Live from Silicon Valley, it's theCUBE, covering Google Cloud, Next 17. Lauren, welcome to theCUBE special coverage of Google Next 2017. This is theCUBE's two days of live coverage here in Palo Alto studio. We have reporters and analysts on the ground. We have all the Wikibon analysts in San Francisco have been up there since Monday for the Google Analyst Summit, as well as reporters at the keynote. We're going to be going live to folks on the ground for a reaction commentary from the keynotes, as well as all the big breakouts and news coverage. Again, two days of live coverage and we want to put a shout out to Intel for their sponsorship and allowing us to do the two days of in-depth coverage, really breaking down the cloud and really talking about this new mega trend around cloud service providers where it's a multi-cloud game which is pretty clear that's happening and then the classification of the world with AI, machine learning, really changing the game on infrastructure, software development, this is the digital transformation, this is the made trend and here to help kick off our two days of coverage is venture capital Scott Rainey who's a partner at Red Point Ventures who has a lot of history in network, software SaaS. Scott, thanks for joining us on the kickoff here for our coverage. Yeah, the big story I was Google news is obviously Diane Greene, great executive. She gets a lot of criticism for her presentation. Some people were saying all this a little bit sleepy but she's got a folksy kind of, I called the Berkeley kind of vibe but she's super smart. She's a great cool person but she came in from VMware which has a lot of chops in the enterprise. So it's no surprise that Google cloud is now marching heavily towards the enterprise. They have all the window dressing, you're seeing all the check boxes next to the sales and marketing, some of the things that they're doing but the end of the day, it's an AI machine learning at the center of all this where data and a new cloud developer or a new developer market has been emerging very fast. They call it cloud native. You're investing in this space. Give me your thoughts on this because you guys have to look at the 20 mile stair down the road, look at kind of that five year horizon or plus for investments whether it's early stage or whatnot but you guys have done a lot with startups that have been successful. Twilio when public that you're on the board of you have a lot of investments in there that are doing very, very well. The developers, the opportunities, what's your take as an investor writing big checks? Yeah, well I think Google's a really interesting way to start this conversation not just the Google cloud platform but Google as an entity. I think Google is frankly been defining about 10 years ahead of where enterprises are in terms of how they're thinking about building and deploying applications.  So obviously one of the great examples of that is what happened around to Duke and that wave. I think what we're in the process of seeing right now is a whole series of innovations that are being developed around more kind of cloud-native technologies. I think Kubernetes is a great example which is really the outgrowth of work that Google had done around Borg. And so we spent a lot of time thinking about the work that Google's, the things that Google are working on now recognizing that's the future of enterprise computing. It takes, obviously takes a while to get there. But there have been massive initiatives. And it's transformative too. Again, I mentioned to you that they went public, great service. So it's not go public, they're now running on Google Cloud and some on AWS. There's game-changing opportunities out there that are going to come out of these unique perspectives that developers and entrepreneurs might have and say, hey, I'm going to innovate on camera technology. That becomes Snap, which becomes kind of a unique, weird app to mainstream. This is not a one-off. I mean, there's a lot happening around creative young entrepreneurs and old, some guys are age. But either way, it's not just apps, it's transformation at the network level all the way up to the top of the stack. What are the trends around that? Because machine learning is aussie hot. What are you hearing from pitches? What's coming through your door? What are you looking at? You guys see a lot of deals. What's the trends that are coming out of that? Well, every pitch we see has machine learning in it. Every company has become an AI company at some level. So that's clearly a big trend. I think for us, the way that we look at that in terms of investments is we're recognizing that the algorithms are really becoming commoditized at some level. And Google with TensorFlow is actually helping make that happen. As we just talked about democratizing machine learning at some level, the key there is data. And so when we look at these companies, we're looking for companies that have a unique proprietary access to data that they can apply those algorithms to deliver insight. I think one of the more interesting areas of applications around that we're seeing is in the SaaS space. So at this kind of upper level, the cloud space, how it's really not enough now to build a SaaS application that just automates the business process. What you have to do is deliver insights. You have to help make the people that are using these applications better at their job at some level. And the way to do that is through things like machine learning. What's interesting, Peter Burr is one of our head of research, Wikibon pointed out, last week when we were covering Mobile World Congress, he goes, it's interesting. Years ago when I was breaking into the business in the late 80s, early 90s, it was known processes, unknown technology, and those were automated. Now you have known technology and unknown processes. So getting those insights to get that discovery could really disrupt existing incumbents, big players. So someone can innovate, say, hey, I'm going to innovate on a new process that's emerging. This seems to be the big trend that's going on. And again, the software model's changing. So how do you guys see entrepreneurs looking at the AI and are they that focused on that or do they see that? I mean, what are the key areas of do they actually say, hey, I'm going to disrupt this marketplace with this one feature? We always hear the MVP or pick something, do it great. What are some of the things that you're seeing? We're really seeing two things in the AI and ML space. We're seeing one is the general kind of platform place, people that are trying to actually offer machine learning to developers in some way, shape, or form. And the reality is I think those are very difficult businesses to build. I think Google Cloud is actually extremely well positioned to be able to actually kind of drive that forward for developers based on all the work that they've done internally and the way that that cloud is built and architected. The second are applications around AI and ML and that's where we're spending the vast majority of our time because we think that that's where the most value will be created there for folks that don't own a cloud like Google. The thing that's interesting about entrepreneurs is it's been a nice thing with cloud. You can get into the game with open source and build a business. You don't have to get all that provision in the data center. That's kind of been talked about. It's not new news. Yeah, you can get up and running. But it's interesting. It was easy to get into the enterprise and then all of a sudden now as it gets more complicated, we're almost going back to the old days of it. It was really hard to crack the code in the enterprise. It seems to be a lot of new table stakes are emerging. Used to be cloud native, I'm going to go in the enterprise and you saw box.net and that became box and Dropbox, they're getting the enterprise very easily. But now as we go post, I'd say post 2012, all these new requirements start to rear their ugly head around. It's hard to get into the enterprise. So this is something that Google is certainly challenged with right now is that they have a lot of tech. They're serious about the enterprise. That's clear. But to be an enterprise contender and winner in winning deals, how hard is it to win the enterprise? And is that something that you see where the enterprise landscape has changed where it's harder or is it easier? What's your thoughts and the complexities in the enterprise? Yeah, I maybe have a different point of view than you do, which is actually, I actually think it's actually easier now to penetrate the enterprise at some level than ever has been before. But it has to start with product and open source is an incredible phenomenon that we're seeing that's kind of overtaking the way that enterprises think about building infrastructure today. I don't think you can build an infrastructure company unless you're offering it as open source software. And so what we look for in terms of investments and I think what entrepreneurs need to do is think about how do I build products that enterprises will love and then release that as open source and hope to see some level of adoption. When you see that, then that's the best path to actually them being able to go in and sell to them and building revenue around it. Kind of transitioning back to Google and what they're doing with the cloud effort. I think that their approach is actually, it's intriguing. Diane is a world class executive in this way and I think kind of brought in the last big transition that we've seen through the works she did with virtualization and I wouldn't bet against her here. I think the things that those guys are doing is offering a pretty compelling set of higher level services now that are getting traction with things like BigQuery. I think the TensorFlow is obviously very interesting and then what they've now announced recently with Spanner as a service. These are all technologies that Google understands and mastered and are very compelling technologies that I think the average developer will want and they're highly differentiated from the services that are available from the Amazons and the Microsofts of the world. Yeah, Spanner's certainly got that horizontally scalable mojo going on. They still got some work to do outside of MySQL and they're on the relational database side but we're watching. But they know that. I mean, Google's clearly not saying they're fully baked. They're actually candid in the analyst meeting. They were very candid on the security side and very candid on some of the things that they know they got to do but they are peddling as fast as they can. So I got to ask you the venture capital question developers are out there because there was a line, literally a blockbuster as they called it. People around the block had to get in. Google I.O. has had similar attraction. Those events are awesome. Google runs great events. They have, I would call them the technology store. People love to go in there and see what they have. But as an entrepreneur coming in, they're going to build on a stack whether it's Amazon or Google or somewhere else. You got to worry about the viability when you have the big gorillas out there. You got Amazon, now