Penny Pritzker: America's economic future

00:01: Good afternoon, everyone. I'm Michael Barr, I'm the Joan and Sanford Weill Dean of the Gerald R. Ford School of Public Policy. It's terrific to see you all here. Thank you for coming. My particular thanks to President Schlissel for being here this afternoon. It's a great honor to have you here. I wanna start by giving a very warm welcome to a good friend of the University of Michigan and to the Ford School in particular, and that's Hank Meijer.

[applause]

00:33: Hank and his family, through their family foundation, have established a fund in honor of Senator Arthur Vandenberg here at the Ford School. The fund the Meijer family has established will be of tremendous support to our school, enabling us to host distinguished visitors, workshops, and other educational programs. It will support an annual series of major public events named for Arthur Vandenberg, and today's talk is the first in that series.

01:00: The Vandenberg lecture series will focus on global issues and will serve as an ongoing tribute to Senator Arthur Vandenberg, who worked across partisan lines to construct some of the most significant and enduring foreign policies of the 20th century, including the Marshall Plan, NATO, and the creation of the United Nations. You may know that Hank just wrote a beautiful book about Senator Arthur Vandenberg called "Man in the Middle" about how Vandenberg changed his mind about America's role in the world and became a staunch advocate for a bipartisan and engaged foreign policy. Hank, please accept our deepest gratitude to you and to your family for your support of the University of Michigan.

[applause]

01:46: Let me just say a word about our format. After my introductions, our featured speaker, Secretary Penny Pritzker will be joined in conversation with Ellen Hughes-Cromwick. You are all invited to use the question cards you've been handed to write down your own questions for Secretary Pritzker. Shortly before 3:00, we'll move into Q&A. My Ford School colleague, Professor Betsy Stevenson and two Ford School master's students, CJ Meijer and Emma Watesman, will select and read the questions.

02:16: Ellen Hughes-Cromwick, in addition to being our moderator today, was the catalyst behind Secretary Pritzker's visit to Ann Arbor today. The secretary spent the morning in a series of meetings and tours with business leaders, startup firms, investors and university leaders all focused on propelling the future of work, mobility, sustainability and growth in the Big Ten region. Ellen convened today in her current role as Senior Economist and Associate Director of Social Science and Policy at the U-M Energy Institute. Previously Ellen served as Chief Economist at the commerce department and before that, Chief Global Economist at Ford Motor company and an Adjunct Professor at the Ross School. Thank you, Ellen, for your tireless work, collaboration and vision in making today's event happen.

[applause]

03:07: And finally to our featured guest speaker. It's my great honor to introduce the former Secretary of the Commerce, a distinguished entrepreneur, civic leader, philanthropist, Penny Pritzker. Pritzker served as US Commerce Secretary in the Obama Administration. She was a core member of President Obama's economic team and served as the country's chief commercial advocate. Leading the administration's trade and investment promotion, she launched a highly successful initiative to attract foreign direct investment to the United States. She negotiated the US-EU Privacy Shield, chaired the presidential ambassadors for global entrepreneurship, and served as the administration's point person on manufacturing. She developed a strong workforce and skills development agenda and began revamping the important work of the commerce department on data.

03:56: She is a highly successful business leader, having founded quite a number of successful business leaders. Pritzker today is the founder and chairman of the PSP Partners and Pritzker Realty. She is the former chairman of the Board of the Transunion, a past board member of Hyatt Hotels, William Wrigley Company, Marmon Group, and LaSalle Bank. And she is a truly global leader. She is the incoming chair of the Carnegie Endowment for International Peace, a member of the Aspen Strategy Group and the Aspen Economic Strategy Group, and she's on the advisory council of the Hamilton Project among many other wonderful things. Please join me in welcoming today, Secretary Penny Pritzker.

[applause]

04:41: Let me turn it over to Ellen.

04:44: Thank you, Dean Michael Barr. Thank you very much for your generosity and hosting this wonderful gathering today. And we are just so delighted by the turnout. Thank you all for coming. I think you'll very much enjoy our honored speaker today, Penny Pritzker. Penny, you have accomplished so much in your career, and I guess maybe we could just start, if you wouldn't mind, talking a little bit about your journey through the whole period up to 2013 before you launched as a cabinet secretary in the Obama Administration.

05:28: Well, I'm not gonna start at childhood or as my parents used to say when they'd ask me about my day when I was growing up, "We can skip that you brushed your teeth part."

