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<<Rob White>> I want to thank those people that made today possible. There's a lot of work that goes into a forum or a summit like this, as you might well imagine even if it is only one day. And so, I'd like to ask a couple of different people... groups of people to stand up. First, by show of hands, the CNMI board or a leadership group. If you could raise your hand, let everybody know who you are, and thanks to them, these are the folks... these are the folks that have worked very hard for a number of months to really put this effort on and there's a number of exciting things you'll hear about later this afternoon, as we move forward into the next year. The other group I'd really like to recognize, especially within that and led by Jim Shoppe at CMTC, is the CMTC staff. They have been, primarily, those folks that have put together the registration, done all of the work here at the event and really helped to pull this together from the CMTC staff. So if you're on CMTC staff, please raise your hand. And thank you to them. There she is, good. I was stalling to make sure that Dion got back into the room. The other group that has really been instrumental in making sure this happens is USC. We are thankful, not only for the facility and their sponsorship in that, but staff, especially Dion, really making sure that a number of things here, coordination wise for the event got done. So, if you're with USC and you helped out on this event, if you could raise your hand please. And we should probably just let everybody that's a Trojan just throw those two fingers up in the air. Had to get that in eventually, right? Alright, today's panel number three is Growth Opportunities for Manufacturers to Improve Sales and Profitability. Our moderator today is Ed Tackett, Director of RapidTech at UC IRvine. Mr. Tackett's been involved in additive manufacturing and product development for the last 16 years and has presented at more than 150 national and international events. His broad range of experience comes from working with over 700 early stage start-ups. He offers a unique perspective on innovation and technology adoption, especially in the manufacturing sector, and with that, Mr. Tackett, please come up. <<Ed Tackett>> Hello, everybody! Generally right after the lunch session, I make everybody stand up and do the hokey pokey but since we just came off a break, we're going to pass that. So. Okay. So let me talk a little about what my center does at the University of California Irvine. We primarily deal with additive manufacturing but inevitably that spills over into regular manufacturing or advanced manufacturing. So, in manufacturing growth, this particular technology is the EBF3 system. So, for an example, we have a... well, traditionally would be a 5,000-pound forged billet, we machined 4,750 lb of chips off of it, and we end up with a 250 lb finished part. So, our buy-to-fly ratio on that is 20:1. Using additive manufacturing, we take 200 lbs of rolled sheet, 75 lbs of wire, we apply the EBF3 process to it, and we end up with 25 lbs of chips. We had the same 250 lb finished machine part. Our buy-to-fly ratio is 2:1. So like anything else, additive manufacturing is a tool that when used appropriately, can provide great cost-savings and accelerate the time to market. Why this is kind of important is currently, additive manufacturing or Rapid Prototyping, as a lot of people refer to it. As of 2011, 16% of the parts produced on additive manufacturing, were used for direct part production. As of 2013, that number had grown to 28.3% and it's a... as of 2013, it's a 2.2 billion dollar industry. As of 2015, they're projecting it to be a 4 billion dollar industry. And as you can see by the wheel, functional models, presentation models. The presentation models and the early stage prototypes, that number is actually shrinking. And it's being chewed up by direct part production. Some of the companies we worked with at the Engineering school and companies that are adopting newer technologies to drive forward, I mean Mattel. Anybody here from Mattel? They're a huge user of additive manufacturing. If you remember, I don't know if anybody... was anybody around in the 80's? I know I'm probably quite older than most of you. So in the 80's, the movie would come out and we would wait months, usually until Christmas until the toy actually hit the market place. Then we absolutely had to have the Transformer toy. Now, when the movie launches, the toys are actually in the store before the movie launches. And that's all made possible by 3D printed additive manufacturing. They can very quickly go through their whole design alteration. Hollywood really likes it for example, because all the CGI is done with computer modelling. Those can be the same computer models that are directly sent to the industrial manufacturers of that. And they actually fabricate those toys directly off that model. And that's a pretty phenomenal story. So, let me introduce my panel. <<Bill Genevro>> My name is Bill Genevro, I own a small company called Airflow Systems, we make parts for aircraft, light aircraft, 2 to 6 passenger. We make heat exchangers, oil coolers, inter-coolers, air conditioning systems. We also make composite parts for aircraft and cast aluminum... cast iron parts for the heavy truck industry. We are what is now called a ""VSB"", a very small business. It's myself and one other part-time person. We currently have 50 products, which adds up to about 730 land items. I am a student of Ed's. I took the very first rapid prototyping class offered at Saddleback College and ever since then, I've been able to use that technology in my business. <<Scott Melton>> FANUC America makes industrial robots, industrial controls, and robo machine, so we're a factory automation