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Thanks a lot Martin for this tour the horizon of this tour the force We decided that we would try to Start the Q&A session With two brief introductions or comments one from Annika Sundein whose chief economist of Cedar and the second From Tony Addison whose chief economist and deputy director of wider. So Annika over to you Thank you very much Finn and thank you very much for the invitation to come here today And thank you very much for an interesting and very rich Lecture Martin. I think it's clear from what we heard this afternoon that social protection is absolutely crucial for combating poverty and for for re-distribution And in particular in the in the changing of poverty poverty today is much more about inequality The distribution of resources rather than the absolute lack of resources We also see a core of chronically poor people also for whom very little has happened Also in countries with rapid economic growth So it's central in our efforts of leaving no one behind and as as as recognized by the SDGs But I think it's also important to underscore How these programs if they are well-designed are part of the social contract in a society and in that way our integral to nation-building democracy and social cohesion If we look at developing countries today, they're expanding their social protections programs rapidly Sub-Saharan Africa is just one example and and many donors like Cedar are involved in These efforts and Sweden supports programs in several countries in Sub-Saharan Africa If if this is going to be successful if these programs are going to be successful long-term However country ownership is absolutely crucial It's the country itself that has to design and implement their programs and there I think Professor Revalio makes a very important point and that's the one about administrative capacity We see that many of these programs are complicated And we have to think about that when when when they are implemented What type of programs can and should be implemented and I think we as donors have reason to to reflect here If we then look at what kind of programs are are implemented In particular in Sub-Saharan Africa It is the conditional cash transfers that we've just heard about And they they are model on the programs that were introduced widely in Latin America in the 1990s in the 2000s These programs and as research have shown have been have been successful in reducing poverty at least in the short run But going back to the to the issue of country ownership I think it's very important to be careful when you take a model that's been successful in a certain context and then transplanted in another context You really have to think about the country where you are when you implement a social protection program When you design these programs and think about the various components I also think it's important to recognize that these are not just singular programs They really are systems and that goes to the fact that they have to meet several objectives It's about poverty alleviation about protection It's about protecting against risks that we all face during life unemployment sickness disability work injury old age And they have had they have to help build capacity for increased product productivity health and education So the programs that we see expanding widely now the cash transfer programs. I would argue is just one piece of the puzzle They build on the idea that they are they are targeted and they should be temporary All be it for a fairly long period of time And it's only the poorest that should receive the benefits and that's as professor valin clearly pointed out There are a lot of problems with targeting. It's difficult. It's expensive. It's complicated. It often misses the mark I would I would add another another argument to why why we shouldn't focus so much on target And it's it's what what are the what are the people who what are the characteristics of the people that that these programs are aimed for There are some groups that will never be able to support themselves through work Children the elderly the disabled these are also the people who are at risk for poverty And are the target of the cash transfer programs. So instead of thinking about Designing the programs more more or or targeting them on income. I Would say that given that these are the groups that are at risk for poverty There's an argument for permanent social protection programs such as social pensions and child allowances We heard that today's rich countries Appear to have done much better than today's poor countries To reach the poor when today's rich countries were poor my hypothesis is that this is because universal programs were were part of Policies when we went from being poor to rich Sweden is a clear example of that In the beginning of the 20th century Sweden was one of the poorest countries in Europe The first social protection program that was introduced here was a social pension in 1913 Then that was then followed by child allowances 30 years later and then successfully the programs were expanded Programs that are targeted at the poor are all also easy to cut Universal institutions that Encompass a majority of population tend to reduce levels of poverty inequality much better Because they don't have the exclusion problem problems and they have support by the middle class But of course if we look and in particularly if we look if in sub-saharan Africa today We know that tax bases are small and fiscal constraints Prohibit countries from introducing universal schemes for example looking at the young population in Africa today It would be difficult to introduce universal child allowances social pensions could be could be easier So targeting may be a way to start But if you are going to target on income or wealth you have to make the construction simple and transparent Not just because of administrative capability, but also because of it's much easier to understand Simple targeting is a way for beneficiaries to understand why they receive the benefits and how much they receive And it also makes makes pays the way for having a transparent and functioning grievance Procedure so you can complain why didn't I get the benefits when I'm eligible? The second point that I want to talk about it is of course the conditions in the in the conditional cash transfer programs That they impose on households if you were if you are to receive the transfer you need to send your kids to school You need to go to health checkups And and as we heard in Latin America this is this has had success in in health and education outcomes at least in the short run But here I would argue that Policymakers try to solve problems that may originate somewhere else by imposing conditions on the poor If you ask people living in poverty what they want, but what do you want for your children? The answer you will get is education. They want education for the children to be able to make a better lives for themselves But in the countries and the countries where Cedar work The obstacles are many. There are high fees to go to school. The schools are poor quality There are few schools and they are far away So the question if if the supply side problems will be fixed by imposing conditions on the poor One argument is that if you do this the poor could could could have a voice need will put pressures on governments to expand health and Education But I think this is actually questionable given that people living in poverty almost always lack power and voice So I think instead social services need to be part of the social protection system And ensure equal access and that's much more efficient than imposing these conditions My final point is about the the long-term perspective and that social protection really is long-term and that it takes time to build I said that you know Sweden started with social pensions in the beginning of the 20th century It took 60 years until our social protection program was fully expanded to what it is today. I Also think it's crucial to think about the design of the programs and financing together They go hand-in-hand Tax revenues are necessary for these systems to be sustainable long-term and as countries expand social protection programs They also need to expand their domestic resource mobilization. They need to think about how they're going to finance these programs the link between social protection the link between the design of the program and the financing is also crucial because if you Do that, right? You can build a willingness to pay taxes and get get get get something that's also sustainable And of course the link between the labor market and these programs are are crucial to create incentives to work. Thank you Well, this was a tremendous Tour de force by Martin the the first example that Martin gave us the first Empirical example from England had personally tremendous Resonance for me because I come from the coal mining area of the north of England and My ancestors the family history the family legends are all about actually moving in and out of poverty depending on the the cycle in terms of coal production and Avoiding the workhouse in Victorian England and certainly there's a family legend of a of a young woman Having to go into the workhouse In the early part of the 19th century And actually being separated from the rest of her family because this is what the workhouses did to Determine you and make sure that you didn't go into the workhouse unless you were in a very desperate Condition there's also actually a family legend about another member of the family who tried to solve his poverty problem by stealing a sheep and Stealing a sheep in early 19th century England was a hanging offense and he was convicted and he was hung if he'd stolen a pocket handkerchief or something smaller he'd have been transported off to Australia Martin's homeland so in some ways this This sort of set of examples, you know illustrates the the kind of political dynamics around poverty the seeking of control Over poor people But also as Martin said in the case of India the expression of people poor people's rights They're their right to demand a better future for themselves and for their children But as Martin showed it's a very complex set of Factors that you have to get together To produce an effective social protection program in some ways we live at the most Exciting time ever in terms of poverty policy as Martin said we've never seen so many people Move out of poverty. We still have deep poverty across the world But we have lots of exciting new Technologies some of them coming from new technology itself to replace the old mechanisms and old ways of doing things so for example the right to sorry the The make work programs the public works programs that India has had for many years Martin mentioned now the move over to biometric identifiers precursor now to Moving to more effective and cost-effective forms of financial transfer One issue of course with with public works programs is the quality of the infrastructure that's constructed Which is sometimes not a very good quality a very good comparison might be for example With Ethiopia which Martin didn't have time to mention where there's a very large public works program Reaching now, I think nearly 10 million people which has done a reasonable job in terms of creating infrastructure Potentially better than that of India, but you know, we've now got better ways and means to think about these issues But it's still a difficult mix because there are of course all kinds of macroeconomic Dimensions the very macroeconomic shock that might make social protection Essential to keep people out of poverty could be the same