Billy Riggs (00:38)
Welcome everybody. Welcome to rewiring the American Edge. I'm Billy Riggs and I'm your cohost, with, Vipul Vyas. And, this is a episode five. And if you joined us for a lapse episode, it was pretty epic. Thanks for joining us for, pretty long and, but I think insightful discussion with Seneca Scott.

We talked, uh, transport innovation, um, and I, even some philosophy. I think when we think about rewiring, I think we can go deep, but we can also go wide. today, we're going to talk about decoding the future of innovation and resilience.

It's about some of the institutions that are really reshaping our country that relate to state and local governments, universities, nonprofits; about who we work with, who we trust. And I think when we think about the future of automation innovation.

When we think about trust and work; this is extremely urgent. And this is about buying software, signing vendor contracts, etc. It's about national security, economic resilience. And it's about leaving kind of doors open to who we influence and who we trust.

so the, the elephant in the room here is what's happening with Harvard. What's happening to the pressure we put on our institutions. And so without further ado, Vip, what's the, what's the canary in the coal mine with Harvard right now? Hey, what's up Vipul?

Vipul Vyas (02:06)
Not much except for everything.

Billy Riggs (02:08)
Yeah, what's the canary in the coal mine, man.

Vipul Vyas (02:10)
I think we are leaving an era where there was, despite the fact that everyone would say that there's always conflict around the world, we for the past more than 25 years, I'd say maybe in 35 years since the fall of the Berlin Wall, we're living in an era that was pretty unipolar. There was one mob don.

and that was essentially in a way the United States, I don't want to characterize it that way, but you know, there was one dominant power. There weren't multiple crews, if you will, in town. And so you effectively did have a very solid Pax Americana that has persisted for a really long time, as long as anyone can, many people can remember. And as a result,

Billy Riggs (02:59)
Yeah.

Vipul Vyas (03:00)
this notion of adversaries and conflicts in a very stark way. I we had like the war on terrorism, things of that nature. But otherwise, it's been everyone sort of in some, to some degree or another, falling in line with the US defined world order. And that is slowly eroding. And what that becomes, who knows, the current administration is obviously accelerating that process, but I would probably argue

the process was to some extent inevitable given the relevance of some of the institutions that underpin that world order are probably becoming not so relevant anymore. It would be nicer to have an orderly transition to something new with new institutions or upgraded or updated institutions to fill in the roles that are required, but we're not seeing that. And so all that is to say is that now you do have much stronger adversarial networks. So

As an example, in the great financial crisis around 2008, when the Chinese were confronted with potentially helping, I think Russia devalue the dollar, the Chinese actually came to us and said, know, hey, look, this is going on, just a heads up. We're not really about this and don't want to support it. And so they actively looked at their interest as being very intimately tied with the US.

and with the world order, which they just really entered with the WTO less than a decade earlier. And so there was no interest on their part to do anything to undermine that. Now there's beyond cooperation or even competition, there's just outright competition for what's perceived to be a fixed pie. Now, what does that all mean? It means that there are many great games going on and I'll kind of...

spend another, wrap up another 90 seconds here. There's a lot of things happening that are happening for bigger reasons than we may appreciate on the surface. So for example, know, October 7th, the tragedy that happened on that day and then everything that's happened since then really was probably the need for Iran to prevent Saudi Arabia from legitimately recognizing Israel in a much more formal way.

the other Arab states falling in line and in suit and therefore Iran's relative power in the region being undermined and therefore they kind of I think had to press the button, get a proxy Hamas to do what they did. And so that created the whole conflagration we're having there. And then more recently, the India-China, or India, sorry, I called it India-China, India-Pakistan conflict really was to some extent potentially rooted, and I don't think anyone knows for sure, in a variety of factors. The rise of India becoming more stable power.

