Fostering a Government of 'Open Innovation'

Fostering a Government of 'Open Innovation'

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Technology and Innovation

from Voices of the Next Generation

Former U.S. Chief Technology Officer Aneesh Chopra joins Neal A. Pollard, director of PriceWaterhouseCoopers' forensic technology practice, to discuss how technology and innovation affect public policy. Chopra, the inaugural U.S. chief technology officer, begins by discussing his book, Innovative State: How New Technologies Can Transform Government. His core recommendation for the U.S. government, based on Innovative State, is to embrace an "open innovation strategy." Chopra's prescription seeks to capitalize on the ingenuity and entrepreneurial spirit of U.S. citizens, allowing them to interface with U.S. government data in an open way. Over the course of the conversation, Chopra discusses privacy, public-private partnerships, and case studies in government innovation.

POLLARD: Thank you, everyone. My name is Neal Pollard. I'm director of PricewaterhouseCoopers. And I'd like to be the first to thank everyone for joining us, both in the room and I believe this might be livestreamed, so those out there in cyberspace, thank you for joining, too.

As a remember—as a reminder, tonight's conversation will be on the record, so that means that the usual Council rules that apply don't apply because you can use this, you can cite to it; it's on the records.

We are honored to be joined tonight by Aneesh Chopra. He's the cofounder and executive vice president of Hunch Analytics, and he's the former and first U.S. chief technology officer.

Hunch Analytics is a technology firm focuses on improving the productivity of public and regulated sectors of the economy through data analytics.

Aneesh also serves as a member of the Council on Virginia's future, and he's the inaugural Walter Shorenstein Media and Democracy Fellow at Harvard's Kennedy School of Government.

When he was in the White House as the first U.S. chief technology officer, he designed the National Wireless Initiative, among other things, and helped launch Startup America, and executed an open innovation strategy across the government, built on private sector collaboration.

He's also the author of the book, "Innovative State, How New Technologies Can Transform Government."

Mr. Chopra, I'd like to start with that. Given the work you did on this book, "Innovative State," and the lessons that you derived from your research and the conclusions you came to, and the insight you garnered, if you had the world's government and industry leaders in one room for 15 minutes, big, big room. And it would be on the record, too.

CHOPRA: Yes.

POLLARD: If you had them all in one room, what are the key 15 minutes of insights and key messages that you would impart unto them so they can make better decisions for the benefit—and not only their constituents, but general technology and humanity?

CHOPRA: First of all, thank you, Neal, for the question. Thank you to the council for inviting me, and it is my honor and privilege to join you this evening.

So I'll spend a few minutes responding to Neal's question by framing what I think is going to be a decade of extraordinary problem solving. And that this optimistic decade is, in large part, on what the recommendation I would make to that audience, which is that we should forge ahead with an open innovation strategy.

And I want to share a few minutes with you about what that strategy looks like, and how it might be best put to use to solve the challenges of our day, as the audience, Neal, you referenced would be both of the public and the private sector.

The core of this is to acknowledge a new role for government in the 21st century. And it's built on what President Obama alluded to in the first term, when he unveiled the U.S. strategy for American innovation. And it described a role for an economy that really lifts up everyone to participate, and to benefit from.

And it has three basic elements. The first, that we re-imagine infrastructure, or the foundation, or what my colleague Tom Kalil used to say, the building blocks of an innovation economy. The traditional forms of infrastructure that those public and private leaders would have been familiar with, roadways, railways (inaudible) turning out basic research. The R&D as infrastructure argument, that the president was very bold in commenting on, even in the midst of the worst difficulties of the Recession. That this new foundation would be an area that has, surprisingly in many cases, earned bipartisan support. Not exclusively, but in many cases. But in and of itself, not enough to realize the potential for the economy.

You have to couple the new investments in infrastructure with new approaches for rules of the road that allow you to take advantage of that infrastructure that furthers entrepreneurship and innovation. And here, a lot of where we would recommend to the audience that we borrow heavily from the way the Internet has operated. That is to say, a rough consensus, running code.

As we set rules in this new economy, and we build up the capacity to take advantage of this new form of infrastructure, as we think about, for example, security and privacy amongst these new assets, that we use the Internet approach, which is to say that we multi-state—we collaborate on a multi-stakeholder fashion.

So you leaders in the private sector, you leaders in the public sector, you're going to find yourselves working together on developing the capabilities that strengthen security on the Internet, as an example, and that protect privacy on the Internet. We're going to hear, and I'll give some shout-outs later that one of our guests tonight, Shane Green, who will be an embodiment of a lot of this—a lot of this construct.

And even that is insufficient for us to say, "Leaders, you can declare victory on this." Because, yeah, you'll have reallocated your investments, you will have set up a new model for rulemaking in this new era.

But the most important thing, and the thing that I might spend the last few minutes getting into, is that you've got to open up that infrastructure for catalyzing the breakthroughs society needs, and the big issues that we find ourselves grappling with. Climate change, health care, thinking about manufacturing anew, and solving the big challenges on education, to make sure that everybody has a shot, to realize their full potential.

This opening up default is a different culture in the historical public-private relationship. But it's one that's proven to be successful in the past. I often reference the—our nation's first open innovator was, in fact—I'm a Virginian, so I can say Mr. Jefferson.

Mr. Jefferson had been—I wouldn't say obsessed with, maybe that's wrong, but excited about and engaged in weather data. He would record the weather twice a day, every day, and share it with his peers.

And Steve Fetter, you're going to correct me if I'm wrong. As he dispatched Lewis and Clark, as President Jefferson, among his instructions was to collect data and to be able to share it upon their return. Opening up weather data became a natural extension of the Jefferson philosophy. And it is, in fact, how the weather economy works today.

The—what is now a $5-plus billion economy. You might know it as weather.com, Yahoo Weather, TV broadcasts, print, radio. This highly competitive, lucrative, for-profit industry, has a very interesting historical consistent context, which is all of the underlying data is sourced from the Commerce Department and, more specifically, NOAA.

You see, our federal government invests in the satellites and sensor networks, that then is made freely available without intellectual property constraint, and without any effective tariff or barrier in terms of financial or otherwise. And this has led to an explosion, not just of weather services, sort of extending the arm of weather, but in the reuse of weather to think of entirely new products and services, like the Data Science team at Climate Corporation, which combined weather data with census data and agricultural data, to design brand new crop insurance products that could help farmers mitigate the risks of climate change.

And this team of, I don't know, 40, 50 people, essentially mashing up and reusing open data, has built what is essentially a billion dollar business acquired by the Monsanto Corporation. And many, many, many examples have fallen. In fact, McKenzie (ph) estimates, and I'd say this to the CEOs and to the government leaders, opening up data in heavily regulated sectors of the economy, health, energy, education, transportation, et cetera, is estimated to unleash $3 to $5 trillion of economic surplus.

