tv Bloomberg Business Week Bloomberg July 1, 2017 7:00am-8:01am EDT
♪ carol: welcome to bloomberg businessweek. we have profile the most prolific innovators and innovations around the world. oliver: including tencent's global ambitions. carol: and the future according to elon musk. oliver: all that and more on "bloomberg businessweek." ♪ carol: we're with the editor in chief about global technology.
why now do this? >> technology has always been a franchise that bloomberg businessweek. it is something we have distinguished ourselves on. we pride ourselves on the covers, the stories we are able to tell. we really wanted to keep global tech as a franchise and even make it more global than it already was. what you see in this issue are two things. here are some of the companies in developments and entrepreneurs that are changing the world, like 10 send. in the future is closer than you think. whether that is fish skin being used to treat wounds or the race for space, things we thought were science fiction almost are not so much. we wanted to bring that to readers. oliver: this is was to be one of the coolest stories you guys ever had in one magazine. we want to keep this sort of business economic thing open, but the stuff is so exciting. what the you is most exciting that maybe you had not heard about? megan: i think the space
piece. ashlee vance talks about satellites. i'm 43 years old i figure satellites as these huge behemoth things. we are talking about satellites the size of a boombox. and old radio. they are going up in the space and think you can almost carry into a briefcase. the start of technologies around space and how it is capturing satellite imagery. going can monitor blitz on in ukraine from a satellite the size of a briefcase and track that visibility. we are being watched all the time from everywhere. whether you think it's a good thing or a bad thing, it is happening. i think this really gets to the heart of that race for space and how fundamentally it has changed and how cheap it is getting. carol: you mentioned companies you know the company's you don't maybe focus on. tencent. is one of those storiesm.
megan: they have 940 million active users. ,t obviously has the wechat app its main thing. , in china people spend an average of four hours on it. is embedded in everything you do from ordering in a restaurant or talking with your friends to buying a new shirt. it is almost impossible to get into any aspect of commerce without having we chat. we go to the guys who have really move it forward. martin lau, the driving operational force behind tencent. when he was going to make a presentation to buy a videogame, play the videogame so much he eventually got the 97th highest score. a former mckinsey, a list of credentials as long as your arm. in charge of a company
fundamentally free shipping the way people live their lives. and it took two job offers to get in there. oliver: what i found interesting was the juxtaposition between ubiquity of 10 send in another part of the world, and then now there is attempts to expand beyond that world, to find out what they are going to do. we talked to brad stone. >> if it up familiar with tencent and are interested in business or the internet, you need to learn about this company. it is side-by-side with alibaba one of the technology giant of asia. known most prominently for the messaging service we chat. if you're not familiar with it, i could draw parallels to facebook messenger, but it really is so much more. in the u.s. we tend to have one app for everything we do online, to buy movie tickets or make payments or message with our friends. we chat is like the dominant way
people in china spend their time online. is really the internet donald into a messaging's -- bundled into a messaging service. you talk to friends and contacts, but there are apps within the app for dating, buying tickets, ordering stuff online, e-commerce. it has become over the past five years or so the largest planet in the chinese internet solar system. that is the best way to describe it. 900 million daily users. almost two thirds of chinese internet population. they spend about two hours a day each on it. it is a tremendous asset for the company tencent. >> you talk about two individuals closely tied to 10 send. -- 10 -- tencent. they are not really out in the public that much but crucial to this company. >> that is right.
one of the five original founders, one of the wealthiest people in china. very quiet. does not do a lot of interviews. we jokingly referred to this photo with the chinese president, with all the world's technology executives lined up, there was a photo shoot. everybody is looking at the isera and smiling, pony ma staring down. there was something very characteristic. he does not do a lot of interviews. no one at this company does. we got this tremendous opportunity to talk to the ony'sd in command, p collaborator martin lau. we described him as the michelle sandberg of tencent. before that he worked at goldman sachs and he helped take tencent public. he guided the international
expansion, created a culture at tencent, and help steer we chat to what it is today. carol: tell me more about this guy because he is obviously important to 10 sen -- tencent's next step. it was offered a job and said no thanks. it to the second job offering? >> we had a lot of fun talking to him. lulu chen, one of our asian tech correspondents went to visit martin lau in hong kong. this was a unique opportunity. he rarely talks. we sat in their hong kong office and he reviewed his trajectory and his journey into tencent. when he was first given the opportunity by pony ma back when they were taking ten ce publicnt, he turned -- tencent, he turned down the job. could they overcome the pessimism in the market? it was a one trick pony, no pun.