company serving the needs of North American and South American manufacturers. <<Kelly Kline>> Fremont's the fourth largest city in the San Francisco Bay Area and some of you might know us as the home to Tesla, or the manufacturer model *inaudible*. Every time you see one of those gorgeous cars on the road, that came direct from the Fremont factory. Fremont, I like to think of as one of the kind of touch down places for advanced manufacturing in the United States. In addition to having a lot of companies like Tesla, who are either prototyping or actually manufacturing products on-site. We have an additional 40 or so contract manufacturers. And companies like Seagate, who are getting ready to convert the old cylinder building into the next-generation, disc-drive prototyping facility. So, there's a lot of interesting things going on in Fremont and although I don't directly do advanced manufacturing, I guess you can say I'm a collector of really interesting case studies for advanced manufacturing, right here, right now. <<Connie Bates>> Hi, I'm Connie Bates and we're actually just north of Fremont, in the Hayward, we are a contract manufacturer. We do precision manufacturing for a number of different customers. One of our customers is Tesla Motors, and they are indeed hopping and keeping us very busy. One of the biggest things, I think, that's really interesting about the whole subject of advanced manufacturing is just how well it correlates with the actual real-life path that we've seen, which is that, increasingly, customers want us to be engaged with them on the early front-end of a design. And from my perspective with my company, the large success stories that we have, have most commonly been those where we have indeed, engaged with the customer at the very beginning. Done prototyping with them, gone through the validation stages, and then into production. And it's a real fun paradigm and once you get them locked into it, they actually are able to find the value as well. <<Ed Tackett>> Great. So, our session appears entitled, Growth Opportunities for Manufacturers to Improve Sales and Profitability. So, the first question I will throw out to Bill here, is what do you think is the number one issue that keeps manufacturing from growing in California? From your perspective. <<Bill Genevro>> So, there's two things, actually, Ed will know. *inaudible* student but I won't *inaudible* myself to one. The first one is the manufacturing industry in California does not promote itself as a service to the state of California, as a service to the country. We're failing ourselves in terms of national defense by losing manufacturing capability. If we can't manufacture the things that we need to maintain security, we're in big trouble. And the manufacturing industry does nothing compared to the energy industry, the finance industry, to market itself. The second thing is we've killed off technical education in the state of California. And I could go on for hours about that, but I'll turn it over to the next. <<Scott Melton>> You know, we can't find the engineers and technicians to implement the advanced manufacturing. The innovation's there, the ideas are there, but who's going to carry the ball forward? And that's where we're having the biggest difficulty is finding the engineers and the technicians to implement that technology, here in California. And then, I think really, it's the adoption of advanced manufacturing, whether it be lean manufacturing, Six Sigma, robotics and automation, or other technologies. It's that adoption but, really, it's finding the engineers and technicians to do that implementation here in California. <<Kelly Kline>> I kind of take issue with the premise of the question because my challenge in Freemont is that I'm having a hard time accommodating the huge growth that we're seeing in the sector. So, in my sense the barrier is really from an infrastructure perspective, which I think is fairly anemic from the... just based on the fact that manufacturing has been in decline for so long that all of the kind of underlying infrastructure that used to support it has eroded. So, one example of that, you know, kind of looking at it from my city lenses, just the space itself. We have a very outdated building stock that works for advanced manufacturing, and advanced manufacturing, by definition, needs a more flexible type of space than was built in the past. So, to try to meet demand, we've got about 2 million square feet of manufacturing and related logistic space in development, right now in Freemont. But the problem is that, it's coming online anywhere from like, six months from now to two years from now, and I've got people moving out of the Tesla factory, suppliers who used to be under their roof who are now being forced out as Tesla gets ready to build their Model X car that no longer have space. So, I've already lost a few because I couldn't accommodate the right now, flexible, large footprint, space demands. So, that's a challenge. The workforce that has been mentioned, it's a challenge. Although, I see it from a little bit of a different lens. I'm hearing from people that it's not so much, even the technical skills that they're having a hard time with. They're having a hard time finding mid-level managers to be on the line. And I think this might be a Silicon Valley-specific problem, where we've got plenty of PhD's and we've got plenty of people who can work on the line. But nobody in Silicon Valley, or at least none of the parents are telling their kids, ""Aim for the middle."" So, we have this... We have this dearth of people who can actually do that. Luckily, we have amazing whips who are helping us with this problem. And then, last but not least, there's a regulatory aspect to this, that I think is particularly challenging. And I'll just give you a very quick