Google. What's the formula for this? And what do you worry about as an investor because the things you must think about is, okay, what's the approach? Where's the viability? Is there a marketplace? Is there monetization? Can they get traction? Can they go beyond the first three million in sales? Because SAS, you can get there pretty quickly as it's been discussed. What are the fears that you worry about and what advice would you give entrepreneurs as they start to start really innovating and saying, hey, I'm going to take the democratization of AI and I'm going to do some damage. I want to enter a market. These are considerations that you got to think about and you as an investor, where's the risk and what's the opportunity? Oh man, well, there are lots of risks starting a company. I mean, we could talk for an hour about the challenges associated with being an entrepreneur. It's probably the hardest job you can imagine. Having, I think that the first and foremost is you got to build products that people love and you got to solve a real problem. And so, I think for us as investors, we look for that. It's different now in enterprise investing and infrastructure and before where there used to be 10, 15, 20 million dollar efforts required to build the technology and then you take it to the enterprise and you would hope that it would sell. Now, with a couple million dollars, you have the ability to actually go out and write some compelling software, release it to the open source and see whether or not it gets traction. And then really then the challenge is figuring out whether or not you can monetize that or not. And in today's model, that's really where we struggle. It's ultimately how you ultimately package this and sell it. I think that the primary models that we're seeing are either some form of upsell on open source. So either service support, open core or an enterprise grade application built on top of the open source. The other alternative is to deliver it as a service. And we see lots of folks that are taking that open source and saying, we're going to run this as a service. We have a company in platform nine that does that for Kubernetes, but there are companies like Databricks that are doing that for Spark and the whole data pipeline. And that is potentially a very, very compelling model too. Do you have a formula for an algorithm for an investment? I remember talking to Jeremy Liu way back in the day and I just saw an interview about a Snapchat was an investor and he actually jumped into the stats with Evans Beagle and saw the traction because he was skeptical. A lot of people had passed on about that story, but is there an algorithm that you look for besides the team and being an exceptional team of people, technical shops and product shops? Is there a way that you look at the identified traction in this marketplace because it could be, there's a lot of turbulence, microservices, you've got Kubernetes and other Google innovation that's kind of becoming a glue layer, if you will, across services. Is there a way that's saying, oh that's got traction, I like that or here's some benchmarks that I look for for hurdles and ventures. Yeah, within this infrastructure space, primarily around models that are going to be delivered as open source, there's a couple of things that we can look at, we'll track GitHub stars and so we'll get a sense from that how the community views this, whether or not this is something they're particularly interested in and the level of traction they're getting within that community. It's almost like, that is almost like a stamp of approval from the technology community that says this is a really cool project, right? And then beyond that, you start to look at download volumes and to understand just how widespread the adoption of this technology is. Those are imperfect metrics, you know, and so a lot of times then it comes back to kind of switching. Market forces or whatever. Switching gears and looking at the customers and asking them the kinds of problems they're experiencing or whether or not these technologies have a chance to actually address real longstanding challenges that they've had in either building or deploying or running applications. So it's different than consumer. Yeah, consumer is a little bit easier to measure and you have a lot of data. Consumer has its own challenges and it's very difficult to kind of predict a priority what's going to be successful, but you know, it's, I think it's, the good news for us is with high quality teams, these guys typically know where to focus and where to spend time and ultimately we'll be able to create. And customer traction is always a great one to look at, I mean it's other data points. Scott, Rainey, what's new with Red Point Ventures? Give a quick plug for what you guys are doing, what you're investing in, size of the fund, how much dry powder you have as they say. Are you still writing checks? What kind of checks? We are in business and we're looking for great entrepreneurs. So we have two funds. One is a $400 million early stage fund that focuses primarily on series A and occasional series B and then we have a $400 million early growth fund that is really more on occasional series B and series C. We, you know, our attitude to the entrepreneurs is they should be indifferent as to what fund they're in, we treat every investment the same. Really, we just want to be a part of great companies and get a chance to work with them. And you guys also sponsored a party last night with the CNCF, the Cloud Native Compute Foundation. How did that go? What was some of the conversations in the hallway there or in the hallway in the event? I was at a social event, but you know, great community, the CNCF, developing a couple of new projects emerging. They've done some great work and you know, the projects that are coming in, I think all represent a lot of the foundational work that's going to be required to build cloud native applications. The first thing we did in this event last night is try to define what cloud native actually is. And I think everybody has a different definition for that. What's the most common one? Is there a trend pattern in there? Yeah, I think people were saying these are applications that are built, traditionally built using containers. They're leveraging microservices and they're built with the assumption that the underlying infrastructure is going to be ephemeral in some way. So, you know, built with that. And you have a pony in that game with HashiCorp. So, update on those guys? You know, it's a company that's doing extremely well and solving a broad set of problems around helping developers build and run applications on top of the cloud. And I think what we're seeing there and we're seeing kind of across the board is a general desire by enterprises to start to think about multi-cloud, to start to understand what it takes to actually deploy applications and run applications across multiple clouds and also to be more agnostic about what the underlying substrate looks like. And you know, those are trends that have been bowed well for Google and Microsoft. Yeah, we're excited. Scott, thanks for coming on. We're going to be watching that Kubernetes, that orchestration layer that's going on around microservices. It's a hot, I'd say, battleground around innovation. A lot of good things happening there. Great opportunities when there's a lot of turbulence. There's great opportunities to invest. Good luck with your investments. Scott Rainey, partner at Red Point Ventures. Very active in the community. Great VC, check them out. This is theCUBE, two days of live coverage all day. Going to 4.35 today and then tomorrow, Thursday. And then we're off to South by Southwest again. More coverage, we'll be back with more coverage after the short break.


What's going on everyone? Sam here with late in sports cards ripping three boxes for Jonathan L We've got two at 23 Bowman Chrome University football hobbies and one 23 mosaic choice So start with Bowman Chrome you knock these two out. Come on Jonathan. Let's see it buddy Roman Dunze first. He's a stud dude. He's gonna be disgusting He's been mocked to the Ravens Marvin Harrison first, okay So I'm now a huge Roman Dunze fan A little uh, a little early Jackson-Arnold's, shake, Sean Ward That's why you got a must win game. You're trying to get that 18th pick exactly Autricistina I'm not in the range for 18 right now No win one You got to squeak out a victory against the Lions here Dante Moore Oscar Delp to 2.99 Drake May throwback Phil Moplet Trig Emmett Moorhead Vic Kahuna, Sam Hartman. Nice. Congrats on that Jonathan. I'm the short print Ex-fractor Emmett Moorhead, Rhino Keefe Left-ass Moe, what do you hit? Yes, sir. Or tomorrow I mean Ty Simpson Frank Gord Jr. Blake Shapen John VanEdwards rambling man Blake Fisher first refractor Otto to 4.99 That's one there. Yeah, I was gonna say you like that one John, I'm sure That was a nice Hartman Bo Nick's refractor Shaz Preston That is a Bo Nick's teal to 150 on the 55 throwback Kid Clubnick You see? Bassado, Ty League Williams. Nice one there Do you see Julian? Yeah, a little bit. Now it's like the Right here Radia and Ole Miss I know Radias and Olna Michael Pratt Brutal I don't know those players What's up? I don't know those players Purple Shimmer is James Williams Yeah, true, true, true, true John Because they're a standalone I think in PY College Monterey Baldwin I think, right? I think that's right Tatayvon Sanders Casey Thompson refractor Rashad Dabinyan and Conor Colby See if we get out through your Holland 101 in the New Zana next break Hope so Andrew McCuba to 299 Cooper Dejean Stime Dante Amor Early Risers Purple Jordan Travis Nice one there, 399 Donal There he is Worthy and bass Sleep schedule is so shocked There's Keon Coleman Nice one there Same, dude Same Drew Pine Nice one there First bass auto for Arizona State And Caleb Johnson Jeremiah Hunter Shadoor Sanders Bill Maffa Braylon Trice first refractor Cézanne Bullard Shimmer Bucky Irving Rhino Keefe Audra Costime Jackson Arnold There's like the side of the room on shot Oof, Caleb McDowell Yikes, not something to do in three seasons J.J. McCarthy I kind of want to bot you It's the size of the password Yeah, thank you Nick Batum there, let's go Bullard's My guy One of my favorite jerseys I own Nick Batum believes he's a jersey You're 30 Yeah, now it feels like it Harold Perkins to 499 Nice one there I'm not working until the first week of January the other day It was like 6 a.m. with playing God And didn't realize the times X-Fractor Kendall Milton How'd you get to not have to work until the first of January? That's kind of dope The accent dart Ostime Is it ostime? I knew, I knew his TMA is not right I knew that Ostime I've heard Estime too Audric Ostime Phil Moffam Purple J.L. McMillan to 299 for Washington They're kind of loaded in this actually Layden Robinson Caleb Johnson first and base All right, one box of mosaic choice now too, Jonathan Good luck buddy Junior was no department major Shocking This Cardell Jones says we came here to play football I'm not playing school Yeah We got a peacock Come on Tucker Kraft and Jake Moody That's Chris Olave Max Crosby Mark Brunel to 25 on the green Nice one there I love the checklist in this product man Such sick names All right, we've got a Shannon Sharp to 80 Riley Moss to 80 And then does not look like a rookie It is Mike Alstott for the bucks Nice one there That's six That's cool I gotta get a nice like PSA 10 Peacock Of someone on the Raven Somebody like Roquan Smith That'd be dope I'll do that Dofioa Jeez Yeah, I don't know about Adafioa That'll do it for your break there Jonathan, thanks again for the sport buddy Get him right out to my man