they were doing deals with mobile phone operators in china to get the prescription revenue. that is why there was optimism around the ipo, and a year later when they made the offer, martin lau excepted. oliver: turning the future of technology into the cover image was the job of rob ardis. >> with these special issues we don't want to seem like it's about this one story. we shot the facilities for rocket lab. there was a shot inside the rocket we felt was nice. kind of abstract. it is not too specific, but it it immediately get you to the point that this is a tech issue. carol: when i first looked at it i read some he stories and i had no idea what this was about. how did you get that picture? rob: a lot of the rocket in the facilities -- rockets in the
facility were in progress. we got inside and shot it. carol: it is not what you put a lot of other mentions in the other stories on their. it -- on there. it is very clean. rob: we have the cover flap with the table of contents. they give you more of what is inside. when you open the magazine you see the shot of the man standing inside these tubes. that is also what is here. carol: up next, the middlemen behind drug price hikes. oliver: emmanuel macron's plan to update french labor laws. carol: this is "bloomberg businessweek." ♪
♪ carol: welcome back to "bloomberg businessweek." oliver: geeking case is online at business week.c -- businessweek.com. health insurers higher pharmacy benefit managers to negotiate drug prices with pharmaceutical companies. carol: that has led the price hikes in lawsuits. >> pharmacy benefit managers work of a half of health plans, employers, unions, anyone providing health plans to employees. the role of the pharmacy benefit manager is to represent the health plan in its dealings with drug manufacturers and to
negotiate discounts, which are referred to as rebates, on the drug manufacturers. the health plan pays less than the publicly advertised list price. that is the first step in understanding what they are going to do. to get more complicated after that. carol: how is that working out in terms of reducing costs? paul: it does reduce costs for some health plans, but seeking the rebates has the perverse kind of side effects of causing drug manufacturers to raise their list prices, so the list price is higher in they can -- a remake can be taken from the higher list price. give a bigger rebate. the pbm's heap a slice of that rebate. they have incentive to see the list price go higher so their percentage rebate goes higher. that would all be fine of don't actually paid the list price,
that's not the way the world works. a lot of people do pay list price. if you are among the millions of americans who still lack health insurance at this moment, and there may be millions more of those people if the republican obamacare appeal replace bill is enacted, if you're one of those uninsured people, when you go to the pharmacy you pay list price. --you're on medicare and you there is a coverage gap in medicare where the recipients have to pay for their own drugs, again, you will pay the list price. carol: and a medicare recipient, if you go above that, all of a sudden you have to pay list price. seems herefirst it the price it takes to make the drug and distribute it, but i found it similar to when you go and buy a phone. phones have a high this price from the manufacturer. ultimately, most people don't
pay for that. they get a plan and discount. it is analogous that you feel it when you have lost her phone a couple of times and you say this is what they charge. and fallsp paying under that gap for the have to pay the list price? paul: the biggest group of people who are uninsured. even after obamacare was enacted there was still some 27 million americans who pay full price. obamacare there are more provision of insurance but also with high deductibles. let's say you have a $4000 deductible, $6,000 deductible, you are paying list price. list price is due by a lot of people. carol: what i love about your story is a given a personal edge. to talk about david hernandez. he is someone who is diabetic.