anecdote from Fremont, which is that advanced manufacturing, by definition, is changing constantly. That's why everything's on rollers, right? And so, what was happening with a lot of our manufacturers is that, they would put in for building permits and by the time the inspector would come out to approve it, it had already changed again. So, they are in this never-ending cycle of building permits and they would have like, 200 of them open, none of them have been closed, because none of them... they had all changed. And so, we said, okay, forget that. It's not working from a regulatory perspective. We need to figure out, okay, who's in this new kind of manufacturing? Let's have a building inspector just be assigned to them. He shows up once every week or two weeks, kind of signs off the everything. Like, okay, yes. Everything's bolted to the floor correctly or that the locks on the wheels are in the right place. And we'll sign off on it. But there's no need to continually submit for the individual building permit for the thing that's going to be changing in 2 weeks. I mean, that's just an example of how our infrastructure needs to change to be able to adapt to new styles of manufacturing. <<Connie Bates>> From my perspective, I think that the single thing holding manufacturers back today, is the inability to be agile. I'm actually involved in a panel in the East Bay and we have manufacturers coming together trying to find out how we can pitch our cause. Pitch how much fun manufacturing is, how live it is, how we can draw in the younger generation and get them engaged in it. And we see it. Because our workforce, we have some very young, dynamic, engaged engineers who are having a fabulous time. But they never would've thought or said to themselves, ""Oh, I'm going to go into manufacturing."" Because quite frankly, it just doesn't look like a lot of fun. And so, I think that one of the things we face is we have to learn to be agile. How can you respond quickly to the market, to the changing conditions. How can you respond quickly when there is an opportunity that comes up. When the market changes, do you adapt or do you watch it go by? And I think that's a real challenge for us right now, because a lot of times we are ingrained in the systems that we've put in place. Sometimes they're legacy systems and they don't support proper collection of data and I know data was something that was spoken about quite a bit. And I'm a firm believer in collecting relevant data, and applying it intelligently. And I think that that's a really important point for manufacturers. But sometimes they're hampered by their systems that might be a little bit old school, and not really helping them to get where they need to be. <<Ed Tackett>> Okay, great. So, it looks like we came up with about four different things that are... seem to be hamstringing manufacturing. Agile, we need to be more agile. Companies have to figure out, work with state and local municipalities to be able to change to the responding needs of the marketplace. We have regulatory. That's always something that bubbles to the top of every conference I've attended since 1992. So, regulatory is definitely an issue. Education. You know, I work at a university. I'm on the front lines. That pushes some very specific buttons with me. Somebody gave me the horns back there. You're from Texas, right? UT? Okay. And infrastructure. You know, we've all driven the five. We've all bought new tires. And rims. And so, infrastructure's a big issue. You know, as you have to look at Hawthorne, for example. Or any of these cities, for example. When we were involved in the space race, these manufacturing centers in California sprung up in these small towns. And then, the workforce built up around them. And eventually, choked off their supply lines, whether it be rail system or road system. So, we do need to look at infrastructure, and that's something, again, state and local municipalities should be able to engage with businesses. Okay? So the next question, I'm going to start with Bill again, because that seemed to work out pretty well. And how big a role do you think advanced technology, i.e., things like 3D printing, the Internet of things, big data, social networking, will play in the future of manufacturing in California? <<Bill Genevro>> The biggest advantage to the new technology is it's going to democratize capability. We've already democratized knowledge with the Internet, now we're going to have the ability to manufacture things in a two-car garage that you could not do even just a few years ago. Now, I was mentioning to a couple of attendees, I've been in garages where people have built their own 4-axis CNC routers. When he got done building that 4-axis CNC router, he put the plans, for free, up on the internet. So that means, hundreds and thousands of people across the country can put 4-axis routers in their garage. I think that's going to be the biggest impact is small, really small companies are going to be able to do some amazing things. <<Scott Melton>> You know when you look at advanced manufacturing and advanced technology, it's critical for the state of California to continue to grow. You know, to be competitive in the world market, to be competitive versus the Chinese or other low-cost countries, you're going to have to be implementing advanced manufacturing. We even see it in robotics on the farm now in California. We have folks that are handling corn, sorting almonds, milking cows, picking strawberries, and they recognize that advanced technology is key to their being competitive and to their continuing to grow and to prosper. <<Kelly Kline>> California's kind of in a unique position as it relates to utilizing all these tools, because we have Silicon Valley in our midst and it's closer to some of us than others. But