macroeconomic shop that reduces fiscal space that reduces public revenues available for that social protection Clearly as we move towards Basic pensions more universal systems of social protection It has to be within a macroeconomic framework that preserves those over time and sustains them So these are really very very big issues now Martin is very well known as an Innovative quantitative economist particularly in the use of household data and other data And something that's very much come out for me in this lecture But also in Martin's book is the importance of data and it might be nice during the Discussion to have a little bit more sense about what kinds of data we do need in the world Over 30 years We've seen much more data created particularly household level data Better measures of poverty, but I think none of us feel as researchers that we really have the data that we Sufficiently need sometimes to inform policy. I Have one and here this is the point at which I end I have one question for Martin and the question is many young researchers are thinking about careers in economics and if they want to go into Economics obviously one of the great areas they could go into is development economics and they could go into The economics of poverty. So my question to Martin is if you Were recommending to a young researcher now, what should they go out? What should they commit in their future to doing perhaps in the form of a PhD or some other piece of work? What would your recommendation be to that young person that young man or woman going out from Stockholm to work in India or the Congo in terms of research impact pieces of research that would really change policy for the better and for poor people Thank you if I could invite Martin Annika to join Tony and Maybe I could Just mention that I am deeply interested in that data point Some of you may know that at wider we we holds sort of two conferences a year and We had worked quite a lot on developing a concept paper for a data for development conference to be held in September this year and Just two weeks before we were going to announce it the World Bank came up and said we're going to do the ABC DE Conference this year in June on data for development. So there seems to be at least a shared concern about this Obviously, we were then changing so we are now going to respond to crisis in September instead But the data point is a very valid one Martin, do you have any sort of immediate reaction to Annika and Tony? Well, I think it might be efficient to collect questions. I mean I'm hoping there's Lots of questions I'm going to start over here on the left hand side if you could sort of indicate if you want to Intervene have a question and then sort of move over. Please do introduce yourself if you have any questions Okay. Yes, please. Thank you. My name is Gunnel Axelsson. They're from Church of Sweden International Department working on development issues I would echo very much of what Annika said about especially about targeting in a more universal approach and really saying as Scandinavian and Sweden listening to your arguments about targeting and the Downsides of that is quite I mean we all have it from from growing up and the political debate and all about marginal effects Etc. And and we know all from our personal life the the benefits of inclusion systems However, we can see that it is the more and you also reflect that that it's more the more targeted system that are now not only in Latin America, but also in in in Africa and Asia often promoted and we can see that At least up until now. I think it has been mostly diffed and the World Bank that has been Promoting these kinds of programs When many of the experts actually have the Anglo-Saxon welfare welfare model in their DNA to say Whereas we can see that the experiences from the universal models as we have in Scandinavia hasn't been in that influence or influential in Giving a device to development countries Of course, this is easy for us to say yes, it's good for targeting Not as comfortable maybe for to say the same thing in the United States because it Inevitably goes back to your own society and the our own system So my question would be would you think it's possible for institutions like Difford and the World Bank to actually promote to more Universal models Okay. Yeah, please Yeah, it's me. Ahuna Bransian and I'm the CEO of Center for Business and Policy Studies I You said in the beginning of your talk The need for adaptation of policy in relation to Evidence that comes from research and the type of evaluations or programs that you have described to us I would like to ask The problem of adaptation of policies what is the reason In your mind behind that is it the fact that people are unaware of the research and the evidence and lack of Expertise and actually then adapting policies or is it more maybe the type of questions of values and ideas about models or and That is behind that you don't believe in the evidence so to speak Or or or kind of have a higher higher higher type of goal with your with your Choice of a model Okay, I think here in the front with Tobian and then over here afterwards First marketing. Thank you for your excellent presentation and an overview. I think yeah This is the perfect place for this. This is a school and this was a fantastic lecture So it's also an inspiration to all of the teachers and students here. I have two questions Two different Issues you mentioned political political economy a couple of times in your talk But I was wondering how you you think of these different programs in different political Circumstances I could see big differences in terms of how much of Populism you you may fall for as a politician under certain political regimes and and how that may be different in others So under what sort of political circumstances would you promote certain policies or or avoid them? And I'm I'm thinking now in terms of also interest of Sida and other donors Where should we push push for these kind of programs under what political sort of umbrella should that be done? The other one that I didn't really think you you you touch so much on and and I think it's also interesting And I think you Annika was hinting at this is The trade-off you mentioned here was was sort of within the realm of of having Transfers, but really another trade-off is different items in the government's budget and And really is this the most cost-efficient way over time to reduce poverty or would sort of education or health care or something else Be more relevant and and one of the issues here. I think it's extremely hard also when we now say we should evaluate things and see what works Evaluating school reforms and poverty takes much longer than than maybe evaluating some of these programs Per se, so how do we actually figure out what is the most cost-effective way of reducing poverty? Thanks over here And I think we will pass over to Marty also my name is John Joyce I'm the chief economist at the Stockholm International Water Institute. Thank you Martin for a very innovative lecture and I want to pick up on Tony's point and about data and picking up on what Martin said you and his lecture on data not designed for purpose measurement errors, etc And as an economist, we always like to use the quantitative side of things, but I'm just wondering how we've used qualitative data From an ethnographic perspective and how much Economists now need to start working more seriously on qualitative data in order to reduce Specification bias and mis-specification, etc. Thank you. Okay. Thanks. You want to take care a Turn Martin a time response. These are all good comments, and I can't do justice to all of them, but Anika's Comment really I Like this this way you talked about it and I'm not sure is that really how? Happened I mean I know this a little bit about the Swedish history, but but if it was the case that that the rich countries Started with universal schemes and regressed to more targeted ones It would be very nice for my argument. So I like it, but I'm not is that really? Has that got any external validity beyond Sweden? I'm not sure but I got to look into that you know because it nicely It nicely emphasizes my point that Currently all this emphasis on fine targeting in poor countries You know is running against that Historical process and the historical process makes a lot of sense starting universal and you develop capabilities you get more finely targeted and You don't overdo it because you've still got it's little got to be politically sustainable That would be a very nice story, but so I'm going to look into that I Like the way of you described it fits very well with how I think about it. I guess but I have to look into it Data who is the point of I didn't write down then who is talking about yeah Well, you you're talking qualitative, but somebody else on data. I just can't oh Yeah, right. Okay, it was Tony We're two different very different questions. I'll do it doesn't separate. So Tony um, I Know to your two questions You know, we all know how important data is I think there's two kinds of ways that data matter here One is for doing the kinds of research and evaluation of what works and what doesn't and another reason How data is used in policy? And I think I have to be careful about those differences I see it an almost the important role for high quality surveys often times the specific programs building the capability for Survey data collection in poor places and I think that's happened in a big way. I mean you're here often here's characterization that social economic data is poor in poorer places and probably that's true, but it is a bit Exaggerated I mean you get some really good data as poor countries But data for informing research and doing evaluation When we start to take that data to to social policy then we get into a lot of trouble Because then we've got to extrapolate to much larger samples Then I start to worry. I mean this this proxy means test. It's so popular. I'm doing a study now for Africa where we're Across every country that we have data in Africa. We're just systematically going through to figure out under the ideal conditions How well does the proxy means test really work now? In the audience a proxy means test is that what it sounds like you don't observe income That's the data problem So in the survey do a good measurement of income when you go to scaling up to the policy You've got to impute incomes in under less than ideal circumstances for the purpose of implementing the policy They're very different things Proxy means test is an attempt to use a few relatively small number of variables to predict somebody's income Based on the correlates you found in the survey But you take that that model and you apply a scale it up to the country as a whole and you implement a policy Even under excellent conditions on the survey what you get in the end is really Sorry, it's very very poor indeed The the inclusion exclusion errors are it's horrible. I mean in many countries what we're finding you It's just a little bit better than tossing a coin If you really want to reach they undernourished Women and children as part of your anti-poverty policy Good, you know, this is not going to work and part of the dissatisfaction with social policy Finally target social policy in poor countries from the community perspective is they see it They just see how badly it works All right, which is part of the motivation for this study to really do a careful job of seeing how well it works And I tell you when I look at it Doesn't look good and we're basing Our social policy in poor places on this Technology so very important distinction the data you use for the surveys