacker funds have distinct personalities um so and i've never been to hope um certainly there's that thread of political engagement and particularly when it comes to security and some of the international issues in terms of censorship um but i don't i'm sort of running through in my head of the different communities whose cons i participated in i don't i don't see it as a universal uh a theme that dominates yep cori doctor is both makers is an interesting scenario for the near-term future and obviously you know it but it would be interesting to look at that in relationship to what you're doing and how it might project forward there's also at the same time this great explosion in the craft community which is a little bit different from hack it's certainly different from hackers and and a little bit different from makers um part of that is because of etsy and other things but i don't think yarn bombing would have taken off without some of the hacker stuff happening without some of the political things behind hacking and making happening there's also this also seems to me to be a part of of the old stream of appropriate technology by minister fuller's design science and um the relocalization movement and it as someone who's been involved in in alternative agriculture local agriculture for 30 years it's taken 30 years for people to recognize that we've built an alternative economic structure that's a base and it's not only a base for farmers but it's a base for can be a base for a lot of these things certainly in terms of craft food and production like that but also in terms of crafts and making you know spaces that are open to all of these other more technical quote unquote ideas so let's pick up on a couple things there um so this notion of returning to say appropriate technology literature that there are older streams of conversation here um so one of the one of the claims that uh some of my subjects have made is this notion of well the idea of making you know across domains is really just a resurgence that actually the last 20 years has been a generational blip of consumption and that we're returning to older cultural practices um there's i think a lot of richness there that's not it's that's just outside of my scope okay i can't go that far but it's um it's certainly a theme that resonates um with me and in terms of the appropriate technology literature per se that's something that i'd make my students read all the time because there's some really terrific examples there i think actually the ictd community might benefit from some uh golden oldies there and then the you know the craft thing the craft make uh boy there's a lot of there's a lot to be said there in terms of gendered the way that uh technology is gendered and um patrotsky has these intro engineering books for students um i forget is it henry patrotsky uh any you know he talks about how sewing is engineering and cooking is cooking is engineering if you look at them as actual practices but because of the our expectations about technology they sort of fall off the table and so that's part of the kind of reincorporating of different communities into these uh into these practices and seeing oneself as technical what practices do you already engage in that could be seen that way um so when make magazine started publishing craft and as a companion piece i think there was some uh there was there were some voices of dissension there that separating them out reinforce some gender boundaries and my my understanding is they no longer publish uh craft but if you go like if you go to a maker fair they have the craft people you know cordoned off their own in their own pen so and there are great labs i mean nmit at berkeley of students working on really terrific low tech stuff so is there a hand over here yeah fantastic okay i really love all of these things um i'm trying to decide which of the many questions i have i want to ask um one of them connects the best and sort of they connect in the communities and i think in a certain way i think what's really interesting that you're seeing is that is the attitudes outside of the university and kind of the cultural way of working is actually what you're defining as being one of the most valuable things that the university could try to nap start to offer distances it and part is the technology but it's sort of like the attitude that comes with that way of working in these communities and then so your experience isn't actually trying to make connections across like so creating this environment within the university but these students and then their exposure and access into participation in the extra university so and i think that's where the definition of expertise can become such poison because students are taught to respect certain kinds of expertise and so there's a boundary then to availing themselves of the resources that are in their community and are available to them and yet there's always talk of like the importance of lifelong learning and so that's you're right i am i'm trying to just sort of recognize those pathways that already exist and say you know go over there go over there but i'm like maybe i'm so like here very concretely in boston there's a series of makerspaces of people that don't have academic backgrounds some people maybe undergrad in the community but they're not academics in any way and those communities don't interact very much with people that maybe have very similar sensibilities inside the