paul: he's a restaurant worker in new jersey. he does not make a lot of money. of years he had no insurance whatsoever. during that time he had to scramble on insulin -- scrimp on insulin, and is that horrific effects on him. he went blind in one eye and ultimately needing a kidney transplant. he now is covered under a new jersey public plan for the disabled, but his coverage will expire at the beginning of next year. that his costs will be subbing like $300 a month for insulin. is a very big burden for someone who is not making much more than minimum wage. carol: in the economic section, emmanuel macron is wasting no time tackling the most explosive item on his economic policy agenda. oliver: france's famously rigid labor laws. >> he promised labor reform as a
central part of his campaign. it is about two weeks. the new assembly got sworn in this week, so two weeks since the second round of the elections. he presented his proposal on tuesday. carol: a 3000 page labor code. this is not an easy thing to do, is it? >> they will not revamp the whole thing, but they want to make significant changes. it is not easy to do. we have seen three previous presidents of france try and fail. carol: there are a ton of issues that impact workers. downerything is codified, to the size of the windows and offices, the length of bathroom breaks, and if you email a french worker on the weekend, he does not necessarily have to reply to you. it is in his contract. carol: public order specifically? >> the cost of severance. the cost itself is not the highest in europe, but employees
can easily drag companies in the courts. records are very employee friendly. -- the courts are very employee friendly. it is long and expensive. the other big important issue is to let companies negotiate directly with workers. in france, less than 10% of the workforce is unionized, for are bound by these sector wide agreements that are negotiated by unions. that would give companies a large flexibility if they can deal directly with workers. oliver: why is one of the first orders of business for mac rn was not so much centered on this. the economy comes into account, but it was about foreign policy and immigration. here we are attacking this thing that is well rooted within society for decades. why is he choosing to go after this? >> a lot of people have identified as the key economic impediment.
france has unemployment that is hovered around 10% for five years. germany and spain both saw on a plymouth fall after they introduced their own labor reforms. for young people it is worse. 21% to 22%. what has happened in the absence of reform is more companies have been relying on these temporary contracts. it is hard as a young person. you cannot go and rent an apartment, never mind buy by showing a landlord a temporary contract. he wondered what jeff sessions has been up to since recusing himself on the russian investigation, we will tell you. woes. illinois's budget -- go from bad to worse. oliver: this is "bloomberg businessweek." ♪
radio on sirius xm channel 119, a.m. 1200 and boston, 91 fm in washington, d.c. and in asia on the bloomberg radio plus app. carol: jeff sessions may not be involved in the russian investigation. oliver: he has been trying to roll back a lot of obama era policies. >> for the attorney general, it has been business as usual. he has been able to use this time everyone is focused on the russia investigation to kind of remake the justice department and move them in a direction that he wants them to move towards, which is a focus on violent crime. a large part of this has been stripping back a lot of obama era initiatives and legal legacy. carol: talk about the specifics
of what he has been undoing in terms of the obama legacy. >> he has been rolling back, charging policies that have sort of taken a softer approach to nonviolent drug offenders and ordering all prosecutors to charge the harshest -- go for the harshest penalties in cases they bring. way is a big counter to the prosecution seven handled over time. -- have been handled over time. he has been taking a harder stand and look at these settlements we entered into with various cities over problematic police departments, saying he was to review all those settlements because his view is that they don't the fed meddling and handcuffing police
officials. carol: i think it's interesting. we watched this trade going into the elections based on what we heard on the campaign trail. privateally, to do prisons. we have been moving away from that. jeff sessions is moving us back towards a relationship with the u.s. government having your relations with private prisons. tom: he has done a number of these things with the private premise -- prison memo coming out last august by then deputy attorney general sally yates. it was to try to phase out the government's use of private prisons for a number of reasons. but he has been able to kind of come right in and sort of immediately issue his own number saying that is gone -- his own memo saying that is gone. he has been able to quickly dismantle a lot of items that event in place. some very recently, others in
place for several years. oliver: with $6 billion in debt, the state of illinois is on its way to another credit downgrade. carol: here is elizabeth campbell. >> we are on the verge of entering her third straight fiscal year without a budget as lawmakers and the governor don't come together by july 1, we are going to start fiscal year 2018 without a spending plan, billions of dollars in the red, and the state is in big trouble. we are heading for another credit downgrade which is put us in injunction territory. carol: but a number on how much they are in debt. >> because of the ongoing budget impasse, about $15 billion of unpaid bills. that is a record. at the same time our deficit is in the neighborhood of about $6 billion. statengs keep going, the is effectively hemorrhaging cash. we will have to cut into things like core services. she did emphasize that debt
