Thank you for that kind introduction, Marco (Bravo). I would also like to thank the organizers of the Texas-EU Business Summit for putting together such an excellent program.
As a Bostonian, I am well aware of the Boston/Austin connection first established in 1960 when John Kennedy named Lyndon Johnson as his running mate at the 1960 Democratic Convention. Although you will have to forgive me, America’s Team resides in Boston with the New England Patriots not here in Dallas!
Boston, Massachusetts has always symbolized our nation’s foundation and its history; Texas, its frontier and its future. Today our cities are two hubs, united by innovation. We both produce cutting edge technology—disruptive technology–in information systems, and bio-sciences which is not only changing the world around us, but changing how mankind lives on this planet.
That is why I am so honored to be here today. It’s my first visit to Austin. From the minute I stepped off the plane, I could feel this city pulsating with the passion of young entrepreneurs. And there is no place that better captures that energy than UT/ Austin. Hook ‘em Horns!!
Now, given the title of today’s event, I’m obviously here today to talk about business. Boosting business – or trade and investment – between the United States and Portugal has been my number one priority since I touched down in Lisbon just over two years ago.
A big part of this is promoting the U.S.-EU trade deal – which I promise I’ll come back to later, because it really is a big deal. But here, in this city, and in this state – still basking in the afterglow of South by Southwest – I want to start by talking about unicorns.
When I was growing up, like many of you in the audience, I thought a unicorn was a mythical horse with a spiral horn coming out of its forehead. A fairy tale creature.
Today, as you probably all know, the word means something quite different, especially in places like Austin, Silicon Valley, Boston, and New York. If you haven’t googled it yet, a “unicorn” is loosely defined as a start-up valued at $1 billion or more. That’s billion with a B. There are 174 companies in the world that have reached “unicorn” status. So, apparently unicorns are real, and they are multiplying. They do everything from selling eyeglasses online to launching rockets to supply the International Space Station.
The vast majority of these startups are headquartered in the US – 101 to be exact, including Mozido here in Austin. China is a distant 2nd with 36. And Europe collectively, has only 18.
This shouldn’t be a surprise. A big part of why so many of these unicorns are born here, or move here, is because of the American spirit of entrepreneurship. We’re risk-takers. We’re adventurers. We need no more evidence of the fruits of our frontier spirit than the gleaming city in which we now stand.
So, do not listen to those naysayers in the political or business world who bemoan the decline of the U.S. as a technology innovator and economic power. Numbers don’t lie.
So if a unicorn is something that is truly special and rare, the U.S. is a unicorn nation. We do exceptionally well in creating exceptional companies. That has been our history. Walt Disney built his dream company around a mouse. And then Steve Jobs took the mouse concept to a level that even defied Walt Disney’s imagination. And on and on it goes.
For our entrepreneurial spirit is contagious. Entrepreneurship is an expression of a universal desire for ownership and self-determination. Everywhere I go, from Austin to Boston, from Lisbon to London, I meet people who are ready to start something of their own.
This is a new generation brimming with ideas, who are ready to shape their own destinies. Instead of ideologies of violence or division, this spirit of self-determination can fill the void for young people who don’t see a future for themselves. And yet, there are also weighty obstacles. It’s hard to access capital. It’s hard to get the training, and acquire the skills necessary to run a business. It’s hard to build a network of mentors and motivators that can mean the difference between a venture taking off and one that crashes and burns. It is hard to persevere, but necessary. Even in successful companies it takes a long time to get an idea right.
Take X, formerly Google X. Employees are incentivized for “killing projects” and then inventing new ones. Eric “Astro’ Teller director of X’s laboratory summed it best when he said: “enthusiastic skepticism is not the enemy of boundless optimism; it is optimism’s perfect partner.”
So in many ways – and the businesspeople in the audience know this – the environment for success matters. That’s where government – that is, people like me, and many of those who share the stage with me today – can help. I’m an ambassador, so I will talk about what our foreign policy is doing to help businesses.
Now you may think it strange that a diplomat is talking about business creation and promotion. That fact is that economics and market forces are at the center of U. S. foreign policy. The influence of a nation is no longer measured by the size of its army, but by the strength of its economy. And using economic statecraft to boost jobs and competiveness both domestically and to strengthen our allies—and our staunchest allies have always been in Europe—is vital to America’s global leadership.