and the evaluation Versus how you scale up to the social policy based on Correlates you find in that data. You can have a great survey, but the correlates are still so weak The information base for fine targeted programs is very poor and you're not going to reach the groups that you Want to reach as effectively as you might like It's very subjective though. All right, there's another little observation Two people can look at the same thing. I see this repeatedly and come to different conclusions Toward late in this study that we're doing in Africa. We haven't written anything yet, but we've been massive number crunching Late in the study I Started looking at what people who defend proxy means testing which once included me by the way Until I started really looking at it seriously I Look at what the arguments they make and and they occasionally do something quite similar what I'm doing and they look at it And say oh look how good it is and I look at and say look how bad it is and it's the same thing It's a glass half full half empty There is its perception but but obviously people are defending a this technology is is taking over you're seeing it all over the world Developing countries this proxy means test technology, and I really worry if that that's going to be able to deliver again back to the point that You may be much better off with the universal program and and somebody raised these the really important issue of funding these programs I think it was Annika Remember what I was doing with that n-rega. I'm taking the budget of n-rega. They've already got a budget I'm taking that and I'm allocating it uniformly I'm not spending more money than they've already decided to spend I Don't think they're spending enough. That's another point. All right, and that goes back to the very important point that was raised by I think Professor Baker your second comment. I think items on the budget the trade-offs between Things you know this is really neglected and it silos if you look at this they've got social protection silos We've got human Development silos education they've got worse and worse as in the sense of they're not communicating each other and very few people in development Now are asking those questions about the trade-offs. Should we be building bridges or should we building schools? And we're not informing. We're not telling countries about that They want to know that this answer to your question as well, but we can't tell them We're because our research is in these silos and this is a really big problem I'm not seeing enough of that kind of Broadcross sectoral work and that's one of the many recommendations. I'd give back to Tony's second question Many recommendations I give to PhD students those bigger trade-offs that between the the the line ministries If you like and it's it's part of the politics of it when we deal with countries we deal specifically with the ministry And we're tight. We're tied to that ministry We used to have the cape much more capability. I think for the cross ministerial Debates and discussions than we have today Sadly, I think the old planning commissions the legacy of the sort of control economies that were common in In in developing countries. Well, you know the control economy was pretty much a mistake We know that market-driven economies are much better producing growth and all of that fine I think that's pretty well established, but the planning ministries all got axed with one with very few exceptions some stayed But they were doing different things We didn't we gave we threw the baby out of the bathwater You know the baby was the the capability for making those broad cross sectoral Prioritizations in public finance. I think we've got diminished capability in that area The silos have not helped other questions the how to get more universal programs this is The person from church of Sweden very first question You know a little bit uncomfortable with this Anglo-Saxon versus Scandinavian model characterization, but okay, that's not a big issue I can live with that. I'm an Anglo-Saxon side, but I'm thinking I don't think that and certainly wasn't just Scandinavians or Nordics or whatever you were talking about this this is goes goes way way back Certainly lots of discussion of this in the 18th century there was Anyways a lot work could say there, but that's more history of thought stuff on your the more much more important question How do we get well bank and DFID? Well, I think DFID is pretty much following the bank on this How do we get them to talk about this scope for universality? Well by by me and you and discuss them in discussions like this You know, I've tried for 24 years good to get the bank and the fund to Think differently about targeting, you know, and I will acknowledge it as one of my greatest failures It's so embedded You know target the thing finally this word targeted you'll do any you're sure spend money on poor people, but target it really well In situations where you don't have the capability to do that credibly It's really you're you're you're just and in the end it's poor people Not getting the benefits and the self they should be getting because in the end you have to judge it by impacts on poverty not by targeting It's a mantra that has been very hard people will you know smart people will obviously recognize my arguments and and agree But it's become and in fact again the silo of social protection In the industry of social protection has not helped either So I don't have an answer to that I think we just got to keep That that's that thing I keep saying that targeting is not the objective It's poverty reduction now we can debate about what that means But I think we've got it. We've got a pretty clear idea and we can talk about specifics, but Keep your eye on the objective In terms of people's welfare and how you get there and the more we can emphasize that the better What have I left out of me is comments on the I Think a lot of it is is the politics of capture and bureaucratic inertia. I think it's the main Reason we don't see more adaptation to it from evidence that in programs become embedded and they have a Lobby group in the government and they have a constituency and they're fighting for keep their program all the time And we see that repeatedly and that's not not a that's not just a problem of developing countries You know everywhere we see that and that kind of Entrenched support and a bureaucratic inertia and protection of the your favorite program is the main reason I think and we just have to call that out and Now a lot of this is a researcher I always think what I'm doing and other researchers are doing is really doing just that calling it out You know informing a public debate with evidence to try to move it on a bit and that's really the main Point of my lecture on the John's point about the qualitative data. I I'm I've never ever thought you could only Study poverty and inform anti-poverty policy with qualitative data. I find it very limiting But equally well, I've never thought I Well, that's an exaggeration. I probably once thought you could do it with only quantitative data, but I've now Come to the view you need both But you don't need it in the way it's it's often used I mean, I'm a big fan of doing qualitative work after quantitative work You know Not before or in parallel with So I'd really like to see more economists doing this. This basically means do your quantitative work Every time every study. I've done almost everyone. I've had puzzles You know what we do in economics and empirical research is very black box like we have these black boxes You know, we can't see inside them with our tools the worst case of course the randomized control trial is it's a complete black box About how you got the outcomes that you got But but everything it's not just a problem of RCT. So I mean a lot of what we do in economics is very not very It's not very revealing about the process is empirical economics It's not very revealing about the processes that generate impacts and I find actually talking to people I don't I think I'm I'm much better at quantitative work than qualitative work And I always try to get people who have the reverse comparative advantages to work with me But I think you can learn a lot about processes of how things actually happen by talking to people and Subduing subjective data in intelligent ways as well recognize its objective, but but you can still learn from it. I Think I left anybody out. I think I've covered most of the questions. That was pretty on array Other questions. Yeah, please here in the center and then here My name is Odie. I'm a PhD student from South Africa. So I China's been quite successful in Regicing poverty and I think the num if you look at the numbers the The global numbers a big chunk of that is coming from China Can can we attribute all of that to growth and and if not What can how much can we attribute to grow to growth and and where do we have attribute the rest? Okay Here in front My name is root Kipam Shana. I'm a former a diplomat and a former banker originally a synologist my question in my question I want to introduce another kind of silo and that is the silos we see dominating the Many countries in the emerging markets And I'm thinking of a traditional Structure social structures like clans case and so on the Indian case system you could call an infline inflationary rigidity in the Indian labor market and my question is Since these social structures frequently seem to operate as poverty traps How do you eliminate a poverty in countries where? The strength of the social structures exceed that of the state Possibly looking at the fiscal revenue relative to GDP. Thank you Okay Are there questions? Okay here over the back Sorry sure absolutely. No, please go and then we take the other one out. Thank you for a very interesting lecture My name is Christina. I'm from the trade unions I have two questions the first question is in the in the beginning of your lecture You mentioned the fact that rich countries of today were better at targeting the poor When they were poor and it would be interesting if you could elaborate on that and explain why why was that? the second question is the the factor of a weakening bargaining power of the trade unions and the lower level of union unionization in the world right now and how that would affect the the possibilities of protection and promotion And in some countries like in Sweden it is actually the the two-part model that sets many of the protection and promotion policies So how would you see that? Thank you Thanks, I did not be in the back Thank you professor Rebellion my name is Damir. I'm economist working at Stockholm peace research Institute The question goes partly to your case studies when you mentioned in China case That knowledge through the movie you provided didn't really transfer to action So the question is what helps to move people from being knowledgeable being informed Changed attitudes and moving to action change in behavior Okay Thank you I think we will pass over to you Martin and then Tony and Anika if you have any Okay, the I'll try to go and order this time rather than chopping around the the South African PhD student Okay, so there's two levels of answer to your question First is a kind of almost a mathematical level. You can think of a change in poverty is determined by growth in part and changes in distribution Okay In a narrow sense All of China's public deduction has been due to growth rather than changes in distribution because distribution has got worse Relative distribution in a relative inequality in China has been on a trend increase over 30 40 years not not not sort of all the time