that, really, is the differentiator for us and for our industry. You know, in order... We have to kind of match the companies that are demanding these new products. And so for the contract manufacturing realm in particular, there can't be any difference from where it hands off from the company to the manufacturer. The company's going to expect that that environment kind of mirrors its own. And where I've seen these two things kind of merge together is, really, at Tesla where we have a factory now, that's behaving more like a tech campus. And it's been very interesting to see the transformation from new me, which was very old school auto-manufacturing teach something like Tesla, where the robotic arm is picking up the car and twirling it around and there are people, literally, making cars on laptops with scooters, it's very cool. But they've done a lot of things to kind of signal a difference, and some of them are cosmetic. You know, replacing turnstiles with glass walls, and, you know, it's just everything about that experience of the white walls. I mean, when I first visited the factory, it looked like something out of an Upton Sinclair novel. And when you go there now, it's like you're at Google. Right? So, there really is this blending, I think, Silicon Valley companies are leading the way and they are a kind of injecting, not only their tools but also the type of presence that they want to see within the manufacturing realm. And now that the two are kind of taking cues from each other. <<Connie Bates>> I would agree with Kelly, having also visited many times and seen the Tesla factory grow. I think one of the things that's important when we look at additive manufacturing or any of the other ones that we were speaking of earlier, is that it's really important to realize each one of them is quite simply a tool. And the tool used at the wrong time, in the wrong hands, in the wrong way, is not going to be effective. So, I think our role is really to make sure we have a broad understanding of all of the manufacturing and best practices tools that are out there, and then to use them at the right time. And we actually are involved on the *inaudible* way with additive manufacturing, but we're involved with a lot of other technologies that relate very relevantly to the customers that we work with. Will we get involved with it? When we see it playing a key role with our customers? Absolutely. And I think for us, that's where trying to stay a little bit ahead has always been really important. There's a lot of great tools out there and in California, I think we have the benefit of having some of the finely... best-trained minds who are open to embracing those tools. And so, I think along with that, that Kelly also referenced, is having a really... a very open attitude. And that may sound, you know, very basic, but in manufacturing, sometimes, it's a little bit of the same old, same old syndrome. And you have to break past that and be willing to try new tools at new times. <<Ed Tackett>> Take away from... that I'm getting from that is, you know, we need to be agile enough in California, because we're always chasing a moving market. You know, I was at a presentation, and I believe somebody in the audience gave this presentation last week. But they were talking about milking the cash cow. It used to be where you could spend 50 years and you could milk the same Kodak camera for 50 years. When's the last time anybody has created a product that's been around for 50 years? It very seldom happens. So, I think we need to be able, as manufacturers, to be able to rapidly respond to market shifts in the marketplace, and the globalization of the markets. So, I'll start with you, Bill, on the next one. So, question number three. There's been a lot of hype about 3D printing for the manufacturing enterprise. What do you see is the barriers to entry? Capital, equipment, workforce, material, science, that are facing California companies? <<Bill Genevro>> Since the cost barriers have pretty much disappeared, you can walk next-door and find some rapid prototyping machines that are incredibly inexpensive, given their capabilities. I think the biggest issue right now, and I'm gonna be repetitive on this, is education, and by education in this case, I mean dissemination. How to use these pieces of equipment that have dropped so much in cost. And then, the other side of it is finding a standard for these machines. Ed and I have talked about this for years. The average small businessman, when he walks into a trade show, and all these people are selling rapid prototyping pieces of equipment. There's no industry standard as there would be for, let's say, metallurgy, to know that when you bought or when you manufacture a part on an FDM machine by this company, it's gonna be exactly the same as a part coming off an FDM machine by another company. So, I would like to see some kind of industry standard, so that the buyer knows what they're getting. <<Scott Melton>> We're using a lot of 3D printing for rapid prototyping of tooling. Parts, different kinds of applications. And again, it's the training. It's really having a workforce that's knowledgeable and capable of implementing the technology is our biggest barrier. <<Kelly Kline>> I think it's actually quite easy for people to kind of start out but then, it's much harder to kind of, make it past, you know, that first couple of years in operation where it's time to scale up. And the two things that have really come to light from companies in Fremont, who we've talked to about this, the two things that they mentioned the most are capitalization and also competition. So, on the capitalization side, I find it extremely frustrating. Then, in an area known for VC funding, so little of it goes to companies that are making or supporting the hardware industry. It's all