[laughter]

05:39: Anyway, so I will start with, in 2006, then Senator Barack Obama approached me about becoming chair of his... Finance chair of his effort to run for President which I thought was something there was just absolutely no way I could do. I had teenage children, I had a full suite of companies that I was running. My family was in the middle of a major restructuring, and I was trying to be a good wife and mother on top of all the civic and philanthropic things I was involved in. But fortunately, my husband basically when I told him, "You won't believe the most... I got asked whether I was open to doing this, and I said there's no way," and he said, "We've gotta talk about that. Come home." And I said, "I'm on my way home." And I walked in the kitchen of our home, and my husband started knocking on the door of our kitchen... To our kitchen. And I said, "What are you doing?" And he's always one for the dramatic flair, and he said...

[laughter]

07:00: "This is destiny knocking on the door of our country, and you've gotta find a way to help." And so that night at dinner I explained... I asked the kids 'cause we're a small family, I said, "Our friend Barack Obama," and I had gotten to know Barack Obama probably, I don't know, 10, 12, 14 years earlier because Michelle Obama's brother was the basketball coach of my kids when they were five and seven.

[laughter]

07:35: It's amazing how you meet people. Anyway, I said to the kids, "Barack would like me to be his national finance chair. I've never done anything like that. I'm not a particularly big political fundraiser, but here is what I do know: If we do this... If I do this it means how many ever nights a week I'm away from home now," which was probably at least one night a week, "I'll be away from home at least another 50 to 60 nights a year during this two-year period." And the kids said, "Mom, this is a great idea. You should definitely do it."

[laughter]

08:13: So I'm not sure what the message was there. But the other thing I said to 'em is, "It'll really be a family affair because this will suck all... I could not quit my job, and this will suck all the oxygen out of the room. And so we're gpnna have to all be in on it." And the kids basically said, "Mom, you gotta do this." And so I was... For two years I was a part of a groundbreaking campaign, and literally started when there were 11 of us, and three phones, and two desks, and holes in the wall to build an amazing national effort and introduce the country to Barack Obama, and ultimately for him to win. I then served on his Economic Recovery Advisory Board. And you recall, and it's really hard for some people to remember, and for others of us we will never forget as long as we live, we were losing 600,000 jobs a month in this country, maybe more. Our banking system was on the verge of collapse. The auto industry was bankrupt, and our country was really near collapse.

09:24: And so having the privilege as a not someone in the administration but as an outsider to advise the President on those efforts to deal with those challenges was really extraordinary, and then I was on what was called the Jobs Council which was really... We had gotten the economy stabilized, "we" meaning a lot of people worked on this. Betsy I think was involved, and others. But then it was... We had huge unemployment and needed to figure out how we're gonna get companies to start hiring again. Anyway, I did that, so I was outside of the administration working on behalf of the administration, and then in 2013 in January, shortly after the inauguration, the President asked me if I would come see him on a Friday afternoon, which I did. And he asked me then if I would be interested in becoming Commerce Secretary. And we talked about what did that mean as part of the journey. And he said, "First you're gonna have to go through confirmation." [chuckle] "First you have to get through all of our ethical hurdles, and you have to comply with everything the Office of Government Ethics requires of you." That was novel, or it feels novel now.

[laughter]

10:55: Anyway, but then it was... And I'll get back to that. It was actually important. But then he said, "Look, there's really three things I want you to do in this job." He said, "First of all, I want you to build a bridge with the business community." His relationship with the business community at that time was not very good. In fact it was rather strained, and he said, "I want you to build a bridge to the business community. I want you to make sure that voice of the business community is heard in our policy-making. Second is I want you to be a part of my economic cabinet, and third is I want you to be the chief commercial advocate on behalf of American business both domestically and around the world." He did not mention the 47,000 person organization I was also in charge of leading.

[laughter]

11:44: But he told the bar was low there so I should... He felt I could do that part. Then you go through a period, and about six months later I was both... In May I was nominated, and then in June confirmed. And I'm not a politician. I've never served in government. And I had the honor of a lifetime to serve our country and to represent the United States of America both in working across our country but also around the world. And it was an amazing experience.

12:25: I'd like to follow up a little bit on that in an issue that has really emerged in the last several months, and that is the tension now around protectionism that we see evolving here. And I know how hard you worked on many of these efforts to undertake commercial diplomacy in Trans-Pacific Partnership agreement, that you worked diligently to bring into the fold so many countries on a very historic agreement. And this challenge that we have in our country around the tension between globalism and how important it is to have trade, open and free trade and what a benefit that is to our society. And yet, at the same time, some of the adverse consequences if not treated properly with policy, job losses in certain vulnerable industries. Given the tariffs that we've seen now implemented on steel and aluminum, remember in January, we had solar panel tariffs put on. Can you comment a little bit about that and what you see is the potential way forward? 