I mean, Apple was just about to announce that they're moving manufacturing to India, et cetera, which is going to undermine the China manufacturing growth story and their need to keep those manufacturing jobs. So that conflagration probably has a little tiny bit, if anything, to do with the religious animosities that exist there and more to do with the economic competition that's emerging. So in the context of this increased era of adversaries and increased competition,

there's going to be the desire to influence and manage the narrative to get people on your side versus the other. And so espionage, the ability to influence, the ability to penetrate and understand, and by virtue of that, redirect is only going to become more significant. And so this is...

part of free speech, of course, the First Amendment, also a part of measures and countermeasures in terms of wielding soft power by various forces in the world.

Billy Riggs (06:29)
Yeah, I think Vipul too if we were to kind of, for the audience to kind of rewind and situate what we wanted to talk about today, which is kind of this concept, and I kind of wanted to title this today kind of like about.

Foreign affiliations, US institutions, we seem like we're, and I've been using the term "guarding the gates". We're like putting up walls around the gates of our institutions. And we can, that sounds kind of like a term, guarding the gates. Should we be, should we be guarding the gates? That's an open question, but we started a couple of episodes ago, I threw out this term, co-opetition, with regard to transportation and innovation, because we're seeing,

cooperative competition in my industry that I focus on and one of the industries we focus on is transportation innovation. And particularly in the EU, we see this emergent trend and we have on a global level, co-optition is beneficial. And we ended up our discussion last week with Seneca. A big theme was innovation and entrepreneurship on a global level

And particularly when we think about competition in the global marketplace for America to regain its edge and our theme of rewiring the American edge, it requires a capability of thinking beyond America. And this is like exactly what you're saying by, by, by guarding our gates by, by like, perhaps increasing scrutiny, even, even on

specific countries, whether or not it's China, whether or it's Iran, by having this more protectionist approach, do you stifle, do you begin to stifle innovation even more? And I think I, I drew it down to the erosion of trust. And, we do have

tensions with foreign adversaries, but tensions that are always balanced with trust. And negotiations in good faith.

Vipul Vyas (08:26)
or they can be mitigated.

Right. And what it comes down to is what happens when trust is lost or further eroded. And in terms of guarding the gates, we really haven't had gates period for a really long time because trust has been so pervasive given the world order that's existed for, as I was talking about for such a long time, the issue becomes, you know, is the current administration overreacting with the entire foreign student ban at Harvard? Now there's a lot of dimensions to it.

Billy Riggs (08:34)
Mm-hmm.

Yeah, yeah, yeah.

Vipul Vyas (08:53)
They're going after Harvard to set an example because it's the pinnacle institution.

Billy Riggs (08:59)
Well, yeah, well, maybe let's get it

because because it's brass tacks it down because like I think we're talking about this. So let's let's go down to kind of the example number one and kind of like go down to the news. ⁓ Back backlash, Chinese, what is it Chinese student chosen as commencement speaker in the context of of kind of canceling over 100 million dollars in federal contracts, know, scrutiny over free speech.

Vipul Vyas (09:11)
Yeah.

Billy Riggs (09:25)
or scrutiny over academic freedom. I can say I had some federal grants revoked as well. There's definitely a congressional probe over research affiliations with what were considered foreign governments, China, Iran, potential Russia. That's the backdrop. What does it mean? What does it mean?

Vipul Vyas (09:45)
Well, I think there's one, there was an article, I think it was in the New York Times or maybe it was the Washington Post. I forget that there was a joke that there was so many Chinese Communist Party officials that had gone to Harvard, they referred to it as their party school. But the issue is there's a few things going on. One is there was a law that was passed, I believe, in June 2017.

That essentially says that compels I think it's like section seven or something like that of this Chinese espionage law That like I said was passed just under a decade ago that says any chinese national can be compelled by the government to reveal secrets or divulge what is requested of them And so this essentially makes anyone whether they want to or not be a spy effectively for the

the the CCP So that creates all sorts of interesting tensions where even people who are most of people are going to be Just coming here to get an education innocently looking to improve their lives improve their lot in life work and be around and be educated around the best in the world and But as virtue that they're gonna also get to be exposed to our best ideas and our best ideas get now because of this law

exposed to potential loss to an adversary. So that creates some clear tension. Now there's other some other great tactical things going on. So for example, the US military has a contract with a company called tutor.com, I believe, and so do many academic institutions and libraries across the country that are owned and operated obviously by municipal or county governments. And

Billy Riggs (11:20)
Mm-hmm.