focused on software because it's the get-rich-quick scheme and it pays off so much quicker. Then, my heroes who are in clean technology and doing things that are going to save the planet are the people in the bio-industry who are making devices that are going to save our lives. It's so much harder for them to get the attention. And while there's other types of funding that's available out there, it's a lot more scattered, it's harder to locate, it takes longer to secure. And so, I think that's kind of an ongoing concern, that it is time for us as a nation, not just to hope that this happens and feel good about it, but we actually have to be prepared to put our money where our mouth is. And then the other part, I think, which is very unique to California, maybe even more unique to Silicon Valley, is the competitive factor. In the same way that they're competing for funding with software, they're also competing for employees. And working in manufacturing or for a company that's making hardware is very different than working in the software industry, where your stock options are going to pay off in three years and so forth. And so, some of it is, you know, they're now using a lot of the same employees with the same skill sets, but it's much harder for the hardware manufacturing company to attract and then also to retain that talent. <<Connie Bates>> I agree that getting into it at the entry-level is not as big as an obstacle as it was a few years ago. Again, coming back to it as a type of a tool, I think that's it's really important that a company or organization understands what they are using this tool for, how they're going to engage with the customers, how they're going to use it as part of their business development cycle. What's the value to it and making sure that that's captured, making sure that there's an entire plan that wraps around that, as opposed to just having it and holding it out there at the end of the stick and thinking that everybody's going to understand why you're offering this and what the importance of it is. And that does go back to training and I think that training is one of those things where we all understand and agree how important it is, but too often it just kind of tends to get a little bit overlooked. And in this case, I think that if you don't, if you have the equipment and you don't have the training, I don't think it's going to benefit your organization very much. <<Ed Tackett>> So the take-away from question three is education, workforce. Obviously, that's a hot button issue. And standards. I'm on the ASTM-F42 committee for additive manufacturing, and also the ISO and Mil Specs standards. It is a very contentious standards process. You know, with buying a billet of 6160, you get your certificate, you get your traceability, you drop that into your manufacturing stream, you know where it came from. The material right now, differs lot size to lot size. So, lot number 12 is different than lot number 13. So, what ASTM is trying to do is develop a standard protocol for processing raw stock material feedstocks for additive manufacturing. The problem is because this has been such, what we consider a captured industry, so there's three companies that held the majority of the patents for that. And they also, they had a chokehold on the stream of material supplies for that. Only in the last four years has that really opened up to become... We have third-party companies now providing material. So, and of course, the large companies are trying to mitigate outside materials coming into the machines. There's some significant issues We're looking at, actually, balloting material standards for metals additive manufacturing, the first quarter of 2015. So, it's coming. It's not fast but it is coming. And capitalization. There's very few, when you talk about like, 3D printing or capital equipment that, I mean, we're seeing that in the VC industry. You know, VC's are willing to fund the software company because their flip on a software company is six to eight months. But when you capitalize a manufacturing company, you're looking at a much longer term payback. So, there has been some hesitation in that arena. And of course, we have competitive. I mean, everybody's stealing everybody else's employees. So, that goes back to point one, education and workforce. The more workforce we have, the better we can service all the companies. And of course, knowing how to use the right tool. I have horror stories about companies that bought the wrong equipment. I'm sure most of the manufacturing folks here can tell you the same thing. ""Oh, we should have bought a Volvo instead of a Yugo."" We all have that story. So, the next one we're gonna move on to is, the Federal government has placed a white-hot spotlight on manufacturing. And what future technologies do you think California manufacturers should be looking at? <<Bill Genevro>> Most governments have a mixed track record on picking successful technologies. So, I don't think I would particularly trust them to identify promising technologies. I would, however, suggest that we start holding more contests in California like DARPA, held for autonomous cars. The rate of progress in those contests over two or three years was just stunning. And I think if we put out problems or projects and said, ""Hey, find your best solution for this."" You know, put the students to work on this kind of thing. This is the kind of problem-solving that'll move us ahead in the future. <<Scott Melton>> Three of now, that we see. One is, obviously, 3D printing, has been talked about several times. Simulation software that was talked about earlier. There's a lot of powerful simulation software for whether it be manufacturing design, it's just a critical technology. And the other one, you know, *inaudible* selfishly is a collaborative