Billy Riggs (00:38)
Hey Vipul, go on.

Vipul Vyas (00:39)
one.

Good, how are you?

Billy Riggs (00:41)
Okay, yeah, surviving. Well, this is episode two of rewiring the American dream. And if you recall last time we spent a lot of time kind of defining what we meant by the idea of rewiring and just to refresh folks. That concept was really just kind of rethinking and resetting.

this idea and kind of starting at zero from a strategy standpoint and I think you know we came up with some lessons but I think they were kind of management 101 lessons at the end do you want to kind of refresh everyone in terms of kind of what our our management 101 lessons were at the end of our last episode

Vipul Vyas (01:29)
was just have a goal. ⁓ And, you know, it reminds me there's a Dean Preston who was a former supervisor on the Board of Supervisors in San Francisco, part of the city council basically, and was not re-elected, you know, had a post today, or it was yesterday, recently, that essentially said that.

Billy Riggs (01:31)
Yeah.

Vipul Vyas (01:50)
The police in the city who he was never very aligned with or aligned with were taking sick time and using that sick time to go work private security jobs. And as a result, they were booking lots of overtime for the people who were covering for them. And then obviously they were increasing their salary because they're still getting paid, most likely for the six days, sick days, et cetera. And so it was a rant basically about how the police are bad.

and the reason this sort of circles back to what we're talking about having a goal is it's a rant. It's a rant against the police which are political opponents of his and he wants, you know, after being in office a jab at him I would assume or something. I don't know, you know, it's but the thing is is that it could be a very legitimate point like look this level of

you want call it, know, corruption or fraud is happening. This is taking place and a city audit has revealed this. But if you don't have a guiding North Star or a goal to say, well, look, our goal is to make streets safer.

And we want to do that by making sure that the X millions of dollars that we spend on the police force is used wisely to achieve that goal. And therefore, my policy prescription is to say that negotiate with the union and say, look, if you're caught doing this, it's grounds for automatic termination, something like that. Or if you caught doing this twice. Now, I don't think you can do that because that means it involves

holding public sector unions accountable. You may even introduce performance-based pay, all kinds of things that on the other side of the equation, where he is allied with labor, it's gonna be a problem. So his North Star is to essentially damage, ridicule, humiliate, what do you wanna call it, a political foe as represented by the police department.

Civic goal doesn't exist from what I can tell or it's not clear and a civic goal you would hope is the safer streets and The best use of limited resources to achieve that goal in the most impactful way possible But that's not articulated in the absence of that points to the absence of a goal in the absence of that goal points to an absence of intent Which is the clear problem? So that's the management 101 lesson

Billy Riggs (04:05)
Yeah.

Vipul Vyas (04:16)
I think I'd take away from all that. Now, not taking anything away from his potential argument or his findings, but the fact that they don't lead to a suggested remedy that's very concrete and specific is the issue.

Billy Riggs (04:31)
Yeah, well, and thanks Dean for your service. I just realized, Dean, that I played City Sessions with you way back in the day at Club Wazima. So thank you for that too. City Sessions was awesome. So Dean did a lot of great things for the Visadero corridor and the local music scene way back in the day. I actually forgot about that, that I played music with Dean because he did a whole music thing early on.

Vipul Vyas (04:34)
That's right.

Good.

Billy Riggs (04:58)
with City Sessions, which was this whole acoustic music thing that happened in Ethiopian restaurant on Divisadero early in the day. no, think also with this idea of reset or this idea of rewiring and this idea of tech automation and kind of having a strategy. And we got to give shout out to Matt Mahan here in the Bay Area with City of San Jose, who's one of these dynamic new young.

mayors in the US that's really kind of using strategy, but it's also not a scrape clean. I mean, I think what we're seeing now is like harnessing the best of policy and the best ideas, but also ideas that aren't new. It's drawing ideas that are grounded in...

in past theory, you know, that we can draw on the ideas of Locke and Jefferson and the great thinkers of the past. And Vipple, I know that you are passionate about the Federalist and the Anti-Federalist papers and the great thinkers of the past. And I know that your son sings Hamilton songs all the time, but you we have to...

Vipul Vyas (06:05)
Yeah.