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This is Swiss punctuality. So thank you for everyone in the room for joining us also. Thank you for everyone watching at home or in the office. Now we have 45 minutes to break down some of the biggest challenges for the world economy and really over this. There's one overarching question that we're going to try and answer as global growth has slowed, squeezing living standards and public finances, what can be done to reverse this trend and how should efforts to drive up growth balanced with other national and global imperatives. To answer this very important but also very difficult question, I am delighted to be joined by a stellar panel. Faisal Ali Brahim, the Minister of Economy and Planning for Saudi Arabia. Laura Dandrea Tyson, Distinguished Professor of the Graduate School, House of School of Business, University of California, Berkeley and Christian Keller, Head of Economics Research at Berkeley. So thank you all for joining us. Minister, let me start off with you and this is a difficult question. In the next 12 months, and we also have Jay Powell by the way speaking about three hours from now. So we're not gonna outshine or anticipate exactly what he'll have to say, but what kind of growth do you see in the next 12 months and then longer term, how will that transform in the next five years? So I believe over, if you'd asked us a few months ago, we'd say there are more concerns for recession or a slowdown than ever before. I think today there is less concern for a recession specifically, but definitely a slowdown and we'll find out today if the rate hikes will continue the same momentum or it will see a different pace. I think the IMF recently said that we had growth of above 3% last year. It's expected that this year is 2.8 and next year will probably go up again. Saudi, we've seen a growth rate of 8.7 last year being the highest or the fastest in the G20, but we expect a different growth profile this year. For non-oil activities, we expect the same momentum, high pace of non-oil activities, which leads me to maybe the conclusion that different areas, different regions and different countries witness different, definitely growth profiles. What we've witnessed since the beginning of the pandemic and the other poly crises that we've witnessed is that some governments have taken it upon themselves to really enact some reforms, to build institutional capabilities and to capture opportunities that align their interests better with global interests and we might see some momentum kind of, you know, growing their opportunities for a better growth profile than the global economy. Professor Tyson, is a recession at this point globally a given? No, I do not think it is. Look, the Economist report was just up here before the Economist report coming from the web. I think economists are just divided on this. This is like a 50-50 call at this point, okay? About half of economists think there's gonna be a recession in the United States and half don't. If you look at the historical record, you would say the odds of recession are pretty high because historically speaking, there's almost no example of a soft landing. So remember, what's happening here is the Fed is using monetary policy to cool off the economy without creating a recession, just to cool off the economy. That's the soft landing goal. Very, very hard to achieve and probabilistically pinging, not too likely. That would suggest to me that we get a rather short and rather shallow recession if we get one at all. And I would say there are already a lot of positive signs for the fight against inflation, which has motivated the Fed. If you look at the supply chains of industry, all of those pressures have really eased. If you look at key price areas, commodity prices, food prices, you see easing or declines. You see a labor market in the United States, which is showing signs of cooling, but luckily enough the signs are a soft landing cooling. Just a somewhat of a small increase in the quits rate, but quits remain very, a small decrease in the quits rate, but that they remain very high. People are thinking I can quit and find another job. The unemployment rate remains near historic lows and wage pressures seem to be easing. So I would say that right now the data suggests that indeed the Fed may manage a soft landing, but if not you will get, I would say, a recession which will be short and shallow. And growth really to me is more about the long term. And there I think we have to look at labor force growth and something that has not been discussed a lot in this conference so far and I think we should focus on and that is productivity growth. Because productivity growth long term, it's two things that drive long term growth. It's the growth of the labor force and the skills of labor force and productivity growth. And productivity growth has been very disappointing. It's been very disappointing in the advanced industrial countries for quite a long period of time. I won't get into this now, but let's think about will something like AI and technological change which drove the productivity expansion from 1994 to 2004. That was the internet, ICT, the development of that technology. Will the build out of AI have the same effect? So we'll talk about that. Yeah, we'll talk about AI, we'll talk about fragmentation, we'll talk about decoupling. All that. What kind of economy do you think we'll be left with Christian in the next 12 months? So we start with the cyclical which is my bread and butter in a way every day in the market. We do think we go into a shallow recession in the US. If you ask me about globally, I think we will not have a recession. In China, just coming out of a prolonged lockdown and there's a lot of dynamic now. Europe didn't go into the deep kind of energy crisis so there's dynamic there too, a lot less than in the US but it looks, if you added up, I think globally, we're going to 2.5% or so growth economy globally which is a lot less than we saw as an average over the last decades. But I think what we will see is probably less growth in the coming quarters because we had a massive global tightening of interest rates. We forget, it's not only the Fed, it's globally we had zero interest rates and now we're seeing in a very rapid way within 12 months or so, interest is going from zero or sometimes negative to like 4%, 5% and as economists typically, you expect this comes with a lag. So we will have a lot of the effects of that tightening will only happen over time. So, and we already start seeing it with some banks in the US, we saw it in the UK with a little bit of a pension crisis there. So whenever you increase interest rates that rapidly, I think you're going to see something, right? But I think the longer term question is very interesting and we have a massive demographic change, you mentioned. Labor force growth has been a driver in many economies and China, which contributed basically 20, 30% to global growth every year has a very, very dramatic demographic change. The labor force is not only slowing in growth but it's the growth is turning negative. So that's one. And I think productivity growth is the one part, I think, I guess we'll talk more about it, but that is I think the big hope because if you know, demographically, in the 60s, 70s we grew, the world population grew with 2, 2. something percent. We're now growing at 0.8. So I think there's no hope that just population growth will maintain growth. So it has to be productivity. Capital stock, we have to talk about greening of the economy. I think there's a little bit of expectations there. But I mean, it has to be a productivity growth and the good thing about it is, or the good thing in the sense of, it's so difficult to predict. It has been very low, like you say Laura, like since early 2000s, very disappointing. Very disappointing. But you know, there's a famous saying, I think it was Robert Solow, the famous growth economist. The famous... He said it in 89. He says, I see computers everywhere, but not in the growth statistics. And sure enough, three years later... Then it happened. We saw boom in U.S. productivity in the 90s. So look, I want to go on record. I say, you know, I see iPhones everywhere, but not in the productivity statistics. Well, maybe GPT chat is now going to turn into a, you know, into some kind of a productivity boom in the next 10 years. Who knows, but I think... But you're optimistic on that? You're optimistic? Yeah. Exactly. Listen to some people here. We talked over the last few days, you know, those who know this better, you know, understand it better than me, to the extent that we can fully understand it. It seems to me that could come quite quickly. Yes. You know, it typically takes a time between a new innovation and when it finally shows up in GDP. Yeah. It becomes a general purpose technology, like with electricity. But I think in this case, it could go quite quickly. You know, we all have it on the iPhones. Minister, are you optimistic about... I mean, first of all, the shift, and of course it's different if you're sitting in Saudi Arabia, having to diversify your economy than if you're, for example, in the UK, that kind of, first of all, you know, had to stem the decline and then have to put policies in place to grow further. So you mean... So what are the kind of policies that you're looking at that would actually work? So on AI or on large language models, we're also cautiously optimistic, but we see that there's a lot of opportunity for regulation to mature as fast as... Hopefully it won't slow down the innovation, but to catch up, to make sure that we have the best utilization of this. The kind of growth that we want to see is a growth that fosters or builds on people and ideas. I think this is what's gonna give economies the cutting edge moving forward. And it needs to be an inclusive growth, sustainable growth. Luckily, we started Vision 2030 seven, eight years ago, and then when the pandemic kicked in, everybody started thinking differently about their economies and their strategies and their policies, which made it easier for us to collaborate with other countries and multilateral platforms. And for us, we see one that really builds on making sure that growth is inclusive, especially when we have the intersection of economic opportunity, which is something we're witnessing a lot of, social responsibility, the same thing, and social development globally, especially as demographic profiles are changing. At the intersection of these three things, we have what we call inclusive growth, and it would be a shame and a waste if we don't, at the end of this, I'd say, disruptive period we're going through, we don't really crack the code on inclusive growth. Lord, do we have inclusive growth when you look