Vipul Vyas (11:21)
that particular vendor is owned by I believe a company called Primera Capital out of Hong Kong. And so Primavera, I'm sorry, Primavera Capital Group. And so they, as part of an extension of this law and just kind of communist party general operating theory is even if this private equity firm based in Hong Kong has no intention of doing anything more than making money,

off of their investment in tutor.com, they can be to some degree compelled into doing more, into divulging more. And it's a two-way street there. Through that relationship that they have with students, whether military or otherwise, they can influence thinking. They can also just understand what thinking exists and...

tapping into divisions and fractures in society, taking advantage of those, exploiting those, understanding through AI what resonates, what messaging works, what doesn't work. I mean, you're looking right now into my home, can peer into my life, and I've got, fortunately, this blank wall behind me, but if I was looking at the other part of my living room, you can get a sense for what my situation was, what my life is like, and then use that to take advantage and message to me the things that would resonate with me. Now, if you look at the other thing that's happened,

More recently is that there was you know, tick-tock which is owned by bite dance, which is a large Chinese Media company software company bite dance Tick-tock officially tick-tock isn't this based I think in Los Angeles though it has owned by Chinese overseas interests The backlash when people thought

TikTok was going to get banned was significant because it's embedded itself into our lives in ways that has not been allowed to occur the other way around. So American social media companies really can't operate freely because they don't really abide by all the censorship restrictions that are required. Can't really operate within China. So China, near peer adversary has this completely open access to understand, influence and shape the thinking of the U.S. which is really powerful.

Billy Riggs (13:00)
Mm-hmm.

Vipul Vyas (13:18)
I'll just sort of pause on my my current little statement here by saying this was something that both the US and the Soviet Union desperately spent. Spent you know countless sums of money trying to pull off during the Cold War. We ran you know messaging campaigns in around the world and so the Russians and some of those even linger today. There's some you know things that.

The Russians planted years ago, especially around the catholic church in latin america that still are believed They're just planted there for purposes of you know propaganda, but this was really important in the cold war and it's going to be important in this conflict or Dynamic, let's just call it as well And I don't think it's totally appreciated. So when the local library

And the defense department's funny. There's a 19 sorry, 2024, December 24 law that actually requires that the secretary of defense, I believe really evaluate the foreign ownership and interests of these companies that it contracts with. I guess that was ignored for whatever reason. I'm not sure what the details are. But the point is that we can unwittingly become useful

Billy Riggs (14:22)
you

Vipul Vyas (14:29)
idiots in a bigger game that we don't fully understand and so Unlike what the behavior that we exhibited for most of the past 35 years. I don't think we can be that Blind anymore Even though we want to have the assumption that everyone's coming in with the best intentions, which in many cases is truth But how do you catch the tunas without catching the dolphins is the trick?

Billy Riggs (14:50)
But I think, well, nice anecdote. Although, know, catching tunas is probably pretty unsustainable at this point. you know, yeah, whatever. Yeah, like, so we should probably just not eat tunas or dolphins. But I think, know, if we we view we, we are a nation of institutions, and

Vipul Vyas (14:58)
I think it's a little Mercury too, but yeah.

Billy Riggs (15:10)
despite the fact that like we want to believe that there is one, one institution to control them all at the top. At the end of the day, these institutions, whether it's Harvard or Berkeley or Florida State, know, you know, whether or or UT Austin, we've got these big research institutions that drive innovation. They develop amazing companies and they develop a workforce that drives

jobs that drives the amazing companies that generate economic growth in our amazing company that employ the American people that create amazing companies like Waymo, like Zoox, the companies that I study, the companies that you go out and create when you created all these healthcare companies, when you were innovating at the ground floor of

of, you know, speech recognition and, and at the ground floor of speech recognition AI many years ago. So I think, I think part of the issue here is when you start, when you start clamping down on the talent that these, these institutions can house and the, the talent that they can, that they can recruit, but also the, the

You start restricting Just the ability for The the choices that things make and you make them almost geopolitical entities You know, my question is What is their role and do they have that responsibility? You know, do they and and and so my question to you is Vipul what is the answer? You know, they do they do they become somewhat nation-state?

institutions? Is that their role? And how did they stay competitive? Because if they don't stay competitive, our economy starts to slip.