Now, the bulk of that is consumer surplus. Reductions in traffic and congestion, improvements in recommendations engines so we get to where we want to go better, faster, cheaper. But it also will mean revenue growth to industries, companies that—not yet known or born.

So this idea of openness as the new default would be the—really, swan song, if you will, of my message to these leaders. And I would point to three private sector examples for how we might function together in this spirit of openness.

One is technology culturally, that it matters that those of us in the room that are leaders profess that the best ideas may not come from within our internal silos, but rather may come from outsiders collaborating with our internal resources to bring about better products and services.

This is best exhibited by A.G. Lafley who had been the CEO of Proctor & Gamble, and made a very bold declaration that 50 percent of all new products and services that Procter & Gamble would bring to market, would come from ideas sourced outside of the P&G lab network.

And I awkwardly asked the Chief Technology Officer for Procter & Gamble at the time, Bruce Brown—I didn't really say this, but you can imagine, "Ooh, that's awkward. Your boss just told you you're only good for half the productivity. Was that embarrassing? Were you punched in the gut? You know, what would that make you feel?"

And quite the opposite. The answer was, "Wow, Aneesh, that was liberating. We could now, with a license from the CEO, look outside our walls for ideas that we knew could help us make a difference."

And among the stories that blew my mind, Steve happens to be an expert on nuclear issues. I'll share an interesting little aside, I said, "Where were some of the best ideas that came from outside of P&G?" And he said, "Well, the U.S. government."

And I said, "Again, where were some of the best ideas that you incorporated into your products?"

And he said, "The U.S. government."

It turns out that in making diapers, you have a really tough engineering problem. You have to place very sensitive material in just the right place within the diaper fabric, so that you can absorb the most urine without overwhelming the diaper. And you have to do this at 1,000 diapers a minute scale.

So it turns out there's another production process, where sensitive material precisely deposited has relevance. And it happens to be the production of nuclear weapons. And it turns out, that some of the modeling and simulation techniques used for this capability within Los Alamos National Labs, were available for the public to reuse.

And the Procter & Gamble team grabbed those models, repurposed them to their diaper production line, and generated over $1 billion of cash flow benefit to their shareholders. And probably saved hundreds, if not thousands of jobs, because they still produce diapers in the U.S.

So, culture. You've got to believe and embrace the idea that outsiders may have value. And it's sort of a derivation of Joy's Law, if you know the co-founder of Sun Microsystems, who famously said that, no matter who you are, even if you're a life member at the Council on Foreign Relations, the smartest people on the issue you care about most don't work for you. And that if we could find a way to tap into that expertise, we can make a difference.

Think that when you walk up to the DMV counter, that the front desk worker can be innovative and a source for breakthrough ideas to solve the long and frustrating wait times. However, we borrowed a page from Jeff Bezos who, among many leaders, believed that we've got to find a way to empower front-line workers.

And he had a couple of interesting programs. Some kind of an old Nike shoe would be awarded to the front-line worker who tried new ideas, even if those ideas didn't quite work, and awkwardly, even if their bosses hadn't approved the idea, something to that effect. And so, this sort of spirit and celebration of experimentation was something that he carried within the culture.

But also, I guess more to the point of where I would go about valuing front-line workers, he handed an andon cord to his customer service reps. Now, in the Toyota production system, if a front-line worker sees a defect on the shop floor, can pull, physically, an andon cord, stopping production, identifying the root cause, resolving it so that the damage was contained, and that you could continue in a more effective and productive fashion.

The Amazon equivalent of the andon cord was something to the effect of a front-line worker capable of removing an item from the online catalog, if the perception was that product was defective.

There had been some folklore about some furniture that had been shipped not once, not twice, but many times with damage. And it was a front-line worker who brought this to the attention. It hadn't—was not otherwise going to be caught. And it turned out the manufacturer was just packing the furniture, you know, improperly, but hadn't gotten the feedback loop to the point where that was actually a resolved issue.

So, giving front-line workers this concept of an andon cord meant that, you know, if you want to solve the V.A. claims backlog, or we want to find a way to empower students to get better guidance counselors, you might have to ask and engage front-line workers and value their opinions. And again, thankfully, in today's open, often digitally connected infrastructure, you can do so with minimal friction.

But last, and I'll end perhaps with this final parting thought to the leaders in the room. We should embrace the spirit of force multiplier. Force multiplier. And I was sort of aware of, and just shocked by, the scale, when I had the pleasure of joining Sheryl Sandberg, who has just suffered a terrible loss and we're very sorry for her family.

But she had joined a conversation that the White House sponsored around jobs and the economy. And in preparation for the discussion, had asked her staff the question—I think at the time, Facebook had roughly 3,000 employees.

And the question was, "How many people have the job title Facebook Developer?" And Shane, I'll put you on the spot. You know, what's your best guess on the number of people that would have the job title Facebook Developer. Pick a number, any number.

SHANE GREEN: Three thousand.

CHOPRA: So, a very narrow, good guess, which is to say that, you know, this is a culture of coding and building. And so, a good chunk of their workforce would have it.

The real number was 35,000. Neal, are you good at math?

POLLARD: I have a math degree, so, no.

CHOPRA: OK. That number was sort of shocking because, you know, 3,000 on payroll. A and B don't compute. And the answer was, they had opened up the developer platform, so if Nike wanted to build a Facebook app, they hired a Facebook developer on Nike payroll. Force multiplier, by opening up the platform. And at that ratio, 10:1 leverage, could you imagine? Three million federal civilian workers? If 30 million Americans were building better government apps and services? You know? How much better would our lives be on all the interfaces that we have with the public sector or the regulated sectors?

So, I would convey to the leaders the following hopeful message. If we think anew about infrastructure, we have a clever way to collaborate in setting the rules of the road that emphasize entrepreneurship and innovation, and that we open up that infrastructure to really call to action the talents of the country to, you know, go about solving. And we inspire them and actively recruit them to do so, because of our faith and culture in this, and that we gives the folks the tools they need to be successful, I think we would have the recipe for what I would call an innovative state.

That was my 15 minutes. I hope that was reasonable. I don't know if that's a good summary, but that's where I'd start.

POLLARD: I think putting ourselves in the shoes of government and corporate leaders across the globe, that would be very compelling. And a host of very useful messages and lessons, a few of which I'd like to pull the thread on a little bit...

CHOPRA: Yes.

POLLARD: ... and go into deep dive.