university why do you think that is i think it's because in part the university even with people of similar sensibility inside the university creating an environment like the one you're describing of washington there's something that happens when it's in the university and there's students versus people that are outside of the university and that i'm just curious if you're expanding to that because i think it's a really interesting challenge because i think actually that making those connections socially is potentially one of the highest benefits of this type of activity can have so the first time i gave this talk at my university i was terrified a couple months ago because i felt like i was going to be perceived as doing a hatchet job um there yeah i mean i completely agree with you and it is always astonishing to me when i'm moving around in the communities outside of the academy and then i run into someone i might know it's most evident to me when researchers when graduate students who are doing research at the university end up giving talks in some of these community forums because i was there for years before anyone would would showed up to give the first say presentation on their computer science research outside of the university um the i'm trying i'm moderating my words carefully i am mindful of that camera so maybe we could just talk about this later yeah so again thank you for the talk and i'm totally on board with you know the general direction i just want to make two kind of notes they're like side notes is one what's interesting to me the difference between metallurgy let's say and computer science uh so metallurgy as you said there's kind of a very high barrier of entry besides besides being a mature science it's kind of difficult to get it going at home uh he can do a lot with the microwave though and i think that has just structurally resulted in in the kind of packing community being much less kind of stratified in terms of credentials and so on so you know when i worked for a software company like 50 percent of the people who worked with me 50 percent of the engineers had degrees in english history and so on so that's kind of a there's a natural affinity there for discreditation sure let's discredit them so so that's one and the second thing is i mean i've been also thinking a lot about this how to introduce this maker culture packing culture into academia and i love that you you kind of i think package it very nicely in a way that somebody who's not familiar with this space would kind of perhaps understand so this is great great that's what my hope you more about it great um but i think the kind of a slight problem there is that there's there's no usually in the in the classroom there's very little continuity of the community so you know you the class comes together as this group for a semester and then it disappears students come together for four years and then they disappear so these badges right this kind of social the any cultural capital that they gain uh dissipates with that with the transients of the community where is the these conventions they know they they keep them for a long time so i think it's worthwhile to think about how to counteract this structural problem how do we create a sense of a community that goes beyond the classroom beyond the four years so that's just my tool yeah so it's a great point i the the polyana in me will say if you create a project that's compelling enough then the students will continue on i mean i have to say with that ultrasound project the students continued long after they some of them had already graduated they didn't get credit they didn't get paid they just worked on for a couple years but because it was very compelling to them meant a lot but that notion of transiency particularly the sort of temporary identity of being a university student i think that's really key and you're right that's something that i haven't addressed i think that there's a potential given given the blogs given the online version of what they're doing to have some kind of persistent identity that will carry beyond you know the four years either you know the ten weeks of being in the group or the four years of being a student particularly once they get linked up to the larger community and it might be worthwhile for me to think about creating that persistent identity not just within the group at the u but creating those connections those online connections with the community as well so that their the identity that they build within their group is a de facto identity within that larger community thank you are we done there's one more channel okay one more um uh in a similar light to scott's question uh that was the last one what might be the cultural or societal barriers to overcome in order to inspire the hacker ethos you may have covered that i'm not sure the cultural or societal barriers to overcome to overcome in order to inspire the hacker ethos so okay i think part of it is the perception of hackers as you know somehow bad there's so much discourse there's lots of other people working on that as well um uh from the perspective of the participants i think that's where the notion of being able to claim a technical identity comes into play so and and and then just you know tearing down those those barriers between self and other and thinking about those communities is disconnected from oneself or disconnected from the university or disconnected from one's major or one's profession and starting to see those connections that would be that'd be how i start all right with that please join me in thanking best thank you very much