[chuckle]

13:56: Can you solve all those problems? 

[laughter]

14:00: Let me step back for a minute and try and put that in context. So one of the things... You get sworn in, and how do you actually lead? I had never been in government. I didn't know how to do this. How do you do it? But what I did have is I had a business background. Those of you who are going to the Public Policy School, you have a real advantage. You're learning from people who've been there before. You're studying history. That had not been my background. I was a business person by background. So when I came into the job, I did what I knew how to do, which is I said to my team, I said, "We're gonna take the first 100 days and we're gonna focus on three things." We had to get people in place. We had a ton of vacancies, so we had to do that. Second is we're gonna go on a listening tour. We're gonna talk to our constituents. So we divided the country into eight sections arbitrarily and we went out to each part of the country, and we went on a listening tour. And then we... Third thing we're gonna do is we're gonna develop a strategy.

15:03: And what was interesting, it didn't matter where in the country we went, we kind of heard the same thing over and over again. "Help us get market access around the world. We want trade agreements. We can't find the skilled workforce we need. Help us with that." "Help us in terms of continuing the investment by our country in advanced manufacturing. We want... " And one of the highest priorities of the administration was, "We need greater job creation." And I kept saying, "Governments don't create jobs. We create the conditions for the private sector to create jobs."

15:43: So we took on foreign direct investment. You remember we used to talk about our strategy, so we put a strategy together and we... Where it said the Department of Commerce we're gonna focus during the balance of President's term on trade and investment, trade agreements, foreign direct investment. Innovation, advanced manufacturing policy. Digital policy: What do you do about privacy, broadband access, cyber security, free and open internet? What's the policy around that? Data. How do we make more of our data available? You were very instrumental in that, Ellen. Environmental intelligence. We run the weather service, so making sure that we're doing the best we can. Environmental intelligence. And the fifth part of our strategy was operate the place with excellence. The reason I give you this as background is we then took our strategy, we went over to the White House. Betsy, I think, was there, and others. And we said, here's... In a PowerPoint, "Here's what we think the Department of Commerce can do to further your agenda." First, you meet with all the people. And then we met with the President, and he blessed the strategy.

17:04: My point in telling this story is there was no out of the blue, "What were we doing?" It was, we spent a lot of time both developing, listening to our costumer, which was basically the business community, listening to the administration's priorities, putting a plan together, and then saying, "We're gonna go execute that," over the three and a half years that we were so fortunate, as a team, to be in government. And with that... So the idea that you're gonna surprise people, it's a problem in government.

[laughter]

17:41: Because government doesn't know... It's a battleship. This thing is... It's massive, and to move organization like that, to have it be effective, you have to be really clear and you have to have a steady hand over time. And so you ask me about tariffs and steel and all of this. Our answer to the steel problem was first we did the highest number of anti-dumping and countervailing duty findings ever in the history of the Department of Commerce, like a 171 on steel and aluminum. So, we put the tariffs in place. Second is we globally went to the OECD and other global organizations and said, "The world needs to come together and we need to fight who is producing... Overproducing steel, which is China."

18:38: They produce excess capacity, four times what we produce in steel in the United States. That's their excess capacity. So they're screwing up the steel market. That's not wrong, yes, they are. But the way you address it is you have to get the whole world to come together to push back because otherwise you will see there is... Other countries will behave differently, and so you had to bring the world together to fight against this. Anyway, that's how I think we would've approached this challenge. The challenge is real, but how do you address the challenge? So that's one, specifically what do you do about steel. But there's another challenge that's not being addressed, and I think you're alluding to this.

19:28: We have real angst in America about the future of our families and their ability, and for young people and people of middle age, what does work look like? What does a career path look like in a time when the world is changing so much, when there is automation, artificial intelligence, automated vehicles, autonomous vehicles? We drove in one today. Those things are real and they're gonna have real impacts. And what we need to do is come together as a country and say, "We're not doing enough to create opportunity and access around the world for our companies that create jobs here. But we're also not doing enough for the people who are feeling real angst and feeling left behind." And that's the Barbell approach, I think that would be actually...