service is a priority and will continue to be paid regardless. oliver: these costs will keep adding up because if and when the downgrade does happen, that takes it down to junk. that's a first date that ever happened to. look at of yield does that bring us to? put pentecostal that put on the state? -- what kind of cost will put on the state? >> if they have a junk rating, borrowing costs will go up. illinois, according to bloomberg data, has the highest spread on its bonds compared to venture debt. it has the highest spread over triple-a bonds. in terms of the unpaid bills, about $800 million in interest and late fees alone. that comes on top of any future bonding costs when they go to market. carol: they cannot file for
bankruptcy. this is not detroit which could. how did they get to the state? where they constantly in the red? -- why are they constantly in the red? >> there has been a deficit is about 2002. in 2015, tax increases expired. they did not cut expenditures connected with the declining revenue. the governor, the first republican to lead the state he has been battling the democratic-controlled heislature over how to -- has bush what he calls structural reforms. things like changes in acting term limits, property tax freezes. the democrats have resisted and they have not been able to come to an agreement or pass a spending plan for two years now. carol: we speak the best selling authors of the second machine age of other new book, "machine
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delivers consistent network performance and speed across all your locations. hello, mr. deets. every branch running like headquarters. that's how you outmaneuver. oliver: welcome to bloomberg businessweek, i am oliver renick. .arol: i am carol massar it is the 20th anniversary of the asian financial crisis but many unlearned messages -- lessons. the new tech challenges facing businesses today and how they can be overtime that overcome. -- overcome. it is all ahead in this week's bloomberg businessweek. ♪ oliver: we are back with
bloomberg businessweek editor in chief megan murphy to talk about must reads in an awesome issue. let's talk about the opening remarks, you solicit the input and analysis for michael schuman who lived through asian economic crises and is getting a little bit worried about what might be next. then: this goes back to 1997 asian financial crisis, one that many have not forgotten because it was so vastly outpaced by 2008. whichian financial crisis was triggered by a deep linking of their currency at that time is what he is making a point in this article, a very good and important one, it was predicated on an extraordinary rise in debt .evels as a percentage of gdp he traces that to the extraordinary rise in debt we saw before the global financial crisis in 2008, and where he takes that link is what is going
on in china as the debt level rises, that this is triggering some of the same kind of alarm bells. if people forget the lessons of the 1997 crisis, they have been replicated. carol: it is so much, i feel you,for me once, shame on for me twice, shame on me. is alwayst fascinating to me as a reporter who covered the financial crisis is that we do not learn the lessons, and everyone says, the next crisis will not be similar to the first. it may not be triggered by the same thing, it may be a hedge fund or shadow banking thing. housing crisis, the tipping point may not be the same thing we have seen but the signals, there are signals you can trace within the mortgage market and the auto loan credit market right now. if we look at those, we may be able to create -- prevent some of the chaos. carol: everyone just explains it
away. megan: and everyone is wrong, similar to election forecasting. oliver: one of the big elements is he starts by putting in the 1997 asian crisis into perspective, what happened. i the time you get to the end of the remarks it has gone into a conversation about china which is the second biggest economy in the world. any type of potential similarities between what willned in 1997 in china probably have a more cataclysmic and systemic effect. megan: people have already been closely at china, soft landing, hard landing, whether they can sustain the kind of growth. how dependent on their desk or their economies on china's continued growth. are their economies on china's continued growth. in their domestic economy, the
levels of debt are concerning. some of their state intervention and how they have massaged the economy, the sized the numbers, either there is reality and true translation does transparency, -- thats transparency is the issue with china. it is a less transparent economy . warningsr not these will tip into something more serious is something that people should watch for. carol: also a must read, going back to global technology, cannot do an issue without talking about elon musk. you have some fun with him. megan: this is something we saw weeks ago for the first time, and it is an unbelievable business graphic. it charts everything elon musk is doing, charting how successful he has been. it really is a map of everything he is doing, how far he is going, how his predictions have an right or wrong, and we call it a future for elon musk.