So how can governments engage? First, we have an extraordinary ability to create networks. We can connect the next Mark Zuckerberg or Elon Musk to the right mentor, or to meet the right investor. I often say my greatest power as ambassador is the power to convene. People answer my calls and respond to my requests. We seek to prioritize resources to lend a hand up to those entrepreneurs societies have held back.
In Portugal, for example, my wife, Kim Sawyer, an award-winning entrepreneur, created an Embassy program called Connect to Success, which focuses on mentoring women entrepreneurs.
Forty years ago in Portugal women could not vote, nor could they travel without the permission of their husbands. Now, more women than men are graduating with Ph.D’s, and MBA’s and are starting companies. But they haven’t had the traditional support system to know how to grow those companies.
So we created a corporate mentoring program, an MBA consulting program, where teams of MBA students take on projects for women owned businesses and we provide free workshops. Going into our second year, we have helped over 600 women entrepreneurs in Portugal.
President Obama convened the Global Entrepreneurship Summit in Kenya last year—by the way where 3 out of the 120 companies selected by the White House to be presented were our Connect to Success companies. There we unveiled a unicorn of our own: More than $1 billion in new commitments from banks, foundations, and philanthropists to support youth and women entrepreneurs around the world.
This year’s Global Entrepreneurship Summit, the seventh edition, will be in Silicon Valley. This June, the world’s best innovators, thinkers, social entrepreneurs, and investors will get the chance to meet each other face-to-face, to compare notes, to make pitches, and to hopefully turn their ideas into a reality.
Later this year, Lisbon will be host to the 2016 edition of the Web Summit – Europe’s premier event for tech start-ups – featuring tens of thousands of participants from more than one hundred countries. The U.S. Embassy will be deeply engaged, all with the aim of making connections between American innovators and investors with their counterparts from around the world. I’m looking forward to seeing many of you there.
So, we can build networks, to connect those with great ideas to people with experience or capital to make those ideas a reality. The next thing government can do is cut the red tape. I know this might sound like a contradiction, but we are acutely aware that needless bureaucracy is the mortal enemy of economic success. We are trying every day to deliver crucial public services faster, more effectively, and at less cost.
I said earlier that I’d talk about the U.S.-EU trade deal – known as the Transatlantic Trade and Investment Partnership, or “T-TIP.” Let me start by saying this is a big deal. In many ways, this will be the biggest trade and investment deal, ever. The United States and the European Union already have the biggest bilateral trade relationship in the world.
Look in the pocket of anybody on the streets of Lisbon, and you’ll find an iPhone or Android device. Look on the street outside this hotel, and you’ll see people wearing clothing from Zara or H&M. Even without T-TIP, we already eat each other’s food, wear each other’s clothes, and drive each other’s cars. So really, this agreement is about making it easier to do what we already do. This is a common-sense upgrade to our economic relationship.
In fact, the biggest piece of this agreement is not eliminating tariffs, although there is still work to be done there. What is most needed is cooperation on eliminating regulatory barriers. Companies are deterred from entering new markets when their products are subject to duplicative registration requirements and conflicting regulations. It is simply cost prohibitive and the impact falls disproportionally on SME’s.
T-TIP is getting United States and European regulators to literally sit down at the same table, and work out a way to cooperate and simplify the whole process. From automobile standards, to medical devices, to textiles and clothing, there is almost no industry that T-TIP doesn’t cover.
We are pushing to close negotiations for this deal by the end of 2016. The sooner we do, the sooner businesses on both sides of the Atlantic will be able to enjoy its benefits.
And as the US lead negotiator has said, there is every reason for Europe to get this done while President Obama is in office because the rhetoric coming from the candidates seeking to replace him is not nearly as supportive.
And at the same time we’re closing T-TIP, we’re continuously advocating for our companies in Europe. In February, the United States and the EU unveiled a new mechanism for data transfers across the Atlantic, called the “Privacy Shield.” The Privacy Shield is good for privacy and for trade, and will eliminate uncertainty for the thousands of European and U.S. businesses that rely on such data transfers to operate.