20:20: And we've done that in the past. United States of America was the first country in the world that said, "We're gonna mandate every person in America is gonna go through a high school, get a high school education. And we can redefine how we train people and what we do. We have that kind of bold capacity to say, "Okay, this isn't working, we gotta address these problems." And this whole city/rural thing, we need to make sure rural America has broadband, we need to make sure that it's easy if you don't wanna stay where you are, you can move to... We have to make it easier to do mobility, we have to remove barriers. There's a lot we can do.

21:03: You're giving me hope.

21:05: I'm an optimist.

[laughter]

21:06: You're giving me a lot of hope.

21:07: I am an optimist. I believe in the future of the United States of America and I believe particularly in the young people here that you guys, there's paths forward.

21:19: Penny, you've just hit on such an important element to the future that you demonstrated during your leadership at Commerce, and that was the whole area around reaching across the aisle and deploying... Building relationships and doing it in a bipartisan way, and thinking globally as well, but then using data, having data and analysis as a foundation for that effort. Could you talk a little bit about that because it just seems like that was so important, and is and will be in the future.

22:07: So, when I was going through, well... President Obama... And I have this great photo. When he nominated me, it was my birthday, and so we're standing outside in the rose garden; my family is in front of me, it's very exiting. And he says, "And, Penny, for your birthday, you get to go through confirmation."

[laughter]

22:26: And so there's this picture of me with my head thrown back laughing. But going through confirmation is a phenomenal experience because you get to meet... I met 55 senators. Mostly I met Republican senators. I knew a lot of the democrats from my background and from the campaign and from other things. So I really spent a lot of time getting to know the republican senators. Why? First of all, what all of you know from your own life is relationships matter. It really matters that you develop a rapport with people if you wanna get something done, even if you disagree with them. It's very important, and I learned that not only from my father but also from one of your great alums from Michigan, Ira Harris. He really always reinforced that to me.

23:24: But while I was going through that process, Ted Cruz was a new senator. So, his office was in the basement, which he was quite perturbed about and felt it was insulting that he would have to meet me in his office, which was in the basement of the building 'cause his real office wasn't finished yet. But he said to me, and I'll never forget 'cause he kinda got really close to me, and he said, "Penny, I want you to know something," he said, "Commerce is a bipartisan issue." And I thought to my... I had no idea what he was gonna say 'cause politically we probably don't agree on a lot of things. But I was like, "Okay, I can work with this person. We can find common ground. We can figure this out, and we can try." My appropriator, my head appropriator is a guy named Chairman Culberson. He's a Tea Party guy, so if you were to say, "President Obama is here," Chairman Culberson would kinda be here.

24:24: And the first time I met him, it didn't go so great. But I worked it. I worked hard at developing a relationship with him and really understanding him and what was important to him. And he came to support the things that... I tried to use data. I tried to use evidence as to why investing, let's say, in the Census early, was important, or why it mattered that we... The Weather Service get new satellites so that we could report the weather accurately, which meant spending extra money. And what you realize is if you bring an attitude of, "I'm not here to embarrass you. I'm not here to demean you. I'm not here to fight you." Chairman Culberson and I absolutely disagreed on one thing, and it was really interesting. He called me and he said, "If I can get a law passed before you take this action, will you follow the law?" I thought that was bizarrest thing I'd ever been asked.

[laughter]

25:45: I said, "Of course, Mr. Chairman. That's my role. It's my duty. It's required of me that I follow the law." I said, "Okay," I said, "But if you don't get the law passed, you know we're gonna take this action 'cause we've talked about it." It was something to protect the... He and I agreed that we needed to protect the internet. We disagreed on how to do it. So it was an action I was gonna take. And I said, "But come this date, I'm gonna take this action if you don't get it done. You know that." And he said, "I understand." We absolutely disagreed. We had an absolutely civil engagement about the entire thing. I ended up doing one thing and he didn't like it, but we never... He didn't hold it against me. We moved on. We had work to do together. So I think part of it is we have to, one, you have to invest time in those relationships, and right now, people don't spend time in Washington.

26:48: It's kind of a Monday afternoon to Thursday town, except if there's a crisis, like we don't have a budget or we're gonna shut the government down. But that's it. Otherwise, they come, they work 24/7 for three and a half days, and then they leave and go home. So it's not a lot of investing in relationship. And not a lot of... And then there's a lot of... And I didn't totally understand this when I went into government. A lot of our representatives and senators, the leadership, you have to... If you don't follow the lead of the the leadership and you decide to go rogue and be independent, you could pay a big price, your committee assignments, your priorities for certain... You could be punished. And it's kinda the cold reality, particularly in the House. So that's why... Why do you not see more fracturing of opinions? That's part of it.