Welcome to the Gap, the podcast for enterprise leaders delivering timely insights for today's global economy and tomorrow's competitive advantage. I'm Chris Kane, president of the Center for Global Enterprise. And today we have a timely and critical discussion for business leaders about inflation and its effects on global business. Sam Palmosano will be our guest special host today and he's joined by Kevin Warsh and Michael Spence, both renowned economists and business experts. Countries around the world, you're experiencing the highest rates of inflation in decades. In fact, it has been more than 40 years since current inflation rates have been this high in the United States. Current CEOs and business leaders have little direct experience to draw upon about how to manage through this kind of general economic environment. With the exception of Warren Buffett, no current Fortune 1000 CEO has been serving long enough to have this kind of muscle memory. Sam, thank you for piloting today's discussion and I'll turn it over to you. Thank you. And Kevin and Mike, thank you for joining us today. We really appreciate your time. It's been a lot written, as we all know, given the inflationary environment and how we got there and maybe consensus is being formed. But if you don't mind, I'd like to start with where we are today versus how we got here and get your perspective on the issues that we face from a macroeconomic perspective, as well as your perspective or your view as to where you see us headed. So Kevin, let's start with you.  There are a couple of exceptions, Japan, parts of China, but inflation is eating the real economy, eroding business and household confidence. And the funny thing about inflation, Sam, is it camouflages the work that it does. Nominal growth for companies and revenue appear to be okay. And if you didn't know that this inflation monster was out there, things might have the appearance of being just fine. But the truth is that the variability and volatility of price levels is making it harder and harder for businesses and households to make decisions. In some sense, the oldest definition of inflation is my preferred one, which is, when every kitchen table and boardrooms talking about prices, it's too late. And so, unfortunately, fiscal and monetary policymakers around the world really missed the plot on this one for a very long time. And so the harm to the economy is something that we're seeing and feeling it is showing very little evidence of moderating anytime soon. Mike, I don't think there's any solution in the short run to the inflation problem. I mean, that's an open question how aggressive the central banks can be or will be. But I think it's with us and I think you can confidently expect a sort of continuing and reasonably lengthy global slowdown. So I would build that into my plans. There may be sectoral and company specific exceptions. There always are in various environments, but this one is pretty massive headwind. If I had to put a time horizon on that, Sam, I'd say the next 18 months for sure. Longer term, there are both at the company level and at the economy level potential solutions to this. We need productivity. We need unblocked supply chains. We need a whole bunch of things that change the equation, the underlying macroeconomic equation. I think one of the reasons that central banks lost the thread here, and Kevin may not agree with this, is we lived in a demand-constrained world. Basically, the supply side was so elastic every time demand went up, the supply side responded. We had virtually no inflation and sometimes inflation below targets. Quite suddenly, we shifted to a dramatically supply-constrained world. The labor market is not behaving the way it used to, etc. So I would just keep that in mind when one's framing one's strategies and policies. Kevin, do you see this going long-term as well? Do you see it as an 18-month kind of horizon that companies will be dealing with this inflationary environment? The national security gurus counterparts to Mike and me and the national security realm have an old saw, which is the price of stopping a dictator goes up over time. We see that evidence to the situation and the Russian invasion of Ukraine. Same is true of inflation. It is more expensive and more difficult to dislodge in the inflation risks now than three, six, nine, 12, and 18 months ago. That requires harder decisions and gives fewer degrees of freedom for policymakers. So I think even though we see some headline prices of things like energy falling, there's a temptation to think that the peak of inflation and the problems of inflation are in the near future. But if you look at the data, what you see is a broadening of products and services that are evidencing changes in price levels that would have been impossible to imagine several years ago. So this new level, the new sort of inflation problem, this new era of price instability, I think, is with us. And it will require much more global coordination by monetary policymakers, better coordination between fiscal and monetary policymakers in countries to solve this. But like Mike, I'm not optimistic that there are any short-term fixes. And I think the other piece that Mike brought up is what are the sources of this? And I share his view that central bankers assume supply