Albany, New York, once a center of industry, is now host to new research facilities like the SUNY Colleges of Nanoscale Science and Engineering, shown here.

Albany, New York, once a center of industry, is now host to new research facilities like the SUNY Colleges of Nanoscale Science and Engineering, shown here.

For decades Americans have watched as blue-collar workers lost their jobs in droves to cheap labor overseas. The nation’s once-thriving industrial heartland became known as the Rust Belt, marked by abandoned factories, population decline and urban decay. But a new book points to a renaissance occurring in some Rust-Belt cities like Akron, Ohio, and Albany, N.Y. The authors – an economist and a journalist – argue that by focusing on how to make things in ways that are smarter, instead of cheaper, some former Rust Belt areas are becoming “Brain Belts.” Join Diane and her guests to learn about some new and unlikely hotspots of global innovation.

Guests

  • Antoine van Agtmael Former principal founder and CEO of Emerging Markets Management; co-author of "The Smartest Places on Earth"
  • Fred Bakker Journalist based in the Netherlands and co-author of "The Smartest Places on Earth"; former editor-in-chief and CEO of the financial newspaper Het Financieele Dagblad

Read An Excerpt

The following is adapted from THE SMARTEST PLACES ON EARTH: Why Rustbelts Are the Emerging Hotspots of Global Innovation by Antoine van Agtmael and Fred Bakker. Reprinted with permission from PublicAffairs.

The Smartest Places On Earth

Transcript

  • 11:06:53

    MS. DIANE REHMThanks for joining us. I'm Diane Rehm. American politicians often rail against the decline in U.S. manufacturing. They put the blame on the opposing party and foreign competition and propose solutions accordingly. But the authors of a new book say those proposals might be moot. They point to a number of industries that are not only doing very well, but could be a model for futures prosperity.

  • 11:07:25

    MS. DIANE REHMThe book is titled "The Smartest Places On Earth: Why Rustbelts Are The Emerging Hot Spots Of Global Innovation." Authors Antoine van Agtmael and Fred Bakker join me. Antoine is a friend and long time supporter of Public Radio. He's former chair of the NPR Foundation and a current foundation trustee. I do invite you to be part of the program. Give us a call at 800-433-8850. Send your email to drshow@wamu.org. Follow us on Facebook or send us a tweet.

  • 11:08:07

    MS. DIANE REHMAntoine and Fred, it's good to see you both.

  • 11:08:11

    MR. ANTOINE VAN AGTMAELWell, it's wonderful to be here, Diane.

  • 11:08:12

    REHMThank you, Antoine.

  • 11:08:13

    MR. FRED BAKKERThank you, Diane, for inviting us.

  • 11:08:14

    REHMFred, good to see you both. Antoine, talk about how this project began.

  • 11:08:23

    AGTMAELWell, for me, Diane, it began -- and as you know, I coined the word emerging markets and I observed a nation, talking to CEOs that I know well and they started to complain to me about American competition. And I said, this is because your labor costs are going up? Yeah. Is it because perhaps the shale gas? Yes. But no, the main thing was, they couldn't keep up with American R&D. Research and development.

  • 11:08:51

    REHMInteresting. Interesting.

  • 11:08:53

    AGTMAELAnd then, I realized something was changing.

  • 11:08:56

    REHMSomething was changing and how did you go about thinking about what was changing?

  • 11:09:06

    AGTMAELWell, what we decided to do, I met up with Fred, actually, on a radio show in Holland.

  • 11:09:12

    REHMReally, really?

  • 11:09:14

    AGTMAELFred should tell that story.

  • 11:09:15

    REHMYes. All right. Fred?

  • 11:09:18

    BAKKERYes. Well, we -- in Amsterdam, I'm from Amsterdam in Holland -- and I'm a financial reporter for a financial newspaper and we also have business news radio and that is a real-time news all day long. And Antoine was there in Amsterdam to promote his former book. And so I met him and it took a couple of years that we were both interested in the same subject and we were connected by a colleague of mine who heard the story Antoine just told you and he had heard a story I told him because I made a trip to four -- the MIST countries, Mexico, Indonesia, South Korea and Turkey.

  • 11:10:13

    BAKKERAnd I heard there the same arguments Antoine is using that they knew that cheap products, cheap labor was coming to an end and they were wondering how do we organize innovation. How do we organize added value? How are we going to make products that are not only based on cheap labor, but on knowledge. And how do we organize it? And that was the same discussion we had in Holland, we had in Europe. So I wondered, well, we are not lost. Many people thought, well, we lost the race. We've come to be a museum in Europe.