27:53: Civil discourse is another issue. And I think we all have a responsibility back at home, kind of away from that environment, to hold our representatives accountable, that that's not okay with us, by how we vote and how we... And by the fact that we meet with them and talk to them about the issues that we think are important. 'Cause, certainly, they're being met with and talked to by the interest groups. But you're ultimately the voter. You're more important. I think it's hard work, but I think it's doable to build a [28:29] ____, not on everything, but on a lot of things.

28:32: I think that's good advice for all of us and for our students here in the audience as well.

28:37: I think on this DACA issue, I really think there's a bridge to be built there. You could tell there's a deal. It's just they haven't figured out the exact right deal. But, frankly, if there was a deal, if there was enough votes in the House and the Senate, I believe whatever was proposed, the President would sign. It's a question of relationships. It's a question of leadership, too, and priority.

29:01: Speaking of leadership, you, at the Department of Commerce, placed a significant amount of effort and emphasis on commercial diplomacy and diplomacy worldwide as an instrument of our foreign policy, of our national security. And I don't know how many countries you visited in the three and a half years at Commerce. It had to be, Kyla probably knows, dozens and dozens.

29:33: 38.

29:33: Okay, 38 countries.

[laughter]

29:35: And some many times.

29:38: Yeah. Multiple Red Bulls there. Can you talk a little bit about that, the importance of that, why you emphasized that as part of your strategic plan that you were implementing? 

29:53: President Obama made... He understood something, and therefore as working for him, he understood that our economic and commercial power could be as potent as our diplomatic and our military power. And so his team, and what's interesting, his national security team, we partnered with them and we were deployed around the world to countries to build more bridges. And whether it was with China trying to open more markets and more opportunity for our companies, or even I got dispatched once to Seattle to give a speech in front of President Xi about intellectual property theft, and you had to stop with the intellectual property theft. Basically that was the message so nice Microsoft, big fancy dinner, hundreds of people, and I'm like the skunk at the party.

[laughter]

30:58: But how do you deliver that message and not burn all your bridges? At the end of that speech, the Head Economic Advisor to President Xi came up to me and said, "We heard you. We understand." Mexico. Vice President Biden basically asked me to lead what was called the High Level Economic Dialogue on his behalf. He was the titular head. But I was the execution, our team. It was about improving border infrastructure, increasing the amount of travel between our countries, making sure that American companies had access. They were opening up their energy sector to foreign investment, making sure our companies had access. Improving entrepreneurship in both our countries. With India, we proposed to our own senior leadership and then to the Indians, with approval of the President, that we elevate our commercial relationship with India to be equivalent to our strategic relationship. And it was very interesting. There was one person in the Indian government, not Prime Minister Modi who fought this.

32:19: And then a year later that person we were all together at our strategic and commercial dialogue, and that person stood up and said how proud they were of the fact that we had elevated this relationship. And I thought, that just knits us more closely together with a very important ally. Africa. We had many initiatives across the Obama administration to increase, to engage more with Africa. But the thesis that we had was, "Let's increase trade over aid," 'cause we weren't getting more money from Congress. So let's do more trade to knit us together. So we had two BiG Africa business forums, we did a bunch of travel, entrepreneurship. We created the President's Ambassadors for Global Entrepreneurship. President signs one of those pieces of paper and says, "Okay. Voila." We had 20 American enterprenuers who... The founder of KIND Bar, Tory Burch, Julie Hanna who founded Kiva, and Rich Barton from Zillow. And they agreed to be ambassadors around the world, meeting in other countries, and they would go with the Secretary of State and the Secretary of Defense or with me or with the President and talk about entrepreneurship and the importance of entrepreneurship.

33:47: We created something called the Commercial Diplomacy Institute at the Department of Commerce to train our people to be better and able to engage across the world. You can't do much unilaterally, and commerce is a great way to create multilateral relationships. And that's what TPP is about. It's about creating rules, rules that look a lot more like the way we would like rules to look than let's say some other countries. Rules of trade and engagement that bring your countries together. Was it Tom Friedman that says, "You don't usually have a war between two countries that both have McDonald's." We know that. All of you know that from your global travel. So why did we do it? As much fun as it is to travel that much, it can be exhausting. Why? Because it's really a critical way to help knit the world together. And better we're talking and trading than we are fighting.