increasing not monotonic as we say but but Some periods falling other periods, but you know the trend at the upward has been dramatic In fact, if you just extrapolate the trend in China's inequality Back over the last 30 years, you know, it's going to be the same inequality of Brazil within 10 years But I don't think that'll happen And I actually think it's topped out I don't think it's there will be little bit of limits because there's changes in the Chinese economy particularly coming from the absorption of rural labor China started from a situation of Massive it's a classic go career Lewis model We had massive labor surpluses wage rates were no then no upward pressure on wage rates for a long period That upward pressure is now emerging wage rates are rising at the low end in China The capital is actually starting to ex-leave China looking for lower wages elsewhere And that's a very good process That's it's great good news because real wages are poor people who were poor are rising and that's great Going forward, I think that'll put a there are other things that involved too, but that's one of the big economic changes It's going to Put a break on the right on rising inequality, but there are the forces Working in the opposite direction. So we'll see what happens. That's the easy answer All right now they go up to go a deeper All right, and when you go deeper it gets more complicated I'd point to a number of things that were really crucial So then then you got to ask well why what to determine the growth what to the inequality what to what was going on? What's under the surface? There are a number of things. Um, I Actually think the sequencing of economic reform China is one of the few developing countries that know you got that sequence roughly right It started with agriculture and rural development Moved on to a basic industry. It moved up a kind of a sensible ladder In its policies, this is a highly interventionist economy This is amongst developing conneries with high with good with a lot of administrative capability They can do a lot they can also make big mistakes as they often have Some of the greatest mistakes in human history Like the Great Leap Forward and the Cultural Revolution, but but um When you when you the sequencing and reform from Deng Xiaoping's initial impetus for reform in 1978 focused initially on agriculture and Rural development has stayed with that for till mid to late 80s and and then started to move on to industry and that Sequencing was roughly right actually think they moved on too quickly I think they could have had an even more dramatic poverty reduction and it is astonishing what happened the absolute poverty reduction is Fastest and great largest in terms of the sheer numbers we've ever seen Could have it could have done better with if it if it had stayed with it was a lot a lot of the agriculture and rural agenda The grand reform agenda was left undone by the time the industrialization push the TV is the Manifest export led manufacturing growth by the fight by the time that started to take over in the trajectory for poverty reduction Well, the bulk of the work is still was done by a rural poverty reduction in China Another aspect that they got right I think Which was there is a very important lesson this the first is important lesson for Sub-Saharan Africa because Very few countries in Sub-Saharan Africa have got that sequencing right they've tried to they've gone straight for industry They've neglected agriculture and that's been to their peril and that has not helped their poor the poor so Second thing is as evidence-based policymaking We don't think of it and actually the politics was driving the first as well But it's the second especially the politics here was that you had a potential food crisis in China in the late 1970s that they really had to address a food security problem We're massive, but there's the second very important thing was in the sequence is in the The way they learned the way they tailored their sequencing a reform and the specific reforms the two evidence now Denk Chopin again. He said seeking truth from facts That was a political reaction to the culture revolution to ideological based policymaking and there and and it was so important I They didn't have the tools To do good evidence-based policymaking yet, but they had the culture of evidence-based policymaking as a reaction to to now essentially And that was really important so you saw all the time they were looking Experimenting the program I talked about today the debauch program that emerged out of an experiment in Shanghai They they try and all these experiments going on all over China They still are and they're looking at them and learning and all that seems to work. Let's do that Yeah, when I look at the quality of their evidence, you certainly don't see randomized control trials, but you know, maybe now The quality is is not always there, but the culture is there, and that's really important And that's another lesson for sub-Saharan Africa So there are there are deeper deeper answers to your question. There are other things I could say, but I think that's Start um The question about silo social structures. This is really hard And the caste system in India particularly has been just so Hard to change it's um, and I don't have an answer I I see it all the time at the Now all the time we're worried about social exclusion We're worried about social exclusion in everywhere from from be hard through to Brussels And and we're seeing it all the time And this is partly why I emphasize the importance of thinking about relative poverty as well as absolute poverty You've got to look at both and that's really about the concept that sociologists have and people like going back to people Like Peter Townsend and Bretton social exclusion is is hugely important as a concept in my view I have there are debates about that some economists are not so fond of the idea, but I like it and I can't it gives me a way of understanding a lot of problems and the lack of inclusion associated with the rigidities in India's labor market associated the caste system is is just Horrible it's horrible for the information transmission for learning about public programs not as well as for the labor market I Don't have any simple answers You know the India's been Officially if you've been fighting the caste system since India has been a country. I mean since it's been an instance in Paris 947 that the struggle has been going on to But it's it's still there. It's alive and well What do you do? I don't know There's a nice topic to add to the really tough questions that Tony would like to give PhD students and I Needs it needs a lot of focusing though before you can turn it into a researchable question but certainly we have lots of research on the implications of Cast and clans social structures the costs of those the economic costs of those and and the Effective policymaking as well, but in terms of research on how to change it. I don't know Um Christina's question rich countries. I Think the answer rich countries doing better targeting when they were no poor I think the the answer goes very much to the previous discussion about Universality, but I put that out as a hypothesis that where was it? Where is Christina? Oh, yeah, sorry I put that out as more hypothesis that Rich countries will were more successful in social policy early on because they they better Tail it what they did to the capabilities they had administratively the constraints they face politically but That's that's that's my contention, but I can't prove it, but I think that that was important I think the decline of unionization is a big concern You know I'm sort of I I Worry a lot about Internal labor markets. I worry about dual labor markets. I worry about the problems of labor market rigidity I don't think there's a hell of a lot. We can always do about that, but I think making I can see the potential for gains to poor people from Making labor markets work better more effectively, but I don't think unions need to be against that so I think a lot of the If the union movement was more sympathetic with the arguments the people like me make about labor market flexibility in the scope of poverty reduction We could make more progress But labor movement has been a by-and-large a hugely important progressive force in the history of fighting against poverty But not always and we should recognize that too And the point about labor market flexibility is one example You know, I think I can give you others too But by and large my answer is that yes, it's it's a big concern And I think it will make it harder probably To achieve the kind of social consensus that we need particularly around I mean, I think we have a social consensus around poverty reduction I don't think we have anywhere now a social consensus around inequality reduction We just have continuing debate and I think The labor movement in What's left of it in the United States could be hugely important here, but I'm You know that achieving that social consensus will be about a lot more than that It will be about trying to unpack this concept of inequality trying to make the it's like it's what about Barack Obama asked He's a bunch of people were invited to the White House Last year and he asked them them people working on US inequality and he asked them How do I talk about inequality in America without being accused of accused of class warfare of Instigating class warfare and that's a hugely important question. How do we get? How do we get that discussion about inequality? To be much more focused on the costs of inequality much more focused on what aspects of inequality are really damaging a generalized discussion is just not going to get the social consensus and I but I think The labor movement could be very important part of that Damien's question on the I thought just a little clarification the movie was about India not China But that's not important and the lesson was that There are two things it's who things are broken right people's knowledge about their rights poor people don't know what is due to them and The public sector is not responsive to their needs and that both things come together to mean they don't get What they're entitled to and that's poor service delivery, which we see all the time service delivery to poor people is generally poor right and it's the combination of their lack of knowledge and The lack of a responsive supply side, but the two are kind of working together You know the lack of knowledge is often part of the reason why the supply side is unresponsive local leaders don't share information Because it reduces their power. They have all kinds of rents that they get out of that process so it's all kind of It's like a knot and you got to cut it somewhere to unravel it and what this study at the movie did is Tell me this is the point the whole point of it was to see whether just changing knowledge Would make better service delivery. Is it just about telling people? their rights under the law and To to say they know and the answer is no it isn't That the supply side and he also needs to change. So so the knot is not unraveled that way You're gonna have to have both. They're gonna have to know What did what is due to them? What and then the supply side has got to be more effective in delivering it Okay, just one last question Martin in your all the work that you've done And all the countries that you visited what has most surprised you for good or bad What is most surprised me? Any other additional last question No, no, I was just thinking about the point about looking at it as systems And if you can elaborate because I think one another reason why Sweden has been