First of all, you mentioned a lot of very interesting, compelling examples of organizing principles and points of cooperation, with very rich examples of cooperation between government and private sector to unlock the potential of both—you mention infrastructure as an organizing principle of cooperation.

You mentioned force multipliers. Your comparison between fissile materials and diapers, as a father, I felt particularly compelling.

Where can government take innovation and entrepreneurship lessons from the private sector, but equally important, where is the natural fail point? Where are the natural limitations—not because of government inefficiency or not because of government waste, but because private sector is often about efficiency and innovation, and the government, our government is, at its basis, about representation.

CHOPRA: Yes. Although, given that history, that framework, I would like to just share a little bit of history to put the—my response in context.

If you go back to the founding of this great country, we've had more periods of time where the public sector has been at, or ahead of, the private sector with respect to innovation. So this question, if you had asked it across the full range of American history, would be, how could the private sector do a better job, borrowing lessons learned from the public sector?

Just to give you a couple of obvious and practical examples, when you—you know, our new secretary of Commerce is just a rock star. If you haven't heard of Secretary Pritzker, she's all about Commerce being sort of the innovation agency, the data agency. They're going to solve big problems.

If you take a kind of a portion of the Commerce Department, and take a look at just the census, and you ask the question, you know, "Well, how entrepreneurial has the census been?" Well, in the recent past, it's been a bloody disaster. I mean, we've spent hundreds of millions of dollars trying to create a Frankenstein-looking iPad for census workers to use, that was mothballed. And I think $800 million dollars spent and not a nickel of it used. You know, so you sort of go, "Oh, census. How is that innovative?"

However, if you go back to the late 1800s, at a time when there was a massive influx of immigrants, our nation's capacity, with manual counting techniques, to get the census done in 10 years, was called into question. And in this stressful environment, where you kind of can't miss the 10-year goal, I mean, this is like, it's in the Constitution. You can't—like, we—oops, you know. We can't get the job done in 10 years.

It allowed some room for experimentation and innovation. An employee of the census actually designed our nation's first set of tabulating machines, right? And that underlying capability, among other capabilities, formed the foundation of which great company? Anyone know the—you might know. IBM.

Widely understood story in American history, that IBM's technological edge originated because a bureaucrat solved a very pressing public sector problem. And you could carry this story forward. Among my—you know, you could imagine, to some degree I'm a little bit of a political—I'm a Democrat. I ran for office. I lost. But I would say that among the stories of great examples of innovation, that I would carry over is actually, believe it or not, Herbert Hoover, who I never in a million years I'd give a shout-out to, because, you know, in general, not a big fan of the Great Depression, OK?

But when he was Secretary Hoover, not president, he (inaudible) edge in aircraft production. After World War I, and obviously we had the Wright brothers, but after World War I production plummets. Quality is relatively bad globally. The Europeans are investing in, to some degree, industrial policy, I guess would be the term, building up their capacity for manufacturing. And the industry turns to Hoover and says, "Bail us out." And I guess his ideology is that he won't bail us out, but didn't want to say, "The answer is no," because that's not really inspiring.

And he designs, really, a framework, which I would argue is one of the best arguments for how we can get the public and private sectors to work together, a collaboration model he refers to as the associative state. He says, "What are the common problems in the industry?" It turns out, from an engineering standpoint, designing airfoils and engine cowlings were the conundrums facing the manufacturers of the time.

So the predecessor to NASA, NACA, is created and funded to do joint R&D, collaboratively and in an open spirit with the private sector, and finds its way, the resulting I.P., into the most productive and successful aircraft of their era, the DC-3 and the Boeing 247. Both share intellectual property borne out of an open and innovative government. So I kind of flipped your question, inverted, by asking, in context to say we've had models where we've done it right and found a way to put it out.

Today, it's very much the three principles that we spoke of, and borrowing from the private sector this cultural statement that we're going to get great ideas from outside, not in. It's finding ways to value front-line workers. And it's about, you know, enabling, if you will, that force multiplier effect.

And you can start to see this a little bit—and I'll—if I—one small example, shopping for health insurance, even with healthcare.gov working, for many individuals, stinks. In fact, Uber had done a survey of their drivers, because, of course, they're a 1099 economy, right? They're not providing benefits to their, quote unquote, "workers." Their drivers are independent. But they asked them. 60 percent said, "We could use your help picking health plans."

Now, Uber could have simply said, "Here's the URL to healthcare.gov. Attaboy." Or, because we've adopted this notion of force multiplier and platform, all of the underlying data at healthcare.gov is widely available. U.S. News & World Report took all that raw data and created the Health Insurance Finder, which is one avenue for folks to go shopping.

And a more nimble entrepreneurial startup called Stride Health actually went to Uber and said, "We can personalize recommendations. Maybe they have a predisposition to plans that are good for back pain. So we're going to put a filter and a lens on top of their choices, so they can make smarter choices."

So Uber partners with Stride Health, a startup, to help their drivers choose health plans. The underlying data that allows Stride to do what it does comes from the government, and in fact the plan purchasing is probably taking place on a healthcare.gov-like platform.

So, I would say these cultural changes and these examples demonstrate how the two sides can work together.

Finally, on failure. It is important—if there was one business school program that every public sector manager undertake, it is the concept of innovation pipeline management. There is a discipline to test, to validate, and to scale what works, in which case, failure is not only tolerated, it's welcomed when managed appropriately. In fact, without failure, you lack feedback loops to try and learn in new ways. But it must be managed.

So I don't want to walk into the DMV and have them miraculously say, "Well, surprise. Today's the day we're going to be innovative, and you're not going to get your driver's license. We're going to put you through an interesting little digital experiment."

"No, no, no. I want my driver's license."

Maybe that's not the right place to experiment. But there might be an innovation sandbox. "Hey, I get an e-mail offer. Would you like a new model to renew your license? Try this thing, and we're going to experiment. It will be operating in a lean, startup methodology, and we'll learn, gather feedback. And if it works, we'll validate that it does and then scale it up."

Failure is embraceable if managed.

POLLARD: OK. That's great. So—and some of the examples of that, and some of the examples of failures and successes that you've given, are very compelling, very interesting. The example of the Census Bureau bureaucrat who came up with this innovation. The empowering the front lines is a way to supercharge the work force. Force multiplier is a way to supercharge the work force.

From what I've heard, all this comes back to one common thing, which is the work force.

CHOPRA: Yes.

POLLARD: Which presumes you have a work force to build upon and draw upon...

CHOPRA: Yes.

POLLARD: ... and empower...

CHOPRA: Yes.

POLLARD: ... and charge and multiply and all that stuff. This is a common refrain, especially when everybody starts talking in technology, which we've been doing, which is incentivizing investment in STEM education.

CHOPRA: Yes.