would always be there to match demand. And I also share his view that the turmoil of the last year with flag and war and the rest made that harder to believe. But my own judgment is that the sources of this inflation have actually quite well been making. I'll just give two simple points on that. In Jackson Hole in August 2020, the Federal Reserve announced a regime change in policy. But there was a shiny little toy that they called Fair Average Inflation Targeting, which they rolled out. But the bigger story, which some commentators overlooked at the time, was what they basically said is monetary policy will be inert. Monetary policy will wait until we achieve full employment. We'll wait until we achieve our 2.0% inflation objective. And then and only then will we consider doing something about it. And in so doing, I think the Federal Reserve and many other central banks decided to cast aside the one principle that we had agreed on the last 40 years, which was monetary policy works with long and variable lags. So we should not be waiting. We should be acting a bit preemptively. They decided as a matter of new doctrine to wait. And that was the catalyst. That was the proximate cause of the surge of inflation. But again, it's like the assassination of the Archduke causing the war. That was the catalyst. But I think the broader reasons for the global inflation problem are around the notion that Mike talked about. It was an intellectual error by many economists and many central bankers. That is, they assumed that the supply side would always be able to react to the demand side. They misunderstood that the period of about 30 years of a great moderation and inflation was going to be there forever. And in so doing, I think what they didn't appreciate was that there were long structural forces that were keeping prices down, in and around globalization, in and around an emerging middle class. But those were not preordained. Those were not going to happen forever. And so as a confusion about what inflation was, how it came about, it was intellectual in origin. And there was a series of other things done like in Jacksonville in August of 2020, like problems of their own decision making at these organizations that made it true. How could it possibly be? That only in March six months ago, interest rates in the United States were still at zero and the Federal Reserve were still buying treasuries and mortgage backed securities. How could it possibly be that only about a year ago, the 19 members of the FOMC think that there would be one rate increase in 2022. And that 18 months ago, they thought there'd be no increases in the federal funds rate until 2024. That is a dangerous aggregation of views. And for institutions that we care about as much as Mike and I care about the Fed, we need to ask ourselves how the decision making process, how the openness to risks and different ideas can be brought to the table. I mean, what about fiscal policy? I know the Fed has had a challenge here. I would agree with the statements that you're making about their management system missed the mark. But having said that fiscal policy clearly has caused a lot of demand increases, as well as policies of zero COVID in China has hit the supply side. Do you have a perspective as far as the role of the governments and the environment we find ourselves today? You know, we, I think, needed fiscal responses to buffer the shock of the pandemic, but to kind of summarize over a fair amount of territory, roughly speaking, my take on the macroeconomic situation is that after the great financial crisis, we underutilized fiscal and got the balance between fiscal and monetary support to try to make the economy recover wrong in the direction of excessive reliance on monetary policy and then excessively prolonged assault on asset prices via quantitative easing in its various categories. And this time we just sort of did something different, but the fiscal side kicked in, both with respect to buffering the shock of the pandemic and now with some important investment programs. But as Kevin just said, the monetary side didn't do the rebalancing in the other direction. And so we had sort of two relatively powerful stimulus engines running at the same time. And that's not the right balance. There had been historically a very real division since 1951 and something called the Treasury Fed Accord between Fed policy and fiscal policy. During the OA crisis in which I sullied my hands, those distinctions were less obvious as the fiscal and monetary authorities were working together. We'd say, well, that's because it's a crisis and we have to. But we go back to 2021 as an example where the economy in the U.S. was frankly booming. Real economic growth was 5.7%, unemployment rate came down among the fastest rates in modern times. What did we find amid that economic boom? Not only that interest rates were kept at zero, but the Federal Reserve bought 54% of all the debt issued by Janet Yellen and the Treasury Department. If anything, that's a conflation of fiscal and monetary policy, not just in moderate economic times, but in boom times. Look how far we've wandered from the crisis of 08 or the crisis of 2020. So like your question suggested, Sam, I put blame on fiscal and monetary policy much as Mike did. But there's an old quote from Justice Scalia, which comes to mind when he was asked about the Supreme Court in its role. He used to say, we're not last to decide a case because we're