  • 11:11:00

    BAKKERThere's much to see of what we have done, what we have created, but we are not able anymore to keep up with places like Silicon Valley or Cambridge or countries like China or countries like Turkey that were authoritarian Lat countries, that were much quicker in adapting to new situations.

  • 11:11:27

    REHMSo you, Antoine, began looking at what was happening in cities in this country...

  • 11:11:39

    AGTMAELExactly, exactly.

  • 11:11:40

    REHM...that had previously been based on manufacturing. And what did you find?

  • 11:11:47

    AGTMAELWell, what we found is that for 25 years, we had been trying to compete on making things as cheap as possible. That's a losing game. We lost against China, of course, because they had cheap labor. What we learned -- and we learned it especially after the crisis in 2008 -- was that you compete on making things as smart as possible and that we are really good at, because we have great universities, we have freedom of thinking, which allows unorthodox thinking, which allows innovation.

  • 11:12:23

    AGTMAELSo when I listen to some of the political candidates on the left and the right who have this depressing talk as if our innovation has run out of steam, as if the best time in this country is behind us, and all we have problem, we came to quite the opposite conclusion. We are not declining. We are regaining competitiveness in this country.

  • 11:12:48

    REHMIndeed, we heard Donald Trump say just recently that we're going into a major decline, if not total depression, within eight years.

  • 11:13:03

    AGTMAELDiane, if you look outside, it will make me think. It is not winter in America. It is spring in America. If you visit these place from Cambridge to Silicon Valley -- but not just those places. But you go to Akron, Ohio, to place we have in our book, Albany, New York, there's a lot of innovation.

  • 11:13:22

    REHMPortland, Oregon. Describe what's going on in Portland, Oregon.

  • 11:13:27

    AGTMAELWell, it's fascinating. Here, you have a basically Phil Knight, the Nike giant, who brought together Intel, which has lots of computing power, and OHSU, gave them a huge gift.

  • 11:13:45

    REHMOHSU.

  • 11:13:47

    AGTMAELWhich is the university...

  • 11:13:50

    REHMIt's Oregon Health and Sciences University.

  • 11:13:51

    AGTMAELHealth and Sciences. Oh, you know better than I do.

  • 11:13:53

    REHMWhere I go because that's where I have my voice treatments.

  • 11:13:58

    AGTMAELI knew you had it in Oregon. I didn't know you were there.

  • 11:14:00

    REHMYes.

  • 11:14:00

    AGTMAELWell, you know that this was on the hill.

  • 11:14:03

    REHMRight.

  • 11:14:03

    AGTMAELAnd what basically Phil Knight's genius was to give them a big grant.

  • 11:14:10

    REHMHe gave them...

  • 11:14:12

    AGTMAEL$500 million.

  • 11:14:12

    REHM$500 million.

  • 11:14:14

    AGTMAELAfter -- yeah. And that allowed them to get people like Joe Gray. Well, Joe Gray started as a nuclear engineer and he was the one who brought together Intel, with its computer power, and this fabulous cancer research that -- of a university that you know about. And it literally brought OHSU down from the mountain into the city. And you have seen it. Portland is changing.

  • 11:14:38

    REHMPortland is changing dramatically because you've got a $500 million influx. What happens in, say, Akron, Ohio? How is that different, Fred?

  • 11:14:53

    BAKKERLet me tell you what is the same and what we found in all those places, that all those scientists, professors, politicians, entrepreneurs, they knew and they know that technology is too complex and too expensive to do it on your own. The example that Antoine just gave about Intel and OHSU is that OHSU has a lot of data. If you want to do cancer research on a cell level, You have a lot of personal patient data and you have to find algorithms. How is that changing?

  • 11:15:42

    BAKKERAnd you need computer power and that's not the business of a hospital. So they looked for a partner and that's the same in Akron. In Akron, it was the rubber city of this country, I understood, and they are the polymer state of the United States now. But there was a Professor Proenza from Mexican origin who came in 1999 to Akron to become president of the university, state university, and he said, well, there is so much potential 'cause you are in a kind of trauma. Manufacturing of tires left and you don't have any faith anymore.