Billy Riggs (06:07)
We do have to, we remember that kind of the values of the founding fathers and the values of democracy and kind of that are, I think espoused in the constitution with which we, I believe our elected officials do pledge to uphold and are sworn to uphold.

are really important and I think a lot of what we, I think we should ground ourselves to in terms of leadership and what we kind of are ascribing to in this idea of rewiring is basing those policies on this grounding these ideas in norms related to ideas that are already based on

Kind of things that we know already work too. you know, sometimes I think like everything new has already been, everything new under the sun, we kind of already know. We know what works. So let's not reinvent the wheel.

Vipul Vyas (07:11)
We definitely know a lot about human nature. Maybe not everything, but quite a bit, just through thousands of years of observation and experimentation with what motivates people.

I think that the tension you described, the Jeffersonian Hamiltonian tension in the US as long as persisting, which is basically a tension between decentralization and centralization of both authority and resources and action. And so when it comes to San Jose, and you mentioned Matt Mahan, I think a few things he's doing, he's embracing technology and actually he's from a GovTech perspective, which is great.

He's implemented realistic strategies around homelessness and basically said, look, if you refuse treatment, then your options aren't to continue to live on the street because there are negative implications to that for the individual and for broader society.

And so he's just being realistic. And I think he may be perceived to be radical in that regard, but in truth, most of the European cities that have solved or been good at dealing with homelessness have generally done the things that he's suggesting we do. So he's actually, as you said, he's not being radically cutting edge and trying and doing something.

completely avant-garde, he's actually implementing strategies that have been tried elsewhere and generally have worked. Which is, your options are you can get treatment, get help, get social housing or some form of it with the treatment, or you can't stay here. But living on the street is no longer a viable option.

because it probably never really was. It's a slow form of, in many cases, not all, but in many cases, it's slow form of suicide.

Billy Riggs (09:03)
Yeah, and if we recall, since we're doing this, it's kind of additional content for our Autonomous Vehicles in the City initiative. And related to our Automation and Innovation initiative, Matt was one of the keynote speakers in our 2018 Autonomous Vehicles in the City Symposium, so when he was CEO of Brigade. So it was kind of cool, full circle kind of citation that Matt is now.

mayor of San Jose. but I think that leads us to, you know, full circle to Vipple. You and I are now doing this, this crazy rewiring the edge podcast. And we're talking about automation. And that was not just about machines. It's about people. And that's really was our focus. Wanted to be our focus today. So let's, you know, let's dive in. Automation is not just about machines, automation and innovation.

Vipul Vyas (09:57)
Well, when people talk about automation today, they think about it in a few different contexts, one of which is artificial intelligence, obviously, and the fact and the fear that people have that, or let's say it's the fear more than the fact, because we don't know, of AI automating away any number of jobs now and potentially all jobs over time. That's a fear. The alternative view is that

Billy Riggs (09:57)
⁓

Vipul Vyas (10:21)
you know, around the turn of the century, 40 odd percent of jobs were agricultural jobs, and today it's about 2 percent. And it's steadily dropped over the past century, and people found other things to do. And there's an argument that we will find something else to do, even though AI is doing all these other wonderful things, and that AI could theoretically be, you know, smarter than us, and that scares people because, you

It's not the smartest, as we have seen, the smartest of the species on the planet tend to dominate the others. So we'll have to see how that works out. more tactically and practically in the short term, as you have some job displacement, as there will be, and it's a matter of, will the rate of job displacement from AI exceed

the rate at which we find new things to do and new ways to organize society and our political institutions adapt to these realities. And my suspicion is they won't. None of that will happen fast enough. And then people will think about things like universal basic income. How do we essentially or other welfare models, how do we effectively keep people relatively whole given this disruption? And can we re-skill people? Can we reorient and re...

Redirect them to other things that we are now understanding are more going to be more valuable in this age There's that of course, but there's also just another simple thing that That I think occurs in terms of let's just talk about universal basic income the idea of that Society becomes super productive because these machines are super productive and as a whole we have more output more productive output both physical in terms of goods and services

And so society as a whole is richer because more things are able to happen. Now that wealth could get aggregated at the top and the people who control those means of production, to draw on some Marxist thought, create sort of a stranglehold on this development. And then that just worsens everything we have today in terms of wealth inequality, et cetera.

So one way to create universal benefit, if not universal income, is to create infrastructure. And so the path to doing that is to say we have to consciously now, if we see that this AI revolution is coming, this is gonna happen, we need to invest in our infrastructure, our services, our civic capacity.

that everyone can take advantage of. The one that we all take advantage of today are roads. The ability to be able to get around and go from one place another, you you do have to have a car, but the capacity to do so is much better than it was, you know, 100 years ago. To go up and down the peninsula in the San Francisco Bay area was by private railroads or probably an all-day trip on a pretty uncomfortable road.