POLLARD: But I'd like to hammer on some specifics of that.

Did you derive any insights—had you have any findings, do you have any examples in your historical review or in your—that nexus of government and private sector, that you can incentivize the education that will build the work force to empower all these lessons that you've learned?

Getting the work force into governments, so government can recapture entrepreneurial spirits. Getting into a global competitive state, and then from that you get into—how do you incentivize retention? You know, a lot of the industries we've talked about, there's a retention challenge. It's not just because the skills market is hot, but it's because new generations coming on line don't expect to be the 30-year-old salary man at IBM anymore. But also there's the flight research.

All these human capital challenges...

CHOPRA: Yes.

POLLARD: ... that we haven't heard terribly brilliant solutions for. Tell us about the terribly brilliant solution that you found...

CHOPRA: Ha.

POLLARD: ... in your book and in your insights.

CHOPRA: I would say, tackling the challenge of STEM education, applying the principles of an innovative state, is actually an angle into how we think about this. And let me provide some context.

The—prior to the White House, I served as Virginia's secretary of Technology. And then Governor, now Senator Tim Kaine was my boss, and had asked for a review of our science standards, and then asked a bunch of NASA experts who lived in Virginia to volunteer their time, as did many others, to think through what our gaps were between what we were teaching in our sciences, and what the world needs, and how we could close that gap.

And we had a phenomenal panel, and the output was thoroughly depressing, which is to say, as an example, we were teaching children that the main component of a television is the cathode ray tube. Not in and of itself a problem, but for the fact that we used to make cathode ray tubes for televisions in Danville, Virginia. That plant is long since gone. Last I checked, if you could think of the last TV any of you bought, it's—you're five generations beyond the cathode ray tube.

And you look at the physics books, and they basically hadn't been updated since the '50s, effectively. No references to dark matter, Steve Fetter. No references to pretty much anything that the physicists of our era are grappling with. And more sobering, was the idea that in order for us to fix this, number one, we all had to wait for the gods of Texas to determine that they were going to change the textbook, because we all are beholden to whatever they do for buying textbooks, or something.

But the other point was that we're on a seven-year buying cycle for textbooks. So here we have a fact in Governor Kaine's hands, and it's like four years to the procurement, and God knows how long until the actual textbooks are purchased and on the shelves. So, we're literally, like, watching silly educational gaps flourish because of this inane operational mess.

And I kind of said to the governor, "Governor, do you want to, sort of, like, not do that? And maybe, you know, try another approach?"

And he said, "What do you have in mind?"

I said, "Well, I'm kind of thinking we might want to crowd source this thing." So I, in a period of 90 days, met with a bunch of stakeholders. Said, "You know, we have school teachers who'd love to contribute chapters."

And we said, "OK, here's what we're going to do. We're going to put out an open call to action. Governor puts out a request.

"I have no money. But we have this embarrassing physics problem, which is to say, that our textbooks are way out-of-date, and there are all these concepts that we know you want to get into, but no one's really, you know, publishing on, or what have you."

And we found an open source platform, CK-12, which is a platform led by Neeru Khosla, who's the wife of Vinod Khosla, the famed venture capitalist, who created a kind of a mechanism, if you will, for us to on-board all this intellectual property.

And we said, "Who wants to volunteer for free?" And we had like a dozen, two dozen filtered contributors, from science teachers, to a freshman in high school, to students in college, a professor at William and Mary, someone at the University of Utah, who has nothing to do with Virginia. And all of a sudden, we assembled, with four levels of quality review, within a period of about 120 days, the Virginia Physics Flexbook, a compilation of 12 chapters, including dark matter and modeling and simulation, and a whole range of modern topics.

And the argument was, let's build this free, open sourced resource, and let's invite school teachers to do whatever they wish. They have their—they should have control. And our argument was, one day a week, teachers should be able to have the freedom to choose elective material in physics. And one of the benefits we had for that, by the way, was that our standards of learning—we did not have a standardized test for physics. So—for general science subjects, yes, and for math, yes. But not engineering, not technology, and not in terms of this case, physics. So we could experiment.

I give you that long-winded story to say that one can apply these principles to change the content we teach, which I think there needs to be a lot of content innovation when it comes to—how do you explain basic concepts? Not everybody wants to be a Ph.D. in math, but they might want to have a new way of learning math, so they can be effective in whatever they want to do. That you can better engage digital resources in how you educate kids, so you get feedback loops.

I was with the CFO of the Khan Academy yesterday. Khan produces just millions of tracking—you know, keystrokes, so they can understand the DNA of a student who's struggling with math, because they've got all the feedback loop data that you don't get in an analog world.

And third, that you help foster best practice sharing, so that these tools can be used so that the teacher in southern Virginia can collaborate with the teacher in northern Virginia, and perhaps even around the world. And that—the application of the innovative state philosophy to the challenges of STEM education might make a huge difference.

And on the issue of values, the key thing that's happened—my successor has done a phenomenal job. Todd Park was the—followed my role. Probably the only accomplishment I'm proud of is the fact that we begged, borrowed, and dreamed that Todd would take the role, and I'm glad the president recruited him and had it happen.

But then, Megan, the current CTO, she's talked of this idea of, we need to increase the T.Q. in government. It's not the I.Q. or the E.Q., it's the technology quotient. You've got to boost the T.Q.

We're on our path to bringing in the best and the brightest engineers to come in for two weeks, three months, a year, two years. We said, "You know, sign up for whatever you're willing to sign up for. In this—not everybody wants one job for life. Come on in. Go on out. We can scope work that takes advantages of your talent." And I think that is a key success in how we're going to do this.

But finally, the connected force multipliers means you may not necessarily need the capacity in-house. But you need them to be connected to you, so that they can build that last-mile service. And that formula, that wholesaler role of government, where the last mile is built by, perhaps a nonprofit or a for-profit, can actually be the model.

I had mentioned earlier I was going to give Shane a shout out. I don't know if Shane would come work for the government, because he's wildly successful entrepreneur. But, we have a problem. Kids who fill out the FAFSA don't apply for all the private scholarships that are available to them, in part because there's friction. It takes two hours to complete the FAFSA, at fastest.

So we said, "OK, we're going to open up the FAFSA data. When you apply for the FAFSA, at the end of your interview, you can push a little button that basically says, 'Download my data.'" And we invited entrepreneurs and app developers who may not work on our payroll, who do—who can build better services.

Shane, without a government procurement, funding, count—how much did we pay you, Shane? Zero. Shane says, "Give me that file, and I will prepopulate scholarship forms for every senior who wants to apply for this growing number of scholarships that are out there." And he rolls out this service as part of a product that he's rolled out with Personal.com.

