So, we're going to start a new session of the World Economic Forum on Latin America Brazil. I think that you all have the simultaneous interpretation receptor, so we're going to be speaking in English in Spanish, so you have the simultaneous interpretation to understand everything that will be discussed during this day. So, we'll be speaking about agriculture, how to broaden the scale of agriculture, so how to scale up innovation in agriculture so that it can be more healthy or can be healthier. Well, I'll be taking this with these five panelists. So the thing is how innovation should be financed and also broadened in terms of use. So tell them we're going to help me to answer this question. So here I have Mauricio Adadi, he is the president of Latin America of DSM. Thank you very much Mauricio for being here. Thank you very much for the invitation. Here are lots of patents. She comes from Uruguay and she is the founder and executive director of Chipsaper. And then we have, from Norway, Zvaym Thor-Hoseter. He is the president and chief executive officer of YALA International. And also we have the minister of agriculture and livestock of Paraguay, Marcos Medina Leslie, Patrick Strebi, founder and chief executive director of Ferra Trasa. So it's very clear that the food system today is unsustainable. Something is wrong with the microphone. Okay, we're back again. So I was saying that it's very clear that the food systems today are unsustainable for both the planet and also for human beings. And the idea or the question to all of you is how can we change this trend? How can we use the technology to change this trend? Mauricio, thank you very much. Good morning, everyone. I'm Mauricio Adadi. And I would like to start by saying by speaking about a topic that should be very much related to the improvement of innovation in agriculture, which is sustainability. I believe that speaking about innovation and speaking about something that is new but cannot bring benefits cannot only bring benefits to agriculture or to livestock without thinking that we have to look at the planet as a whole. And it has to be sustainable. And two things that I would like to point out here. And of course I would like to give the opportunity for my colleagues to speak. So I'm not going to take too long. So the first thing is the importance of investments. Investments that is required. And this in general is very difficult because for many entities, investments that is made and that is required innovation and also for research and development is like investing in a black box because you don't know exactly what will come out. So it is very important to see a discussion that we had yesterday for IND, Latin America. And one thing that came up is resilience and funding. For example, in our corporation, every year regardless of whether it rains or it's sunny, we invest from 4% to 5% in innovation, 4% to 5% of our sales investment in research. And when we have a bad year, it's very difficult to think on the day of tomorrow because innovation in IND, if you want to scale up, we have to think in the long term so this is why investment is very important. Now an example, so what we do from the global perspective is that we have a nutritional additive which is for animals because we're speaking about agriculture and livestock. So focus on animals. This is a special additive. So we know that one of the major concerns from the sustainability point of view are the gases that are produced everywhere. So one of the gases that is more complicated is methane. When we compare the cows, we can think that each one of them is like a BMW because they do produce a lot of gas and there is an interest on the part not only of the entities and governments but also manufacturers of animal protein to reduce the number of gases produced. So for the last 10 years we've been investigating this and we want to bring, come up with a molecule that can be used without changing of course the relationship with what is the usual digestion of the ruminant animals but this molecule will reduce up to 30% the emission of methane by animals, this is confirmed by studies. And this molecule also is able to increase the conversion of animal production. So it is a very important investment. So this is an investment that is very sustainable in R&D but global investments that do not understand this local perspective is very difficult especially when we develop a new concept for a new molecule in Europe and the US immediately letting America will simply copy and paste that. That's the reality. So what we do is that we have these farms that are used, one for ruminants, so this is for livestock and the other one we have just recently invested in a research to understand how this molecule can be used in letting America which is different from the type of livestock that we have here. So this is why we conduct a local research and now we go back to the PPP, usually I say PPP-E because there are many PPP that are not efficient. So in this case a PPP-E is one that develops, that performs development together with the University of Sao Paulo for this kind of studies. So it is very important investment and also resilient investment is also very important to understand the development can be done from the global perspective but also we have to have a specific understanding of how it can be applied locally. So this is global, global development for local solutions. And how about you Alonso Perez? Well to start up, I think that we have to invest in agriculture not only because of course this is an important industry for letting America but also for the humans for survival. And for 2050 the population will be 9 billion point 8 people. So this means a high number of people. And what happens is that there is a report from the World Bank saying that the productivity will reduce by 50 percent, 25 percent. So as I was saying the use of resources is very important. Now in terms of livestock we have a platform to monitor livestock remotely and we know what the local cows are at that precise moment. And we can also control or monitor genetics of this livestock. We are depending on the climate also it's monitored and certain animals can also eat less and they can get fattened faster. So we have to consider that we have only one planet. So we also have to consider the area that is limited for livestock. And also we use the Internet of Things and this is very important because then we also have sensors that are connected and sending information all the time. And so we come to a point in which we will not believe without our mobile services or mobile cell phones. But do you know your cell phone number by heart? Because people usually don't know that. So this is going to happen with agriculture too. So we will have to understand data so that we can understand better livestock and also get caught so that we can make better decisions. And this is very important for survival. Sven, how do you see this? But Carol as you said initially the food systems today clearly are broken and looking at the numbers they certainly back up that 800 million people go to bed hungry every night. Agriculture is a major contributor to greenhouse gas emissions. 25% is from agriculture. Half of that is from change of land use. So from the starting point we have some real challenges. But I'm an optimist looking at what is out there in terms of technology and knowledge. It is possible to grow enough food for the world. Growth today and also for the growth that we're seeing in the next 20, 30 years where we will get to 9, 10 billion people by just utilizing that. But we need to think differently. And I think when it comes to innovation it's important to think not just innovation in terms of technology and products but also in terms of collaboration and partnerships. And I was in a session in the World Economic Forum in Davos and one of the head of the African farmer unions he made a statement that made a big impression on me and he said when you think about innovation make sure that you respond to the needs of the farmers and don't make innovation that creates needs with farmers. Because being a farmer is very complicated and when we think about innovation how can we make the everyday life easier for the farmer? So that's what I'd like to say initially on not just focusing on product and technology but rather also on partnerships. Okay. Minister, do we have? Well Minister, I would like to hear your view about this as someone who is in the government. So how is it to have a state that supports agriculture and is also on the side of the culture to allow this innovation to be implemented also by the small farmers. Paraguay is a bilingual country and our language we have a very special tone to address these issues. So thank you very much for the question. Thank you very much for the invitation to be here. With regard to the question it seems to me that it's very important. But first of all I would like to say this from the political point of view because I come from the private sector for five years I've been in the government so I know both sides of the coin. And the first thing I would like to point out is the importance of innovation and technology for countries or emerging countries like Paraguay especially for agriculture and livestock. 15 years ago Paraguay was a country that was closer to 50 percent when we started this implementation of technology. And 15 years later Paraguay is now among the major producers of food in the world. We are the fourth largest exporter of soybean and also the first of meat, seventh of corn and we export wheat. We are the only sub-tropical country that exports wheat among other commodities. We are in the top 10. So this major advancement is because of technology, because of innovation that has been implemented that has impacted very strongly our economy. We are the most stable country in the region although we have major or great neighboring countries. But we have maintained a growth on average of five percent a year and our economy has an inflation rate that is below five percent every year. We have the same currency for the last 70 years and it's very important that despite all the difficulties of our neighboring countries we have been stabilized and this is mostly because of innovation technology that we have put in place. And what is most significant is that we have reduced poverty by 50 percent which is now nearing 20 percent. So when we speak about innovation this is not only thinking about energy from food security but also from the point of view of the economic impact and also the social impact and also of course the environmental impact that it has. What is then said about the farmers, I'm also a livestock producer so I understand very well the fact that technology and innovation should respond to the needs that the farmers or producers have. When we speak about needs I think it's also very important to take into account innovation and the concept of technology because in the world that has been a big debate about what is a technology that can be accepted or not by the consumer. GMOs for example, my country uses the GMOs, the genetically modified organisms and this has made a difference but in some countries they're not accepted so this is key in innovation and not only to see what the producer or the farmer needs but also what the consumer will accept in terms of what