34:55: I wanna come back home for a minute here and talk a little bit about some of the work that you have been doing co-chairing the committee and taskforce at the Council on Foreign Relations about the future of work. And I know at Commerce, you with the team had developed a lot of different initiatives around advanced manufacturing institutes to upskill and train workers, and the development of apprenticeship programs. And now with this study that I believe is coming out next month, you may not be able to tell us everything in there, but I know you have been very much looking at this issue of how do we transition? How do we make sure we've got the workforce for the future? As you saw today, we have in the Energy Institute two battery labs. We have M City. We have a lot of faculty doing research on clean technology and the future of mobility. And now with this study could you talk a little bit about what are those solutions? How can we move to that better place? 

36:19: So we believe and I believe that one of the central issues, and frankly it's a generational issue, for our country, is how do we create a better pathway for all Americans to adapt, to thrive in a changing, a rapidly changing environment? Which is what we have with the advent globalization's just more so. Artificial intelligence is just at the beginning stages. Autonomous vehicles are here and they're going to be present in our lives. Automation is very much affected opportunity in manufacturing for people. So what do we do? And that was the assignment that Richard Haass from the Council on Foreign Relations gave John Engler and me, was come back with a report.

37:20: Governor Engler and I are kinda action people as opposed to report people, and so what we created is a menu, and the audience for that menu is really the following: There's people in the federal government, people at the state and local government, business leaders, the academic institutions, everybody from K12, community college, universities, etcetera. And there's really six or seven major themes of recommendations. I'm not gonna give you the laundry list. Please read the report. It comes out April 9th or 10th.

38:04: First is, you gotta have a strong economy. So we gotta have more opportunity. Full employment's good, a strong economy is critical. So what do you do? You need foreign direct investment. You need policies that encourage that. You need more entrepreneurship. You need trade agreements that provide access for American goods. You need infrastructure spend. You've heard all of that. Second is, we have to maintain our technological leadership. We cannot take our foot off the gas pedal. You've gotta continue investing in R&D. We must have a comprehensive immigration policy. Because frankly 40% of the Fortune 500, 40% of those companies were either started... Were started or being run by somebody who is either a first generation immigrant or the child of an immigrant. Immigrants are phenomenal entrepreneurs. I'm not an immigrant in my generation. I'm an entrepreneur. We have plenty of entrepreneurs who are not immigrants but we certainly don't wanna turn off that.

39:18: Third is we have to promote growth and income opportunity everywhere. What do I mean by that? We have to have policies both at the state and the federal level there are make... Pay work tax credits and things for those who are on the low end of our earning scales. We have opportunity zones. You should read about... This new tax bill has opportunity zones. Should read about these opportunity zones. It is a policy for distressed communities that we should be taking advantage of. And there's a great incentive, it may be the biggest incentive in the tax bill. We need to strengthen the link between education and work.

40:05: That can make some people in universities squirm because we want freedom of expression. We want freedom of exploration but we also need to recognize that we need things like much more career counselling in frankly middle school and grade school. There is no career counseling. There's college counseling. There's no career counseling. And families and individuals are yearning for this. We should use technology to make it easier to understand, "Hey, I wanna be a cyber security expert. What do I need to know to do that?" We need a lot. And then there are pilots, and we talk about the pilots going on in different parts of the country. What we want is governors to say, "Hey, that's happening in Colorado. This is happening in Delaware. This is happening in Michigan." Take those ideas. We're gonna have more than 30 new governors next year. Opportunity to take up these ideas.

41:01: We have to overhaul transition assistance. What does that mean? That's our fancy government words. We have a wholly inadequate system for dealing with those people who are left behind when their job goes away. And we need to have a system that promotes lifelong learning and more flexibility to be able to invest in that. We have to remove barriers to opportunity. In 1950, 5% of jobs required a licence in a state. Today, 30% do. So in two income earning families, military families, when you move, could your trailing spouse, doesn't matter gender, they may not be able to get a licence. They may not be able to... We gotta make that easier.

41:47: And then our benefit system, the seventh big category is about benefits. Our benefit system was created when you went into a job and you kinda stayed in that job for your life, or maybe you had two job. That's not gonna be... Certainly my children who are in their 20s, that's not their reality. They're gonna on average have 10 to 15 jobs. We need to recognize 55 million Americans work either on contracts or in the gig economy. We need a benefit system where you can earn partial benefits etcetera etcetera, and stack benefits. So we need... There's things we can do.