right. We're right because we're last. That is the Supreme Court eventually gets to look around and decide what to do. Again, I'd apply that to the Federal Reserve. I blame fiscal authorities for excessive spending that overly goose demand was not fiscally responsible. The Federal Reserve gets to sit there last and observe what's happening. And here in this case, not only did they encourage, stream, call for the fiscal authorities to write these checks, they monetized it. They bought that so that the markets would never see that paper. That's the QE they did in 2021. So while I think fiscal policy deserves an inordinate amount of blame for irresponsible spending, well beyond what we needed to cushion the blow from hardworking Americans that were in tough times. To me, in some sense, I'll go back to Milton Friedman. Inflation is always and everywhere a monetary phenomenon. And I would put an asterisk in applying that to this moment, especially when the monetary policy is cleaning up the fiscal mess. I want to go to the corporate world and what you'd advise CEOs to deal with. But clearly, I think both of you are suggesting that the system that we have today is not coordinated. I could use a harsher term like it's broken, but I know that that's inappropriate. But nonetheless, it's not coordinated for whatever sense of reasons. And that's within the United States. And then you talk about coordinating the world to get through this thing. It becomes even more, I think, complex to try to solve that problem, which leaves me to. Now, if you're advising and you guys do this all the time, so I know I'm not taking you out of your conference zones here. But if you're advising the CEOs, what's happening in this business cycle if you're running the company or anywhere in the world is you're setting the budgets for the next couple of years, both from the expense side of the house and capital allocation perspective. That's what's going on right now. So they're making decisions and they have some planning assumptions. So what would you advise our colleagues to do? The first thing I would do is go look at your accounting systems and make sure you actually can deal with inflation. I've just run into repeated accounts by CEOs and founders saying there isn't anybody in the company that's ever experienced inflation. And when I looked at the accounting systems, they all presume there's relatively little inflation. Now, this varies from business to business. So that's item one. Second, I would anticipate a major, major slowdown in the global economy. I mean, go scrutinize the cost structure, set priorities with respect to absolutely critical investments that you need to make, but otherwise tighten the belt. I guess it's the sort of simple way to put it. And the third thing is I would look all over the place for productivity increases. We're going to have wage and price inflation at the current prices. We can't hire enough teachers, nurses, airline personnel in various categories. I mean, this isn't just going to go away. Those folks have disappeared. They're retired. They don't like it. It's dangerous and unpleasant work, et cetera. And so I think the long run solution to this and I think corporations that line up with this will succeed better than their peers. Because people really go after productivity as you well know, Sam, because you talked about it all the time. You just got powerful tools, including the digital ones to get that done. So those are my three. Expect a slowdown. Go look at your accounting and make sure you're not going to get fooled by your own information systems. Tighten the belt and go after productivity. It varies from company to company. Some of it will be in supply chains. Some of it will be at the airport, et cetera. But still, I think that's where I'd go. Well, my good sage advice, I'm going to add one little comment. The reason why there's no muscle memory on this thing is because CEOs and corporations, their stock price evaluated was appreciating based on revenue growth. So the dynamic of capital allocation or investment alternatives all drove the top line. Right. And that's what happened. And then you would say to people, you need to be focused on productivity as well. And their point of view was they didn't care. Money was cheap. They leveraged up their balance sheets. They drove revenue growth and got rewarded for that by the investment community. So that's over, in my opinion. So I'm going to pass to the Kevin. Now that that's ended and all these young people, not like the old guys like myself who had to deal with this, but these young guys have never dealt with this. What are you going to tell them to do? Because they have a culture that they've created that the most important thing is spend for growth. So how would you advise them? They got to somehow change their culture and their management system like Mike's saying, to now adjust to the new realities that they're facing. So some posts, most policymakers in Washington, central bankers there and around the world, they seem to have as their baseline forecast softly. The unemployment rate moves up to the low fours in the U.S. Economic growth comes down a little bit, but stays positive. Interest rates only have to go up another hundred basis points from here. We have a soft landing, in which case they're right. Most of our friends in the business world don't have to make major adjustments. I would not bet on that forecast. I would take the alternative and