results from this innovation because eventually you can just produce something that will not be accepted by the consumer. And innovation and technology also has to cover sustainability. Everything that we do should be sustainable in three dimensions, economic and social environmental aspects and lastly I would just like to restate that innovation has to have an impact on the social, economic and political perspectives and fundamentally has to answer to the needs of the farmer on one hand but also the consumer on the other hand. Patrick, how do you take care of the small farmers that are the ones that Ferdazza mentioned? How can they have access to innovation? How can they really benefit from this innovation? Farmers to compete with large scale farmers who have economies of scale and I think we need really to look at how can we find solutions that we can take into that potential to link small scale farmers with global markets. Now we started, I started my organization in Mexico 12 years ago focusing on the development of small scale farmers and linking them with markets. We used the Fairtrade model and organic because at the very beginning it was clear to me that if I want to do this as a social business and I have higher costs at the production side I somehow need to offset this and I could do this because there is somebody called like the conscious consumer who walks into Tesco, walks into Whole Foods and is willing to pay 20 cents more and this is how we scaled our model from one company to 15 companies in 12 countries but the question now is how can we scale and this is the question of this panel, how can we scale this and I was thinking long and hard about this and now that we talk about the force industrial evolution and we see how technology is disrupting every single sector, agriculture will also be one of them and so we have, we were looking at how can we use technology to really scale, how can we use technology that we can give a farmer the tools in his or her hand that they can be the best farmers and how to link them with markets in a direct way and we are now at the point where we are very close to having a solution that really can scale and that can scale globally so I'm very excited and as Sven was saying is an optimist, I'm probably one of the biggest optimists you've ever seen and I think we need to be optimists and so I'm very excited to see how can we use technology to scale solutions that we can tap into that huge potential because the world needs it, we need to tap into small scale farmers to link them to global markets because it is not just the win-win, it is a win-win-win-win, why? Because you have a farmer who now live in poverty who has better income, we address the food security challenge, you know, we connect to markets and we focus on sustainable agriculture and if we do this and if we do this in collaboration as we heard this on the panel, you know we have to collaborate, the time is over where we can work as islands, the world needs to learn to work together and this is what the forum is so good at, you know, public, private partnerships, how can we work together to reach these important goals? I just wanted to build on what Patrick said on the need to include smallholder farmers because and I said initially that 800 million people in the world go to bed hungry every night and a large share of that are smallholder farmers so how do we connect the smallholder farmers to the to the market and you are a fertilizer company and in my life a lot of work I spend a lot of time out with the farmers, I spent a lot of time in Africa and I seen at first hand how difficult it is to be a smallholder farmer without the whole value chain. We have examples of farmers that have followed the advice, they increase the crop yield but then there's no market for the product and it rots and it's really heartbreaking to see that they don't know the right things and then they're not connected to the market. But I also see some really good solutions to this and it's something called the farm to market alliance which is trying to create scale for smallholder farmers. This is an initiative where the world food program which is one of the largest buyers of food in the world have committed that a certain percentage of what they buy will be from smallholder farmers but then we need to create the full value chain and here Yara together with Syngenta and Bayer and Rabobank and others we have then tried to make a full value chain from the input to the farmer all the way to the to the market. Today in Africa we have 136,000 farmers on this this program. We have increased their yields by 34 percent and the farmer income by 83 percent. So it's an example of getting a private public partnership that really works and it creates a sustainable business model for the farmer but how do we bring that to to scale 136,000 farmers now? We have a vision of getting that to one and a half million farmers within the next few years but the need is much bigger than that. So how do we bring that even further to scale but it is possible to connect more than the world food program to this value chain. So that's a challenge that I think we all should take. Mauricio, you wanted to add something to that? Yeah very briefly I think that I like very much what you said minister. At the end of the day the solution of scaling up has to be end to end has to be the total ecosystem. Not that I am against that we improve the farmers small farmers but also we have to take into consideration the consumer. So it's changing a little bit the concept that this not only from farm to fork but also from fork to farm. At the end of the day the consumers they play an important role. You mentioned one example that is I mean if the consumers it does not resonate for them being a new technology or even simple things that the consumers don't like the food that you're producing then it's difficult that even if you get the correct incentive to the farmers that you can you can really be successful and so let us think about end to end the total solution and I think that in this direction an example of blending everything you said here and to have a public and private partnership but it's effective something that we're doing in Rwanda it's called African Proof Foods. It's together with the World Bank together with the development banks of the Netherlands and the UK but also together with the government of Rwanda and there we are talking and improving the capabilities of 9,000 small holder farmers but at the same time the product that we are producing there 45 zeros they go hands to hands what is the normal habit of the local population. In Rwanda people are very used and they like very much a special kind of porridge so if you don't take this too in consideration it's very difficult to push through something to the consumer. So just to finalize one concept that we like to introduce from the consumer point of view if you want to make this a success and scale up and those things can be reproduced three A's for the consumer point of view it needs to be available it needs to be affordable people have to be able to buy it and less but not least it needs to be aspirational I want to eat this otherwise I mean it's very difficult to do end to end. Patrick can I build on this? This is a very good point and you know you mentioned the consumers and I absolutely agree you know I mean we need solutions that are market-driven and who is at the end of the market it's the end consumer and when we look at this the megatrends globally in food is you know we live in a very different time today and when you look at the consumer today the consumer today wants to know what is in my product you know if you drink your coffee who produced that coffee you know those farmers who produce that coffee have to receive the fair salary has there been an environmental harm and if a product does not comply with these standards today these companies are running the risk of getting out of business so the world has really changed you know we are as a company we are fair trade pioneers we said a lot of products and fair trade started like 30 years ago but it was a very intransparent world you had some rich countries and you had the poor ones and then the certification was like the label who was guaranteeing that if you buy that banana you will help some farmer far away the world today is very different we live in a world of radical transparency this means today if you don't have a product that complies with this you will be out of out of the market so we need to understand that whatever we want to do you know that transparency will be very critical so this means food that as as as you said that is healthy and a farmer consumers want healthy food and they want to know that there is food that has produced social and mental benefits very key point moderate this debate i found this marvelous document i recommended to everyone it's extremely interesting and on page six it has a list of 17 arguments of why there is a need to transform food systems i won't read all 17 i'm just going to read two almost 80 percent of poor people live in rural areas in the world and they work mainly in agriculture agriculture employs more people in the world than other industries it employs about 60 percent of workers in less developed countries this is extremely interesting we know that in innovation we can find the answer technology is the answer why has it taken us so long to innovate why has it been so slow in agriculture where are the obstacles and hurdles i had a startup in latin america since 2012 and i think that we had some obstacles for example we developed hardware and developing hardware in latin america is a little complicated to have the components here when i lived in the united states i just ordered by amazon and i'd get the next day but here it's not doesn't work like that so we have to innovate in that sense here what's good about innovating in latin america is that for example in montevideo which is where i live i have a field that is just 30 minutes away from my house so the producers are really close to me i can go talk to a client see what they need so i think that for latin america we can innovate thinking about that seeing what the problem is and how we can find a solution but we've taken long because of the cost of technology here and i'm talking about technology if iot for example rural producers have profit margins that are very very low so in order to offer a service that improves their yield and productivity and that doesn't generate them cost is very complicated so we have to see how we can fund technology so that these producers can have access to the technology and we also have rural connectivity issues so in rural areas in latin america sometimes reaching certain areas with technology is very difficult minister medina you'd like to say something i think that the question is extremely important why hasn't technology reached smallholders i think we have to differentiate what a smallholder is in a rich country and in an emerging latin american country it's two completely different profiles and within latin america we also have different levels as well we have to we have to analyze education technology and education go hand in hand low educational levels means low technological levels secondly and this happens at least in paraguay we still have weaknesses as a