robot. You're going to see in the next 3, 5, 10 years, robots that are designed to work right inside the factory that don't need safety enclosures, that work right next to people, or right next to others doing critical tasks. You're going to see a lot in collaborative robots, where robots are going to be implemented right in the floor without need for the old-time safety requirements that you used to see. <<Kelly Kline>> Particularly in California, the things that we need to be focused on are the things that are going to keep us alive and the planet alive, so. I think the industries that I think about every day in Fremont, are the ones that were strongest and with just clean technology and biotechnology and I think that those are great industries to bet on, because there... I would like a driverless car but it's not imperative to my health and well-being, it would be nice but, I really think that that those two areas are fast growing for a reason and it's because they are of absolute critical importance. And underlying, you know, both of those industries is the sensor technology and I think that's really kind of the key to everything. And we did some analysis in Fremont about clean tech, in particular, because we were curious about why we had so many clean tech companies. It just seemed odd. We had this massive cluster and we hadn't done anything to really encourage them to come and it just seemed to happen on its own. And another thing, kind of similar to the background in history there, what we found is that our historical strength in the semiconductor industry meant that we had a lot of sensory technologists and engineers who had been focusing on that, in that industry. And then, had to basically spun themselves off and were eager to take on new challenges and wanted to be a part of clean technology. So, we have a lot of 50 to 60 year old CEOs of clean technology companies who used to be in the semiconductor industry, who have found, kind of, a rebirth of their skill set in this new industry and it's really fun and exciting to see. So, I really see that as a kind of underlying a lot of different industries and being kind of critical to growth in manufacturing here. <<Connie Bates>> When I was thinking about the particular area, focusing on... one thing I keep coming back to is something our company has been very involved and that is going after business that has previously been offshored. And one of the tools that we used for that has been around forever, which is automation and robotics. And we went from having one robot in our facility five years ago, to just installing our ninth robot, just a few months ago. And when you do that, every time you do that, you gain knowledge and then you gain expertise, and you gain a showcase that you can bring a customer in and explain to them how you can construct a business model that's going to give them the value point they need, to be able to buy their products here in United States rather than having them offshore. And when you can also support them with a written model that helps them to understand a landed cost. And I know that's off a little bit, sorry. But the robotics have really been a key part for us and it's an old school technology, and it does go back to the sensors and I'm also with the Silicon Valley. Semiconductor continues to be quite large. And it drives us today. It's one of our largest customers, as well. But I think that continuing to understand how can we get automation and robotics in some of the smaller companies. How can we help a small business owner to incorporate something that's going to enable him to reach a customer that he may think he has doesn't have access to right now. <<Ed Tackett>> Thank you. So, on that question, I like the idea of the contest and the act surprised, we've got a challenge, state, we try to solve it. That has led to some significant technology increases through DARPA and the DARPA... different DARPA programs. You know, 3D printing simulation software is huge. You model it, you seam it, you fabricate it, you prototype it, you design it, you reiterate it, you drop back into that cycle. And that's perfect. Obviously, collaborative robots, that's kind of a cool technology. Then, we have green tech and biotech. Those are huge areas. There's segments of California that are just... you can't swing a dead cat without hitting a biotech company. And that's actually a good thing. You know, dragging back offshore businesses. You know, no pun intended on the dead cat thing. But, you know, bringing back reshoring, I mean, there's companies that are successful with that. I mean, with rising fuel prices, a world in stability, we definitely have an opportunity to start reshoring some of that technology. Then of course, automation robots, you know, and that a long, long time ago in a universe far, far, far away, I was automated industrial technology robotics. So, and that was when the dinosaurs roamed the earth and things like that happen. Okay, so, let's talk about, now, what do you feel the role, now, this is a loaded question, what do you think the role of federal state and local government in providing assistance to manufacturing companies in California should be? <<Bill Genevro>> If you look at the history of the United States, and particularly the state of California, all you have to look at is what happened after World War Two with the GI Bill. My father was an industrial arts instructor at Long Beach State College until the state of California decided to no longer fund machinery purchases. And then, they decided to no longer fund repairs of the machinery they already had. And eventually, they figured out a better use for that equipment or for that space. So, in a relatively short period of time, we went from having one of the best technically sophisticated education programs in the United