oliver: the future and the past, i love the analysis of where all of his promises were completed or fell short. we talked to tom randall. >> elon musk is hard to keep track of, not just because he is involved in so many industries doing so many different things, but also his communication style. he will make announcements about products and goals for his companies through twitter or through public appearances, or like speaking in the middle east or hong kong. he doesn't have a normal communication company where you put out press releases and track your goals. >> you wonder how much, is this a new corporate mission or he was thinking about something. >> it off and throws employees into a loop, saying, we did not know that was coming so soon. what we wanted to do was rigorously track some of the goals and pronouncements he has made for various companies, and
see how he follows his own goals and predictions. >> tell me how you guys kind of set up a little bit of a coding system on how you were tracking his businesses. >> right now we are tracking about 70 goals and this will expand over time significantly, through his for companies. he has tesla, spacex, he now has the boring company and narrow neuro link. >> i assume on the web you will continue this process? >> every time he makes a new pronouncement we track when he made the pronouncement and when he set the goal for, and his progress along the way. when the goals get moved back or forward. one of the amazing things that you discover going through all of these things is that these goals fall into two categories. one is things in the future that seemed kind of outlandish like they will never happen, and then
a category of things he has already accomplished that once seemed outlandish. you really get a sense that he is accomplishing, pushing forward the vision of the future of his own and making it actually happen. carol: let's talk a little bit about spacex. he has had a lot of success. >> absolutely. but if you look at his goals from earlier on it has been slow going. carol: lay it out for us. >> from the beginning he wanted to make reusable markets and wanted to hit the falcon one with a single engine rocket that he wanted to get up, and he was going to have the falcon five and falcon nine, and had ideas about putting humans in space and delivering people to the space station. a lot of these things have already happened but not the timeline he initially predicted. carol: i feel like whenever we talk about elon musk there is a , but heespect and awe
didn't quite, he is like a year later or two later. >> he is moving behind his own schedule but ahead of everyone else's. carol: he has talked about space tourism. >> he plans to put people into space next year. there will be two missions, one just into orbit and he wants to send tourists well beyond the moon and back again. we will see if he can hit that goal. one of the interesting things about musk's delays, they seem to be getting better over time. averageook at tesla, on he is about 50% later on any prediction than he originally forecast, or about six months. carol: but does he get there? >> the ultimately gets there. there is only two to three projects he has ever canceled. carol: a self-sustaining power source as early as 2025, but there is a catch. oliver: will a dermatologist ai
♪ welcome backver: to bloomberg businessweek, i'm oliver renick. .arol: i am carol massar in the technology section, the global network of scientists working on creating limitless clean energy. oliver: we are talking about sustainable fusion and it could be a reality sooner than you think. >> there is a really cool nuclear fusion project going on, and nuclear fusion is basically this holy grail of energy. it requires cheap materials that exist everywhere, it is clean, there are no carbon emissions, but it is really hard. oliver: that sounds too good to be true. ofthis is been the work
almost a century and we are still not close to having an actual plant. carol: what is so complicated about it? >> what nuclear fusion is trying to do is create the sun on earth , and that requires a ton of heat and pressure. you put these materials in these conditions that are hard to control, and just figuring out how to contain them took decades. oliver: once you have the sun on earth you have the sun on and then step number two is what? how do we harness that into usable energy for products and applications we use? >> the funny thing is it is actually really easy to harness into electricity once he can figure out how to generate the energy. the hard part is sustaining that reaction, that nuclear fusion reaction for a long of time where it actually makes economic sense and that is one of the problems scientists are trying to figure out, to prove you can generate more electricity using nuclear fusion than is required
to kickstart the reaction. carol: people have been working on this forever, decade easily. there is a global project going on. tell us about that. -- and it stands for -- everyone just calls it leader. -- eater. carol: who is involved? union, u.s.,an china, russia, south korea, japan, and india. carol: and everybody is contributing funds and scientist and work? >> exactly. it took a lot of negotiations to figure out who exactly was going to do what, and the way it works is the european union takes up the biggest chunk of it as they have the most number of countries. it is being built in the south of france and the u.s. is contributing about 9% of the entire project, and that
includes everything from designing and building essentially the biggest electromagnets we have ever seen, the biggest and strongest. there is concern about a shortage of practicing dermatologists in the u.s. carol: could ai doctors and mobile phones fill the gaps? >> there is a stanford phd student with no background in andatology and builds in out the rhythm from an image search on google, basically, that proved just as capable as a panel of 21 certified or motel just in diagnosing malignant families. carol: -- legions. carol: you put it into a computer and it starts to compare a real image on someone? >> this is the kind of ai called a knurled net. it ne --ural net. oliver: the brain, right?