been successful Transforming from Port de Rich was that that during that period we saw it as a system and having Protection programs that also supported labor force participation and you know enabling both women and men and work by introducing subsidized child care and so on I mean it took took some time, but but been really thinking about it as Getting people onto the labor market So any thoughts on that? Martin? Well, again interesting thought, but I don't have any any comment Um, I'm more than what I've said. Uh, what surprised me the most? Oh, goodness. Let me think Oh, um Going back. Um, something you never would have expected that theoretical economics would not have predicted that Oh goodness other no surprises in the world Yeah, lots and lots, but I'm looking for the the number one surprise Yeah, you you asked me not not did anything surprising. Yes Much harder question. What was the most surprising thing? um the time Because I've seen a lot of time comparing China and India and My prior I started in India obviously, and I've been working in India for 35 years, but um I came to China in early 1990s and um And and in India there's a lot of focus on China You know people are really very interested in China and you get a discussion all the time so and I was going to China is more sort of somebody, you know I didn't think I could ever be an honorary Indian citizen, but I would love to Think of myself like that a bit and um as somebody coming from an Indian perspective And China was a big surprise Um, I was surprised at the administrative capability I was surprised at the but more subtly. I was surprised at the capability To get things wrong too Um, and I would ask myself If I was reborn in in kind of hindu style Uh as reborn as a poor person in a village in india or a poor person's a village in china Which would it be? and After about the first few trips in china and working in the field in southwest china and Sashi in the lowest plateau region. I was pretty convinced that the answer is china And why this is the most I guess the number one surprise because I'd be freer Here we've got a country that's not a democracy India is a democracy the largest democracy in the world And yet i'm saying that if I was poor In a reborn poor in an Indian village versus the chinese village I'd rather be in the chinese village because I'd be freer because I saw Poor people in chinese villages who did stand up for their rights And when they were trampled on they would they would fight they had a you know, they you couldn't do to them What I saw being done To poor people in in indian villages So that I guess number one surprise that When you think about freedom and democracy There's many levels of it You know I sure China is not a democracy at the the highest level of that term But there are are more subtle and finer grained Interpretations of what that means Okay I said in my opening remarks that Martin is a global leader in the field of poverty analysis I certainly think we got that demonstrated today both in western in terms of depth I'd like to say thank you very much Martin for a magnificent wider annual lecture I'd like also to say thank you very much to site for collaboration and to see the for support and I'd like to Thank for the engagement in the lecture You're all invited to a reception outside where the discussion can continue and you can Engage on the questions that you did not ask but I would like to ask you to join me in a big applause for Martin. Thank you very much


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Well, thank you, Brian. And good morning from the US, regardless of where you're at around the world. It's a real pleasure to be participating in this hyperledger event. As you heard from the introduction, I work at the FDA, but I spent most of my career in the private sector, and I've been with FDA for a couple of years now. What I was hoping to do today is talk about FDA's new era of smarter food safety and the role that new emerging technology, such as distributed ledger technology, will play in that. Right at the outset, you might be saying, well, why is there a public health food guy at a hyperledger event? Well, number one, I would say we have more in common than you think. If I were to ask the question, how many of you eat food, if we're in a live audience, all of you would raise your hand. And number two, I've long recognized the important role that distributed ledger technology and blockchain can play because of work that I did in the private sector. But let me begin with this premise. And I think you heard a lot of it already this morning. The world around us is changing pretty rapidly. We've heard this quote that never before has the rate of change been this fast, and never again will it be this slow again. Well, that's true for food, too. You think about the food system. It's been changing from the beginning of time. At the beginning of time, humans were hunting gathers. They then started domestic plants and animals. We had the industrial farming revolution in the early 1900s. And around the 1980s, when I was going to the grocery store with mom and dad, there were about 15,000 foods, different food products. How many do you think there were at the turn of the century? There were close to 50,000 different food items. And where are we going? We're really going to the place where the food system will be an endless shelf where consumers can go online or to their favorite grocery store, whether it's brick-and-mortar or omnichannel, and get anything that they want from anywhere around the world at any time. Granted, the pandemic has presented challenges, but we'll get through the pandemic. And I believe that supply chains will be stronger and more resilient than ever. The other thing that we realize is the food system is changing. The reality is, as we speak, we're seeing foods being reformulated. We see new foods being realized, whether it's cell culture or plant-based foods or gene-edited foods. And we're seeing a lot of change. I believe we're literally in the midst of a food revolution. And to succeed in these modern times, it's the FDA's opinion, and many in the food industry's opinion, that we need more modern approaches. It's time to leverage. And so at FDA, we've created a long 10-year view of how we want to modernize the work that we do over seeing food for the nation. And we're calling it a new era of smarter food safety, which will continue to be rules and law-based, but increasingly technology in age. Now, I'm going to give you two examples in the few minutes that we have together today of real work that the agency is doing using new and emerging technologies. One is distributed ledger technology or blockchain. I always like to emphasize, as a public help guy, for me, it's never about the technology. It's really about what is the public health or business challenge that we're trying to solve. And when it comes to distributed ledger technology, it's this. The reality is, even the biggest of companies don't really have a lot of visibility into how food they buy gets produced, transported, and ultimately ends up on their shelves. It's pretty difficult because we have a very large distributed and decentralized food system. In fact, oftentimes people talk about the food system as a food chain, and I try not to do that because it's not linear fashion at all. In fact, as I learned and studied about blockchain, I thought the way the food system is created, very decentralized and distributed, it models blockchain technology, and that's where I became interested in. We've all seen food scanners because we do have an inability to track and trace foods quickly. It results in, for example, consumer advisories where the FDA or CDC might say, don't eat any product until we find the source of the outbreak, and sometimes it can take weeks for us to do that. When I was in the private sector, I did a proof of concept to illustrate why I think the power of blockchain is so great. Some of you may have heard it, I call it the life story of a mango, but we took a mango that has a very complicated life journey from maturing on trees, then getting picked from farm crews going to a packing house, then getting shipped by airlanders to the United States, and by the time it arrives in the U.S., it's been a long process. And wanted to see if we could trace those mangoes back to source when I was working at a very large global retailer. And it took that retailer six days, 18 hours and 26 minutes to trace that package of sliced mangoes that you see at the bottom of that slide back to source, almost seven days. Now that's pretty good because they had pretty sophisticated supply chains. We then did a proof of concept where we started to work with a major technology provider and small farmers and growers in Central and South America scanned a package of mangoes after we were collecting that data on blockchain and we were able to trace those mangoes back to source in 2.2 seconds. That's food traceability at the speed of thought. Now at the FDA, we understand that scaling food traceability solutions is not going to be easy, but last year we issued a proposed rule and we are on track to issue a final rule for food traceability next year. A key components of that rule are defining what we call the key data elements. What are the data elements that need to be tracked for food such as where the food was produced or are used by date or a lot code, as well as critical tracking events. What are the types of changes that need to be tracked? Whether a food is harvested or whether it's processed. And so we believe this food traceability rule is the foundation for us to allow a new future of tech-enabled food traceability. Let me give you another example where we're leveraging technology for this new era of smarter food safety and that's one using artificial intelligence. Again, it's not about AI, it's about the business problem that we're trying to solve.  