And, by the way, if he does that for free or for a million dollars, that's America. Like, he should do whatever he wants. We didn't have to employ him. We didn't have to issue a procurement to create the FAFSA data reuse form filling app, because I don't think our procurement would have led to anything particularly innovative anyway.

But by opening it up, it allowed the space for folks like Shane to do that, and close that last mile. So that's a long-winded way of describing why I think this—fix the STEM education through a more innovative approach, recruit the T.Q., but also continue that open-up strategy.

POLLARD: Fantastic. Very interesting. Thank you for those.

I'd like to now invite audience members and our national members to join the discussion. Couple ground rules, typical CFR. You've heard these before. Please state your name and affiliation. Keep questions and comments concise, to allow as many members as possible to speak. And of course, the Jeopardy rule, all statements must be phrased in the form of a question.

So, I open the floor to questions, and I also, at the appropriate time, want to give those listening in the opportunity to ask a question.

Do we have a question?

CHOPRA: Please.

POLLARD: Ma'am.

QUESTION: All right. So—all right, I'll just speak loud. Sara Agerwald (ph) from Hewlett-Packard.

So, two things, really, I'm thinking about. One is, you talk about the relationship between government and the private sector. You talk about how the private sector can borrow from government. That's excellent. But government could also stand to improve. And I would say particularly the federal government...

CHOPRA: Yeah.

QUESTION: ... in terms of the adoption of new technology. Be it apart from the intelligence and the defense community, I would judge that we are a little bit behind at...

CHOPRA: A lot behind.

QUESTION: OK. Big data, you know, cost production, cloud computing, much less integrating and networking across government agencies, right? I mean, the single window we're very far from within the U.S. government, and at your role at CTO, I'd love to get your thoughts and input on that in terms of what you think is the best way to improve upon those things at the federal government level.

I see—where I see innovation is happening with the use of technology in government is at the local level, in certain cities, like New York. Because they did a very good job in this area. And I'd love to get your perspective on that. Number two...

QUESTION: Great question, by the way.

QUESTION: ... number two would be—the link to privacy (ph). And you talk about education in the work force. I don't know if you've heard of something called inBloom.

CHOPRA: Of course. Disastrous.

QUESTION: OK. Right.

CHOPRA: They had the wrong architecture.

QUESTION: OK. But the reason they fell apart was in part because of privacy concerns, where...

CHOPRA: Because of the wrong architecture—yes, go ahead. Yes, 100 percent.

QUESTION: Well, and perhaps poor communication, because they didn't make people feel comfortable with what they were trying to do in sort of promoting personalized education, and using data that came from students in order to enhance their learning.

CHOPRA: Yeah.

QUESTION: Right? And it seems to me, like, one of the key challenges making this really work and use of data—and, you know, what you're talking about in, you know, incorporating learning management systems in a way that is truly innovative. It's people's fear of what's going to happen with my data...

CHOPRA: Excellent.

QUESTION: ... and needing (ph) opening that up, OK?

CHOPRA: Excellent.

QUESTION: And so, how do you key that balance, and how can we, you know, educate people about what are the real possibilities of it across the boarder, not just in skills development. With the potential of the technology, your readers really improve...

CHOPRA: Thank you.

QUESTION: ... and the teachers...

CHOPRA: These are phenomenally helpful questions, so thank you. And I'm excited about answering them.

Let me first state the obvious. We're misallocating our spending. So the federal government spends about $80 billion on I.T. The overwhelming share of that is for what I would call commodity infrastructure investment, not the kind of end-user applications that we need to actually fuel the day to day of the government.

This is really like the equivalent of having to build a power plant, maintain and operate the power plant, as opposed to having access to the power that you could then plug into to fuel whatever it is that you want to do, microphones in the room and video webcasting and the like.

So my colleague in the White House, Vivek Kundra, the first Chief Information Officer, who had, kind of, administrative responsibility for the budget on I.T., really implemented the right answer here, which is a cloud-first strategy. Get out of the infrastructure business as much as humanly possible. Move to commodity I.T., scale up the standards for security and privacy within commercial clouds.

So, you couldn't just like put all of the government data on the Amazon cloud, you know, when we first walked in the door. But we launched a standards process, collaboratively with the private sector, said, "What's the right model for security on the commercial clouds?"

Amazon and others are now certified as fed ramp providers. And large swaths, including huge groups of the intelligence community, are now leveraging commercial clouds and getting out of that highly expensive and complicated infrastructure to manage. So there's a little bit of the allocation of capital.

There's also a lot of this idea of wholesaling government systems. So much of why we are behind, is we've spent years building up these siloed databases. And it—you have to have a Ph.D. in government procurement to know how to find a vendor that knows where the keys are to unlock the data, to be able to do anything.

So we tried to hack our way into that problem by doing a few things, namely, where possible, opening up the data. My favorite example is Patent and Trademark Office. I think they're still on vacuum tubes. I don't know. They're on, like, some—God knows what.

And that—so it would have been fun to say, "Oh, in '09, yes, Mr. President, you want an innovation economy, but it's going to take five years, and a $500 million modernization program, blah, blah, blah." No. We put up a zero dollar RFP under the leadership of Dave Kappos, and said, "We have no money."

This is a theme, by the way, for solving problems. Because the minute you spend money, then procurement evil shows up, and it's like, protest period and you get annoyed, and I hate procurement. It's evil.

So, zero is good, because you don't violate rules. And what happened was, half a dozen companies said, "Ah, between the hours of 2 a.m. and 5 a.m., we'll crawl your old tapes, and start sucking out all the raw data, under the conditions that we put out," which was you have to make the data, then, freely available for anyone to reuse.

Google Patents. They sucked out, over a period of eight months, or whatever it was, all the data from those old systems, put it in, and now you and I can interface.

My dad's got three patents. It was a joke for me to search and learn all the details of my dad's patents. I have no idea if I would have been able to do that on the legacy system. So, this openness.

And then, you're from HP. I'll give you a shout-out. Open interfaces, an API-first strategy, which is now becoming a part—forgive me for getting in the technical weeds.

POLLARD: Not at all.

CHOPRA: But here's what this means. Nine years, we tried to modernize the scheduling system at the V.A. By the way, we saw this in the news. OK. This was before it was in the news.

It was a disaster. Not a single line of working code. $130 million dollars in, nine years project. Complete waste. My friend and colleague, Roger Baker, the CIO of the V.A., says, "I'm putting this on red alert, canceling the project." OK. Well, that's smart in management, but that doesn't mean we've solved the problem.