  • 11:16:32

    BAKKERBut research at the university and research of those tire companies is still here and so we can do something with it. And the new age is on polymers and that is the basis for nearly everything, you know, from lipsticks to cars to airplane, all parts of those articles are made of polymers. And so we have to have -- lead in that field and we have to collaborate with business, local business, start-ups. So the university has to be an integrator. It has open up. It has to be the engine in this development 'cause we can't do it on our own. We have to have the cooperation of other universities and colleges.

  • 11:17:24

    BAKKERAnd he interested the governor of Ohio and he responded with a program of many years, $1.5 billion, I thought, and but more in detail, you're more the expert of Akron, but it's a...

  • 11:17:40

    REHMAll right. We'll take a short break here. Fred Bakker and Antoine van Agtmael have, together, written a new book, "The Smartest Places On Earth: Why Rustbelts Are Emerging Hot Spots Of Global Innovation." Short break. We'll be right back.

  • 11:20:01

    REHMAnd if you've just joined us, Antoine van Agtmael and Fred Bakker are co-authors of a new book. It's titled "The Smartest Places On Earth: Why Rustbelts Are The Emerging Hotspots Of Global Innovation." And just before the break, Fred, you were talking about Akron, Ohio, and I know, Antoine, you wanted to add to that.

  • 11:20:31

    BAKKERWell, what I found fascinating was what Louis Provenza did from (unintelligible) there, told us, which is that now there are a thousand little polymer companies, and we cite some in the book, that employ more people than the four old tire companies ever had in their heydays.

  • 11:20:50

    REHMAnd what about wages? Do we know?

  • 11:20:54

    BAKKERThese companies often have good wages because they were more research-oriented. Basically, you know, we have lost seven million manufacturing jobs. What people often don't talk about is that we have gained some four million dollars, four million jobs in the high-tech centers. Half of these jobs are really good, high-paying jobs. Half of them are for professionals. And they are often fairly well-paid. It's the low-type manufacturing that isn't paid that well although what's interesting is that even that is coming back with 3-D printing and robotics.

  • 11:21:30

    BAKKERActually we can make shoes and shirts and socks, there was a New York Times article recently, again in this country. And there are jobs in these factories. And not only that, there's a multiplier effect of about five times, five jobs for each job created in these new high-tech industries.

  • 11:21:52

    REHMHere's an email from John, who says we can do all the research and development we want, but often all the core materials and production centers are in China. If you invent something but have no means to make it, it only serves the one country where things can be made. How do we bring back core manufacturing services that are the true wealth and job creators. Do you believe that last sentence?

  • 11:22:28

    AGTMAELI don't believe it at all, and in fact I've seen the opposite. What is happening is we're creating a whole new branch of the economy that ties together the old industrial expertise, new production methods like 3-D printing and robotics, new materials, new discoveries, with information technology and a (unintelligible) analytics. That gives us the self-driving car. Don't forget Tesla is an American car company.

  • 11:22:59

    AGTMAELAnd so we'll see some of this. It's not that we are bringing back your father's manufacturing. No, we are reinventing manufacturing, and some of this is going to come back and is in fact already coming back. It's not just called manufacturing. It's something new.

  • 11:23:13

    REHMFred, tell us about the role of what you and Antoine call the connectors.

  • 11:23:22

    BAKKERThe connectors are people -- let me first say we saw that the need to collaborate is inescapable. And -- but you have to bring different institutes like universities and companies and start-ups together, and you have to bring several disciplines within universities or hospitals together in multi-disciplinary teams. And what you see is that it is easier said than done because you don't open your door and invite people to come back you don't know who is entering your house. But you want to have specific types of special knowledge but that is all organized in a silo.

  • 11:24:18

    BAKKERAnd what you need is collegial teams. And so it is difficult to break open those silos. Companies are vertical hierarchically organized. The same is true for universities, and the same is true for hospitals. And what you need are people that are able, who are well-informed, well-connected, who have professional status, that give them a position to buy other people into a common purpose.

  • 11:24:59

    REHMAll right, here's a Facebook comment, then we're going to go to the phones. Facebook comment, even if people create new business in the Rust Belt cities are successful, they will eventually be bought out by someone who is bound and determined to ship all the jobs to China or India or some other cheap labor spot. There is a pessimism going on in this country because of what's happened to manufacturing jobs and believing whatever happens is all going to leave.