state we have states that are weak that they don't have a lot of rural presence and this becomes even harder with political ideologies there are some ideologies that have been installed in the states and they go against technology they don't think about food security but they think about politics and the use of technology goes against their ideology and using politics can also go against this sometimes the concept of family agriculture in latin america is politically ideological let's say it has a political tangent and this is a segment that does not want to use technology due to ideology and this is a huge challenge that we have to face yes patrick would you like to add something modicio did you want to add something i come from a different angle here let's if you think about successes we have in latin america today we talk about brazil and brazil is i mean will become if not yet the first producer of soy in the world the minister has mentioned that uh yeah now you're number four in soy you're number six in in order and number seven producer and in corn but this did not happen from day to night so the point that i want to make here is that you need a vision and a strategic plan that is not a short-term strategic plan you need to understand what are the dynamics and the different partners more over now what they think and create the narrative and a plan that is hopefully robust and with a full-loss implementation and this is and this is not happening from day to night and in building this hopefully minister this plan should navigate through the political differences that can have from the government perspective and it's not only the plan that has to be implemented by the government it has to involve all the partners all the stakeholders that play a role into that and again i insist on that end to end bring consumers to the party bring the small farmers also to the party and and having this plan then i think we can tackle and speed up perhaps we can but it does not happen from day to night okay i've visto varias personas acá en el public interesadas en formular preguntas a nuestro panel así que podemos empezar allá tenemos alguien bueno tenemos a dos personas primero la chica y luego ladies first tremendous power nowadays thank you quien responde who would like to answer i think the work that you do is is really really good and and it's also focusing on the starting with the diet and see what the dietary needs are and how we can make that more sustainable as well and then go backwards in the in the value chain and we're part of what's called the fold of the food and land use coalition where we also have the eat foundation in bringing in the science and the diet part of it and then linking that from the dietary needs all the way back to the farmer and then creating a roadmap well what does that mean for say us as a fertilizer company what does it mean for the seed producers and the chemical producers what does it mean for for farmers but to create this roadmap but it's important that we have the diet in part and including the chefs in this is a great initiative no i think that it's very important as a PR strategy it's really important i mean for some weeks ago i think in london some restaurants were closed because they said the meat was coming from the uk and it didn't so it is i think consumers are starting to see that and chefs all of obviously are really important in the sense that if they put in their restaurant that's okay this meat comes from uruguay it's a great place that all the animals have been in open sky yeah i'm a i'm a really fun of my country um i don't see that so but i mean it does it and it it's raises the prices of the meat so it's the whole value the whole meat chain increases if in the restaurant in london the guy at the the chef can say okay here you have a tablet here is where the meat i mean the animal has been and and you can you can know that it had at least a good life while it was living okay just a small comment and thanks i mean we we have been working together into this topic we're one of the partners of gastro motiva i think the the the point here is also we said that before we had to segment i mean where the chefs can really play a role the the developed and the developing countries and i think one important thing of the chefs being a voice now that more and more has gained space is the understanding by the chefs what is a nutritious food they really focus in what is inspirational and what makes sense really that i mean is appealing and then it tastes good but also we cannot dissociate this from nutrition obesity is becoming a tremendous issue globally and then if the chefs are becoming now stronger and their voice is heard they have to understand that empty calories make no sense we have to cover everything make this not only aspirational but also nutritional okay now we go here here and then there please yeah i think uh when you look to the whole supply chain i mean i work for a company for Louis dry foods i mean uh you're talking on fruit we're the third the third largest fruit producer on the world we have fair trade rainforest program and i think there's a big challenge on how we give scale to the small farmer to go uh to the final consumer um and i think how to properly reiterate the small farmer to be doing such a way and i think i mean without really having scale is very difficult to make that product come in an affordable way cheap to the final consumer that want to get that and i think there are large organizations such as the one that i work but i think even much more important than that when you have we have the people that are really having the brand and more important than that people on the supermarket that will be really willing to be giving that transparency and to promote that i think we talk about a lot on what we can do to have technology accessible to the small farmer so he can produce more efficient how he can gain more we talk about what the consumer wants because we we we see that i mean the consumer wants to be having product coming from a small farmer product that is produced sustainably that is really remunerating and helping small holders or small poor people but to to be linking to this one i think there is one step that i think today is kind of seen as evil on the big brands and i mean if you look the value of the big brands in comparison to some of the people that are really applying technology to the final consumer is going in opposite direction but i think there's a a role that i think is super important to be able to have this really income transfer and i think the role of that one i think supermarket has a key role in between that and we talk nothing about that and that's most of the food sold in the world is through big supermarkets and at least from what i feel i don't see a big role of the supermarkets playing and really willing to be doing some advertisement or sort of transferring of that income going across the value chain so i think there is one step in the value chain which includes massive amount of food being sold in the world that i think is missing on this debate and i think the question i have it's just a statement more than a question so the question i have is really i think when we have companies like i mean we have amazon buying whole foods and i mean we have aliba buying china and going which i think there's an opportunity for these guys to be entering the landscape and to giving the transparent so the questioning do you feel like i mean from the fair trade perspective from the small holders how did the technology on the people that are selling everything through the web to be have a role to be changing this this landscape do you feel like this company can really be selling food and making this connection in a more sustainable and fair way i mean this is a very good question and i think it's a very relevant question and when we look at this i think from the very beginning we need to be aware that working with small scale farmers we're setting a very high bar you know so we're doing something it's really difficult because as i said initially you know you're competing with large scale farmers so how can you do this and you were mentioning the the consumer and when you look at the fair trade you're organic and you walk into whole foods you know i mean you pay 50 percent more for organic or you know so the price differential is just too high so i think when we look at this when we look at at that challenge we need to look at really understanding how can we bring how can we make small scale farmers more more more productive is there something of economies of scale for small scale farm that we can bring the price point down i think this will be very important and as i said earlier fair trade started 30 years ago in an intransparent world now i think we need the goal should be now to democratize fair trade if we can work together and find alliances that we can bring economies of scale to this and we can disrupt also the supply chain because when you look at just you mentioned looking at the entire supply chain when you see how much the small scale farmer makes and how much you pay when you walk into tesco or you walk into whole foods and you pay for a banana and you see them all these merchants you will see that in the long run these this will not be sustainable so there will be there will be disruption and i think solutions need to come across the supply chain you know starting on the ground looking at how can we use logistics more efficiently effectively and and and and making a more direct link between product producer and markets okay we have another question here so patrick let me let me offer you a different perspective i'm not sure if i completely agree with one statement that you said and i just want to offer one perspective to you i think that we have a very successful business model for small holders farmers that has economies of scale and end to end on the supply chain and i think we need to talk more about that one so let me let me give you a practical example i was with a farmer uh two weeks ago very small farmer uh less than five hectares so but suddenly this farmer is in the south of brazil and he's connected with one cooperative and the cooperative model in brazil is the what i think is a huge solution when i when i went to to mexico and mexico is a corning porter it's impressive to to say that and you have hundreds of thousands of farmers planting open pill pollinate corn and they cannot make it because they are selling the corn to the coyotes on the on the road if you go to the south of brazil and you go to one of these regions like santa catarina parana you have these small holders farmers connected to a cooperative so let me give you a practical example again these farmers connect to a cooperative that congregates 25 000 farmers all small holders farmers right and small holders farmers to adopt technology they need four things in our field based on my experience also in east europe or even in africa four things they need to have credit they don't have finance to acquire technology sometimes even if the technology returns the investments they don't have the financial terms the second is that they they need to have inputs on a reasonable cost and they need to have a technical assistance and how to sell their grains not to uh intermediate so if you think about the cooperative