OK. We're going to open source all of the data in the V.A. Electronic Health Record system, which was legally open sourced, but not technically exposed via APIs. So, for five million bucks we put it into this open source collaborative called OsEra, published the end-points, and said, "We're going to offer a $3 million prize to the three teams that can bring their off-the-shelf scheduling system, plug it into the V.A., and have it work in our test environment. Not in nine years, in nine months."

Three winners. Hewlett-Packard formed an open source team, partnered up with a lot of folks, proved that a systems integrator can win in the new economy, won the million bid.

A startup that I'd never heard of, MedRed came in first place. Partnered with some others and showed that they could—nimble entrepreneurial company can make it happen.

But my favorite, a hospital in California called Oroville, had separately purchased the V.A. software because it had been open sourced for years. People had commercialized it. And then on their own, built the scheduling module, and said, "It works for us. Just take it back." And it worked.

So it was an example of closing the gap. If I had to repeat the nine-year, $130 million blow-out (ph) and say, "Oh, I'm going to do 20 percent faster and cheaper," it still would have been a disaster. We chose this other approach and, to the sadness on my end, the V.A. has never really implemented those startup solutions. So, I can't tell you that that story ended well, because in some ways we still have a long ways to go on culture, the—that I don't know, frankly. The agency's never spoken publicly about what it hasn't fully adopted those kinds of things. But there's hope.

Privacy. We made a very—this gets to the point of the framework. What are the rules of the road that would allow for a more innovative state to occur? On privacy, a bedrock rule is, if you've got data about me, I'm entitled to it. OK? And that, we felt, was like a default in the government. If you've got data in the Medicare system, you are entitled to your claims record. If you're a veteran and you have data in the Veteran Health system, you're entitled to it. If you are an active duty military, and they've got records on your military service, you're entitled to it.

And the logic was, in regulated sectors, when the regulated entity hands off the data back to the consumer, the consumer's reuse of the data is at their judgment. I'm no longer involved in that endeavor.

There is the inBloom problem. They had a paternalistic view, which is, "Trust us or opt in, or whatever"—I don't know, whatever the language was they used. But they kept a direct interface between this big board that collected everyone's records, and that parent and that child that was just going to school every day.

If they used the exact same technology, the same idea of personalized learning and instructions, but changed it, where—"I'm going to give the data to you. And if you want to choose to turn around and deposit it with an inBloom account, because it's going to offer you these value-added services, that's your choice."

When Netflix says, "Do you want to watch Netflix on Apple TV?", that's your choice. You give Apple TV your Netflix username and password. And then they confirm. "Did you really mean for that to happen?" On the Internet, we have these security standards. They're called o-off (ph). And they are respectful of our privacy. And in fact, if you ever feel skeevish (ph) because Apple TV, or whatever, starts spamming you, or whatever, that you didn't appreciate, you go to Netflix.com/settings, and you de-permission Apple TV from your records. One click.

So in health, we've created the blue button. Every health care delivery system is obligated to provide you the data back. In education, Secretary Duncan and I stood in January of 2012 and said, "We want every child or parent to be able to download their records data." And we asked the DOD—education, to be our—the school that we managed, to be the first to adopt it.

Crickets are chirping with the failure of the schools—no school's adopted it. I don't know why. It's embarrassing. So, you could get your My Data.

And then energy. Right now, those (ph) energy companies are producing these smart—putting in these smart meters. I have one in my house, thanks to Dominion Power. I only know my energy usage once a month at the bill. That meter collects data every five, seven, 10 minutes.

I don't want to go log in at Check-Your-Meter-Usage-Right-Now.com, because that's kind of boring, and I don't know what I would look at. But, I'd love to give that to my Nest app, so that it can intelligently adjust my thermostat if I'm in a cost-saving mode, or if I'm a comfort mode. And it makes my life better.

This is the key principle of privacy. We can actually strengthen privacy by opening up, if we open up with the tools that we've just described. That would be what my look-back on the failure of inBloom was. Wrong approach, technically, to a great idea.

POLLARD: Another question? Ma'am.

QUESTION: Can you speak a little—you talked about...

POLLARD: Can you give us your name and affiliation?

QUESTION: I'm sorry. Gina Jones (ph), Department of Defense.

You spoke a little bit about the importance of failure. Can you provide some examples of how you, one, encouraged, if you will, just to use that—encouraged it and then managed it when it needed to be managed?

CHOPRA: Yes. So, the—in reality, I think of all the initiatives, this is one of the jokes I used to have with my—the first guy that hired me in life is Jeff Zients, who's currently on the president's National Economic Council. And at the time he was the Chief Performance Officer. In fact he was announced the same day I was, by the president. We had our respective titles, and I didn't know he was doing that, and he didn't know I was either, so it was sort of exciting.

And the joke was, I'd like to have, like, 50 plays running at once, and to have, you know, two or three of them get to the end zone. But that meant, like, 40 or 45 of them would like massively embarrassing and failure.

And in many ways, I tried to be a, kind of, a—live—eat my own dog food, if you will, dog-fooding this failure issue. Because I often would lead with stories of where I thought we had clever ideas and then just fizzle—like this example of the Hewlett-Packard. It's amazing that Hewlett-Packard built this scheduling thing in nine months. It is an utter failure that we haven't adopted it and given it a change to try. And that failure is on people like me and others, who couldn't find a way to get that story to the finish line.

And the story of failure is really about celebrating the culture of acknowledging failure. There are so many people in our society who stood up only after having been beaten down. Some of the best CEOs from the companies that we think of as amazing examples, they start by telling the story of their failures. And I think that's a leadership question.

So the—you know, if an organization embraces a spirit of open innovation, and it has a culture of, "Here's where you're going to allow for those ideas to be experimented," then you can manage it quite well.

Before I came to the White House, spending government money is where you have to be really careful of failure. So, the governor had given me a $3 million innovation fund. We called it the Productivity Investment Fund.

My theory was that if we made spot investments, we could dramatically improve service delivery to the citizenry, but you can't just have it all be free. I mean, I could give you a couple open sourcing physics books or whatever, but not, like, fixing the portal to get a business one stop. So, you know, the single window government where you—one place to get all your paperwork done.

So we said, OK, here's $3 million. We adopted—we borrowed heavily from corporate best practices on innovation pipeline management. We acknowledged upfront that we were taking a portfolio approach.

I was held accountable for the 4:1 return that we ultimately delivered on the portfolio, so I'm not suggesting that, like, "Failure's awesome. I'm glad we failed." No, no. I want—I was driven to succeed. My boss, the governor, said, "This is."

But in that, we had a couple of big wins. For example, postal stamps. We were mailing stuff without bulk processing. If you bulk process, you can save four cents or five cents on the stamp, or whatever. Who knew such a silly thing? That one $800,000 investment yielded $1.8 million in return on savings to postage, because we could bulk shop.