Vipul Vyas (16:56)
think there's a few things here. One is we have mastered the art of brain drain and being able to bring the best talent in the world here and cultivate that talent and keep it here, which is ideally what we continue to do. Which is ideally what we would continue to do. However, you have some responsibility when a significant portion of your funding is coming from the federal government to not harm the institutions or the country that's paying.

Billy Riggs (17:05)
Well, come on, don't depress me completely.

But, know, they're incentives, the incentives, for example, for a university. I work for a university. They're not national security. The incentives are grants, their budgets, and even incentives for a city, for example. The incentives for a city aren't a geopolitical incentives. And maybe that's wrong. Maybe that's wrong. Maybe the incentives should be geopolitical, but they're going to be, it's going to be local budgets, partnerships, maybe reputational risk.

Vipul Vyas (17:21)
least some portion of your freight, right?

Billy Riggs (17:49)
But it's not, it's not, they don't think in terms of national security.

Vipul Vyas (17:53)
Well, when your budget, Harvard's budget, 34 % of Harvard's budget comes from the federal government. You can't be ignorant of national security. You can't be blind to it. So I'm not saying it's the prime motivator, but it's sort of like if I own a business.

Billy Riggs (18:04)
Mm-hmm.

Vipul Vyas (18:07)
It's incumbent on me to serve safe food It's incumbent on me to not have my customers get food poisoning So it's my obligation in general to mitigate certain risks. I Can't mitigate all risks, but there's some obvious ones Right, and it doesn't mean that you have to then my tuna and dolphin analogies to say you want to deal with false positives and false negatives in the sense of you don't want to

Just say all foreign students are no longer, you know persona non grata. Therefore You're not even go fish. You're not even gonna go fishing. You're just gonna shut it all down I don't think that makes sense. But at the same time you can't say well I'm going to just Let anyone and everything through and not scrutinize anything Because then you're going to do things that undermine Other institutions that create the risk that we were just talking about

So the answer to question, what do you do is that you just have to be more mindful and professionally responsible about the decisions you make, which means that don't make certain platforms that are key to your institution, ones that are tied to overseas organizations that may not have the best interest of your institution or the country that you're domiciled in in mind. That's not.

Billy Riggs (19:17)
Right.

Right.

Vipul Vyas (19:18)
Why why take there is there are domestic alternatives why take that risk?

Billy Riggs (19:21)
Right? your

city is using a smart city infrastructure with a foreign firm firmware, if your student database is stored offshore, et cetera, you've created a soft target. Now the question is, how do we mitigate? Where do we go from here? Whose role is it to take on that responsibility? Is it the role of the institution? Is it the role of the federal government to...

Vipul Vyas (19:34)
Yeah.

Billy Riggs (19:46)
least that is it a is a legislative role? Is it a I mean,

Vipul Vyas (19:51)
The

base of the risks are only now being understood. Like I said, it's if you know know this it's professionally irresponsible not to do anything about it. So Look in Europe, you have you GDPR which requires from a privacy perspective that things are kept in Europe versus and servers around the world For in this case privacy reasons, but if you are a local government and you have options as you said

Billy Riggs (19:54)
Yeah.

Vipul Vyas (20:19)
Why choose the option that brings on risk that you now know exists? that You don't need to

And look sometimes people say well, you know Does that mean that people overseas shouldn't use American companies, etc. No, I don't think you basically say well, I'm not gonna deal with any company That's not domestic. That's not right. It's a global marketplace But there are certain sensitive areas Where it doesn't make sense? You're not going to

hand over the ability to access data that's sensitive or to influence people that is a sensitive subject or topic you're not going to hand that over to someone whose motivations you or future motivations you really can't understand or that you know can fall under someone else's purview someone else's control

Billy Riggs (20:59)
Yeah.