models in the south of brazil they offer exactly these four things right so they they this cooperative they buy inputs for 25 000 farmers not a single farmer acquisition they have 320 agronomists in the ground they're selling their grains directly to china and they're doing integration with poultry sometimes even fish or swine so i just think that when i when i when we talk a lot about the small holders farmers i i offer the perspective that we have in brazil in the south of brazil a very good example of these small holders farmers successful that can have economy of scale end-to-end supply chain and can be competitive so we think a lot about the the big farmers in mato gross in brazil but santa catarina the average is one hectare so i just offered that because i think that we need to replicate even foreigners like this one we need to talk a little bit more about this cooperative model i know that takes 40 to 50 years to to mature as the time that we had here in brazil but it's a great solution for small holders farmers is less about the technology itself but how you organize them to have economy scale end-to-end supply chain so maybe just quickly so i mean i i absolutely agree you know you cannot help a small scale farmer in isolation so you need to form cooperatives we formed a lot of cooperatives that's the best way of of of getting economies of scale you mentioned the key points with financial technical assistance so i look at this from a global perspective you know in this southern part of brazil perfect there are other areas where you have the small scale farmer more scattered around around the country you know where it's more difficult you know but we need to think along these lines i mean i absolutely agree with what you said yeah i i fully support what you said and the main question for all of us here is who will then make the sharing of this knowledge who will make this effective sharing that is not kept only the south of brazil yeah and and perhaps if you do that we can shorten the period where we're talking here is scaling up and if you can't do this in a way that we find people responsible brokers that bring this information how do i do that and do the effective sharing not only the sharing the effective sharing sometimes people share but the the receiving parts say oh it works in the south of brazil not here so then how can we make sure that we bring a compelling vision and how the cooperatives can work and then i i think it's a question that i i live today to the to us here in this panel because we need to work into that this is a a solution is a proven solution but we need to work harder we have another question here please go ahead following the introduction i was born in concordia santa catarina many many years ago in a city that is dedicated to the production integrated with small farmers and these are properties of family owner that was also chairman of the brazilian association of chicken exporter brazil as you may know is the largest exporter of chickens and this company founded in santa catarina is the largest worldwide exporter and we have around 15 000 small farmers in a system of integration and i could describe the integration system that was created in brazil in the late 60s beginning of the 70s first with hogs then with chickens then with turkeys and today is spread all over brazil with cooperatives and companies we transfer technology training standards uh the production is sustainable because we take the take care of the environment most of the waste of the production is uh transformed in the fertilizer and also the production of biogas with the waste of hogs you ferment fermentated transform and biogas that can move the electric engines at the farm they have low risk because all the risk is hold by the company that integrates that supply also the grandparent stock and the parent stock and the baby ports productivity could be improving according to quality so there is a premium price to the farmers that overpass the average standards the feed this company produces 10 million tons of feed is the largest user of feed in brazil and buy the raw materials from small farmers and large farmers logistic is also controlled and processing sales and distribution we are able to use traceability we know where the birds and the hogs are coming from we could sell a ham saying where the hogs were produced and where the industry is located all these phases until now even selling to 150 countries protectionism for instance us up to now has not opened the entrance of Brazilian products in this area okay so the model I know has been replicated in Paraguay successfully and this model could be replicated anywhere I think Sven has something to say about it yes I just wanted to say that I think we can all take a lot of inspiration from the cooperatives in in Brazil and there are some many really successful ones where you just to say this company is a listed company including in New York so cooperatives are welcome but in some way we are in the same boat but it's all about and call connecting also small older farmers to be part of a larger group and sharing the knowledge and and then connecting to the to the market and I think when you bring this to to scale it doesn't have to be so that producing food in a sustainable way is more expensive when you brought when brought to scale from from start to end it is possible to reduce food waste as well today one third of the food produced is lost before it reaches the consumer and and that's a huge source for financing often more sustainable food production system so I think through transparency we will be able to create a more responsible food production system but also more affordable food production system okay very very assertive I think three three points one resilient funding and investment it has to be resilient if you don't invest in innovation never get it up number two is global global developments and local solutions quite important and everything done third point under a sustainable way we cannot call ourselves successful in this what we're talking about is scaling up innovation in a world that fails okay Victoria I think that's something that I want to really really highlight is the needs that we have for precision farming and precision agriculture we talked a lot about small holder farm small farmers but at the same time we have to to know I mean how to prevent for example diseases catastrophes for example in climate index based insurance that is so important for farmers because what happens if a small farmer loses its cows because of food and mouth disease or because of any other disease they are left with no income and no intake I mean many times they that cow gives them like the food that they have so I think it's very very important to invest in precision farming precision agriculture not only to improve the productivity of the farmers but also to prevent something that can be catastrophic okay so then a final idea just on the responsible business and it was mentioned from from the audience so we still have a lot of actors out there that are not thinking holistically and are not thinking about the responsibly produced food I believe that the ones that don't get that now risk being extinct in a very short time frame and we see that now for one of the world's largest investors Larry Fink in Blackrock he says that businesses that don't think about a greater good in society broader than just the top line and bottom line risk losing their support so this is happening right now and I think the ones that realize it now will have an advantage the ones that don't will be out of business okay thank you ministro three main points the first one technology has to be affordable for small holds particularly it has to be easy to use and the second one is we have to think about innovation and technology is strategic is strategically we have to have a plan we have to think in in terms of having a plan as a block as a value chain to transfer that technology and the third point and we think we have we have we haven't talked a lot but it's very important is communication we have to be able to communicate to both sides to producer the importance of use technology and also to the consumer of the importance of technology and totally agree of organic production as an niche market but the consumer has to know that if we pretend to fit the world in 50 in 20 or 30 years just with organic production that will be impossible we have to be able to communicate that to people okay altric so I mean we started this panel by you know looking at what are these global challenges and I think the the goal of this panel is coming up with solutions and I think what is very critical is that we recognize that we need collaborations you know we need collaboration between different sectors and with different players and and you know there is a saying in Spanish that says zapatero a tu sapatos and and I think if we manage that we give a farmer who is born to be a farmer the tools in his hand that he can be the best farmer and the one who does logistics to be the best in logistics the one who does the market the selling the best in selling and we manage to connect these dots in a very lean way I think you really have the the potential in our hands to make a significant change and if we can use technology to support this we can reach the the 500 million small scale farmers who need that support bueno pues con esto damos por terminada esta sesión scaling up innovation in agriculture gracias a todos por haber estado aquí obrigada y hasta una próxima ocasión gracias


What should we be doing in order to ensure that we have a labor market that can provide good, honest-paying jobs for folks who do not have a four-year college degree and who do not live in one of these metropolitan hubs on the coast but who maybe come from a state like mine, that is majority rural or majority ex-urban, who still want to have communities that are prosperous, who want to be able to support and raise a family, but who want to do that without having to move to someplace else and who have not college, four-year college was either not available to them or not for them, but yet they still want to have access to good quality meaningful work. Well, I think it's an excellent question. I would mention a few things. I think education certainly has to be at the top of the list, and I liked how you described it, which is people get to age 17 or 18 from whatever background they come from with the aptitudes and preparation that they have, and absolutely we should be talking about how to do better reform in society as a whole to make sure we get people to that level as prepared for success as possible. But to the extent that we're not, I think it's a mistake to just wish that we were and proceed from there, given where people arrive at age 17 or 18 today, providing them with more of the apprenticeship-type pathway that we've heard, I think is critically important. And frankly, investing federal money that would otherwise go to the kids who are in college, I'd rather see us investing in the kids who aren't headed for college, in a sense. So I think that's very important, and then one other thing I'd mention is just our regulatory infrastructure right now, wildly undervalued work in the physical economy, whether it's farming, whether it's infrastructure, construction, resource extraction, manufacturing, and