at the cost of living crisis? Are politicians, also because of the election cycle and the short termism, really thinking about this longer term? So, I think we always have had a cost of living problem. And I'm just gonna talk about the advanced industrial countries. We have a situation, and we've had a situation where a significant fraction of the labor force is fully employed, and is not fully employed at a living wage. So, they have a cost of living crisis. It's ongoing, they're working. They're working full time. Sometimes they're working two jobs full time. Sometimes everybody in their house is working. And the minimum wage that society provides is not high enough, and therefore there is no living standard protection. That's a long term problem, okay? It's not a cyclical problem. It is certainly true that the short term increase in inflation, say, of commodities or of energy prices, hits those families very hard. The food crisis, the food alone is very significant. But I would say, again, we have to think about this inclusive growth as a long term goal. We have to think about how we do our growth strategies to try to make sure they are inclusive. So, if you listen to, say, the US and it's moving into what they're calling industrial strategies, which is basically green development strategies, and right now, semiconductors, every single item of those policies includes ways to make the policies inclusive. So, for example, if you are a semiconductor firm applying to the Department of Commerce for some money to help you build a new facility, you have to have in your proposal information about what you're doing for disadvantaged workers, information for what you're going to do for training, information for what you're going to do with the community colleges in that area. Every, and I could do that in the IRA too, this administration, the Biden administration has absolutely adopted that in physical policy that's pro-growth. We must have explicit elements of that policy which deal with inclusion and address the fact that we've had this long-term issue of people working but not at a living standard that is viable. Christian, and frankly, the Inflation Reduction Act has infuriated most European leaders and politicians. What's the growth plan for this region? Well, I mean, first of all, I would say we have a, what we see worldwide now is a bigger state, right? And that's very interesting how the state becomes involved, you know, just, and you know, not only on the IRA, but also, you know, as much as people suffered and there's no doubt, you know, and some people have experienced a cost of living crisis. You know, the US threw a lot of money during the pandemic at the issue. I mean, you know, this, to the households, there were checks being sent out. I mean, we had a fiscal expansion unseen outside of a wall. And this is why we have now, you know, some estimates, two and a half trillion of excess savings in the US. So meaning, you know, the state has been compensating a lot in Europe as well through different means, not as much as in the US. So, you know, in aggregate, there's a lot of demand out there. So it cannot be that everyone has no purchasing power. So, you know, maybe the government has to be actually become better very soon after the crisis now to very target this. At targeted, at targeted. Because right now, in aggregate, there was a lot. And, you know, so your question was on the, more on investment and the IRA. Well, yeah, Europe can do to actually put some of the similar policy. You has now come up with their own green deal, right? And that is a very comprehensive plan. And if you look at the totality of it, it's actually quite big. It's quite large. But we had yesterday on one of the panels, an ex-German minister who, you know, she was not involved directly in this, but she said, it's 400 pages long. And by the time you read it all and you get to it, it's apparently, and I've not read it, but apparently it's a lot more difficult than the US IRA.  Why the Europeans, maybe classic, the classic way the Europeans do it, at least in Brussels is, you know, it's very detailed. It has a lot of aspects and it takes a long time. The question is whether people, companies that is, really pick it up in the same way they can do it in the US. Can we just say politically speaking a reason for that? So to get that deal through, which was a complete, it was amazing. I mean, most, everyone was not predicting that we were gonna get that deal. But one way we got it is a lot, a lot of this is tax credits. And then, so the tax credits as they take effect, therefore tax credits for consumers to buy green products and producers to produce green products and their tax incentives are related to, well, is it produced in the United States? Because we would like to have inclusive growth. So will you please build the car in the United States and then you get a credit? It's easy to use the tax credits, but I will tell you it's been very hard for the Treasury to write them because they're not clean. That is, the frequently they'll have, well, you get the tax credit if you do X, but also you have to do Y at the same time. Okay, and the Y might be that, what number of workers you're employing? So I think it's easier than the European, but it's a little more multi-targeted because, again, it goes back to the, Biden administration is trying to encourage growth that is inclusive and green is the major area it's trying to do this in. So you can see the mix of targets, green targets, inclusive targets. Yeah, we had a conversation also with John Podesta who's gonna try and roll it out. And I mean, he says, look, it's exciting, but there are a lot of challenges on the credits also get to the right place. Minister, I mean, it feels like the world may be fragmenting a little bit, so I don't know whether we're talking about decoupling or supply chain issues. Like, what are you most pessimistic about growth worldwide in the next five years? So clearly globalization is evolving. We still see high levels of global trade, 32 trillion, I think at the end of 22, an increase by 15% in services, 10% in goods, although it witnessed a dip towards the end of the year. And I think it's just signaling that globalization is evolving. We're seeing near shoring. We're seeing all of localization, all of these things. I think that's mainly because we're going from cost efficiency, solving for cost efficiency to solving for resilience. This creates opportunities, but there is a concern that the collaboration between nations or regionally or intra or interregionally may not be at the same level, which would mean a slower or a different growth profile, even if some national interests are being served. So we need to continue to dial up the collaboration, the cooperation, try to invest. And then this is, if you look at it holistically, it's an investment in global resilience. And if you take a very long-term view, it's an investment in deeper globalization. So the concern is if we don't build the right institutional capabilities, utilize this crisis to build the right institutional capabilities that foster and continue to create the right kind of partnerships and collaboration opportunities between nations.  If supply chains keep on shifting? Well, I completely agree with the minister that what is going on here is a kind of a resilience response. So if we think about the heyday of globalization, the last wave of it, was really built significantly from a US point of view on labor arbitrage. That is basically US companies, I heard an amazing comment from the head of tax at GE at one point and said, okay, the products are designed in the United States, they're produced in another place, and the tax revenues go to yet another place, which is a tax haven, okay? So basically, whether one believes the tax haven part or not, the truth is that a lot of US production as US manufacturing came down as a share of GDP, it did not come down that much, it really did not. What happened was the firms automated at home, okay? So if they were gonna keep stuff in the US, they automated it, and where they could, they essentially outsourced it for cost reasons. Labor cost arbitrage, it was very profitable. It worked, it worked, and that was a driver of globalization around the world, around the world, so that you had, that period of time was, that's where you saw a convergence of growth rates from the most developed countries to the least developed countries, from Africa to Asia to Europe to the United States, it was convergence. That has not been true since the Great Recession. Globalization leveled off, there was then COVID and the interruption of supply chains, and I think now what companies are doing is they're looking for building up another source of, so the resilience is there. I've heard companies in the United States say my strategy is China plus one other place. I need to have another place for resilience. I will just go here, I think we should continue the conversation of coupling or decoupling. I think US-China relations are on a very bad course, and I think for the rest of the world, I guess I would ask, it poses challenges for the rest of the world because, for example, what do the ASEAN nations do? Do they, are they going to be two blocks? Are they going to be a splinter net? So you got one internet system in it. I worry about this a lot. But Christian, so if the question is what growth policy works is the first question that you need answer to answer as a nation, what do I do with China? Well, first of all, I think exactly what Laura said. There were these imperfections, certainly, right? In particular tax arbitrage, that people could allocate into tax havens, but I think we have to be very careful not to pull the baby out with the bathwater in the sense that this globalization was a beautiful thing for millions, hundreds of millions of people to get them out of poverty. It was not good for certain workers in the US, middle class, I think also Europe, right? Exactly, but if we look at the numbers in terms of global equity and millions of emerging markets, hundreds of millions in China moved up, so that happened. Second, we got something that was called the great moderation. Since the mid-80s all the way to the global financial crisis, high growth, low inflation, and very little volatility. So now we talk about resilience, but the minister said something very interesting. He said global resilience. Actually, during that type of globalization, the global resilience was quite good. We had just in time, things were moving around, and now we're looking at national resilience. And now we realize that in many ways, there's been a huge dependence on China, and now we want to create redundancies, et cetera. By the way, we had this discussion here in one of the panels. I don't think that can be good for growth, at least from a perspective of just GDP growth, because you create inefficiencies purposefully. It will. And it will be good for other things, and maybe we want that. But to say, to claim that we want to create growth when you do redundancies and all this, I doubt it. So now I think what is very important, I think that's what you mentioned. We all realize now there's going to be a diversification supply chains, but US, China, trade, this