  • 11:25:46

    BAKKERBut Diane, people are looking into the rearview mirror. That is what happened, it is not what's happening today. We are seeing this, what we call the new branch of the economy, all these exciting new products that are not only invented here but often made here. And we'll see this gathering steam. We're at the beginning of this whole process.

  • 11:26:13

    REHMSo you are very optimistic that this new approach to creation, because of the technology that's here within this country, because of the innovation and because of the investment you see going on, that that is going to create something and is creating something new.

  • 11:26:41

    BAKKERYeah, I mean, General Electric, for example, started a factory in Batesville, Mississippi, because of the great research done at Mississippi State University. Now who would have thought? And, you know, who would have thought in places like Akron? Who knows that in Minneapolis, we have virtually -- the United States has a monopoly on pacemakers. Nobody knows it. Even the German company that did it brought its workforce to Portland, Oregon, or near Portland, to make pacemakers. So there are lots of stuff that we are very good at, and more and more is going to be made close to home.

  • 11:27:18

    BAKKERNow close to home could be in China if it's for the Chinese market, but more and more will be done that way because it's possible through robots and 3-D printing.

  • 11:27:29

    REHMThat we are creating here in this country. What has happened to GE? They are sort of shedding what was at one point their basic manufacturing approach and doing other things now.

  • 11:27:46

    BAKKERActually, my impression is that they are shedding some of the things that were not basic manufacturing, like the media, et cetera, that they were involved, and they are going back to some of this basic manufacturing.

  • 11:27:57

    REHMTo the basic stuff.

  • 11:27:59

    BAKKERWhen it comes to making aircraft engines, very smart aircraft engines that now have sensors that can see exactly what is happening and report that back. They are doing that when it comes to making trains. They just bought a company in France to do that. So no, when it comes to basic manufacturing, they are on top of their game, I think.

  • 11:28:19

    REHMAntoine, tell us about Louis Provenza.

  • 11:28:27

    AGTMAELHe's a fascinating character. Here we came to Akron, and frankly we thought it would be a dump, but it wasn't. We come there on a nice road, we arrive in Akron in a trendy little restaurant that could've been on Broadway, and there we meet Louis Provenza, who's originally from Mexico, colleagues from India, from Greece, and they tell us about all of this exciting stuff going on.

  • 11:28:50

    BAKKERSo these are examples of connectors. They're interesting ones, interesting people. If you take Albany, for example, you have Alain Kaloyeros, who is a former Christian militia fighter in Lebanon. And, you know, brilliant physicist brought in by the (unintelligible), who gave a billion dollars to start this nanotechnology center. They are at the forefront of semiconductor development in the world outside of Albany, New York. He leads that.

  • 11:29:26

    REHMSo you're saying that these brand new innovators are at work and changing these states into something better.

  • 11:29:38

    AGTMAELNext door you have a new factory, semiconductor factory, You know, very, very modern, but it employs thousands of people. If you go to Saratoga now to go to the races, you see lots of restaurants and lots of people from all over the world. Why? Why? Because of this global foundry factory. People forget that.

  • 11:29:57

    REHMAll right, let's open the phones. Let's go to Nick in Grand Rapids, Michigan. You're on the air.

  • 11:30:06

    NICKHi Diane, thanks for having me on the air.

  • 11:30:09

    REHMSure.

  • 11:30:10

    NICKSo I just wanted to kind of reaffirm what Antoine was speaking to about American manufacturing jobs. I work for Steelcase. We're one of the -- we are the world's largest furniture -- contract furniture manufacturer. And kind of around the 2000s when the market took a turn, we, just like everyone else in various industries, had to become very agile with our supply chains. So we started to outsource, and that kind of went on, you know, for several years, kind of up until now and about maybe two or three years back.

  • 11:30:43

    NICKWe started to bring those back with all of our tier one and tier two suppliers, whether it's role-forming steel, fabric manufacturing, caster stamping, you name it. A lot of our suppliers are now here in the United States, within the West Michigan area. So I just kind of wanted to comment on that, and as well kind of reiterate the fact that a lot of American manufacturing isn't necessarily driven by wages. It's more driven by our supply chain. And that kind of -- you know, we have manufacturing facilities in Europe that facilitate our European market, and as well Asia and Africa. So yeah, I just wanted to comment on that.

  • 11:31:25

    REHMAll right, Antoine, do you want to comment?