It is a global food system. In some categories, it's fairly low, but in others, extremely high. A good example is seafood. About 94% of the seafood Americans consume comes from abroad. That's literally tens of millions of shipment lines of imports come in in the United States every year. Tens of thousands of different food skews. And so 300 different ports, I can tell you it's a challenge. And you can imagine for data scientists like some of you listening in today, it also represents opportunities. So we did a proof of concept last year where we took our existing, some overlaid it with AI and machine learning functionality. Two years of retrospective seafood shipments that we wanted to see, and that would increase our predictive capabilities of finding which containers of the tens of millions that come across our shores every year might have violent products. And lo and behold, our proof of concept was very, very successful and that we are now launching into a pilot when we're testing the technology or AI function in the field. Let me close with this idea because I think the last speaker did a pretty good job of saying really it's not about distributed ledger technology alone, it really is about a different future. And I like to say, I think distributed ledger technology is going to be a game changer along the term on how companies do compliance, how regulatory agencies do oversight. And I have to say, it's going to change the compliance paradigm. If you pause to think about it, let me describe it in 20th century, whether you work in the public or private sector, compliance was largely driven through writing rules, regulations and standards for two things, facilities and the assets that those facilities produce in my case, food. And so we would write rules and good manufacturing practices for facilities. We would write standards of identity or specifications for the food products assets. And the way compliance was checked, you send inspectors in to do inspections of a facility, you might pull samples of a food product and test it to see if it meets standards or specifications. But we are changing and this is where I'm so excited about the future of compliance and food safety oversight to a world where we no longer have to rely on rules that are paper written and inspections or tests that are very infrequent. To a world with the ability to give facilities and foods, both assets a digital footprint or a voice. You can see through things like sensor technology, IoT, leveraging machine learning and blockchain as a trusted platform where we can now not only track and trace those assets but monitor them in real time. And so that's what I think the future looks like. And so in the 10 minutes I had with you, I wanted to share some real world examples where USFDA is looking at leveraging technology to modernize the way we do compliance or food safety oversight. It's not unique to the public sector, the private sector is taking this approach. And I wanted to end on this note that I think that the future is really bright. I would also say that just having lived through the global pandemic, we know that the virus that causes COVID-19 is not transmitted by food nor food packaging, but it did challenge the food system because worker illnesses and supply chain continuity are two sides of the same coin. And what we've seen is that technology such as distributed ledger technology, we believe could play a role in creating a 21st century food system that is stronger and more resilient, that will be good not only in the course of normal times, but certainly in the time of crisis. And so with that, we look for your questions and engaging with you more importantly. This idea that together we can create a digital, more traceable and safer food system that's better for consumers. Thanks, Brian. Thank you, Frank. I really agree to see the work that you're doing and the thinking you're bringing to the federal government, which I'm sure has ripple effects elsewhere as well. And we've been engaging since you worked for that certain large retailer. And obviously this is work that's been building up for years. And you've worked now both in the private sector setting as well as in the public sector on food traceability on DLT and other technologies. What's the right role for government to play? What role do you see it playing in an enterprise blockchain network? Do you see them as kind of letting the private sector sort it out and being kind of out here and just saying, okay, these reports perhaps maybe they're more auditable, or do you think they might actually run nodes on these production networks and participate in the transactions on the network? It's a great question, Brian. I like to tell a story. Before I joined yesterday, I was working at the World's Largest Retailer and I remember being on the Hill at a hearing with Congress and where they're asking questions about blockchain technology and they asked that same question. And I remember three years ago, not that long ago, I said, hey listen, telling political leaders, stay out of this, let the innovation happen, don't stifle it, don't slow it down. But I can tell you now that I find myself on the other side of the fence, I have a very different answer. I do think there's a role for the public sector. Right now, as you can see, at least on food traceability where the agency has started is writing a rule. Or what are the types of foods that require better food traceability? What are the key data elements that are important? And what are the tracking events? I think longer term as these distributed ledger ecosystems evolve, I think longer term. First of all, let's get, let's make it scale. And let's get better tracking and tracing of foods. But longer term, I do see a government playing the role in a distributed model of trust, where you have nodes that could be run by public sector entities, nodes that are run by academic institutions and roles run by the private sector ecosystems. And so I think a distributed model of trust like that is really important for the 21st century. I like to say, if you think about the financial prices that occurred, you know, now almost greater than a decade ago, if you think about political scandals, if you think about E. coli and runway lettuce, they all have the same thing in common, which is a lack of consumer trust, trust bust. And so the idea that we could create these digital ecosystems where they're distributed models of government being involved in them as well as other institutions, I think probably what society is going to toy with in the future. Do you think there's ways that these networks, I mean, we talked touched a little bit on in my intro on the ways people were starting to deploy them, but what do you think from what you have learned about? Actually, before I ask that question, let me just emphasize for the folks watching this through Hopin, please feel free to submit some questions for that we'll cherry pick the better ones and bring them up before the half hour mark. But if you have questions for Frank, please feel free, I'll try to monitor those questions. And it'd be great to have that as a part of this. But before we dive into that, what do you think from your work with food safety you've seen as things that we could have done better or perhaps we started to do a little bit but should have done a lot more in the response to the pandemic? And maybe just thinking about if we ever, I mean, knock on wood heaven forbid, like had a resurgence or had another one of these, what might help us be in a better position to respond to that from a supply chain traceability point of view? Yeah, it's another good question. You've been working on food for a long, long time now. And I like to say that we just experienced with the pandemic, the virus wasn't transmitted by food, Brian. It was the biggest test we've seen on the food system in a hundred years. There's no question about it. And in the early days of the pandemic, as you know, we were asking consumers to shelter in place. And before they did that, they were running the grocery stores and buying products and hoarding.  So we had out of stocks early on. And then we started shutting down, as you know, institutions that produce food, whether they were restaurants or hotels or theme parks. And so shortly thereafter, we saw supply chain imbalances with food that was held up in those types of institutions, not making its way to retail. And it wasn't that we didn't have enough food, we just had supply chain imbalances and logistical issues. And so what's become very clear is that for the 21st century, those supply chains that were digitized and can share information and were a little bit more nimble behaved and got through it a little bit better. So I think the lesson learned for me is that digitalization of food. And we know, Brian, there's a reason why food has lag compared to other supply chains margins. But I think this idea of digitizing food and how it can strengthen the food system is an idea whose time has come. Because we needed to have greater visibility of where food was and where were the bottlenecks. And we needed to share information more rapidly. And the fact that we weren't as digital and as collaborative as we can be as such to redistributed and centralized ecosystem. I think, you know, we're looking back, some of us predict that would have helped us get through the pandemic better. But I, this idea is not only good for, as I said, a time of crisis, I think it's good for normal times, you know, the ability to optimize supply chains, make them more sustainable to make them safer. Yeah. And well, so much of the focus is on farm to table and trying to source food from as close to you as you can, which is great. I raise chickens and I eat the eggs for my chickens whenever I can. I obviously food networks are global these days. In what way do you and yourself work with your peers and other governments around the world and coordinate on this topic of blockchain technology? Are you sensing some receptivity from other governments to join in? Do you think these networks become global networks that governments join as peers? Yeah, I do. So we collaborate with our counterparts in other nations quite regularly. And some of them, for example, have already done pilots using distributed ledger technology for few traceabilities. The UK FSA is a good example. We regularly talk with our neighbors to the north and to the south and all over the world. My feeling is that this idea, because of the new tools that we have today where we no longer have to track goods on paper one step up and one step back, everybody's interested in better tracking of assets such as food. I think there's a realization that distributed ledger technology, as I mentioned, because some of the features that can be centralized and distributed, you know, concepts of democratizing information and consensus, all of that makes it very attractive and nations around the world are interested in it. I think it begins with laying the foundation, the data elements, the tracking events, and I think distributed ledger technology would be a natural leader. Because when you have such a large food system, it is enormous. Sometimes people come talk to me about distribution systems and we all know they're interested in blockchain, but they're very simple when you compare them to food. Food system is enormous and it will continue to be large and distributed and decentralized. So I think we're going to see it pick up. I suspect that we're going to see food traceability legislation increase around the world and the way people comply will increasingly be through digital technologies and I think blockchain will probably be at the head of fact. Actually, that ties into a question asked by Chris Gabriel. Let me just read that. Thanks for the great presentation, Frank. Will the FDA, these are his words, will the FDA rule be general in nature regarding traceability or will it actually mandate the use of specific technologies like blockchain? Do you think it'll get that particular? Yeah, I think it's a matter of time. The proposed rule that we've written was given to us by Congress or Congress specifically said that we were not to mandate any type of digital technology or any single type of technology. But I do feel just defining those data elements is really critical because you've heard a lot today talking about interoperability. I sit back and say, hey, I've been chasing this holy grail of food traceability for 30 years. I think we're closer than ever before. But why hasn't it failed, Brian? And I think there's a couple of things. One is we didn't have the digital technologies, a centralized database, you're never going to get the large global food system in a centralized database. It's just not going to happen. And so that's why I'm so interested in distributed learning technology standards. People were doing food traceability different ways. And so when we created standards, and I think, but there's other challenges now too, and as you heard today, as I think governance models are going to be critical because we're going to see various ecosystems. I think previously there's a couple of them as islands. And I also think, believe it or not, I hope that in this conference, you guys spent a lot of time talking about it, is data sharing. You know, we know with blockchain networks, you can permission, but let me tell you, I still see, and since I've been in