States, or even the world, to being way down on the list. I think if you solve the education issue, everything else follows from that. <<Scott Melton>> When I think about the 50's and 60's as a kid, we used to have three car companies here. We used to make airplanes here and I think what California has to make a decision is, it's okay to make stuff here again and to manufacture all kinds of products. Unfortunately, we're not going to rights off, or for Google, It's just not going to happen. And to provide the quality of jobs that people need, the ones that pay them a decent wage, and give them a good standard of living or manufacturing jobs, that's just the fact. And so, we got to decide in California that we want to make stuff again, we want to be a place where people make stuff each and every day. From a federal government, you know, I'm going to say the politically incorrect thing, but it's energy, we got to become energy independent. We have an opportunity to reshore, to be a low-cost manufacturer, to be a very competitive manufacturer with low-cost energy. And so, I think that's one thing. And then, obviously education. The more we can do to educate the next-generation technicians and engineers to implement that advanced manufacturing, not just learn about it but implement it, how do you take it out. Okay, you graduated from college. Now, let's go out and implement it. Because, you know, they all want to do it. They just need the skills and the tools to do it because they're great, you know. You go up to, you know, Tesla or you go up to SpaceX, it's just a great environment, because it's a bunch of young engineers that don't know they can't do something, and they go out and conquer the world. It's a great environment. <<Kelly Kline>> So, I think it's very interesting how the role of economic development has changed in the last several years. And I think we used to be looked at as kind of a subsidizer, if you will, or an attraction agent. You know, what can we do to get you to move here, and how big of a check can we write to offset your cost in doing so. For better or for worse local government, especially, doesn't have any pots of money from which to write checks anymore. So we've had to rethink our role and what we've learned and just having a conversation about this at my table, earlier today. But our role... primary role is that it's kind of, someone who retains and gross businesses. Because that's 98% of business growth that happens, is either start-ups or it's companies who already exist growing. It's not from attracting the 2% to come to your city. And how we do that is being kind of a master facilitator, a convener. And we're finding most value in terms of, kind of creating the right kind of ecosystem through those kinds of activities. One of the things that we love to do is working with people like Manex to get manufacturers together and East Bay Manufacturing Group is another example of this, where... what we find is that manufacturers get so busy doing what they're doing. Connie was telling me that she was on a conference call at the airport between 9-10 today. You know, it's very hard to spend the time getting to know other people in the business from either supply chain perspective or another customer perspective. So, if we can play a role in that, that's good. I also find that people from a regulatory standpoint, they don't really know if it was the state or the city or the federal government that got in the way. They just know that government was a barrier. And so, we have a responsibility at all level of governments to understand the different regulatory issues up and down the lines, so that we can be the facilitator whether or not it's in our warehouse, or it's in somebody else's. We should know the right people to connect with to be able to unstick something, if you will. And then last but not least, we're also hearing from our companies that they need help on a global scale. That the boundaries aren't just the local air anymore, they need to go global in order to be competitive. And they're looking for help in that area, too. I don't know exactly how we do that, but those are the kinds of questions that we're getting from companies, in terms of, can you help us with X. It's a much broader thing than it ever used to be and it's much different and more valuable than a check. <<Connie Bates>> Two things come to mind on this. The first one is, right in line with what Kelly was saying, and that is facilitation. I think one of the best roles that government can have is being a knowledgeable database, someone that a company can go to and say, ""How do I find this out? What do I do here? Who do I go to?"" And to have a government that actually understands that the role is active and not passive. And as the city of Fremont does, and I've been involved with them in other things. So, she is... Kelly, speaking of things that they do, very active, very much out reach. And I think when you have a government that's more active, that is much more attractive to a manufacturer. Because they actually believe they have their best Interest and their growth in mind. And it begins a relationship, and not many of us can say we have a relationship with our government or officials. I think that's really an important part that's missing right now. Second one I wanted to just touch on is education. But specifically, one of my personal pet peeves is just that when we speak of education, everyone's talking about the four-year college route and on if you're going be working at Google or Tesla, on for your MBA or your doctorate. But I think it's really important and what's overlooked right now is having a clear and an attractive-looking path for the non-college attendees, for those, who as a senior, they really don't want to spend four more years in school. They're quite