Yeah. You know, it's really an opportunity for, and we can, we should put a link in the, in, the note, the notes for, for this episode to our report on blockchain, because I think it's really an opportunity, for some of the other technologies that we've looked in, because I think when we think about like rewiring some of the, the, pieces of the American system city by city institution by institution, has to be.

Clean, transparent, secure, and it's everything we talk about with regard to using blockchain systems for kind of indefensible methods of transparency, but also privacy and security.

Vipul Vyas (21:44)
Yes, I think it's those are trust enhancing tools right and you know if you think about the the narrative wars which People discount their importance in that but they they ultimately determine policy Right, if you went on the you the the you whether it's a ukraine war the conflict in the middle east Anything else?

Public opinion can get swayed one direction or another and I'm going to comment about which opinion is right or wrong doesn't matter But things can go Different directions based on who's influencing that thinking now if you look back in the early part of this current century The New York Times was extremely influential in promoting the invasion of Iraq

This was the Judith Miller era where the Times was pumping out articles about Iraq's imminent access and control of weapons of mass destruction, et cetera. And so this was a cry for urgency that there's a 1 % chance, but that 1 % is not worth tolerating. It's just too dangerous. And so the Times essentially, in a coordinated fashion,

Walked us into a war that cost us Trillions of dollars in the end And so the implications of shaping thinking are not trivial I Think it's harder these days To dictate broad public thought because there's so many different sources of information but

And and the marketplace of ideas is much more robust but I think it's much more insidious when you don't control maybe a large publication, but instead control the small screen access to someone's mind And again, i'd say look the first amendment applies here Anyone can say anything to anyone about anything? There's no issue with that and that should be inviolate that's that's

not even up for debate however handing over the keys to someone who may be less than objective at a critical moment is just not smart if I had my my kid my children my kid watching tik-tok all day and the algorithm picked up on what they like and then they're basically undermining kind of values I'm trying to instill

I'm not going to be super happy about that. Now that's just me losing in the marketplace of ideas. But that's one of the reasons why parents don't let their kids do that all day until the child is in some perspective or ability, know, some formative years to discern between good and bad ideas. And I'm not saying adults can't do that, obviously. But again, it's creating a risk that isn't worth taking.

Billy Riggs (24:14)
Yeah, so I mean, I think though we started off kind of at a bigger kind of like framework, which was kind of like what happened at Harvard and kind of the full blown policy escalation. And I like that we've now kind of distilled this down to kind of the pragmatics of, hey, there is clear issue here. But and there's a need for clear frameworks.

and transparency to, to rewire the American interest and prevent these type of issues and protect the workforce and the, the interests of competitive innovation. But how do you, how do you, how do you protect that interest without, preventing the cultural flashpoint and punishment that has occurred? You know, cause I don't think.

The canceling $100 million in federal contracts incentivizes the, and the fact is, that it's, the question remains, it's like, it is that type of fear mongering and that type of penalty doesn't get us to make the change and make the strategic investment that it's going to take to shift.

the conversation and to actually make the investments to onboard and onshore a lot of this data and these procurement processes that need to happen here in the US.

Vipul Vyas (25:47)
Well, in all these situations, it's a game of leverage. In the case of the current administration in Harvard, the current administration feels that there are certain policies Harvard has, and whether that's related to admissions, related to advocacy on campus, where they feel that, whether right or wrong, free speech is granted to some but not others.

that certain minorities are more tolerated than others. There's a whole range of gripes that are concerns that they have. And they want those concerns rectified. Harvard has, like I said, a third of its budget coming from the federal government. That puts you in a position of vulnerability. That's just the facts. Now, whether it's legal to cut that funding off or not, that's for the courts to decide, but...

Billy Riggs (26:10)
Mm-hmm.

Vipul Vyas (26:29)
That's what's going on and so I think Just as Harvard has found itself in a position of vulnerability now. They have a 54 billion dollar Endowment that they can always dip into and you know make all this go away. No big deal I think which they're loath to do

Billy Riggs (26:38)
Yeah.