I'll build on a few of the things that Mike said. One is we've never seen this kind of radical fiscal and monetary policy create an inflation that looks like this. So Mike and I have to be humble about what our economic forecast looks in the next few years. But my own judgment is when we get to the bottom, when this economy on a global basis falls into a recession in which there's every bit of evidence to suggest that parts of the world are already there and the rest are playing catch up. I tend to be of the view that this period of weakness won't be as short lived as most recessions have been the last 30 or 40 years in part because fiscal and monetary policies exhaust. Fiscal and monetary policy won't be able to cushion that blow, won't be able to change the amplitude very quickly. So like Mike, I think there's a global recession on the come and I tend to think that it'll be longer lasting even if I'm not sure how dark and negative it turned out to be. So what to do? I would say in the near term, I would act with the urgency that Mike suggested. We don't have perfect clarity on what quarter global GDP turns down the rest, but it's coming. And I'd say my first bit of advice is act soon. The place where I'm surprised financial markets haven't yet adjusted is their view on 2023 corporate profits. History is not a perfect teacher, but for US multinationals when the dollar strengthens as much as it has when energy prices have moved as much as they have when unit labor costs and employment compensation have moved as dramatically as they have since the 1970s. And interest rates, albeit from a low level have moved up with this speed. Those all tend to be very bad for corporate profits. Yet the expectations for most US multinationals in 2023 show corporate profits will be a 5% or 10% from here. Well, it certainly could be true for those that can drive productivity as Mike suggested, but in aggregate that's a very benign profit picture, given our sense, my sense of the state of the world. So I think that's why I would act early and aggressively. And the final bit of advice is the overwhelming free money that's come since the OA crisis to the most worlds companies, they tended to have a leveling effect. Sure, the companies that are best in the sector have been able to drive more productivity, but we've really been in a period with virtually no insolvencies. So most companies have had access to capital and been able to hang around. That is not the world that I would expect in front of us. That is, those that are able to drive productivity to distinguish themselves, their cost of capital will be relatively considerably better than the rest of their peers. And they'll have an opportunity in this period of economic weakness to really redefine their category and their company and their objectives. So I don't mean to sound like this is just some counsel despair from Mike and me. There's probably more hope, more upside, more opportunity among these dangers than there's been in a decade or two. And the best companies are going to seize this period of distress and distinguish themselves by reallocating capital as you and Mike have said, and driving the efficient frontier of that productivity, which I don't think will creep down to the median company in their sector as quickly in this cycle as it has in the past. I would agree with you. I mean, if I was still working for a living, I would be doing exactly what you say. And I'd build on what Mike was saying, which is fundamentally, there are more tools that you have available today than we've ever had before. Now, the issue with tools that drive in productivity, you know what's going to happen is that means you're going to reduce your workforce. And you're going to adjust your compensation systems. You can't separate the two. I think fundamentally, a lot of these issues that corporations have faced with these demands that have been placed on them by their workforces, whether we agree or disagree, and many people supported those because that's what their employees wanted. I think that's going to get back to reality. Because when you have your face with the alternative of kind of having a job and not having a job, maybe some of the issues you have that you've voiced an opinion on might become a little more muted. Not that that's good. I'm not espousing that, but that's about the reality we're going to face. Because companies at the end of the day, I'm with you, are going to act in their own best interests and their own survival. And I'll reflect a little bit that worries me is the balance sheets. I mean, the money was free. A lot of these people stretch their balance sheets to invest in top-line growth, whether it yielded or not, who knows, maybe inflation may have some of that would have you, right? And maybe there was some pricing power because of the supply issues and those sorts of things that they were dealing with. But as that ends, that balance sheet in their accounting system, as Mike referenced, has become every bit as important as we used to say, cash is king. Well, let me thank you guys. We've had two incredibly intellectual colleagues with us today. They are the best in their fields. They were nice enough to spend their time with us and to help you all learn as much as I did. We have been listening to the get, sponsored by the Center for Global Enterprise, celebrating 10 years of convening global enterprise leaders around the most important business transformation issues.