has to continue. And maybe we can find ways whereby, yes, it's not high tech, but just one last number, I remember when we wrote a piece on globalization. In 1914, just before the First World War, global trade was 40% of GDP, export imports together. You know where it was after the Second World War? 7.5. And you know it was in 1990, I think 30. So only in 2005, just before the global financial crisis, we were at 50%, meaning it took 70, 80 years to get back to, or about 100 years actually, to get back to where we were already at a stage before the First World War. Now, I'm not calling that we are in a war here, but what I'm saying is it's good to talk about resilience. Everyone in Washington is united about that one needs to go against China, or be tough on China. But with regard to growth, what we had for growth were quite nicely, and we probably should correct it. It worked very well. But it was for the world. You also talked about polycrisis, right? What are we underestimating? If you look at the next five years, what's the biggest mistake that we could think of when you look at these polycrisis? Because the problem is that if they come from everywhere, it's very difficult for policymakers to find the right medicine. So I think maybe back to this point, national resilience, Christian probably without collaboration, without investing in multilateral, is less global resilience. So we need to cover that gap with more collaboration. I think what we've learned in the last few years is that risk assessment is an evolving thing, and we need to always be at the cutting edge of forecasting risks, discussing it, collaborating on in terms of how to mitigate it, but really keeping dialogue open, being inclusive with nations, even the least developed nations. I think there's a lot to learn, especially today. There's a hunt for talent, and because of that hunt, there's this pull for talent to show up everywhere, and we're seeing talent showing up in middle-income countries and least-developed countries, and some of them are actually evolving their institutional capabilities and policy-making capabilities faster in learning and offering lessons learned that we all can utilize. So I think we should not be blindsided by not taking into account that wider dialogue. I also wanted to add on globalization, I think 1.1 billion since 1990 lifted from poverty, and then in China, 800 million since China started opening up, but that was a result of globalization that really created centers where they received a lot of jobs because of the cost efficiency. Today, jobs are being spread all over the place because you're looking for resilience, and that may affect a little bit growth or create inflation environment, like the panelists said in the previous panel, but it also may create more inclusivity in terms of adopting a global view. Minister, when you talk about risk mitigation, are you surprised that we got so wrong? The economy, inflation, or geopolitics, it feels like the last three, four years were a bit of a blur, actually, in terms of our forecasting full stop. I think even the panel before us was talking about how it's tough. Even a few months ago, our views would be different. I think we tend to forget. During the pandemic, we all worked together almost like, I'd say, seamlessly to address the most global challenge that the world has ever faced or the most global thing that the world has faced, but I'm pretty sure that we didn't capture all the lessons learned, and I think the world is evolving at a different view than we've ever seen before, a different pace and a different structure than we've ever faced. Traditionally, we've always been busy trying to explain what happened in the previous crisis that we miss out on the signals of the upcoming crisis. So I don't have an answer, but I think it is challenging and without the right collaboration and dialogue and discussion, it would be even more challenging. Thank you. I know, I'm sure we have a lot of questions. So if I see a quick show of hands, and so we'll get to you, someone in the middle. Thank you so much. Don't know if we have a microphone and if the microphone can get to, or you can project. I can move without mic. Perfect. Go ahead. There you go. No, I was just saying. Actually, a microphone's coming. Productivity, right. I was fascinated by this remark about productivity and growth. In between 1950 and 1975, we had the golden quarter, and so in advanced Western economies, we had growth rates higher than 5%. After that, we never reset again, also not with IT. Now, according to the future of job study, we have shortage of labor, but still the level of automation is only marginally increased from 33% to 34%, while the expectation where that nearly half of the activities worldwide would be automated now. So don't you think that we are in a kind of hype cycle? So we have huge expectation of those emerging technologies, but it probably will take 10 to 15 years before they really result in substantial productivity increase. What is your view on when can we really benefit from these emerging technologies and will productivity lead to growth? Who wants to take it? I raised it, so I'll start. Maybe we do it together. First of all, the period 1994 to 2005 was a period of much stronger than anticipated productivity growth in the US. I was speaking about the US, and that's where you actually did see the ICT revolution take hold. Now, it doesn't take hold at the same time in all sectors. So it's the ICT sector itself and the financial services sector that really start to drive this. And it happens in about a decade. Then there's the financial crisis and the great recession. Everything seems to come unhinged by that. But if I use that as an example, the chat capabilities, the AI capabilities looks like they can be rolled out very fast. You don't need a whole new infrastructure. You can use it on the internet that exists. You can use it on the phones that exist. You can use it with the software that exists. You can embed it in existing software very easily. You can take a Salesforce thing and drive it by artificial intelligence. So my optimism is that this is a technology that can be rolled out pretty fast. Now, my pessimism is that it really goes to aging and what do people wanna buy? What do people want in life? Well, if people want a lot of human intensive care, if they want teachers in the room, if they want caregivers at home, if they want to have their own personal therapist, their own hairdresser. This is what a lot of middle-class people in developed economies spend their money on. I'm not sure that you're gonna see how AI can enhance productivity of those things. So what I'm saying is I think there'll be sectoral differences. I do think overall the productivity growth rate will be raised and could go back to essentially a short period in 1994 to 2005 when you actually see productivity growing at more than 2%. And I remember, you know, I was an advisor to President Clinton and I used to tell him the economy can't grow this fast because the productivity growth rate is gonna be no more than two. And then of course it turned out to be totally wrong. He still reminds me of that to this day. How come you told me that? I said because nobody could predict the productivity effects. But I think learning from that lesson with the optimism that this new technology can be, it's easy to interface with it. You don't have to train people very much for them to use it. Yeah, I agree. I mean, it's incredibly difficult to predict. No one predicts it. But you know, frankly the chance, the fact that since the early 2000s has been so low, you know the chances that at some point we get a productivity spurt is higher now. Now that is, I would complicate the issue a little bit more. And that is by the way, productivity. What do we measure? We measure GDP and the input. And there's something interesting that happens in the digital age is that a lot of products are free. Why? What enters GDP? It's output of produced goods and services and market prices. Market prices. How many things we consume today are free? Why? Because in a digital economy, a lot of things have zero marginal costs. Now, if something has a zero marginal cost, it's zero price. So without going too nerdy now on how GDP statistics are computed or compounded, I mean, fact is that we may actually be better in terms of growth and productivity than we think. And then there are a lot of people who start working on this. How could we actually capture some of that digital product that we are consuming? And maybe all the digital revolution that we think has been so useless with regard to lifting productivity in a way has already done something. Has already done something. Right. I mean, that is an easy way out. You just said... The quality of life. But I think it's a very interesting thing that we've discussed in the web for you already also. Minister, can I ask you actually as a minister in terms of the economy, do you have a favorite statistic that you look at? I don't know whether it's... We like taking bets on what Jay Powell looks at. But is there a... Because I have a favorite statistic. But we're improving our data, I'd say infrastructure, and we're looking at everything. What we're intrigued by is not only productivity, which is something we're trying to address because we want to shift from a resource-rich economy to one that is productivity-led and knowledge and innovation-based. But we're very proud of the female labor participation rates we've been witnessing, and we're very proud of all the reforms that we've been enacting, even on the cultural level. And I think one thing that can demonstrate how serious this transformation is, is that we've elected to go through social and cultural change to open up room for more optimal economic development. In the past, it was seen as something that will hopefully happen post-economic development. But I want to comment on the technology question. I think if you think in terms of decades, and you adopt a long-term investment horizon, decades is short. It's not mobile banking, how it disrupted Africa. It just happened three or four decades ago. It feels like we've always lived with it, but it happened COVID, our ability to shift from face-to-face meetings to virtual meetings in literally no time and actually address screening using apps and improve the logistics related to actual vaccination. It's something we couldn't have done without technology. AI and quantum, I think it's something every day we're looking at and its potential impact. I think this is more disruptive than the rest of the examples we've mentioned. I think it's important for us to keep in mind. But I think if it takes decades with a long-term horizon, it's fast enough. Thank you. Could I have a show of hands for the next question? So we have someone on the second row. Thank you. Bouchon, Stacey, PwC. Question about participation rates. Can we really have inclusive growth if we don't get childcare back into the workforce and if we go into population decline in some of the developed world? Who wants to take that? Look, the US has had poor labor force participation rates. And if you were looking at that number, you'd say, this is a society that's not working well. We've had