  • 11:31:28

    AGTMAELAbsolutely. We mention Michigan in our book, both Ann Arbor and the Detroit area. In Ann Arbor, for example, you have bioscience, electronics engineering around University of Michigan. And then in Detroit area automation, automotives around Wayne State University. It's always surrounding universities. But as Fred said, working together because collaboration is the name of the game.

  • 11:31:57

    REHMSo you're saying there has to be a university to make this work?

  • 11:32:05

    BAKKERA university, technical university mostly, and a multinational. And I'd like to go back to that question or remark from the person from Michigan about the supply chain. There is one example of a very intelligent supply chain, and that's in Eindhoven in the Netherlands. That's where Philips has its -- was founded a century ago, a lighting company, and one of its spinoffs is HML. HML is a world leader in making semiconductor machinery. And they are a frontrunner.

  • 11:32:55

    BAKKERBut they could not do on its own, and they said about 15 years ago to their suppliers, you have to bring intelligence into your products. So they were simple component makers, and they had to add research to the product. And that was a revolution in The Netherlands but in the world, that's the only integrated supply chain in which those small companies have a completely new position.

  • 11:33:28

    REHMAnd you're listening to the Diane Rehm Show. Let's take a call from Syracuse, New York. You're on the air, David.

  • 11:33:38

    DAVIDGood morning.

  • 11:33:40

    REHMHi.

  • 11:33:42

    DAVIDWell, my comment about this, I've heard this again and again and again, and I live in one of these Rustbelt cities that has a university, has tried to reinvent itself as an intellectual center and has had some reasonable success with that. But there are large numbers of people who live in Syracuse, and I'm sure many other places, do not have the education to take the smaller number of jobs that are being created by the newer, high-tech companies.

  • 11:34:16

    DAVIDThey don't have the ability to take these jobs, and in a sense they are left behind by this new economy. And I believe they're the reason for the political volatility we see now. Donald Trump would not have a candidacy if he was not able to appeal to these people, you know, as a demagogue. And we see that very much in Upstate New York and through the rest of the Rustbelt.

  • 11:34:43

    REHMAll right.

  • 11:34:44

    DAVIDThis if very good if you can do it.

  • 11:34:46

    REHMIndeed, Antoine.

  • 11:34:47

    AGTMAELI think the caller is absolutely right. There are people who are left behind. There are people without skills or low skills that are left behind, and this is a huge challenge. The challenge is not job losses. The challenge is job training. And we could learn something about this from Germany, where they have these work study programs. We have seen it work, some of them, in the US, but there is far too little. We used to have much better job training than we have now. That is true.

  • 11:35:14

    REHMSo what do you mean by work study programs?

  • 11:35:18

    AGTMAELWork study is -- in Germany, you have many people who don't go to college, but they go to a special program where they work part of the time and study part of the time. So when I go into a factory in Stuttgart, for example, where my brother lives, you see machine operators who are brilliant, who have complicated diagrams because they not only learn to work there in the factory, but they also got this training from a -- what is the equivalent of a community college, and the two work together.

  • 11:35:53

    AGTMAELHere they work separately. There they work together. It's again sharing brainpower.

  • 11:35:58

    REHMBut don't you see a trend toward that going on in this country now?

  • 11:36:02

    AGTMAELFar too little.

  • 11:36:04

    REHMFar too little?

  • 11:36:04

    AGTMAELFar too little. Siemens has tried it. Other people have tried it. And there are examples but not enough.

  • 11:36:10

    REHMSo you would encourage companies, corporations, to create the kind of knowledge needed for those companies?

  • 11:36:21

    AGTMAELAnd community colleges, who focus on this. And there are some who do, but many of them don't or at least not enough, and that is what is needed and would make an enormous difference. It should be a national priority. Better than complaining about it, do something about it.

  • 11:36:36

    REHMDo you think that that really is going to happen, Antoine?

  • 11:36:44

    AGTMAELI can only hope so.

  • 11:36:46

    REHMYeah.

  • 11:36:48

    AGTMAELI've seen too little evidence. This is an area where we could really do much better and could learn from Germany. It is not rocket science. Germany, Austria, Switzerland, Holland, Denmark, they all do this, and it's very successful. Why don't we?

  • 11:37:00

    REHMNow take Finland, for example. How do they do it?