the public sector, I see this as a bigger challenge now than when I was in the private sector where a big retailer could demand suppliers to share information. I think sharing of data is still a hurdle that we have to get through. So the take home message is we won't, at least at this juncture, mandate any particular technology. But I think there's some hurdles. And I think some of the hurdles are not the hard stuff, the tech component. I think it's a soft stuff. The human element of working with blockchain systems. I'll provide another data point in this though, which is in India a couple of years ago, the telecom regulators issued a rule around tracking of spam preferences for mobile phone users. They wanted a decentralized system. So in the regulation, they actually specified a blockchain system must be implemented for tracking of individual preferences in a way that was portable between the major carriers. They went ahead and built this. In fact, we've got a presentation on it later in this conference. The different major telcos work together on a decentralized network built on hyperledger fabric and they've been in production now. And it's kind of remarkable. Sometimes I'm never a fan of being specific about technology and regulation because usually that works against the interest of innovation, but I think in some ways that can accelerate it. You mentioned quite a bit the importance of open standards as part of this kind of international cooperation and cooperation with industry. What role do you think open source software plays in that? In fostering that development and harmonizing these operations. I mean, I know government interest and adoption of open source software has increased over the years, but how much of it is in front of mind for the regulators in this space and people thinking about how infrastructure gets built? Yeah, for me, it's really critical right now and especially when you think about infrastructure being built that's used by a lot of entities in a regulated ecosystem like food. So I think it's a necessity. I relate it to this concept of transparency and trust. Just being very open with the industry that you regulate and the consumers that you're doing something in an open and transparent way. So I think it's critical, Brian. Okay, okay, great. And I think there's a related question too, which is a little bit on the topology of these different networks as they evolve. I think some people might imagine that there will be one global network for a given commodity, for diamonds or rice or leafy green vegetables. And certainly then you'd have one traceability mechanism, it'd be easy to harmonize. Do you think that's likely to happen? Or do you think we're likely to see different blockchain networks and how do they map? Do they map by clusters of goods? Do they map by geography or regulatory structure? And then I think a related question to that is, actually I'll ask the related question later because that was a submitted question, but go ahead and start with that. It's great. It's a bit of speculating and looking at crystal ball and imagining what's happening in the future, but if you just look at what's happening right now, you know, compared to where I was when we first started the blockchain ecosystem where we were tracing food three years ago, we now have a whole host, I can't even tell you how many different blockchain ecosystems emerging where they're doing proof of concepts and they're moving beyond proof of concepts. A lot of these are in production now where they're tracing foods. And so I think we have to think about it in a way at least the agency that there's going to be, there varies what I call ecosystem, blockchain ecosystems. I think they're probably going to emerge around business partners, people that are doing business. I think in some instances it might be around commodity, but I don't think there's going to be a one system fits all clearly. I don't think there's going to be one system fits all for a lot of commodities. And we'll see how it evolves over time, but I think there will be multiple blockchain ecosystems for food. And that's where it's critical that we have them in a problem there. And it's not going to be just on the data standard, it's governance as well. Right. Well, this is where I lead into Arun's question, which is from a regulatory point of view, what is your take on multiple island networks as he calls them and connecting them? What works in this space and what doesn't? I mean, have you looked at this, do you think there'd be some policy formed on how to connect these distinct networks? Yeah, no, if people have good ideas on this, let me know, I've spent a lot of time thinking about that, because I think that's what the future looks like and we have to figure out how to get across that. Not everything the agency does has to do by rulemaking. So I had been contemplating the idea of writing some guiding principles how I think these islands should evolve and what type of governance structure should be there for them to interoperate. We're going to have to cross this bridge. I think this is going to be one of the most challenging bridges that the technology won't be the challenge. How do different systems work together? We even need to find the right metaphors. I still struggle, is it an island? Is it a neighborhood? Cause it's kind of like cooperating peers, but is that a cul-de-sac? I don't know, we'll have to work on that. Maria Munaro, shifting back a little bit to talking about food and talking about really the impact on farmers and the last mile she calls it. How do you think that actually she calls it the first mile? How do you think the first mile can be resolved? Where it might involve farmers without access to technology or connectivity issues. How can they become aware and incentivize to participate in these kinds of networks? How does it actually roll out to them? It's a great question. And we spent a lot of time thinking about this, but I didn't, I'm the public sector. And it's this idea, and you're familiar with these terms, but we really have to sit down and ask yourself, how do you create shared values so that everybody gets in? You can't create this concept of a digital vibe that I heard, I'm a firm believer that these types of technologies are going to be good for food producers of all sizes. In fact, I think it's a game changer for small producers and I think it'll be very good for small local producers because I think it could result in some market access that they didn't. You've heard the stories that small farmers in Africa, one of the best help then was just when they got mobile phones. The mere fact that they had them, oh, not a hoe, not a tractor, a mobile phone connected them to buyers. And so just think about the power that this technology has. But I think we have to think about how do you create shared value and how do you get small players in? For farmers in particular, I believe it's market access to visibility, it's the ability for them to tell their stories. And I'm convinced having talked to a lot of small farmers and farmers in general, when we start connecting payment, rapid payment, it'll be beneficial for them. In a food safety scare, for example, what I'm very interested in, if you think about some of these outbreaks that have happened or public health officials come out and say, for example, don't eat any romaine lettuce until we identify the source of the contamination. And when you find the source of contamination, at least in the spinach outbreak of over a decade ago, it was one producer, one day's production, one lot. You destroyed a lot of farmers' livelihoods because you couldn't track and trace quickly. And so I think the benefits are there. I do think another reason why it hasn't scaled though, Brian, is we have to get more creative in the economic models that causes the scale. And so I would challenge your community to say, how do you come up with creative economic models that allow these ecosystems or islands or cul-de-sacs to scale? And right now we're running a challenge, the FDA is. So those that are interested can visit precision.fda.gov but we're calling a low to no cost food traceability challenge. And so we're looking for people to come up with the models because we know the technology works, but we need a little bit more creativity around the economic models. It's interesting to see if there's ways to deploy these networks in such a way where the small-hold farmer, the organic farmer, others can join a system, even if they're not part of a big cooperative or a big ag and a company could say, I just want to write to the ledger, here's the product I'm shipping, here's the serial numbers and have the local consumer who's just one hop away or two hops away be able to verify that and also get the notice of product recalls and that sort of thing. Thinking about how to go down market, but really how to decentralize this that feels important. Just have time for one more question. You guys regulate so much of what gets bill out there. I think the number was 20 cents on the dollar spent by consumers on food, on drugs, on cosmetics and all these different things. When you talk to your colleagues at the FDA and all these different groups beyond even food about blockchain technology, how often comes to mind, cryptocurrencies and energy burn and speculative financial instruments, these kinds of things that I think are part of the spectrum, but how much does that create barriers to diving into what's possible with the technology? Yeah, no, that's a great question. There's been a real sea change on how, I think, folks within the agency think about it. My brother and fellow regulators, I can tell you when I first joined the agency, which was two and a half years ago, even financial disclosures, if you don't have cryptocurrencies, they didn't even know what you're talking about. But I will tell you right now today, cryptocurrency is not what comes to mind inside the agency. We have a couple of work streams involving blockchain technology. We certainly have the Drug Supply Chain Security Act and many of you know there are pilots that are being done for drugs. You've heard about vaccines. There's a great system being run by Cedar here at FDA on sharing of health records on distributed ledger technology. And so I can tell you today, it's really about tracking assets and sharing of information in a trusted way and people no longer think of cryptocurrency. Those days are behind us, I think, in federal service. That's great. Well, let's keep them away from Miami then. With that, Frank, thank you so much for giving us your time. And we'll continue to work with the FDA going forward. Yeah, please. Thank you. Keep up the good work. All right. Thanks so much.