decline in labor force participation rates for men. We've had that associated with a decline in longevity for men. We have, a lot of this has to do, as far as we can tell, with the displacement of the middle-skill, middle-wage jobs that these men would have had that disappeared, okay? The labor force participation rates for women are back up now, though they slow down and I think the care issue is a very important issue. It was highlighted in the pandemic. One of the many things that was highlighted in the pandemic, I did a lot of work with Saudi and the World Economic Forum on global gender parity. And one of the key, key, key issues is care. Because, and we saw this during the pandemic, women take on a disproportionate share of that, whether it's childcare or just household care, just taking care of the house. And if we could build up the care economy, not only would we have a source of growth for jobs in that economy, but we would also increase the capability for women to actually go into the rest of the economy. So I think this is a very big growth issue, certainly for the United States and probably for many other countries in the world. Just one very quick extension, maybe, that is labor force participation is one way to get your workforce up, right? You have a, the young population is not growing, homegrown. And so one way to deal with it, Japan is doing it relatively successfully, getting women into, usually it's women who have not been working. So you increase labor force participation. But another point is, you know, the demographic, the aging we're talking about is of course not homogeneous across the entire world. It's main, it's happening in China way too early. So they grow old while they're still relatively poor. But in generally it's an advanced economy, rich economy phenomenon. Now, there are many regions in the world where there's still relatively strong population with a lot of young population. And that is of course another way if it's increasing your own labor force participation, another one is dealing with this in a way, in an orderly migration way. And that is something I think that is probably, will be part of a successful global growth plan to kind of manage to get these resources into the right places. It's a very complicated issue because, I mean, you mentioned Japan. So if you kind of look at the use of robots, intelligent robots and AI in Japan in the healthcare sector, what you find is since they weren't gonna bring in migrants to handle that, they basically have, they're at the frontier in terms of what you can do in healthcare with robots, intelligent robots and AI. And they will continue to be because they're substituting for labor which they are not going to import. But your point also raises another thing which I've heard in the sessions and I think we should talk about this a little bit. And that is maybe the globalization of the next period is significantly services led. So what does that mean? It means that the digitization of everything means that a worker sitting somewhere in Thailand can do the job. Okay, a worker sitting somewhere in Kenya can do the job. And so instead of having the outsourcing of manufacturing production, which is what we had in the last wave, we actually have the outsourcing of service jobs, okay? And I think this is really important and different countries can set up their talent pool by developing the digital skills of that talent pool and also the broadband. You've gotta have the infrastructure to allow your workers to be in this global system. But I think that's gonna be a very important characteristic of the next decade. Minister. To answer the question, maybe with the Saudi example, 37% of target for female participation rate was 30%. We started at 2015, 16, at 16, 17%. We wouldn't be able to reach 37% if it wasn't for the many programs that the Ministry of Human Resources didn't put forward that even made it easy and accessible for women to go from one location to another and so many other enablers. And to answer the previous question, I have to add to productivity and labor participation rate, non-oil export complexity. That's very non-oil export complexity. We're trying to diversify our source of growth. That's the most important thing we look at. Thank you. Professor Schwab. Can I just... Oh, yeah, let's go ahead. Hold on. If we look at the world we have two, I would say mega challenges. Mega. One is to master artificial intelligence, but the other one is to master climate change. So my question would be, what will be, I mean, it's a tremendous effort, some people say, will cost us three trillion a year at least, what will be impact of the energy transition be actually on economic growth? And we're starting, I guess, we've felt it in the last six months. Who wants to start us off? Christian? Well, I think there's going to be a capital stock that has to be created and there's a lot of optimism around this and the jobs will be created and we have a new infrastructures needs to be built. I think what sometimes is neglected is of course that there's a lot of existing infrastructure and minister, I mean, you have a lot of existing infrastructure in old energy which now will be depreciated at a very fast rate. And, you know, if we had done this early on and we'd have let those brown infrastructure run out and build others, now we have to do it because climate change is pressing, we waited, we procrastinated, it now has to happen very quickly. So frankly, in the transition phase, and I would make a big difference between the way towards having then clean energy where everything runs clean on clean energy, I think that would be a, I don't want to exaggerate, a beautiful world, you know? But the transition, I think, will be tough. And I think sometimes that is a bit of pet peeve of mine. I think we sometimes trying to paste over it and pretend as if it's just new green jobs are being created and all the rest, don't worry, we reconfigure it. I think the transition may be tough and maybe politicians also at some point have to say, look, we want to have that goal. And maybe GDP growth, the output that we measure will not go up, maybe well-being will go up. I think we have to think about how we deal with the transition, which as I said, I think will not necessarily be one that will bring GDP growth the way we measure it up. Minister? You know, I think, you know, just to comment on the Saudi comment, Christian, I think we still are a conventional energy leader, a clean one, the cleanest actually, and we plan to be a renewable energy leader because mainly we are in the most drought stressed and heat stressed area. So we're at the front line of this. It's not just something we're trying to do to win praises, it's something we're trying to do for the well-being of our people and for our role in the global effort to counter or to fight climate change. But I think we need to fight climate change while thinking about energy security equally and think, so we don't go into the issues that we went to recently and also think about fair and equitable access to economic development. And I think we adopt several ways of thinking. One of them is the circular carbon economy where we say, let's reduce, reuse, recycle and remove. We have to have an inclusive view on how to deal with emissions and not just killing it at the source but probably efficiently removing it afterwards. Laura, how painful do you think this transition will be into greener drought? Well, I think, unfortunately, I think we're late in the transition. So the more we procrastinate, the tougher it will be. And we have these reports generally coming out over and over that we're not on track. We're nowhere near on track. So if the world is actually going to honor its net zero commitments and companies are gonna honor their net zero commitments, they're going to have to do much more than they're doing right now. I do think that this move to a different energy infrastructure, yes, it creates tremendous opportunities for investment and growth. But remember, we have an existing infrastructure. So with any kind of, I would say technological revolution, let's call it that, there's creative destruction. There's destruction. There will be job loss. There will be income loss for companies that are in the old energy field. And I think what policymakers need to do is to really ease that burden. I think U.S. historically speaking has handled creative destruction, which we've handled very well, except we don't worry too much about the destruction. Okay, and I do actually think that even in the creation of the IRA, there was a sense that no, we've got to actually create support for say the industries that are going to gradually decline. So I think I agree with you completely that it's not going to be easy, that we're making it harder by making it late, and that we're going to deal with some destruction. And then the question is, how do you ease that pain? How do you ease that pain? Thank you so much for a very spirited conversation.  I'll ask the panel to actually exit with me. And it's my great pleasure to call on stage, Sadia Zahidi, for some closing remarks. Thank you.


So one of the things that we can do inside of Microsoft Excel is we can actually do a little bit of formatting. Say for example, it looks pretty, you know, white screen right now. That's pretty boring and bland in my opinion. But one of the things I can do is I can click on, say, a column, and you notice that entire column is highlighted. That entire column, as long as I scroll down, is always going to be highlighted. So literally every single thing is being highlighted right now in the B column. Well, one of the things you notice is I've got up here my font section. And if I just go ahead and click on that paint bucket, you're going to see that that entire font section becomes yellow. And the same thing that we saw if I was doing it for my columns, I can do it for my rows. If I click on, say, the one row, that will make it so that that's the row I'm dealing with. And sort of the same kind of concept goes in there. If I try and scroll to the left, one of the things you'll notice is I'll even go back. One of the things you'll notice is even though I hit Z, you know, the alphabet doesn't end at Z, we'll actually now just kind of go into the AA columns. And if I go through 26 more times, you'll see that I go into the BA, and we'll continue to do this over and over again. Just in case we really have to make databases or spreadsheets this big. Hopefully you never have to do that. So one of the big issues you might ask yourself is what happens if I got overzealous and I'm all the way over here. I'm on row 100 at column GT. Well, I don't want to have to scroll. I don't want to have to, you know, do everything that I had to just do to come down here. I don't want to have to do that again.  One of the things I can do is I can go control plus home. I have that home button on my keyboard and by holding control and then pressing home, you'll see that I actually jump all the way back to A1. That happens everywhere. It's just like in Microsoft Word where if I use control home, I jump to the top of my document. If I hit control and guess what, I go to the very bottom, very most right thing inside of my document.