>> it tries to mimic the brain. carol: does it work? >> this particular set of image searches anyway supposedly can duplicate with comparable results, of the analysis of a panel of about two dozen trained dermatologists. oliver: how would you come up about this -- how did he come about this if he does not have the dermatology experience, does not have medical experience? >> this is sort of a big data play, is what we would tell you. the assignment was to try to teach computers how to detect cancer as well as train physicians to make telemedicine easier, and allow people to eventually sort of diagnose diseases themselves. carol: in last week's issue of bloomberg businessweek and focused on jobs, wages,
workplace, and it had a great chart that focused on which jobs are most likely to be replaced by on amazing -- automation. physicians and surgeons were kind of safe that it sounds like certain aspects of the medical community can easily be replaced by machines, machine learning, ai. we are ready see robotic surgery. >> it may be a stretch to say easily but there are certain parts that can be automated to certain extent, and even doctors our reporter talked to made it sound like they would be just as happy to have parts of the diagnostic process automated, or to use these kinds of algorithms to basically see more patients. oliver: i remember when we were talking about the surgeon and the medical field replacement, it was very much about the sort of precision with which a doctor has to proceed in a surgery that makes it difficult for robotics to replace, but this sort of
identifying the problem, the early stage being able to look at the imagery, who is taking an interest in this if that is going to be a viable replacement or alternative to a panel of 21 physicians? >> this sort of thing is still at the research journal phase right now, into your point, one big obstacle to try and make actual human dermatologists obsolete is that for about 5 million american patients who need a dermatologist who does something to them versus diagnosing something, there is about 12,000 dermatologists in the u.s. hope is that this will make it a little easier for people who need dermatology treatment to get some of that. carol: how to harness smart machines, web platforms, and crowdsourcing for personal profit. this is bloomberg businessweek. ♪
♪ welcome back to bloomberg businessweek, i am carol massar. oliver: i am oliver renick. you can also catch us on the radio. in london on dab mux3 and in asia on the bloomberg radio plus app. oliver: the latest book by best-selling authors -- carol: it is called the same platform crowd and we caught up with them. >> technologies advanced faster than we expected. we thought we were pushing the envelope a little bit being optimistic. we lowball it. the breakthroughs that have happened in terms of getting machines to not just make decisions but figure out answers on their own have been breathtaking. we have been kind of disappointed with the ability of businesses, organizations, and
the government to keep up with these changes so we are glad we tried to write this book to close that gap. >> we wrote this book about how with the second machine age, everyone underestimates the scale and pace of tech growth carol:. why is that? >> technology is just doing wonderful things. every once in a while there is a technology surge that we are not ready for. >> it has been said that the greatest failing of the human mind is the inability to understand the exponential function. things kind of go like this and when you are in the flat part of the curve you just kind of chalk along. when it goes up, everybody gets taken by surprise. thisr minds kind of know but our intuition is just lousy at things that go like this. carol: still suspect. >> we expect things to go like this and these days it is not. oliver: it seems the impetus is
coming from the theoretical, the technology advancing that is further along the curve coming from the academic thinkers. what does it take to get the corporate side or the government side, the policy side to catch up? >> it is not just the academics, it is the technologists. we are trying to identify the bits and pieces of companies on .he leading edge it has been said the future is already here, just not evenly distributed so we spent time going out identifying people ahead of the curve. then you have to put that into some kind of a framework so people can take that knowledge and apply it to other situations . you cannot randomly say, you have a way stuff for free because other people are doing it. sometimes it actually does work and if you understand two-sided networks and economic platforms you can understand why that works. we took those leading edge companies and put them into frameworks so that other