talented in many ways, maybe with their hands, or how they think and they deconstruct things. And, really, when... if you're in manufacturing, you would be talking to them and know immediately that they would do fabulously in manufacturing and could do quite well, as well. But unfortunately, the vocational path is really not emphasized at this time. And so, I think we really miss out for a lot of youths, who to make their parents happy, and I have two daughters who did graduate from college, okay, sorry. But for parents who are wanting the best for their kids, it usually starts out as the one in college. But really, ultimately, they want them to be happy. And if the path that's going to make the happy is going off and doing something with their hands or getting a six-month... going to a training for six months and being able to go as an apprentice immediately, I just think that needs to be further developed. And I think that in this part, the government, maybe, perhaps, needs to step in because we have really switched our focus over to the educational path that says you go to college or you're a failure. <<Ed Tackett>> Thanks. Let me wrap this one up. We've got education. It's got to be okay to make stuff in California. We have to change that perception. It's got to be cool to make stuff and we need to encourage the students that if they, you know, it's okay to make things. Energy independence, that's always a challenge. And creating an economic ecosystem and supply chain. I go to a lot of meetings, I keep hearing supply chain. It terrifies some of the large Fortune 50 companies that their supply chains, at any moment, could collapse because of various reasons. The knowledge database is a really cool idea for government. I really like that idea. And the career pathways, because that's really what you're talking about. I know Jose is working on some initiatives. Is Jose here? There he is. Now, he's back and he's doing coffee back there, something. Alright, so, can we open it up for questions? <<Audience>> What is it that companies, and maybe, in particular, small manufacturers, what is it that they're spending too... that they believe they're spending too much money on? You know, we've talked about some things. Is it the cost of space? Is it the cost of capital? Is it market research information? Is it healthcare costs for their employees? What is it that is costing too much money in California? <<Scott Melton>> From what I hear the most often is healthcare costs and workers' compensation costs. Today, I have more people that really are implementing automation and robotics, not so much for... to eliminate workers, because they don't plan to eliminate a worker. They're going to find them another job. Nobody's getting laid off. But, what they're looking at is a back injury is $350,000, a wrist injury's a $150,000. And those costs just scare the life out of them, so that's the one I hear, every day. <<Bill Genevro>> I can't really complain because I don't have very many employees. And I do that for a reason. For the reason that he just cited. And it's easier for me to manage my costs, the fewer people that I have. My particular company isn't well-situated for robotics. So, that's not an option. So, I do a lot of contract manufacturing. We do the design work, we do the testing, we do the development, and we get the approvals. And then, we go out and contract with other people who have the problems that he just described. <<Audience>> I applaud Kelly and the city of Fremont for everything that they're doing, for helping companies with the red tape and unknown communities to open. But you mentioned that 22 years you've been doing this and regulatory keeps popping up. And all the slides we saw today of companies leaving our state, so nothing's been done. I mean, 22 years of this has... I mean, this is great, all a great discussion, but where is it going? <<Bill Genevro>> Manufacturing as an industry does not sell itself. As the woman at the end said, and this gentleman said as well, you have to make it attractive to be in manufacturing and you have to make the state of California understand that manufacturing is beneficial. Everybody in here appears to be old enough to vote. So, you know, that's your tool. Unfortunately, it's not the best tool, unless you have a lot of money. But we've got to figure out how to get people in office that see it the same way we do, that manufacturing has to come back to California. I can't do it by myself. You know, everybody else has to participate also. <<Ed Tackett>> I don't have a magic bullet on the regulatory affairs. I don't know... But it's been one thing after another with regulatory affairs. And usually, it's different things at each conference I've been at. But I think as a whole, I think the state should make a concentrated effort, maybe through GO-Biz, or maybe through an industry organization, to really take a microscopic look at how the regulatory affairs are formulated at the state. If you have people making policy and they've never actually been on a manufacturing floor, we should do a petition and put that on the ballot. If they're going to make a regulation that affects manufacturing, they have to spend 48 hours inside a manufacturing shop. But that's the only way I can really see is how to solve it is to use our professional organizations to make that happen. I would like to thank our panel. You guys are wonderful. <<Rob White>> Thank you, panel. Thank you, Ed. And to quickly answer your question as our other panel comes up, I think one of the other things we can do is create social innovation in our public... civic organizations. The more we push risk, the more we're going to have a problem. So, when we reduce risk, we don't get to the kind of creativity you're looking for. So, help us out and we'll make sure that that happens.