favors finance and technology, and we shouldn't be surprised that that's where all the investment goes, and I think we need to recognize and put a much higher premium on the value of the work that people do in the physical economy. Thank you. So I agree with much of that, so I'll just add on the demand side, a tight labor market, strong demand pulls people into the labor market and boosts wages for lower-skilled employees, lower-paid employees. So I think that's very important to overall labor market stability and the health of people who have less of an education or less skills entering the workforce. I'd also say, as I mentioned in my testimony, a healthy churn in the labor market is important for everybody, particularly marginally attached workers, and so the more I'll connect this back to entrepreneurship, the more firm entry you have in the business market, the more that chain reaction flows to the benefit of marginally attached workers, many of whom we've talked about here, who face a number of challenges entering the labor market. One of those is demand, and one of those is a static economy. So when we have static economies, many of those regions you talk about are very static. They're not suffering from business decline. They're suffering from lack of business entry, and they are missing that chain reaction that business entry sets off. And so to the extent that we can focus on entrepreneurship as well, that does create more labor market opportunities up and down the chain and more demand for work of all different types. Right. Dr. Stevenson. So let me also focus on the demand side, putting this a little bit in perspective. So among people in their 20s, their late 20s, 64% do not have a college degree. 16% of our private sector jobs are in the goods producing sector. So there's nothing that this committee or this Congress can do that's going to be able to take most of the people who aren't going to college and get them into some sort of goods producing job. So we need to be thinking about technical training in a way that's very different from the way we used to think about it. So things like computer coding, other types of service jobs are going to be an important place for good jobs. So do we have the training programs to make sure people can do those kind of jobs? That's an important question. And then the spillover effects for things like, are we providing subsidies for high quality childcare? If we provide subsidies for high quality childcare, it makes it easier for families to work. And it also pushes up wages in the childcare industry, which is an important industry. And we can make that a better paying job, a better job for people to feel that both men and women can enter the jobs of taking care of early childhood education. So we need to be both building the skills of the workers who are able and can thrive by having more skills. We need to be rethinking what we mean when we say technical training. And we need to be investing in the parts of our economy like healthcare and education services, where there is huge demand, but right now those are seen as undesirable jobs. They are undesirable because they're low paid. And a lot of that pay interacts with public policy in terms of what's the reimbursement rate for an elder care worker, for example. So there are things we can do on that and that will both support families and work. Thank you. Great question. I listed a number of recommendations in my written testimony, but just five that I want to highlight. Number one, just understanding and making sure that we're clear about the fact that the worker is not monolithic. And so workers are going to be subjected to different barriers and challenges depending on where they're from. But also maybe their race and their ethnicity and their gender, all dealing with different barriers. Also redefining college, a lot of times when we talk about college and higher education, we're just thinking four-year college degrees. Training programs should also be included when we talk about post-secondary education. And we cannot forget community college, which leads me to my third point. Many times individuals are not able to access additional credentialing because of access or affordability. And sometimes community college can even be expensive for our low-wage workers who are seeking to obtain maybe evening classes or additional credentialing so that they can access high wages. And so redefining how we talk about college and then making sure that we're talking about the affordability of all levels of college. And then lastly, aligning workforce development with economic development. It is so frustrating to me. And many other stakeholders, when we talk about economic development and what businesses are looking for over here, and then we talk about what it takes to actually move workers from A, B to Z here. It is important that when we're talking about crafting training programs that we are listening to employers, what is it that you need so that we can craft the curriculum that will ensure that you can draw from these trainees and then you can hire them and employ them so that we're killing a bunch of birds with one stone. And so those, in addition to all the many recommendations I've listed in my written testimony, I believe would help ensure that we're able to get to the labor workforce that we're looking for. Thank you. Thank you, Mr. Chairman. Thank you. And before I turn over to Senator Young, just wanted to yesterday I had a meeting with NFIB, which represents a lot of small mid-sized businesses. And for the first time in years, the number one concern in their survey of business owners is the lack, they can't find trained workforce to fill the jobs that they need at the small. Absolutely. And they're willing to train people. But obviously that's an additional burden that they're facing. So I think that's a very important question. Senator Young. Well, thank you, Chairman, for holding this hearing. And I appreciate all of our witnesses for being here. Mr. Literary, you place great emphasis in your testimony on indicating that we should, at the federal level, consider banning the enforcement of non-compete agreements except for perhaps under narrow circumstances. It's a bold proposal and one that in many ways I find attractive. Could you please explain what exceptions might exist to that ban in enforcement, though? Yeah, thank you, Senator. The most obvious exception is probably when a business owner sells his or her business to an acquirer. In that case, in many cases, the transaction itself would depend on there being a non-compete. So I think that's the kind of thing that makes a lot of sense. In California, the most restrictive state in the country, when it comes to non-competes, they allow for that exception. I think that makes sense as a national rule as well. Okay. There's another concern that I anticipate. Should we go this route? And it's the states, this has traditionally been the prerogative of the states to determine whether or not to ban the enforcement of non-competes. And if so, whether they ban broadly or more narrowly. So what would be your response to someone who had these sort of federalist concerns? Sure, I think it's an important question to address. It's been the purview of the states because the federal government's chosen not to have a say in the matter. But non-competes are properly understood as part of employment law. And employment law certainly is an area where the federal government has a strong interest and sets a national baseline against which states can modify and do other types of their own prescriptions that are unique to their states. I think this is clearly a case in which both falling within employment law jurisdiction and being a matter of such importance to the overall health of the national labor market, there's both a compelling economic rationale and certainly a clear legal rationale as well, I think for the federal government to have a say, as it does on many, many other employment law matters. Sure. I can anticipate a number of businesses. I can think, I grew up in a family business and we'd have sales lists, customer lists. And those were very important to our business model. So there's certain information that's important to certain types of businesses. Are there steps that companies can take without the use of a non-compete agreement under the law that can be used to protect those legitimate interests? I think that's one of the, this is one of the questions that gets to the heart of why non-competes are so problematic. It's that for the very reasons that employers often use to justify their use, they're not necessary. Employers have access to trade secrets protection, to other protections of intellectual property if they have the use of non-disclosure agreements and non-solicitation agreements. And when you look at the reasons that employers give for the use of a non-compete, they often fall into one of those other more finely-scoped categories. And those categories, those tools, don't carry the same type of broad harm that non-competes carry throughout the labor market and throughout the economy. So if you have alternatives that are more finely-scoped to the concerns that employers have over legitimate concerns, frankly, for intellectual property and trade secrets, those are the best tools to apply to those challenges and leave aside the broad prohibition on the very thing that our economy is based on, which is competition. And for workers, their knowledge, their skills, that's the only thing they have to trade on. And so this is the kind of thing that I'd say, going further, really harms individual liberty and makes it very hard for us to get the kind of outcomes we all say we want, which is a boost in wages, more entrepreneurial dynamism, more innovation in our economy. So we have to look upstream from that and say, if this is a tool that's being misapplied, what are the alternatives? And when we ask that question, we find that there are many that employers have to reach to. So you mentioned dynamism, and I know that's something that you're intently focused on at Economic Innovation Group. You and I have discussed it at some length. And do we have economic literature? Is there some good evidence out there about the impact of non-competes on the marketplace? And if so, what conclusions can we draw? Now, very clearly, the literature agrees on a few fundamental things. One, that the enforcement of non-competes greatly harms new business entry in markets, in some cases up to 20%, that it harms the overall wage environment for workers, even though it's not covered by a non-compete. But it states that it enforced them, it has a depressing effect on everybody's wages in certain fields. So there's an on and on, right? I mentioned in my testimony job satisfaction, the amount of time that a worker stays in a job, all of them are harmed. So it's very hard to find an issue that unites the academic literature the way that non-competes does. It's not really a disagreement, academics, as to whether they're harmful, it's just the extent they're harmful. And the more literature we have, the more ways we're finding that they're harming both workers and entrepreneurs. Thank you all for being here, Mr. Littari. Thank you for answering my questions. And Mr. Chairman, I know it's very unsanitorial, but I yield back the balance