And in a broader context, we continue to push for an open and secure internet, in the United States and around the world. And it’s fitting to mention this in Austin – one of the most wired cities in the world. The fact is, the internet today is part of almost everything we do. So, it matters to all of us how the technology is used, and how it’s governed.
We want to keep the internet open, reliable, interoperable, and secure. We take this for granted, because this is already true in the United States for the most part. But the reality is there are state and non-state actors who are actively trying to undermine one or all of these elements.
Some countries – and you all know them – have tried repeatedly to make government entities the owners of the internet. At the same time, hackers – whether lone wolves or state-supported groups – are constantly probing the defenses of our infrastructure and our information systems.
On the first point, the United States has fought in the UN and elsewhere for what’s called a “multi-stakeholder” approach to governing the internet. This means that when it comes time to set rules for new technical standards around the world, everybody should be at the table – the private sector, NGOs, academics, engineers, and yes, governments, too.
There is an ongoing battle to keep this multi-stakeholder model, and we continue to clash with some states that would prefer governments have a monopoly on decisions.
And on cybercrime, we are working to promote international cyber stability. The goal is to create a climate in which all states are able to enjoy the benefits of cyberspace. We want the basic rules of the real world to apply to cyberspace: Acts of aggression are not OK. Countries that are hurt have a right to respond appropriately, and proportionally, to avoid harm to innocent parties.
At the same time we’re fighting malicious governments, others, like organized criminals, con artists, and thieves are also taking advantage of the internet to harm people. So we need a common response to keep our internet secure. As it stands, the best vehicle for international cooperation to fight cybercrime is the “Budapest Convention,” which is a legal framework defining cybercrime and its prosecution. The more countries that sign, the better. We also support the “G-7 Twenty-four Seven” network, which enables police and prosecutors from more than 70 countries to request rapid assistance on investigations into these crimes. So, from promoting trade and entrepreneurship, to fighting for an open and secure internet, government has an important and helpful role to play.
We want our businesses to succeed, and as you can see, we’re doing a lot to try and make that happen.
Now, I know that many in the private sector, and especially in the tech sector, believe the opposite. That we just get in the way. And with all this talk about T-TIP, GES, SME, or whatever other acronym you’ve heard today, I can understand that sometimes, we fail to communicate effectively.
But, as President Obama said here in Austin just two months ago, part of the problem is the fact that when government does great things, we take it for granted. It’s not a story that “trends” on social media.
Some people may doubt what I say. But I know those same people probably today checked the weather on their smartphones. Well, it turns out there are government satellites and weather stations facilitating that.
These same people are getting their traffic updates or their restaurant recommendations thanks to GPS technology developed by the U.S. military, all while using an internet that is still reliant on infrastructure built with, and protected by, government resources. As the President said then, “Every day, government is delivering for everybody in this room.”
And the good news is, we really are here to help. Just ask Elon Musk. Last month, as you’ve probably read, his company SpaceX succeeded in landing its Falcon 9 rocket on a floating drone ship in the Atlantic Ocean, after delivering a payload into space. And a couple of days ago he did it again.
Re-usable rockets like the Falcon 9 will reduce the cost of space deliveries from tens of millions of dollars each to just a few hundred thousand. The event was a true feat of engineering, as well as a product of Musk’s intelligence and raw drive. But what you may not know is that SpaceX wasn’t always so successful.
From 2006 to 2008, the company had only succeeded in one of four launches of its first rocket, the Falcon 1. By late 2008, the company was on the verge of bankruptcy, generating little revenue while burning through cash on failed rockets and the development costs for new ones. By his own account, having exhausted his own funds and personal loans drawn from friends, that period marked the darkest hours of the worst year ever in the life of the cash-strapped entrepreneur. He needed a miracle. Then, two days before the Christmas of 2008, he got that miracle. NASA, announced it would award a contract valued at $1.6 billion to SpaceX for 12 flights to resupply the space station. Musk has famously spoken of breaking down in tears upon learning the news that the government had saved his company.
So the take away is this: Government can be part of positive change, convening and catalyzing people in the private sector to take on some of our biggest challenges. You have the brainpower. We in government have the means. Together we can do great things for the future of the world. Thank you.