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continuous coverage of HP Discover Live from Las Vegas here in the Venetian Convention Center. And joining me is Jeff Canyon, who's director of alliances in the ESSN group of HP. Welcome to theCUBE. Thank you very much, Stu. Great, so we're talking about, I believe, virtual systems, which is something that was announced this week here at HP. And people are trying to understand what it is and how it fits in with kind of matrix and cloud systems and all the other converged infrastructure you have. Can you give us a little bit of a background on virtual systems? Yeah, sure. Yeah, we had a president analyst meeting on Monday and then the kickoff of the show Monday night, we announced a number of systems, virtual system being one of them. And so what we're pulling together there is a HP storage networking and server together with some of our partners, Microsoft and VMware into a unified system that we're testing and delivering as a single SKU for customers in virtual environments. So it's a single stack that's sold as a SKU? Absolutely. Okay. And with services as well, Stu. Great, great. So as I said, I'm familiar. HP's been selling the matrix and earlier this year I heard about cloud systems. So what's different about virtual systems? So virtual systems is something that's brought together into one unified system that's been fully tested and delivers an experience that the customer can rely on. In the case of matrix and cloud system, those are not delivered as a single SKU, but as separate products that are customized for each customer's particular workload needs. Okay, so single SKU, does that ship out of the HP factory as a single rack, or is that something that your partners and integrators do? Yeah, so we're putting it all together out of HP's factory express that'll come with both startup and consulting services. So when it arises at the customer's site, it's not just a box that they have to figure out what to do with, a consultant will come on site, do startup services and implement it into their network and configuring things like LUNs and so on for their customer's environment. Well, so I mean, you and I were talking a little bit off camera earlier and talking, you know, HP has a long history of preconfiguring, getting it all together, making sure there's the management, as you said, LUNs in my IP addresses and everything's ready when it goes out of the box. So, I guess what was the drive to create virtual systems and go beyond just a kind of a packaging exercise to integrating it together? So I think one of the tenants is trying to simplify things across the entire spectrum, from the ordering, from the delivery and to the integration at the customer's site. So we certainly have integrated and will continue to do that. Virtual systems will be shipped as single SKUs, we'll also have reference architectures for customers that want an even greater amount of flexibility. Okay, so, you know, HP has a converged infrastructure group and while it has, you know, we were just listening to David Cahill talking about, you know, HP has very impressive market share in servers, now number two in networking and, you know, very strong in storage historically. But when it comes to fully baking these solutions together in a stack, it feels a little bit like HP is following in some of the footsteps of some of the other competitors out there. Do you think that's fair? So I think timing is actually pretty good for us to come in to the game here. We certainly are, HP's watching the marketplace with VCE and FlexPod. If you look at some of the recent announcements that VCE had out recently, you can see that they're evolving their solution offerings. I think actually the timing's pretty good. I think that some of the market has been seeded, but HP has strong offerings across the spectrum, as you said, for compute network and storage and timing's good for us. So the real battleground I see on Convergence seems to be the systems integrators and the service providers, what's HP's message there? So for service providers, so one of the things we're delivering as we, excuse me, as we talked off camera, one of the things is that customers aren't going to deploy just a virtual infrastructure. It doesn't really do anything for their business. And so one of the things that we'll be working with partners on is workloads on top of that. And I think you're right in terms of system integrators are going to work with customers and can enhance these virtual systems to deliver the workloads that customers are expecting to put on top of it. And I think that's great. I've talked to a number of services systems integrators and they say anything to simplify their job is good. There is a little bit of value in putting all the pieces together, but if that can be done from a single SKU standpoint, they have added services that they can put on top of it. And as you said, applications, the usage once I've got virtualization. And I should point out, I believe you said VMware and Microsoft Hyper-V today from a Hypervisor standpoint. Right, those are the two initial partners that we're working on and we'll expand that over time. And what workloads do you have targeted for the initial deployments? So the initial one that we're coming out with is a VDI workload. As you may know for app systems that were also announced this week, we have some fairly specific hardened appliances, if you will, that are dedicated towards workloads. And we will evolve those types of appliances to take advantage of the investment we're making in virtual systems as well. So you'll see over time different workloads that will work here on top of virtual systems. Okay, so maybe a VDI is the first workload. Wikibon spent a long time looking at desktop virtualization. It's something that always seems to be the next technology from a virtualization standpoint, but it's still kind of niching and the ecosystem is very dispersed. Question I have for you is, do we think desktop virtualization is really ready to take off and why does virtual systems, how does that fit into that? So for virtual systems, one of the things I think about the VDI workload is it is a bit more predictable. So we're able to size the systems more effectively. We have a lot of experience in this area and can deliver the experience the customer is going to expect. Whether that will take off in the market, I think we'll see some of our, we're looking at delivering those through reference architectures to still allow the customer to have that additional flexibility that they wouldn't get in a hardened appliance. Okay, I've also been getting information talking about the service providers doing desktop as a service. So applications from the service providers and desktop is one that can be there. Is that something that you guys are looking at? So not me particularly, I'm sitting in on the R&D side and trying to produce these products, but I think that's probably an excellent point and something that we'll need to incorporate. So one of the things we had an announcement this week about this product segment, and so we're in the labs, my team's in the labs right now developing these and we have some deeper conversations with both customers and analysts later tonight, where we're looking at gathering feedback. So I think it's good to get there. Yeah, so Jeff, yeah, you've got a lab there and you've got a bunch of hardware and you put all the pieces together. Maybe you can give us a little color as to how all of the acquisitions that HP has done. So my understanding is you have three different models of virtual system today, and on the storage standpoint, two of those are from the left-hand technology and one from 3PAR, 3PAR relatively recent acquisitions. So how fast is HP moving those into the product line and how are those products to work with on the inside? Yeah, that's right Stu. So there are three different virtual systems I just want to point out as well. Right, so it's not there's one, two, and three. Inside one, two, and three there's a lot of variability in terms of the amount of storage, the amount of servers, the memory, and so on. So we're trying to bake in a lot of variability and flexibility for the customer. Speaking to some of the technology acquisitions, one of the things we're also including, you didn't mention the 3Com networking portion. So top of rack switching, really important inside the appliance, as well as providing ease of connectivity to the core data center. So good history there, 3Com's been with HP over a year now. Obviously 3PAR newer, but I have to say even in the last six months from my own experience, the engineers are now working on a daily basis with 3PAR, we're trying to position that product. It's obviously very important for both virtualized environments and a nice pathway to the cloud. If you look at cloud system, our premier storage for that as well is 3PAR and some of the thin provisioning and autonomic capabilities are pretty well wired for virtualization in cloud. All right, great. One thing I want to poke at a little bit is if you talk about kind of variability and flexibility versus homogeneity. So one of the challenges that when you look at a traditional data center, which is very fragmented in lots of different workloads and lots of different technology as opposed to, if you look at the Googles of the world and the cloud, it's very homogeneous. So how do we balance making sure that we understand my environment can get my workloads working on it versus the traditional environment? So how do you solve that balance? So, I haven't anticipated that question, Stu. I think that, I'm sure I... Okay, so do you follow what I'm saying? Because I guess when I need to marry my storage, my memory and how much bandwidth I have and if it's very variable, I put it together and I need to make sure it all works. So how do you make sure it's baked so that it's a configuration that when I put it in my environment, I can just run with it versus there's all the permutations and combinations and thousands of pages of interoperability matrices like some companies have. So how do I go from the mess of the data center today to an operational model that looks more like pools of storage, more like what a private cloud, if you will, infrastructure as a service? So one of the things I can tell you as we're developing this product, we're going to push a lot of different workloads on it to try and understand for the customer what kind of workloads are pushing more on the network stack, which ones are pushing on the storage stack and with HP's virtual connect technology, which is going across the family here, we'll be able to tune that and work with the customer to tune it. So I think that the variability workload is something that virtualized environments are really growing up on now. I think we look at very high numbers of virtual servers on these systems, but as the workloads increase, we're going to have to look at ways to better deploy that infrastructure. Sure, so the way I look at it is when we went from physical service to virtual servers, we had some consolidation and got more utilization out of them. We need to make sure that as we put the stacks together, we do that because otherwise you'll have an imbalance where you'll have way too much memory or not enough storage or over provisioning bandwidth. And as you said, the virtual connect product line from a networking standpoint give you a lot of flexibility on the network side. We want to make sure that we have kind of the memory and the storage kind of lined up in the same way. Three par is very flexible. Left hand is very flexible. So I think the good architectural building blocks and just think we need some more maturity overall in the industry to make sure we can just push higher and higher utilization and get more out of our infrastructure. You know, one of the things I'll just, you mentioned as part of this thread connection to cloud and virtual system will have HP's inside control software. That's kind of the basis of both the matrix product offering, now cloud system matrix and cloud system enterprise. And so we already today have services to add the matrix operating environment components to virtual system and then add the CSA software stack. So you really can start out with a kind of a basic virtual system, if you will, and grow that up as your needs. Well Jeff, congratulations on the launch of virtual system. We appreciate you sharing this with theCUBE here and look forward to reading more as the product matures hits the marketplace and everything there. So thank you so much for joining us.