of my time. And you had two minutes left, there are. Senator Sheen. So goody, can I take it? Yes, actually. Well, thank you all very much for being here. I apologize for missing your testimony. I wanna begin with you, Dr. Stevenson, because I sort of heard the end of the question about childcare. But in New Hampshire, childcare is next to mortgage is the highest expense that families face. And for an average family with a newborn up to one year old in New Hampshire, it's over $12,000 a year, just for childcare for that one child. So can you talk about the challenges that presents for families as they're trying to get in and out of the workforce? And that is often coupled with the fact that most people don't have access to family medical leave or family leave around the birth of a child. And what challenges that also prevents, where on the one hand they wanna go back to work, the costs of childcare are very high. They don't have leave to stay home with the child. And what kind of a conundrum do families face? Thank you very much for that question. I think one of the real surprises in recent years is that we've been in this long boom and yet fertility continues to decline. Why is it that millennials are finding it so hard to have children? Well, you touched on part of the reason, which is that they're graduating from college with enormous amounts of college debt and then they're facing down childcare costs that are, that is itself actually equal to the cost of going to college or even greater. And so those costs combined with them having graduated in a recession, so not having the job changes they needed to have to get the wage gains they needed early in their career, and then they face unsustainable costs of childcare. They are in jobs where they may not have access to paid leave, maternity leave, paternity leave, or flexibility or parental leave. All of these things are leading some people to say, I can't afford to have children. So we're seeing fertility decline. What we see with these, the challenges from childcare and not having access to these, what I think of as an infrastructure that supports families is some people choose not to have children, but other people get sideline from the labor force. We see in the data very clearly that people who have access to paid leave, women who have access to paid leave are more likely to stay attached to the labor force. We'll be in the labor force for longer and we'll have greater wage growth over the course of their lives. We see quite clearly in the data that women who feel that they need to take time out of the labor force have a really hard time getting back in. One of the problems with our labor force and with a lack of dynamism is that we have, we're failing to provide the on ramps when people take an off ramp out of the labor force. So we get people who exit for some reason or another and they can't get themselves back in. For many women and many families, if you sit down, if you have a one year old child and you sit down and you look at what is the cost of the woman going to work, the what they're gonna pay in childcare, the marginal tax rates on the woman's additional work, the, you know, the costs of her commute to work, they find that the end of the day they're not netting very much. And so many families then get put themselves in a situation where they say, well, maybe we can't afford to have this, and we can't afford to have you stay in the labor force. But when you step out, it becomes really, you come in at much higher wages or maybe not at all. As I mentioned at the end before is that if you, if we have greater support for childcare, there's a couple things that happen. We invest more in children and those children have better outcomes and earn higher wages. We have a large, large body of literature that shows that early childhood education reaps benefits for taxpayers over the course of that kid's life. But it also reaps benefits for families as women are able to get back to work as they're able to support their families. And those kids, particularly lower income kids, will grow up in a household with higher income, which generates its own second set of benefits. So this issue is very, very crucial to the success of American families. I certainly agree and I hope that we can find ways in which we provide more support for families around childcare and early childhood education. My next question is really for any or all of you, because one of the biggest challenges we have in New Hampshire right now is affordable housing. We have an economy that's generally doing pretty well, very well. We have a very low unemployment rate, one of the lowest in the country. We have a lot of jobs that are going unfilled and we have companies that can't get workers because they can't afford housing in the communities that they're in. So does anybody have any suggestions about how we better spur affordable housing? So I'll go first. I'm sure that John may have some comments around how there are a number of initiatives to provide for housing opportunities within the context of opportunity zones. However, and we have those in New Hampshire and we're seeing some benefits from those as well as we also have hub zones, but they're not providing the incentives that builders need to actually put in housing that's more affordable. Correct, so from a workforce perspective, this is something that the Job Opportunities Task Force has recently started to take on because we're finding there for low wage workers, about 40% of their wages or more is going towards housing costs and we're talking about renting, right? CNN, there was recently a study on CNN to show that in Maryland we were fifth in the nation for how much you must make an hour to rent a two bedroom home, right? It was somewhere around $29.50, right? And so housing instability is a workforce challenge. And so I think that this also goes towards an earlier comment that I made around aligning economic development with workforce development because you're absolutely right, employers and businesses, in addition to looking for a pipeline of educated skilled workers to determine where they're gonna move, they are also looking for the livelihood and what's it gonna take to ensure that our workforce is gonna be able to live and thrive. And one of that includes housing, are there actual options and are they affordable options? And so I would highlight of course or uplift opportunity zones as a way to encourage localities and states to get creative with how to ensure that housing is provided at an affordable rate across income levels. I think that you're starting to hear creative options for whether they be housing co-ops for particular populations. For instance, we have individuals that are returning from incarceration and they need a place to stay as well. And so how do we provide those housing opportunities for them so that it's not contributing to the larger homelessness situation? So that might not necessarily answer your question of what we can do to incentivize builders and others to move into our communities to ensure that we're providing these housing. I would say that the only solution is how can we use opportunity zones as a way to provide incentives to connect some of these dots. I don't know if John wanted to- And that may work in 20 years. It ain't gonna work next year or in the next three years. Do you wanna add something, John? I was just gonna add as we look at housing challenges around the country, the most fundamental relates to zoning and land use regs that are local. So that the prohibition on building towards density and scale of housing close to where the jobs are is a fundamental challenge that no matter how effective a subsidy, there is no way to get around that principal challenge and no subsidy is going to be effective at overcoming that at scale. So I agree there's tremendous opportunity with opportunity zones to make certain types of deals more affordable and especially I think in workforce housing where there's a huge missing middle. In the labor market, I see that as being a perfect match but that doesn't compensate or only partially compensates for the fundamental challenge which is too many places are far too restrictive about allowing for local building and density and their housing policy. Oh, certainly appreciate that. We have a project in downtown Portsmouth that has been held up around concerns by a betters. It's multifamily affordable housing that is right downtown. Now, I think it's gonna go forward but as you say, there are too many, there's the ability of too many restrictions to be put in the place of going forward with that housing. Thank you, Mr. Chairman. Senator Romney. Thank you, Mr. Chairman and to each of the panelists, thank you for your participation. It has been a puzzle I think for many to see that we are one of the very wealthy countries in the world, perhaps the wealthiest of the major nations in the world. If you look at a GDP per capita basis, we have a lot more stuff than we used to have as middle-class families 30 years ago. The things we have in our homes are extraordinary and yet the degree of anxiety, unhappiness, anger, anger directed towards our politics and towards elements in our life that we're not happy with is at a very, very high level and I think it's been instructive to recognize that perhaps some of this is too much focus on, if you will, GDP, a dual track, if you will, in education and I wanna put in a plug and then get to my question. The plug is that some years ago in the state of Utah, a few of the state colleges decided to make a change and became four-year colleges, at the same time said there's no admission requirement, everyone is accepted and you can come in and you can get certification to go into a job, you can get licenses to do various things, you can get an associate degree or if you want you keep on going to get a four-year degree. So as you come in, you don't have to say which one you're gonna do, you take different classes, you find which ones that you find most compelling and most interesting, you pursue that course and off you go. Some go the four-year route, some do two years, some get certification, but I'll put that aside but it's a very successful effort in providing people a wide range of tracks, if you will, in the same institution. But what I wanna turn to is something which I have seen time and again, which is even with community colleges that talk to the local business community to say what kind of jobs are you looking for, what kind of training do we do? It seems to me that some of the most effective training is done by the business itself, by the company itself. We give R&D credit when companies are willing to invest in stuff. We don't give an R&D credit when companies are willing to invest in people. And I wonder whether you believe that employer-based education and employer-based training might be a highly efficient way of helping people find a satisfying career and whether we might be wise in providing a credit of some kind to businesses that hire someone who may have been incarcerated, someone who's been on the workforce for a long time, someone who's just coming in for the first time, and then providing them this credit for training purposes to get them started in their career. Yeah, thank you. I think that's exactly the right way to think about it, which is that employer-led training is pretty much as far as we know the only way to do training. I mean, when you have government-led programs that try to guess what the employers want, they tend to work out fairly poorly, and partly it's a function of employers knowing better what they want, partly it's a function of just actually getting on the job sooner. And so the kind of credit you've described, I think, is a very good approach. We actually have, to our detriment, I think a wide variety of very targeted credits. So a credit, if you hire this exact kind of hard-to-employed person in this industry and so on and so forth, I think a much better model and one that fits with the tracking concept we've discussed and with apprenticeships generally is to really focus the model on saying, for folks who are sort of in those late teen years, the essentially age 17 through 20, that's a period of time when we essentially wanna subsidize the employment. That getting that person into a job, being able to, while they're still in high school, be on the job part of the time, is gonna be incredibly important to building skills sooner.  