  • 11:37:07

    AGTMAELWe were in Finland, in Oulu in Finland, and in Finland they do this very well, as well. But in Finland they know what's important. They know that they are nothing without this -- Finland is where Nokia came from, and so they learned. And now they are working on very sophisticated new wearables as the next-generational smartphones.

  • 11:37:31

    REHMAll right, short break, more of your calls when we come back. Stay with us.

  • 11:40:01

    REHMAnd welcome back. We're talking about a new book co-authored by Antoine van Agtmael, he's an economist, Fred Bakker is a journalist. Together they've written a book titled, "The Smartest Places on Earth: Why Rustbelts are the Emerging Hotspots of Global Innovation." We were talking about politics during the break, Antoine. Here's an email from Tom.

  • 11:40:34

    REHMHe says, "Nationally, I believe the deadlock in Washington and politics of sensationalism and small issues is what will hold American innovation back, either through protectionism of old industries or destruction by culture wars." He says, "In my home state of North Carolina, government action protecting Duke Energy is heavily curtailing the advance of renewable energy. My state's politicians are more interested in reversing social trends, as we've just learned, than planning for North Carolina's future."

  • 11:41:27

    AGTMAELI'm not gonna comment on the social trends. That's above my pay grade.

  • 11:41:28

    REHMI understand. Right.

  • 11:41:30

    AGTMAELBut what struck us when we visited all these old rustbelts was the dynamism. And how people, basically, were not waiting for Washington. They were doing it themselves. And they were doing it quite successfully in cooperation, sharing brain power. Although, there's one thing that's interesting. All of this stuff in Silicon Valley, in Cambridge, in all of these places, would not have been possible without Washington.

  • 11:41:56

    AGTMAELYou know why? In 1980 there was the so-called Bayh-Dole Act, which allowed for the first time federally funded research to be used in universities and researchers so that they could profit from it. That made all of this possible. That's why it became interesting, it was an incentive. Now, the government should have been smart and taken a percentage. It wouldn't have such a big budget deficit now.

  • 11:42:24

    REHMTaking a percent of…

  • 11:42:25

    AGTMAELJust a percentage of, you know, a small percentage. Now, Google, for example, came because of a National Science Foundation grant to Stanford University. They didn't know what to do with it and gave it to Larry Page and Brin. And they invented, you know, something that became Google based on 700,000 government grant, originally.

  • 11:42:45

    REHMAll right. Let's take a caller in Akron, Ohio. Seth, you're on the air.

  • 11:42:54

    SETHGood afternoon.

  • 11:42:56

    REHMHi.

  • 11:42:56

    SETHI'm calling -- I was listening to your guest talk about former president Proenza and everything he's done at Akron. And I just, you know, I'm a little concerned about some of the things he's saying. Because, well, Dr. Proenza took a lot of like strong and commendable actions for the university to bring it into the 21st century, it seems like he sat down -- he mentioned he sat down and talked with him. And it seems like maybe he took everything he said at, like, face value and without doing too much, like, investigation.

  • 11:43:24

    SETHBecause there's a lot of controversy surrounding the University of Akron right now about the budget deficits and stuff. And while he's not the president right now, they were policies enacted during his tenure that have gotten the university to where it is. And you've kind of seen the university gut its liberal arts programs, you know, the core foundation of a university. And I just think that maybe the direction that Dr. Proenza set the university in is a little dangerous for civil society because we're almost fetishizing this promotion of engineering over tradition liberal arts educations.

  • 11:44:06

    AGTMAELI'm well aware of some of the criticism. And I've spoken to a number of people about this. I still think that what was started there was quite fabulous and made a big change. It also caused some debt. There's no question about that. And I think more generally -- I can't comment about Akron, but we just spoke at Yale and they had a question came up about liberal arts.

  • 11:44:31

    REHMExactly.

  • 11:44:32

    AGTMAELAnd I believe that the future is about combining the left brain and the right brain. If it's just the left brain, it's not enough. It's the combination of the two that is so creative and really is what brings all the innovation. So I certainly wouldn't want to gut the liberal arts part. I would want to combine it.

  • 11:44:53

    REHMExactly. Which is what many colleges, universities are trying to do, but they are finding frustration if they go after a liberal arts course because there are so few jobs out there waiting for them. So I agree with you. There has to be some combination. To Little Rock, Ark., Eddie, you're on the air.

  • 11:45:24

    EDDIEHi, Diane. Thank you for taking my call.