Well, that covered the three or four failures that were a couple hundred thousand bets where, "Let's redesign the learning pod," or "Let's re-imagine, you know --" I think one of the things that I wanted to do was to create a single Medicaid application that was, like, you know, senior-friendly.

Because if you applied for Medicaid in Virginia, it's a nine-point font on 14 pages. You know, Grandma isn't that well served looking at a nine-point font, 14 pages. So could we create, like a simpler, dumber form? And so, yes, we built the technical form. But, like, it couldn't be put into production, so it was a complete waste and failure.

So that's the—you have to have the governance for that innovation pipeline that allows you to say, "We will accept failures in this model. We will test, and we will only validate the scale that works." You're seeing this en masse in the Medicare Innovation Center, which hit a big milestone this week.

When Congress passed the Affordable Care Act, it essentially outsourced the authority to change payments, how we pay doctors and hospitals, to the administration, under the following rules. The administration was given $10 billion to fund experiments, to change the way doctors and hospitals are paid, to incentivize better quality, lower cost.

And this was the backstop. If the actuary of the HHS department, who's notoriously independent, certified that the intervention improved quality, lowered cost, then that idea can scale to regulation. And this is the first week the administration had done that.

President Obama—they did a Pioneer ACOs, where they gave the best health systems a two-sided risk to manage populations. It generated hundreds of millions of dollars in savings, and this week the actuary certified and said, "Yup." And the agency announced they're going to make Pioneer ACO the default plan for everyone. So this is the culture of a disciplined approach to failure.

POLLARD: We have time for about one or two more questions.

CHOPRA: I'll be fast in my response.

POLLARD: No, no, no. That's OK. We have time for a couple more questions, but before we take the last couple questions, I just want to remind all participants that this meeting has been on the record. So, do we have any other questions, in the room or online? I don't know. Do we go online at some...

POLLARD: OK. Yes, sir.

QUESTION: Hi. I'm Benjamin Brake (ph). I'm an analyst at the State Department's Bureau of Intelligence and Research, and I'm an International Affairs Fellow here for the year. And I look at cyber-issues.

And so, while I'm optimistic that this will be a decade of problem-solving, I can't help but think about...

CHOPRA: And a decade of cyber-attacks. But keep going.

QUESTION: I can't help but think about the problems, right.

CHOPRA: Yes.

QUESTION: And would agree that defective network devices...

CHOPRA: Absolutely.

QUESTION: And particularly with—you're pushing for an open source solution, which sounds right to me. Does that solution apply in respect to some of the security problems...

CHOPRA: Yes.

QUESTION: ... you have proposed. So, as far as I understand, information security researchers feel with sort of a chilling effect when, you know, end-user licenses bar them from, you know, hacking these things and improving the security. I think information that the company should know if they're barred from actually pursuing. Can you talk a bit about that environment of security protection?

CHOPRA: Well, I can't speak to the specifics of a security researcher not capable of proving a red team-blue team model where they can actually show the faults. What I will say, open source is often mis-described. And I'm being glib in using the term open source as a way to say, "That's how we solve things." Really, open collaboration is the better way.

You know, while Congress has failed to act on cyber-security legislation on the big issues, like liability protection in exchange for data, and some of the other things that the president's called for, it has, in a bipartisan way, adopted whole-heartedly this notion of open collaboration. And what it said was, NIST—NIST plays the role of Switzerland in our society, OK?

In the Baltimore fire of 1903, or whenever it was, when Baltimore was burning—and I shouldn't have used that term because, obviously, we're seeing the tragedy in Baltimore now. But literally burning, fire departments from all over the country came and tried to plug in their equipment and help fight the fire. At the time, fire equipment was highly proprietary. The vendor who sold the Baltimore solution wasn't the vendor that sold it in D.C., or whatever. So everyone shows up with their equipment and, nothing plugs in. You can't fight the fire.

So among the Switzerland roles of NIST, which is we have a competitive, private company for fire, let's at least agree on interoperability standards. So it allowed for proprietary competition for quality, but, like the end connectors be the things that we don't compete on. So we can have interoperable parts.

And that balance is essentially in cyber-security protection, an answer, which is you're going to have lots of private companies. "I've got this widget. It's going to monitor your network better. It's going to detect and attack the incoming with counter-fire."

What the—Rockefeller and Thune said, "Let's get the private sector to come together to say, "What are the standards by which we should hold the ecosystem accountable?" Smart code, so that you can actually test—but software code from the vendors who've made it.

I mean, so many of the mistakes and attacks are because some cowboy culture of coding left some table in a part that wasn't documented, and only to be found through a hacker attack. And so you suffered. So, some of the standards to improve the quality of software development, to think differently about how you protect the moat, to decide if protecting the moat is actually the smart thing to do, that in fact, better let the attackers in, but neutralize their effect when they get in, so minimize the damage. Different methodologies.

You live this every day, so you know all this. But my presumption is we're going to do better elevating industry standards and driving that adoption. If every buyer of software demanded that the code base for the software that they're running have been—gone through some type of a clean code review, you know, what would that do to, you know, the buying power of the industry? And how might people react to what was previously a cowboy culture, now recognizing that they've got to clean up their act.

I am—as more and more regulated sectors depend on more and more Internet of Things, we're going to start to see those principles at the start. And it will be built by the collaborative model. You're not going to have one company appear out of nowhere. "I'm the one tablet with Moses on how all this is supposed to work." It's going to be these designed and deployed standards.

POLLARD: Mr. Fetter.

QUESTION: Steve Fetter, University of Maryland. I'd like to return to this theme of failure and being tolerant of failure.

At the beginning of your remarks, you noted that R&D is part of the infrastructure, federal R&D.

CHOPRA: Yes.

QUESTION: Government-sponsored R&D.

CHOPRA: Lots of—lots of...

QUESTION: It's well-documented that industry invests too little...

CHOPRA: Yes, in early stages.

QUESTION: ... particularly basic R&D. And it—but, you know, R&D is—it's almost synonymous with failure. If failure was not possible and even likely, it wouldn't be research, right, if you knew it was going to succeed.

It used to be that our political systems, society, was much more—well, this was more apolitical, right? You know, there was broad support for research and development, and we trusted science agencies and the peer review process to make these choices about what to fund.

But I think increasingly you see this is not the case with some senators publishing lists of proposals that are funded by NIH or NSF, and ridiculing them as wasteful spending. You see many, or several of the bad bets that the administration made in energy R&D roundly criticized. But the most comprehensive study I recall seeing of the return on investment of federal R&D focused on DOE, the Department of Energy R&D. And it concluded that a few of those bets were huge wins.