42:26: Our students here are so talented and have picked up on one of the points you just made which is this kind of, how do we apply what we're learning? And we've got teams working on micro-grid projects for the city of Ann Arbor. We've got these MAP, so-called MAP Projects in the Ross School. Kind of dovetailing on that, could you kind of follow up a little bit and talk about what advice you would give students? Keep doing that but how do you stay active? How do we make sure that we're progressing, like get out to vote for example. Could you give our students a little bit of advice? 

43:17: Yeah, first of all, I'm optimistic because of the students. I'm optimistic because I have a lot of faith in the energy that comes with our younger population. And I would say a couple of pieces of advice, and it's just sorta worth what you paid for. One is if you get the opportunity or find the opportunity to serve, do it or make it for yourself. Either volunteer... I served on the school board, which was a volunteer job, not an elected job, and the hardest job I've ever had, by far, by far.

[laughter]

44:08: But you wanna get to know your city. Get involved. Somebody, if you have a chance even just for a year or two to go and work in Washington, do it. Because we need the talent, we need the perspective, and particularly folks who come from these great research universities, you have a lot to offer. So take that opportunity, it will open your eyes to so much. I was raised with my parents, to whom much is given much is expected. And all of us regardless, we may have our day-to-day troubles or whatever but we've been all given a lot. If we're in this room, we're in a pretty good situation.

45:00: And so I think we have to find ways to be involved. That could be, get involved in somebody's campaign. Get involved in vote, please vote, please vote, it really matters. Elections have consequences, and if you believe certain things you need to make sure your voice is heard. And I don't care actually where you fall on the spectrum. I just think it's important. Democracies depend on people being engaged. And I would say, to be honest, some of the most fulfilling things I've ever done in my life have been the things I volunteered for or being involved in government.

45:51: Great. Well, we have an opportunity to take questions from the audience, and I think we have a couple of students with cards who are going to be asking.

46:06: Right over here.

46:06: Great.

46:07: Emma and CJ, and Emma's gonna go first.

46:09: Thank you.

46:10: Thank you so much. It's such a privilege to be part of this event. I'm Emma Watesman. I'm a student at the Public Policy School in the Law School. The first question is if you could redo your term again, what would you do differently? 

[laughter]

46:27: Well, first of all, Emma, thank you for being here. If I could redo my term again what would I do differently? The biggest disappointment that I have of the work... And I'm really proud of the work we did as a team, I'm really proud of what we accomplished whether it was Select USA around foreign direct investment or commercial diplomacy around the world, or frankly putting back together the Safe Harbor between the United States and Europe, Terms of Digital Trade which affects about $290 billion worth the trade a year, or advanced manufacture. I could go on. I'm really proud. The thing I'm most disappointed about is we failed to get TPP enacted.

47:15: I could show you a path to where this could've happened, but obviously not in the current situation. And for me that's the biggest disappointment because I think that I had a leader of one of the TPP countries from Asia, said to me about three weeks ago, he said, "Penny, America's off the playing field in Asia and we're getting beaten up, and it's a problem, and I don't know how you get back on the playing field." That's my biggest disappointment.

47:55: Hi. My name is CJ Meijer, I'm a junior in the Undergraduate Program here in the Ford School. I again wanted to say thank you for coming in to talk to us. Our next question from the audience is, "What can students and young people do to best prepare themselves for the future of work and the changing landscape?"

48:14: Well, first of all, CJ, thank you for being here. I think that realization is really important, and being a lifelong learner is ultimately gonna be the key. And you guys are in a position, CJ, you are, Emma is, you are developing a whole array of knowledge base but also skills that you will take with you throughout your life. And you have to not be afraid to, at times, step back to go forward to learn new skills. Now, if you're in the School of Public Policy maybe you're not gonna become a doctor or you're not gonna become a biotechnician, if you will. But, I think being willing to work in teams and understanding the importance of teams, being constantly pushing yourself to learn. Part of the reason we're here and I'm here with some members of my team is we're learning, we're trying to understand what is the state of the most forward-leaning research in some of the areas that we're active in so that we can adapt. Am I ever gonna be and expert? No. But you have to be constantly learning. But I think you guys are gonna be equipped to do that.

49:51: Thank you. The next question is, "How does a cabinet secretary balance commerce priorities with a President's agenda?"