  • 11:45:26

    REHMSurely.

  • 11:45:28

    EDDIEMy question is this, what I hear from your guest is that, you know, this innovation is happening and it's creating new jobs, new opportunities for people, but yet a lot of the American society complain about not being able to find work. I was laid off back in 2008. And I basically had to reinvent myself, which I'm doing now. I'm going for an information science degree at the University of Little Rock -- University of Arkansas, Little Rock. And I wanted to ask your guests, in their research did they find that, you know, the people who complained the most are the ones either unable or unwilling to re-educate themselves, so that they can take these jobs that are being created or was that not the case.

  • 11:46:04

    REHMHe is certainly one who's trying to be ready.

  • 11:46:15

    AGTMAELI think that yes the people who complain are obviously those who feel left behind. Sometimes I think that is their own fault, but sometimes it is because they -- nobody reached out to them. Nobody was willing to help them with technical training. In your case, it's clear you did. But not everybody did. And that causes a problem and that's why I put so much emphasis on this question of job training. And doing job training in a much more effective way, which is this work study, where you combine community colleges and a company so that people then learn skills and then have a place to use those skills. That's what's needed.

  • 11:46:58

    REHMAnd again, here's an email from Trevor in Indianapolis. "Is the labor force in and around these cities and manufacturing centers properly able to move into these new jobs? Or are there going to be lengthy retraining processes needed?" That's the question that people are going to run into. It's not just training coming into or out of the higher education process. It's all those who've been laid off.

  • 11:47:43

    AGTMAELLet's put it in perspective. We have lost seven million jobs in manufacturing. We recently regained one million jobs in manufacturing.

  • 11:47:50

    REHMBut they're not the same people.

  • 11:47:51

    AGTMAELThey're not the same people. That is the problem. And it is -- that's why I come back and back to this question of job training. Because it's not automatic. The new jobs that are being created, and there are many of them. More than we think, over four million, as I just said. There are, in total, 10 million high-tech jobs at the moment. They are different jobs and they have a different skill set. I mean, college graduates have gained in -- have gained employment in manufacturing over all these years, while there were seven million people who lost jobs. So this is the real problem. It's not the job losses, it's the job training and doing it in an effective way.

  • 11:48:32

    BAKKERMay I add this, Van? I think that the difference between Europe and the United States, from my perspective, is that there is a different balance between personal responsibility and the involvement of local authorities or federal initiative. In Europe it is more usual to organize solidarity in a different way.

  • 11:48:56

    BAKKERThere is a bigger role for unions, there is a bigger role for the government. And that means that people are more able to adapt because they are offered more opportunities in Europe because of those programs. And Van already told us, but also because there is more money for this retraining available because we, as a taxpayer, we pay taxes.

  • 11:49:32

    REHMHuge taxes.

  • 11:49:32

    BAKKERHuge taxes. For my income, more than 50 percent is going to taxes or to pensions. So that's a huge amount, but you get another social environment through that.

  • 11:49:49

    REHMThat's a very, very different social environment than what we have here in the U.S. at this time. It's almost…

  • 11:49:59

    AGTMAELBut my belief…

  • 11:50:00

    REHM…everybody's on his own.

  • 11:50:04

    AGTMAELMy belief, though, Diane, is that we're being pennywise and pound foolish. If we would be doing some of these things -- and yes, it costs money. That's true. The result of it would be so positive and would benefit everybody.

  • 11:50:18

    REHMDo you really believe a book like yours can push thinkers into new ways of adapting to what's happening?

  • 11:50:36

    AGTMAELWhy else would we have spent three years writing it? Yes. I hope so.

  • 11:50:41

    REHMHave you spoken to members of Congress?

  • 11:50:44

    AGTMAELNot yet. But we certainly plan to.

  • 11:50:48

    REHMYou've been speaking to universities around the country.

  • 11:50:51

    AGTMAELRight, right. We're just starting our book tour on this.

  • 11:50:53

    REHMYeah.

  • 11:50:53

    AGTMAELThe book is just out a week.

  • 11:50:55

    REHMYeah.

  • 11:50:55

    AGTMAELSo the influence, but, you know, frankly, in "The Economist," for example, they wrote about it and they got it.

  • 11:51:01

    REHMThey got it, but they also wondered whether the two of you are being too optimistic about what could happen.