Today, I am continuing to urge the legislature to pass medical marijuana legislation. As I have said for years, I support the legalization of medical marijuana and I believe it's long past time to provide this important medical relief to patients and families across the Commonwealth. I have met with patients and families, held roundtables, and urged action on this legislation since taking office. Additionally, my administration pushed forward with the program to expand research into the use of CBD for the treatment of children with intractable seizures. It is time to legalize medical marijuana because we should not deny doctor-recommended treatment that could help people suffering from seizures and cancer patients affected by chemotherapy. I urge quick action by the legislature to legalize medical marijuana.


Mentoring a student in Google Summer of Code 2020 was a great experience. The student proposed to increase the performance of the Jenkins Git plugin by removing duplicate operations and by choosing the fastest Git implementation based on the size of the repository. The student added a performance testing framework and provided data from the framework comparing performance of the two different Git implementations. The data surprised us and led to performance improvements that are now available to all Git plugin users. Over 85,000 installations of the Git plugin are now running the code developed by that student as part of Google Summer of Code.


In case you didn't know, CNN's Sanjay Gupta actually went on Joe Rogan's podcast and was confronted about CNN deliberately claiming falsely that Joe Rogan took horse dewormer for COVID. He was in fact prescribed the human version of Ivermectin by his doctor. Sanjay even agreed that CNN shouldn't have done that. Well, it appears that CNN wasn't happy about that. They lied and said I was taking horse dewormer. First of all, it was prescribed to me by a doctor. Yeah, yeah, yeah. Along with a bunch. You got it from a doctor, so that it shouldn't be called that. It was in large part a tongue-in-cheek interview, you know, because it's Joe Rogan and there's lots of you're jockeying back and forth. He did say something about Ivermectin that I think wasn't actually correct about CNN and lying. Ivermectin is a drug that is commonly used as a horse dewormer. So it is not a lie to say that the drug is used as a horse dewormer. Correct? That's right. That's correct. Now, I think what Joe's point is... For humans, but not necessarily for COVID, right? Yeah. That's correct.


Hello everyone, I welcome you to today's lecture. What we discussed last time about IBX based oxidation, hydroxybenzoic acid based oxidations. I hope that you had the chance to go through that and understand what I mentioned in the class where not only we did the oxidation of alcohols to the corresponding carbonyl compounds, but we also discussed how alcohols can be converted to the corresponding enone or dienone and how the mechanisms allow the conversion of ketones to the enone using IBX involving radical based mechanisms. Now, one of the oxidizing agents that we used for converting an enone or transposing an enone to the corresponding enone with an extra functional group such as this was Daubend rearrangement, where we took the alcohol and reacted with PCC. Now that oxidizing agent pyridinium chlorochromate allowed this oxidation of the tertiary alcohol which can be formed from here if we add the corresponding alkyl or aryl group and then we carry out this Daubend rearrangement. So if one also looks at the IBX based reactions, so in 2004 someone reported there can similar type of conversions using IBX in DMSO at 55 degrees temperature. So as one can see that we can have not only PCC, but also IBX as a reagent to bring about this Daubend mitno rearrangement. Now as you can anticipate that the intermediate that can be expected to form on this intermediate would be something of this kind. So when starts with this substrate which is shown above and reacts with IBX that is what you have is something of this kind where you can put the iodine here and oxygen here and of course OH and OH and Iodine oxygen double bond and OH from the IBX. And what one can expect to form is an intermediate of this kind where you have the reagent in this fashion and with an O- and positive charge. So when this alcohol reacts with this iodine this goes off and what you generate is something of this type by the loss of water in the from the reaction medium. Now when such a intermediate which is formed you can anticipate that the iodine here which is the iodine here which is connected to the O- which of course you can write as I double bond O or I plus and O- then we can anticipate that this is 1, this is 1, this is 2, this is 3, this is 4 and this is 5 and this is 6. So you can anticipate that this oxygen can be attached to this with the double bond movement of this kind and of course here something of that type can occur to form the intermediate of this kind where now you have a hydrogen and you have an IR and then you have an O then you have an I then of course you have the bulk of the substrate here and oxygen here, oxygen here and this here and at the same time what you will have is an O- coming here which is what is like this. Now this can undergo oxidation, this allows oxidation to take place and one can get the enone here transposed and plus IBA. So it is very similar to what we discussed earlier with pyridinium chlorochromate but now you have another option of using IBX for the similar type of Daubend Michnore arrangement to take place. Now we look at the other oxidizing agent which is called as a pre-voss reaction and its modification. Now pre-voss reaction gives either trans or the anti or syn alcohols depending on the condition that one uses or trans or cis alcohols. Now what is used is the olefin is allowed to react with silver salts of benzoic acid or acetic acid that means silver benzoate or silver acetate and in the presence of iodine in a reaction where benzene is used as a solvent and what is formed is the dibenzoate which is formed from the olefin which can be hydrolyzed under basic conditions to form the diol. As one can see from here that the benzoate which is here is coming opposite to the other benzoate which is present. That is the reason why this hydroxy group and these hydroxy groups are opposite to each other onto the double bond side. So what is exactly happening is silver benzoate interacts with the iodine and polarizes the iodine to form silver iodide and you generate an I plus. This I plus then interacts with the double bond to form an intermediate iodone amine of this type and of course here in this case you will be losing silver iodide. Now benzoate can attack see on this carbon atom here and this bond breaks the carbon iodine bond breaks and you now have benzoate attack. So this that there is an inversion of stereochemistry at this center. So the R2 group and R3 groups are pointing upwards and from the lower side benzoate is attacking and now you have iodine going on the top where now the next silver benzoate there should be positive charge here on the silver. Now this interacts with the iodine tries to pull it off at the same time this oxygen lone pair of electrons can attack here and by pushing the iodine out which is assisted by the silver salt to form an oxonium ion intermediate of this kind. This of course we can write as resonance structure with a positive charge either on oxygen or on carbon. Of course you will prefer to write the positive charge on the carbon which is next to the phenyl group and in this case now this symmetrical intermediate then is attacked by the benzoate onto this carbon. Now when this attacks on this carbon now this particular benzoate has come from the opposite side of the other benzoate because now this particular part becomes a benzoate. This particular part becomes a benzoate. So now you have a di-benzoate where the two benzoate groups have come from opposite direction and then the hydrolysis and the basic condition is carried out the benzoates get oxidized and you get the corresponding dior. So this is where one of the aspects of pre-wast reaction which was discovered long back has been used. One of the disadvantages as you can see is the use of silver salt which is somewhat expensive if the reaction is to be carried out at large scale. But it is very interesting from the mechanism point of view and now there is some modification which is done and that has been reported by the famous organic chemist R.B. Woodward at Harvard who found out that if the reaction is carried out in the presence of water in this case of course the reagent that has been taken is silver acetate but it does not matter one can also take silver benzoate. Idea here is that you have a source of any carboxylate which eventually gives the hydroxy group. So when the reaction is carried out in the presence of water what is observed is the formation of the cis hydroxy groups that means the two hydroxy groups are coming from the same side. Now if one looks at the mechanism that we discussed without the presence of water you get an intermediate of this kind. Now this intermediate is the one in which we had attacked benzoate in this case of course it would be acetate but in the case of benzoate the benzoate attacks on to this carbon here in this carbon here and this opens up here from here to here and you get the corresponding trans di acetate or di benzoate. So what we had observed last time was the like this here and of course OCO phenyl and you get NOCO phenyl. So basically we were saying that this part and this part are opposite to each other. So that is the case when benzoate or in this case acetate you can also have an acetate reacting. So that attacks opposite to on the opposite side but if we take water as a medium I mean as a nucleophile present in the medium then the water now is competing with the acetate or the benzoate moiety and the water is small is present in a large amount and it attacks on to this particular carbon atom rather than attacking on to this carbon atom and that is to do with hard soft acid base principle that is this carbon is a positively charged carbon with 2 oxygens around and water is harder than benzoate or acetate where the negative charge is delocalized over the carbonyl group whereas in the water case it is not delocalized. Therefore this is a hard base and this is a hard acid therefore the reaction preferential area gives this particular OH group attaching on to the carbonyl where there is a phenyl ring. Now this obviously will immediately break up and releasing the OH and the benzoate which of course