Vipul Vyas (26:44)
Institutions should not find themselves in that position No certain things you just can't help it like you're a government institution you Are what you are you you're a library system a you know? Local school district whatever but at the same time again, you don't for the same reason you don't want to put yourself in a position of vulnerability So doing things that could get you in trouble That could expose you

Billy Riggs (27:02)
Yeah.

Vipul Vyas (27:07)
don't make sense to do.

Billy Riggs (27:08)
Yeah.

I think it's a, you know, when we think this, this lesson of guarding the gates, this lesson, Harvard story, irrespective of the political windup, it's, it's a warning, but it's also an opportunity. And I would say it's not only for kind of cities, for university presidents, for researchers. It's also kind of a reminder for, for CEOs, for CIOs.

Vipul Vyas (27:31)
Yeah.

Billy Riggs (27:32)
for other nation states and around the world to be smarter, to build smarter. it's to revisit decisions they've made in the past. One thing that comes immediately to mind for me is that for years, two episodes, talked about this. I talked about the EU's decision to basically open the floodgates to BYD, this Chinese

automaker has been just selling tons of electric vehicles and outpacing all other electric car makers in Europe. And so here you have basically all kinds of surveillance being offshored to China. And so you now have tons of smart cars, smart data being basically offshored.

Vipul Vyas (28:10)
These are smart cars with lots of cameras and...

Billy Riggs (28:16)
to China. I think it's a strategic, it's a strategic security risk that that for example, the EU has not grappled with yet. And

Vipul Vyas (28:24)
Well, you just saw what happened

in Ukraine with the drones, right? Like imagine a little bit more data, a little bit more insight, and maybe that's unavoidable. But what you say is really an important point that there, these are your example, governmental decisions. This is something that we're okay with. And look, at the opposite side of that is now the green, the shift to green technology and reduce emissions is going to happen faster and cheaper. But one thing we have to realize is that

No one now is immune to getting in the crossfires of these big geopolitical games harvard You know with the whole palestinian israeli conflict found themselves on the wrong side of the administration and they're now they're probably suffering for that's probably some dimension to it So no one is immune. Even your local Library is not going to be immune boeing got a massive order of of jets, you know cancelled from china, right that they had unload somewhere else They're a company that just caught in the crossfire. The issue is

You can't say that's not fair. You can't just go to that's not fair. What did I have to do with any of this? That's maybe all true, but it doesn't discount the reality that we're all stuck in the middle of this wrong

Billy Riggs (29:28)
Yeah. Yeah,

we that the anecdote for that is like, we should we should not call it guarding the gates. We should like, say like, think about who you're letting through the door. That's like, that's, that's just like inviting somebody in.

Vipul Vyas (29:37)
Yeah Yeah Yeah,

I mean the issue is just becoming you have to be mindful You know before you like do vendor relationships if you're a you know Someone at the city or county government. You're just doing okay. Okay I'm gonna base it on price and perceive quality and value and there's some simple dimensions that I'm gonna manage an RFP through now I've got to take on these geopolitical risks and exposures, you know What the you know what?

Are you serious? Sadly, yeah. Yes. You're going to find yourself in a newspaper headline that you don't want to be in if you're not conscious of this stuff.

and then your funding's at risk, you're going to get all kinds of scrutiny you don't want, it's going to become a mess and it's all avoidable.

Billy Riggs (30:23)
So wise. So, my final word is, Hey, I think innovation without security is a gamble. let's wire the edge with intention. Vip final word from you.

Vipul Vyas (30:30)
Well said.

The world is getting more complicated and our thinking has to match the times. And sadly, we lived in an area where we could innovate faster and more energetically and without looking over our shoulders because there was a high trust environment as you described, as you said. Now we have to spend some of that energy that could be used for innovation.

to manage risk and be more cautious, unfortunately, which is gonna be a throttle on innovation, but hopefully a more, if we do it right, not a significant throttle.

Billy Riggs (31:07)
Well, thanks everybody for listening. Let us know your questions. Subscribe, share, keep the conversation going. We will see you next time.