  • 11:51:12

    AGTMAELWe have certainly had enough pessimism. And I think it's not an unrealistic optimism. It's optimism based on visiting these places. And recognizing the feeling that is there.

  • 11:51:28

    BAKKERI think what's so good about questions is that our book of hope is raising a lot of critical questions. And that's the purpose of a book, that you don't -- we don't promise a paradise. That's not the meaning of it. But we put the light on a part of reality that's different and that's hopeful. And when you act and make policies out of hope, that are other policies than when you are afraid, or you are a victim of what others do, then…

  • 11:52:06

    REHMAll right. Let's go to Grand Rapids, Mich. Michael, you're on the air.

  • 11:52:14

    MICHAELYeah, the gentleman was discussing junior college and kind of getting an education, liberal arts maybe. And back in my day we had what was called an apprenticeship. And I think that goes back a few hundred years where a craftsman, electric or carpentry or plumbing or mechanics, masonry, a young person would study under this man and learn that trade. And I think that the trades have kind of fallen into disrepute because they're not IT kind of jobs, but they're necessary jobs. They're good-paying jobs.

  • 11:52:58

    REHMYou bet.

  • 11:53:00

    AGTMAELThat's exactly -- the caller is exactly right. That's what we need. That's what work study is. Work study is apprenticeship programs.

  • 11:53:07

    BAKKERYeah.

  • 11:53:07

    REHMAnd it's exactly what I had as a volunteer in this very, very competitive now radio business, working with someone who trained me and here I am 37 years later. And you're listening to "The Diane Rehm Show." To, let's see, Grayson, Ky. Hi, Ladonna, you're on the air.

  • 11:53:39

    LADONNAHi. Thank you for having me.

  • 11:53:41

    REHMSure.

  • 11:53:42

    LADONNAI would like to make a comment. I think it would be really beneficial if we could use this approach, this broadminded approach of (unintelligible) in the aspect of our health care for the nation and saving money because we have so many citizens getting older. And what I see today is the conventional approach mainly being used, excuse me, in medicine.

  • 11:54:08

    LADONNABut I'd like to see a natural alternative approach used alongside this. For the most part, you know, if we come into doctor offices, for example, we do get scripts, you know, and high-cost solutions. But for decades now I've experienced the benefits of the natural alternatives, saving me a lot of money and really restoring health, instead of just putting a Band-Aid on health.

  • 11:54:35

    REHMI'm so glad you have found that way. And many people are doing exactly the same. We have a caller here from Detroit, Mich., who says, "We need a buy-in from the government for new jobs and training. It cannot be business alone."

  • 11:55:01

    AGTMAELI would say don't wait for the government to help you out.

  • 11:55:07

    REHMYeah.

  • 11:55:09

    AGTMAELTry it first yourself and the government will come in many cases.

  • 11:55:12

    REHMAnd…

  • 11:55:13

    AGTMAELAnd that, in fact, has happened to some extent in Detroit.

  • 11:55:16

    REHMAnd we have a question on Twitter. "Do your guests think that rising tuition is limiting the dynamism in the U.S. job market?" Rising tuition is a big problem.

  • 11:55:31

    AGTMAELAbsolutely. It's a big problem. You know, Larry Summers once gave an example, he said, you know, in 1983 if things cost 100, education and health care now cost 700. And computers and cell phones and televisions cost $7.00. That's the problem. It has become crazily expensive. But you now find that I think this will change. The online course, which you don't need it to work, but gradually are making knowledge available. Not just in this country, but all over the world, are going to help, I think, do this.

  • 11:56:12

    AGTMAELAnd, you now, we have -- these universities sit on tremendous piles of money and the tuition, I think, is often too high. And not always affordable to everyone. And that is another big problem.

  • 11:56:27

    REHMLook at Harvard University, for example, sitting on that huge, huge sum of money.

  • 11:56:38

    AGTMAELBut they do something with it.

  • 11:56:39

    REHMI hope so. All right. And we'll have to leave it at that. The new book is titled, "The Smartest Places on Earth: Why Rustbelts are the Emerging Hotspots of Global Innovation," by Antoine van Agtmael and Fred Bakker. I think you have a lot of persuading to do to convince people that indeed the possibilities are there. But if I know you, Antoine, you'll be able to do it.

  • 11:57:18

    AGTMAELWe'll do it.

  • 11:57:19

    REHMThank you both for being here. And thanks all for listening. I'm Diane Rehm.

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