So some of you may have seen just the other day I did a video on you know MSPs and ransomware Kyle from Hunter slabs Did a video on this this is IBC a really hot topic here in September of 2019 and in that video I suggested ways to help mitigate the risk and security is all about mitigating the risk So I have an expert with me because one of those questions come up. Well, how do you mitigate the risk Tom? Well, it's called a vulnerability assessment Yes, and or risk assessment and risk assessment. Yeah, how are you want to phrase it exactly? He can help you with those those most things of yeah, I know a lot of stuff I know how to set up a lot of things that doesn't mean I should be so overly confident to make the assumption that everything I set up doesn't need a second set of eyes that everything in my office everything in my stack Shouldn't be audited because the bad guys will audit you for sure You do not want their findings because that's how all these attacks happen. That is how all of these attacks happen So what so what happens is for a vulnerability assessment? It's very much so different than a penetration test I would say that vulnerability assessments are kind of a precursor to Penetration test so what you would do with the vulnerability assessment is external and internal and you would see okay What is my external posture? How many ports do I have open to the world? What are my external services? Are they patched? What do they look like?  You know compromised my host already and was using it to do other bad things What other vulnerabilities could they leverage on my system to be able to escalate privileges or you know do further damage and This is really important to constantly be assessing this to constantly looking at your network stack and actually make it happen This is imperative right now if you care about security and you don't want to lose everything that you've had built You know you hear these horror stories, and I feel terrible for these MSPs that got hacked I know they didn't want to you know, there's always that tongue-in-cheek ha ha Oh, yeah, they didn't have to FH or not But the reality is some of them genuinely tried and had a really minor slip up They had one little thing and that's the challenge with security You have to be right all the time the bad guys are just waiting for you to be wrong one time red teamers only have to Be right once that's why I love red team. Yeah red teamers pretty much always win It's really hard to beat the red team and it's even harder to beat the bad guys sometimes because they're just poking away at it And if you're the low-hanging fruit, you're the one that's going to get picked So I'm just sending this as a warning if you're wondering about resources to do it I'll leave a link how to get in contact with Xavier how you can start the process to get assessed. It's not Free but it's also not you know unreasonably priced. It's affordable We're in a company called enterprise offensive security and we are dedicated to helping you find all of your exposures Yeah, and we're very open about the process We're going to use and everything else and I have more information on his website on there plus you can follow him on his channel You know we talk about I have a lot of information on my channel here leave a link also Xavier has a YouTube channel He started where he's starting to show some of the way he does some of the testing We'll also link to a video me and Xavier do before about how we do like this application testing We're very public about all this is being done. The but the most important thing is you know At least do your own assessment internally if you think it's something you were ready to have someone extra to look at Or you have a larger MSP base don't let one little oversight one little mistake destroy everything you built This is not trying to play on fears of playing on the reality of every day You see another MSP hacked and it's almost always just some minor oversight have a second set of eyes I know I do and I would say this right if you are mature enough in your vulnerability assessment program And you feel like you have a coverage right and you have a team that's dedicated to that get an external pin test Because now you've actually qualified and check the box of hey Have you done anything to take a posture in your maturity on security? And so then we would come into a penetration test and kick you even harder and see exactly Hey, can we come up with novel ways to break your software? Is this your product?  Is this your process? Let me come up with ways to abuse your process So that's when the the more advanced things come into place But I would say vulnerability assessments in the place to start. Yeah, it's about getting started on it It's about not becoming under statistic and that's really why I wanted to make this video I want to make sure people have a resource have you know that there are things out there I've also mentioned there's you know following the NIST programs running out. There's plenty of free stuff There's plenty of stuff you can find online But make sure you start doing it and when you're ready, you know contact us I'll leave links below and where you can get a hold of Xavier and offensive security and of course watch our YouTube channels We try to put out a ton of information out here both of us do on cyber security and everything to help keep you safe and See you guys later. Thanks. Peace And thank you for making it to the end of the video If you liked this video, please give it a thumbs up if you'd like to see more content from the channel Hit the subscribe button and hit the bell icon if you like YouTube to notify you when new videos come out If you'd like to hire us head over to Lawrence systems comm fill out our contact page And let us know what we can help you with and what projects you'd like us to work together on If you want to carry on the discussion head over to forums.laurancesystems.com where we can carry on the discussion about this video other Videos or other tech topics in general even suggestions for new videos They're accepted right there on our forums, which are free Also, if you like to help the channel in other ways head over to our affiliate page We have a lot of great tech offers for you and once again, thanks for watching and see you next time