CHOPRA: Yes.

QUESTION: And more than paid for everything else.

CHOPRA: Yes.

QUESTION: Things like compact fluorescent lights...

CHOPRA: Yes.

QUESTION: ... you know. Fracking is another example.

CHOPRA: Yes, yes.

QUESTION: And yet, there is still this political dynamic where particularly with one party, where there's almost irresistible temptation to seize on the failures...

CHOPRA: Yes.

QUESTION: ... and not to adopt this portfolio approach. So I love your energy and optimism, but in fact I think we've been moving in the wrong direction.

CHOPRA: See, here's my unexpected response to you. Number one, Newt Gingrich's call for doubling the NIH budget—did you all see this?

QUESTION: Yeah.

CHOPRA: Newt Gingrich called for doubling the NIH budget. I think there is an acknowledgement, if you sat down and said, "Is this infrastructure investment allocation adding R&D as foundational to the country?" it does pull bipartisan in the context.

To me, the answer to the question, Steve, is fix health care. What I mean by that is, the reason we're having this horrible fight over R&D is it's in the category of non-defense discretionary. And in budget poker, if you're in the non-defense discretionary bucket, you're in, like, tough—you're in a bad place.

However, if the rate of health care inflation hits GDP plus one, or GDP plus zero point five, which, by the way, we're, like, actually—like, it is within eyesight of us actually being in that space. It will blow all of our deficit projections in the positive, meaning it'll make us look like we are solving the deficit problem, because basically the deficit is a proxy for Medicare inflation. I mean, basically.

So the answer to the question of why can't we convince folks to fund da-da-da-da-da, it's, they're living in macro-environment where they have to compress non-defense discretionary. And then you have a couple fringe, you know, calling out the stories. But that's a fringe.

The fundamental point is, if we freed up capital by having constrained some of the health care inflation, then I do believe that freed up capital will have a healthy discussion about reuse, and a good portion of it will reinvested in the higher ed space.

And I think Virginia's a microcosm, which is to say when Mark Warner was governor, now senator, he had a Republican majority in the house and the senate, and yet he convinced them to increase taxes after a very long and painful process. But it was in large part to allow for the investments in higher ed and the first ever R&D bond package that the Commonwealth had ever put money behind.

So, there is evidence on the books that there is support for these things. It's just the macro-environment. If the pressure was eased, we will be in a much better place. So I'm Hawk. GDP plus zero on health care, GDP plus zero point five. Let's follow Zeke Emanuel and get this thing done.

POLLARD: We have two more minutes and I will take the presider's prerogative of asking a very short, easy to answer, last question.

CHOPRA: OK.

POLLARD: We've talked a little bit about this in the fringe. We haven't addressed it head on. How can technology and innovation overcome partisanship?

CHOPRA: Well, I mean—easy question. No, no, no. But here is the—story.

After I left the White House, I ran for lieutenant governor of Virginia and lost. But in this process, Clayton Christensen, a professor at Harvard Business School, godfather, right, genius—hosted a forum on innovation in government.

And in the room was the former lieutenant governor of Maryland, OK. So, candidate for lieutenant governor, former lieutenant governor, and the discussion was food stamps, which is sort of politically tinged. And, you know, the discussion of being more innovative, or whatever, was being bandied about. And I was silent. And the lady says, "Whoa, whoa, whoa. I disagree with the premise. I do not want to make it easier to get on food stamps."

So, being more innovative, i.e., moving away from, like, friction and paperwork, whatever, I—"You know, what if I fundamentally don't want people on food stamps," was sort of the discussion. So I sheepishly raised my hand, and I said, "Professor Christensen, this is the central reason why we've had artificially created fights. So let me rephrase the question.

"The purpose of the Food Stamp Program, among many, was to provide access to healthy foods for folks who couldn't afford." Let's, for the sake of discussion, say that healthy food is $50 a month. I'm making this number up, but let's just say for the sake of discussion. And if we can't afford $50, we'll subsidize the delta from 20 to 50, so you get a $30 voucher.

What if there was an agenda to find ways to make healthy food for $5? Would the Republicans and Democrats agree, let's make a modest investment in the R&D, Steve, in the innovative—open up the data, the reuse, the studies, so we can get to $5 food, healthy. I don't believe you would find as much partisanship over the investment in $5 food R&D. In fact, ARPA-E, even though it gets attacked in the—it's a non-defense discretionary victim, the actual bipartisan support for the idea of ARPA-E is widely expected and appreciated.

So the point I would get at in the question is, change the debate. If broadband to every American's going to cost $1,000 to the home, and we have a political fight over whether the government should subsidize that, or should regulate carriers to eat the subsidy for that, or we let people just go about being disconnected, that's a very political fight.

If we can say, let's invest $5 to get that $1,000 down to $200, you have a different story. In the debate on the National Wireless Initiative, which is one of the things I'm most proud of—I've worked on, really finishes the job on the 9/11 Commission.

Our cops and firefighters didn't get the message on the same frequency. When the towers were hit, the cops were told to get out of the building. But the firefighters were on a different frequency. They didn't hear that message. To this day, we do not have a nationwide interoperable communications system for our cops, our firefighters, or EMS. Because it's expensive.

We took what was estimated to be a $40 billion problem and said, "We think we can do it for $7, and we're going to get the $7 through this clever spectrum auction thing." And the Congress, a majority of Republicans, Steve Fetter, in the Senate Commerce Committee, voted to fund $500 million of R&D, to basically pull forward some of the network and spectrum sharing technologies necessary that would allow us to dramatically lower the cost of connecting people, not just public safety, to broadband.

And that—of course, the House whittled it down to $300. But it's still $300 million of new money in R&D that had never been offered before. And that is bipartisan evidence that you get the idea. Let's invest in the elements that can bring the cost of a social good down.

And, by the way, we're talking—this is the Council on Foreign Relations. And I've been so U.S.-centric. My guru, C.K. Prahalad, had written the book you all must read. First, my book, "Innovate State." But second, "Fortune at the Bottom of the Pyramid." If you've not read it, it's a must-read. And it's the story of how people are literally delivering health insurance at scale for a dollar fifty a year per person, including two surgical procedures and preventive care. Dollar fifty. Not $10,000 Medicare expenditure.

And so, this idea of just globally thinking about low-cost education, low-cost health, low-cost financial services, et cetera, is an answer to this partisan divide by bringing down the temperature on the cost of acting in the public interest. And I hope that we'll start to see more of those options on the table, not less, as we proceed.

Thank you.

POLLARD: Thank you.

Join me in thanking Aneesh Chopra for his time, and especially for his very valuable insights.

CHOPRA: Heartily. Thank you.

(APPLAUSE)

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