50:02: So, I'll tell you a story. When President Obama, I was in that meeting, first meeting where he was asking me whether I would become... Willing to become Commerce secretary. Basically at one point he said to me, "Penny, you've been running your own business now for several decades. You do understand that it's okay to disagree behind closed doors but if I make a decision, you're gonna be able to... You get that that's my decision and that's the way it's gonna be? And you're expected to go out and carry the water for my decision." And he said, "Can you get comfortable with that?" And I thought to myself, "Well, you've never worked in a family business."

[laughter]

51:00: I said, "Mr. President, I can get comfortable with that."

[laughter]

51:04: The point was when we developed the strategy, which we called our Open for Business Strategy, it began with what were the President's priorities. And then what we were trying to do was to say, how could we broaden or deepen his priorities and at the same time do what is the job of the Secretary of Commerce which is to represent American business, our number one stakeholder. And I have to confess, [chuckle] another story, I went in first day, I go in to begin to be trained for the nominating process or acclimated, and whatever, and I asked people, I said, "Who do you think is our number... Who do you think are our stakeholders? What's the constituency that we need to under... I need to make sure I build bridges with?" And they're like, "The White House and the Hill, and the think tank community," and the this and the that, and I said. "Well, what about the business community?" "Oh yeah, the business community." I said, "No, no, no. The number one stakeholder is the business community because our job in government is to represent them, and help them." And so for me that was one of the biggest parts of my job was to actually help the department understand we were really a service organization in service of the business community.

52:41: Our next question from the audience is, "America's steel industry is hurting. If you disagree with the steel tarrifs, what would you do to help American steel?"

52:54: And American steel is hurting and American steel workers, and American aluminum workers are hurting. And, as I said earlier the Chinese are dumping more steel on the world than... Four times as much steel that they're dumping and not using around the world than we produce in our country, to give the magnitude of the problem. But as I said earlier I really believe the way to address this is you've got to bring particularly the developed countries together and the developing countries together to say, "This is not okay. You can't." In essence... And the Premier of China who's the number two, Lee said to me, "We're going to use our policies to take our excess capacity around the world." They don't use the word "dumping". And so the way to address it is first of all is to get the global... The countries of the world to come together and say, "This is not okay," and put pressure on China. And I think that that was working. But now we're gonna have a new dynamic.

54:16: Thank you. This is the final question we have time for and it comes from the audience. Is there any value to having a business person in the executive office and can the government be effectively run as a business? 

54:30: I think whether your background is in business or otherwise, there is absolutely room in our country to have a leader from many different types of backgrounds. I think that there is a difference between running a government and running business. People thought it was amazing as a business person that I figured out how to be able to lead in government, 'cause it's different. Our democracy requires building consensus. Nothing happens by one person alone; you have to build consensus. The truth is, as a CEO, you have to build consensus also. You have more levers and you have more ability to just say, "You know what? No, we're gonna actually go do this." In government, you don't have that luxury. So you have to be able to develop the skills to bring people along. Sometimes you can bring them along by incentives, "I need you to do this. If you do this for me, I'll do that for you." Sometimes you do it by broadening.

55:50: Sometimes you do it by coercion, whatever. But you need to bring people along in a democracy in a different way that you bring people along in running a business. And the consequences as a leader are different. In a business, you can be removed by your board; vote of the board, you're gone. Much more complicated to get removed in government. Because you need half of the House and two thirds of the senate or three quarters of the cabinet or something. Very complicated, so very different governance structures and mechanisms. Now, are there things we learn in business that are absolutely applicable to government? Yes. How do you lay out a plan? How do you motivate? Do you have bonus... The same kind of bonus structure? No. But I didn't find that was at all an impediment to guiding and motivating this 47,000 people at the Department of Commerce.

56:57: I found that what they really wanted was leadership. They wanted to know, where are we going? What does success look like? And what do I need to do to achieve that success? That's kinda human nature. Yes, you're gonna have some bad actors. Every organization could have a bad actor. That's not different or the same in government. So, I think there are talents that one has in business that are absolutely applicable. But the government is a very large complex organization with many more facets of people in different roles that you need to bring along, and you have to have either the temperament, the tenacity, the capability to actually bring folks along. That's how our democracy is structured. And so, often that could be different. But I don't think you are either qualified or not qualified, because you are a business CEO, to lead the country. I don't think that's the relevant thing. I think it's really the skill sets.

58:11: Wonderful. Great questions. And I wish we had more time. Thank you so much.

58:16: Well, thank you all very much. Thank you.

[applause]

58:20: Thank you so much, Secretary Pritzker and Ellen.

[applause]