on the hydrolysis will give the OH now in the 2 OH groups are on the same side. Obviously here we are writing benzoate because we are comparing with the previous reaction that we did it but we can also have the acetate as I mentioned here. So in place of this benzoate part here you can have the acetate part also. So one gets the diol which is cis diol. So this is a very interesting modification that has been introduced by Abhi Woodward. Now if one looks at a complicated example such as this which is an intermediate for a steroid type of synthesis. Now if one takes silver acetate and iodine so obviously since the methyl group is beta oriented beta oriented the sterically less hindered side will be from the alpha side. Therefore iodonium ion formation takes place from the alpha side. Now if one then attacks the acetate now this reaction we are carrying out in the presence of water. So it is since the iodonium ion is formed from the alpha side the attack of the acetate ion would always occur from the beta side and on the less hindered side of the iodonium ion. But it does not really matter eventually because we get anyway the diol. So but the reaction occurs from the beta side that is the reason why what we are getting is an intermediate where this diol would eventually come from the from the beta side because the intermediate that is going to form will be something like this and here you have O, C, O and methyl. So now if this reaction goes further then we will get O which is beta, C then this here O and this. So this is also beta and this is also beta and then of course you will have methyl group here and the positive charge here. This is what is going to happen and when this is attacked by the water then of course what we would get is an intermediate of this type where we have an OH here and the methyl here. When this part breaks up in whichever way eventually finally what we would get is OH here and of course OH here. So this is how the reaction is carried out. Now that means if the iodine reacts with silver acetate and the iodonium ion is formed from the alpha side the diol is beta. Now if one carries out the dihydroxylation using osmium tetroxide then similar to the iodonium ion formation, osmium tetroxide would also attack from the alpha side because there is a steric hindrance from the beta methyl group. So the osmium tetroxide would make an intermediate of this kind which is from the alpha side and since it is a cyclic intermediate involving both the oxygens of the osmium tetroxide attacking on the double bond from alpha side eventually one would get the diol in which both of these hydroxy groups are alpha oriented. So one can see that that the difference between the two of them is eventually the outcome of the diols stereochemistry. So this kind of application has been very well utilized in the reaction or pre-wast type. Now there are disadvantages as I mentioned that you use two moles of silver salt and one mole of iodine. It is something which is not very good because if one carries out the reaction on a large scale then you have this as expensive protocol. So these protocols involving silver salt and iodine are expensive. So what has been recently reported in 2005 is you take lithium bromide as a in a catalytic amount as a source of Br- and lithium plus and this can be reacted with one mole equivalent of an oxidizing agent which is phenyl iododiacetate. Now this phenyl iododiacetate oxidizes the Br- to Br plus and then of course that Br plus and the Br- will eventually become a bromine. So now this molecular bromine in the process of course you use you get Irobenzene and lithium acetate from the oxidizing agent which is phenyl iododiacetate. So basically what you have done is you have oxidized the Br- the bromide ion to the corresponding molecular bromine which then reacts with the olefin in a similar fashion as the iodine was reacted with the double bond in the pre-wast reaction where silver salts of the benzoate or silver benzoic acid or acetic acid was used as silver salt. So when this bromonium ion is formed you will get of course the attack of the double bond onto the Br plus taking place exactly in an identical fashion as iodine type of reaction and then when the attack of the acetic acid or in this case acetate or acetic acid occurs then one can imagine that the nucleophile coming from the beta side and this particular bond breaking from the lower side and therefore the acetate and the bromine the acetate and the bromine would be opposite to each other or it is very clear that this is what exactly will happen similar to the pre-wast type of reaction. Now obviously you have the acetate which is now going to react it from the opposite side in the presence of this bromine leaving group in the form of bromide and you generate a similar intermediate to the pre-wast type of intermediate. Now it is very clear that the acetic acid or acetate ion would now attack from the opposite side and then you get an antidiol or antidiacetate which can be hydrolyzed to the corresponding antidiol but if water is added like Woodward's modification then this is the intermediate that can be attacked by the water and then you have a similar situation as Woodward's case and you can get the cis diol or syn diol that will form when water is added. So it is exactly similar to the pre-wast reaction the only difference is that in place of iodine as a molecular iodine and silver salt of the benzoate what one is using is basically nothing but lithium bromide in a catalytic fashion. Now as you can see from here when the reaction takes place you have a bromide ion coming from here is also bromide ion coming from here. So you have two of the bromide ions which have come out of the reaction medium and acetic acid or acetate they react and then of course you generate the intermediates which are diacetates or either in anti form or a syn form but this bromide ions then are re-oxidized by the same oxidizing agent which is phenyl H I O A C twice and you regenerate the bromine here. So you do not have to use molecular bromine and you can take the corresponding lithium bromide and then carry out by reacting with phenyl I O O diacetate as an oxidizing agent to form the corresponding syn or anti diacetate. So this is a very interesting modification and new modification a relatively cheap modification. Now we have another reagent which is called as Phetizones reagent which exploits the utility of silver carbonate which is essentially absorbed on the surface of silite and although this allows the oxidation of primary secondary alcohols both but it is more selective for the oxidation of secondary and allylic oxidations or in other words the secondary and allylic alcohols are preferentially oxidized over primary if the substrate has such both the kind of alcohols which are present. Now Phetizone oxidation involves oxidation of primary and secondary alcohols utilizing the compound silver carbonate which is absorbed on the surface of silite. Basically silite is nothing but diatomaceous earth also known as Kieselger is a naturally occurring soft siliceous sedimentary rock. So basically it is a fine powder white color powder which has mainly SiO2 as the chemical present however it allows adsorption of different kinds of chemicals on its surface. It is known as Phetizones reagent because it was first employed by Phetizone in 1968. It is a mild reagent suitable for both acid sensitive and base sensitive compounds and it is specifically reactive with lactols to obtain lactones. Now this is something that we will discuss from diols not from a diols from diols. It is the obviously it is an expensive reagent because it is a silver salt which has to be utilized however it has lot of advantages one as I have mentioned above it has a selectivity in terms of secondary and allylic alcohols are oxidized faster than primary. The diols can be interestingly oxidized to the corresponding lactones. The only disadvantage or one of the disadvantages of this reaction is that it it can be utilized but if there are polar groups present on the substrate then there is a problem because the those polar groups can have a competition with the silver carbonate for the alcohol adsorption because ultimately silver carbonate which is adsorbed on the surface of silite interacts with the hydroxy group of the alcohol. But if there are other polar groups which are present in the reaction medium or on the substrate then there is a competition. Now there is also a possibility of steric hindrance of the alpha hydrogen that means the alcohol which is getting oxidized that alcohol if it has the hydrogen which is sterically hindered kind of oxygen hydrogen then there is a possibility of a rate slowing down because of the steric hindrance that is exhibited by that particular substrate. So in case the reaction is carried out in a solvent which is polar then also there is a problem. Now I just want to show one or two examples here for example of this allylic alcohol can be oxidized to the corresponding enone. This allylic alcohol can be converted to the corresponding alpha beta unsaturated aldehyde and as I mentioned that you can take a diol of this type and it is a symmetrical diol. So you get only one particular lactone and then if you have this diol which is not a symmetrical diol but then as you can see the difference there is an allylic alcohol here and this is a non-allylic alcohol here. So this particular double the OH group gets oxidized to the corresponding aldehyde which is in equilibrium with this lactol and this lactol then is again allylic alcohol and it gets oxidized to the corresponding lactone. So this is how the lactone has formed. So one can go to the diol to the lactone in two different ways as it is seen one diol which is a symmetrical diol which does not have allylic alcohol but then this is allylic alcohol. So allylic alcohol is oxidized faster than the non-allylic alcohol and that allows the lactone formation in a very regioselective fashion. So these are the examples which indicate the utility of silver carbonate on silite which is called phetazones reagent. So I will stop it today at this stage and take up the further aspects of this phetazones reagent in my next class. In the meanwhile you can go through these oxidations which I discussed just now both the prevost reaction as well as this silver carbonate based reaction and prior to that I discussed the IBX based Daubner, Dauben-Mischno reaction or rearrangement and you can carefully look at the mechanistic aspects and application of those reagents in organic synthesis and then we will look at further aspects of these in the next class. Thank you.