companies could make the decisions. >> the reason we brought the book is to address your -- wrote the book is to address your questions and hopefully make this wheeled world of technology -- weird world of technology comprehensible to institutions and organizations. >> to tell people, this stuff is being implemented by your peers. >> by people that want to disrupt your industry, this is not going to leave you alone. >> by people coming out of left field. crowd.machine, platform, these are the three elements. >> there are three balances between mind and machine, running than flat form -- platform, or an crowd. -- core and crowd. using machines to make more decisions whether it is data-driven decisions or machine learning. the second one is a platform revolution overtaking products
and the third is using the crowd to help make decisions as opposed to a small group of core people. >> what we are where learning is most of the people in the established company are still and -- -- fond of mines mines. .- minds they have worked hard on strengthening their core and they undervalue the crowd, millions upon millions of random stranger weirdos. carol: like wikileaks. >> wikipedia. >> linux. >> there is many ways of reaching out to the crowd and people are still inventing them. it is powered by the fact that we have a digital network that connects billions on the planet. the leading entrepreneurs and leading businesses have found a new way to tap into that expertise. carol: but have they? i think of traditional companies
we cover that have been around 100a decade or more than years, great brand names trying to figure out how to compete in this marketplace. >> one of the things we know from business history is when a really profound technology shift happens, the expertise and knowledge that you build of the old regime are no longer assets and could become handicaps in world enabled by a new generation of technology. we believe we are rapidly heading into that new world. >> some of these companies are doing it effectively. ge, a be the oldest of blue chips and they are tapping into the crowd to help identify new products. a new kind of icemaker, believe it or not, and to fund that they went to indiegogo, not because they needed the money but because they needed the knowledge from the crowd. it turned it out to be a great way to take core expertise and leverage it with a bunch of smart people around the world. senseinitially makes no
for one of the giants of the industrial era, you would think they have the tools. >> you would think they do not need indiegogo to write a new product. value. is where they add >> it is a big product -- part of it. >> in the old world you could be in a focus group and launch some kind of analysis. in the new world you slept together some kind of prototype and the world says, i want one of those -- slap together some kind of prototype and the world says, i want one of those. carol: in chapter 11 you say something like the expert you need is not the expert you know, you have kind of got to go beyond your world. >> it is not a matter that there are billions of people out there who can potentially contribute. no matter what company you work for, most of the smart people work for someone else.
people in other organizations have a different kind of expertise, there is diversity. inside your own organization this of -- there is a bit of group think, people honing a certain technique and you get to a certain level but it starts leveling off. if you get someone to look at it with fresh eyes and you can have a quantum improvement. carol: bloomberg businessweek is available on newsstands right now. oliver: an online at businessweek.com. were you able to pick a favorite? carol: i love the story about nuclear fusion, the possibility of creating limitless clean energy. the u.s. plays a big role and it is curious whether or not we will get enough money to do what the u.s. needs to do. oliver: we need a good chunk of cash. carol: how about you? oliver: i love the interview we ,ust did, two brilliant guys and learned a lot of the combination of the economy and
♪ scarlet: coming up on "bloomberg best," the stories that shaped the week in business around the world. another global cyber attack causes havoc. most u.s. banks ace the fed's stress test. the gop delays a vote on health reform. european markets try to stay in sync with central banks. >> the euro and markets have reacted very strongly to a speech by draghi. >> comments in sintra suggest that august 3 is going to be a tricky meeting. scarlet: italy commits billions to save two banks. the country's finance minister explains the deal in an exclusive conversation. >> it is not a bailout.
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