And so targeting more of our, what we call education spending right now towards supporting that kind of relationship, I think is a very important approach. Thank you. Any others that would like to comment? Yes. Chris Vaughn. Thank you. So I do think you're onto something. However, I do think there should be multiple options in terms of training. I mentioned the Maryland program, the Employment Advancement right now. This is an employer-led program where the employers, you have the jobs. You know the curriculum that you're looking for. And so you tell us the curriculum and we partner whether it's a nonprofit, for instance in construction, it's JOTF and we partner with a training provider, say associated voters and contractors. Or it could be a community college, but you are working with that community college to come up with the curriculum that is directly aligned with the jobs that you're looking for. But I also wanna make sure that we are not moving away from community colleges because community colleges also provide an opportunity to access that training so that you can access the jobs. And then we can allow employers to build on top of that. Regarding your last point, tax incentives for employers who may be interested in hiring individuals with the criminal background. You know, I struggle with this because for the Job Opportunities Task Force we are always interested in ways to incentivize businesses to hire, right? To incentivize businesses to, you know, ensure that they have a robust workforce. But the flip side of that is when we talk about individuals with a criminal background and we talk about providing a tax credit as an incentive, these are actually very qualified individuals. They're able-bodied. There's actually nothing wrong with them aside from the fact that they have a criminal record. And so in today's market when we have an aging workforce, when we have all of these challenges where employers are now having to recruit and consider employees, prospective employees, that before they did not necessarily have to, such as individuals with a criminal background. I worry that we may be sending the wrong message by relying too much on tax credits to incentivize employers hiring individuals with a criminal background when these are probably would be some of your best employees because they're hungry, they have something to prove, and would be eager to come on your job site and would be eager to be trained by you as an employer and everything that comes with that outside of having a tax credit or some type of tax incentive. And so, I mean, to be, I struggle with it because I understand that we wanna incentivize businesses but I also wanna make sure that for individuals with a criminal background, we're not putting them in a box where we are assigning them some particular handicap because the only handicap is the fact that they have a criminal record and we as a society have assigned the stigma to that record but they can work and they're great workers. So I think what we've learned in recent years is that when the labor market gets really tight, businesses hire people that they wouldn't have looked at when the labor market's not so tight. It's not a big surprise. It means that incentives matter. How much of an incentive do they have to hire hard to employ people? How much of an incentive do they have to provide training? One strong incentive is a tight labor market. We're not always gonna be blessed with a tight labor market. So I think it's absolutely a good idea to be thinking about what are the other ways in which you can build incentives into the system when there's not a tight labor market. I do think that it would be very wise for the committee to think about a set of incentives that might actually move with the state of the labor market. You might not need incentives as strongly today with our 4% unemployment but I'd sure like to see those incentives when employment is six or 7% and I'd rather you debate that right now than waiting until we see unemployment at six or 7% and start debating it then. It's possible to have policies that are automatic stabilizers by increasing the kinds of incentives we provide employers to hire people as the unemployment rate rises. So I personally think that the types of tax incentives that you're talking about are a wise thing for you to be considering and I would add to that to think about ways in which you could think about ramping that up and down as the business cycle changes. Thank you. Just some questions now reclaiming my time but I didn't use it at the beginning. Mr. Work, let me ask you, I support, I think we all would, the goal of helping those who have criminal backgrounds, convictions and their backgrounds from finding meaningful work but we're all aware there's a stigma associated with that. Some employers shy away from it for a lot of different reasons. What's been, other than just the market need, we need to hire people and we're gonna have to hire people who wouldn't have hired at other times, what's been some of the more successful methods that you've been able to use to convince employers to hire people that have had a previous conviction? So I mean, one of the methods is actually one that's not led by JOTF. It's one that Dr. Stevenson just articulated just the fact that we have a tight labor market and so by default they're having to consider workers who they would not necessarily consider. JOTF is also a member of a number of business associations you wouldn't think we are but we tend to be because we have to be responsive to both the worker and the employer and we find that within those groups, those employers that for a long time maybe have always hired individuals with a criminal background, are now able to anecdotally advise and inform and influence their colleagues and their partners on what it's like to actually have an individual with a criminal background on their job site and how the sky has not fallen and actually it's one of my best employees. Outside of that, it's really just getting folks to actually understand, particularly employers, to actually understand the dynamics of an individual with a criminal background and add that humanistic approach because a lot of times we just focus on the fact that you went to jail, you have this record and that's all I see and that's all I care about. These are individuals, these are our neighbors, these are our brothers and sisters and again, if they were not sentenced to life, they're coming home and so if they do not have access to employment, then they are going to jeopardize our communities because they will feel that they have to resort to illegal means. This then becomes a business challenge for those businesses that are looking not just for a stable educated skilled workforce but also a safe environment. So how can we talk about the importance of investing in these individuals, not just for the moral social feel good kind of thing but making the business case for why this actually will ensure that our communities are safer and you have access to workers. But we're really relying on other anecdotes from other employers. We're relying on the fact that if you train them and provide them with the supports, quite honestly it doesn't matter that you have a criminal background because if you can get to work on time and if you have the skills and the training that's necessary, all of that is irrelevant outside of any regulatory challenges that are presented with the criminal background. Mr. Cass, the strategy of productive pluralism that you described I think could have some interesting implications for small business. If the primary focus of labor market policy is on connection, that's what we made it. Connecting workers, especially young workers to productive employment that's consistent and that builds skills, then it seems like that might entail greater engagement with small business and with entrepreneurs. I wonder if you could just discuss that because it sounds to me like that's tailor made for connecting workers to the needs of small businesses, startup businesses and unique industries. Yeah, I think that's right. I think there's two things I would say about the special relevance to small businesses here. One is to recognize the role that small businesses play in the ecosystem of a local economy. Dr. Stevenson rightly pointed out that a very small share of overall employment is in manufacturing, for instance. But when you step back and look at the ecosystem of a local economy, what you tend to have is a few large employers, some of whom need to actually be sending something out to the rest of the world, and that that then supports a much more robust and vibrant service sector around it. So I always say we can't all serve each other coffee. And so to have a vibrant small business sector, it can't simply all be, for instance, child care providers providing child care for each other. We need to make sure that the economy is one in which the types of business that small businesses are likely to engage in can still connect to larger multinational nationwide companies. And that's where a lot of their growth and productivity gains are likely to come from. So small businesses as kind of a key component of local economies in particular is very important. And then the second thing I'd say, and this goes back to what we were speaking about a moment ago with respect to education, is that small businesses are an especially tough place when it comes to training. A small business might need to hire one person every year or two. They can't run a gorgeous global training program with three off sites a year for their one worker per year. And so for small businesses in particular, it's really important to have structures at the local level that allow multiple small businesses to come together, to collaborate with larger businesses. A little bit like Ms. York was describing, where you design the curriculum, maybe it's hosted at the community college, and then all the small businesses that need a particular skill set have access to those trainees. And so having small businesses be able to collaborate in that respect is critical to having them be able to take on new workers, where they're not going to be able to invest in a full training program themselves. I also wanted to ask you about, it's really impossible to talk about work today without automation. And when people think of automation, they tend to think of a robot or a computer that was going to replace their job entirely you. And I guess that can open us up to the entire panel. I know you, Mr. Cass, have a different view on this. Perhaps those of you have different views on it, but how should workers understand both the challenge and the opportunity embedded in automation and in technology, which does as always create the potential of displacement, but it also creates the potential of increased productivity and thereby higher pay and new fields opened up. So what's the, as you talk to people, particularly in small business world, but even in larger firms, and there's just a lot of fear among workers that they're going to get replaced by a robot. So what's the best way for us to focus on that, particularly as it impacts entrepreneurship and startups? Go ahead, I'll just go from left to right. I'll say one thing about it. I've realized the more I talk about this, that we have a real problem that we anthropomorphize robots. And so it sounds like it makes sense to say a robot could take your job. But a robot is just a new form of technology. You would never say electricity took my job. That would sound ridiculous. You would never say many of the sort of technological breakthroughs that have made people more productive over time took your job. It happens that the kinds of robots we're picturing look more like a worker. But at the end of the day, the effect is the same. And as Dr. Stevenson said, rarely do they actually replace the person. They replace some portion of the person's tasks. And so the key is going to be for workers to collaborate with technology and to recognize that the technology is what makes the worker more productive. I think the one other thing we could focus on as we talk about it and as policymakers talk about it is to realize that workers are actually the constraint on how quickly we can deploy technology. That when we talk about these jobs with we can't find the worker for the job versus not ready. So one effect of that is that's going to slow down the rate at which automation actually happens. But a second is to reconfirm the fact that this is going to accrue to the benefit of workers and really finding ways to design technology for the workers we have and equip workers to work with that technology is going to be the secret sauce for a labor mic market that thrives. Yeah, count me in as an automation apocalypse skeptic. I don't think there's evidence to back up many of the concerns that we often hear thrown around about the rise of automation as it relates to replacing workers. To Orrin's point, there are very few jobs that can actually be replaced in full by a robot of any form. I think the key is that we're missing the kind of safety net that robust business dynamism used to provide. We've always had industries and jobs being phased out of our economy. That's always been true. Productivity gains by definition are displacing of some future potential worker as we get more efficient at doing certain things. The difference is we haven't felt that in previous eras because we've had a more robust firm entry that's caught more of those being left out of certain jobs or taken out of certain industries and brought them back into productive use. So areas of the country that are particularly undynamic are the ones not with high death rates of firms but of incredibly low birth rates of firms. That's what's missing, or one of the major things that's missing I think as we think about the worker piece of all this, we need to think about the entrepreneur as well. Incumbent businesses tend to shed jobs on net every year as a whole, of any size. And so it's where we get net job creation is disproportionately from new businesses. When that fades, that's the engine of job creation. That's the missing safety net for workers. So my testimony focused a much on this because this is something that I'm thinking a lot about and as has been repeated, the idea that automation doesn't take jobs, it takes tasks. But that creates an enormous opportunity for us to create jobs that are more meaningful. And this is one of the things I'm looking at in my research is which are the tasks that are being taken and are they the tasks we like to do or the tasks we don't like to do? In the past, what has happened with technological changes, our jobs have gotten better. We've seen an increase in job satisfaction. We like the stuff that we're able to do more. I certainly know that my job, being a university professor, is something that's much more common today because of all the technological change that has come before. And I like my job a lot more than I would have liked working in an agricultural field. So there's a lot of promise that comes from this, but I do think it's worth keeping in mind that there is a lot of disruption. And when I go to conferences on AI, I will tell you that I'm shocked at how fast the technology's moving. I agree very much with Orin Cas that we can only move as fast as our workers are ready for us to move. So there is a real limit that comes from our workers, but the technology is moving quite rapidly and we need to make sure that our workers can keep up. It's one of the reasons why I have such concern that in the race between technology and education, technology seems to be racing in front of education and I think we need to correct that problem quite rapidly. I do want to emphasize that these kinds of technological changes, this AI is going to allow us to produce services that are more tradable. So the idea that when we hear services, you think cup of coffee, I think that's not the right way to think about it. That's, the US is really succeeding with a lot of trade and business services. They're a really important source of not just international trade for us, but of course cross-national boundary trade. Remote work is allowing us people to live in places that they couldn't have lived having the kind of job that they were having before. So technology will create a lot of opportunities. We need to make the space for it to happen, not try to get in the way of it and then help make sure that the prosperity that comes from it is shared so that lots of workers are able to benefit from this change and not just the few owners of the people who own the technology.  And towards the end of 20 minutes of him railing against how terrible self-driving cars are, I asked him, what if you owned the car? What if you were the one sending it out to do your work and you could stay home? And all of a sudden his attitude towards self-changing cars changed a lot. So the real question about this technology is not gonna be that it replaces workers, it's gonna be about who owns it. I have nothing else to add to the remarks of my eloquent panel, besides that absolutely for workforce advocates, we're looking at how we can use these opportunities to turn them into training opportunities for workers. But we're also struggling because, you know, we also like self-checkouts at the grocery store, but also know that that is, you know, taking real jobs away from real people. And so how do you balance efficiency and easy access and quickness with ensuring that folks are able to still be employed and have good jobs? And do you have something? Just two quick observations. One, as you point out, innovation is where job growth will take place and good jobs will take place. Whereas where we started, because innovation occurs much more frequently among small businesses and large businesses. So our tools to preserve a healthy, small business community very much as part of having the type of economy we need and the type of jobs that we want. So I just make that sort of bringing this together. The second observation is on these tax credits. And we recognize that the labor market changes at times, so there's different periods in which employers have different incentives. But I can tell you, as one of the champions of the Work Opportunity Tax Credit, and having talked to a lot of employers who have used the Work Opportunity Tax Credit, there is a higher risk factor by those employers and it has to be compensated somehow. And we can talk about getting good workers as we all want, but we know that our workforce programs are not equitably distributed, particularly people coming off of welfare, returning citizens and the Work Opportunity, or people who are unemployed. If you're an employer and you have a choice between trying to take someone who currently has a job or somebody who's unemployed, there's an actual bias in favor of someone who's already employed. So long-term unemployed individuals have a much more difficult time in getting the attention. And the Work Opportunity Tax Credit has compensated for that and has worked very well over time. I just really wanna put that on the record because there was some conversation about the values of tax credits or compensation issues. And I certainly understand that discussion and we really need to focus on what is the right policy. But I do believe that our current tool, the Work Opportunity Tax Credit is one that has worked well and is very valuable. I wanna thank all four of you for being here and all the members that attended. For this is really meaningful to us for two reasons. One is we, the jurisdiction of this community, small business and entrepreneurship. And it's important to mention those two because they're not always the focus of small business. Obviously we have oversight responsibility over the small business administration and we're gonna be undertaking the task, I hope, of reauthorizing it because it gives us a chance to help modernize its programs, to deal with some of the things we're taking testimony on. And on the entrepreneurship side, the notion that we want to continue to be an economy and a society in which new business and new ideas are being pursued. And in many ways, technology is intimidating to people but it also has lowered the barrier to entry in a lot of fields. It used to be that in order to have a business you had to have a big marketing department, you had to have people you could send out to find customers. Today, a small business is everything from an Uber driver who's an independent contractor to someone selling things online. And they don't have a massive sales force. It's the, so technology's empowered entry into the marketplace that would not have been there. So it's actually, in many ways, opened up entrepreneurship access to markets but it also has lowered the barriers to entry in a business you would normally need more traditional constructs around you in order to pursue. So these are the kinds of things that we need to be thinking about as we not just try to reauthorize and modernize SBA but writ large public policies that help incentivize all this. So again, I'm, we're grateful to you for your time, for your forward thinking ideas across the board on strengthening the nation's labor markets on which I think go hand in hand with enhancing small business dynamism and entrepreneurship. The record for this hearing is gonna remain open for two weeks and there are any statements or questions for the record by any of the members that should be submitted by Wednesday, March 20th at 5 p.m. With that, thank you again. This hearing's adjourned. Thanks.