Now that's all obviated by the fact that you have all this infrastructure, this civic, municipal, and county, state, federal infrastructure that's been created. And that's one of the easiest and best ways to create universal benefit. And so we have to get lot more serious about that. And that is benefit in the terms of...

If I was going to say again, think last time I may have rattled these off if I was king for a day the Several areas that focus on are going to be energy transportation infrastructure and infrastructure in general education health care and an education and Those five and maybe a couple of the other one. I'd probably throw in there would be safety so

if you do those handful of things really, really well, you become competitively attractive, but you also are focused on the things that make it easier to do business as well, and just to live. And I think that's where the whole point around the North Star is, if you have a clear definition of where you want to go in terms of those several dimensions, you'll be able to move the needle ideally. I'll close on this thought by saying, if you look at how Mayor

Lurie in San Francisco's organized his departments. It's roughly along those lines He said these are the big things on a move the needle on so kind of he's kind of clustered things in those rough groupings there's a few things he's omitted but like around energy and other things but Roughly that's that's an approach. He's taking

Billy Riggs (14:34)
Mm-hmm.

Interesting. I think also when we think about these areas that you've identified, they really map well to this idea of re-skilling and empowering future workers as well. And also the sectors that potentially open up opportunities in the future.

And I'm wondering too, if kind of how these fit within your vision of what we need to think about in the future of on-shoring. And I think you've thought a lot about this topic when we think about on-shoring jobs. when we, how, you know, how should we be thinking about defining,

the word on-shoring in the context of what's happening politically right now with tariffs and with this idea that right now we see global contraction from an economic standpoint when, you know, I'm, I'm from an economist standpoint, am definitely a globalist and more of a free trade economist.

and am a borderless.

economists. And I am not... I am a little conflicted with the way I see the trends these days. But how are you seeing this trend of of on-shoring parallel the reality at current?

Vipul Vyas (16:07)
think the tariff thing, ultimately everyone is trying to get to zero tariffs. The tariffs, I assume, I hope, are negotiation tactic to get to the point where you do get essentially relatively reciprocal trade in terms of, and that we've actually, or historically have that anyway, but.

you actually reduce even existing trade barriers. So that would be the ideal outcome is that this is a temporary tool used to get there. Probably a very blunt instrument, usually done behind closed doors, not so much in public this way. I don't know if that works better. We'll have to see. It's a tactic that's, I can at least say it's novel, the way it's being executed.

whether it will work or not, think we'll, like I said, we'll have to wait and see. But I the ultimate goal, let me just say that the ultimate goal I suspect is to get to freer trade actually versus a mercantilistic system with everyone having their own little worlds. but to answer your question, I think what'll happen is...

There's also a desire to become much more self-reliant, you know, and the US has done that for example in the space of energy, you we now one of the biggest oil producers in the world for good or bad So we don't depend on anyone in that regard unlike before Where that was a severe that was a serious constraint, you know when it comes to basic energy and food

agricultural output, though we do, I think we are maybe a net importer now, we generally can feed ourselves and we can, we provide ourselves our own energy, unlike in the past. So I think there's a recalibration to do more things of that nature, like that. And so one thing that's happened, or is happening, I think, is that US businesses saw

and businesses in general saw that it was just cheaper to make things in China as an example, as just one reference point. And so get cost out of your business by just producing stuff there. I think one of the things that people forgot about is that, and it's fascinating because Apple has this approach of being really connected from a vertical integration perspective from design to manufacturing and really owning the whole stack.

I think one of things we're learning is that when you do this overseas in this way, you are basically giving all your expertise to somebody else. If you look at Roomba, for example, all that expertise has gone to folks overseas and they just now make that thing better.

Because they can they own the manufacturing process they can look at the fact go down the factory floor They can see maybe you make this change. Let's prototype this very quickly they can make that happen all very fast and Do that in a way that they're constantly iterating which is much harder to do for Someone who's just designing, you know here from the US and that decoupling actually, you know the classic thing that I saw happen recently

close with this and my perspective is as a terrorist got ratcheted up there was these Instagram memes of a guy of a gentleman in China showing these Hermes bags these designer purses and handbags and saying look this is something that Hermes charges $38,000 for but I can make it for $1400 so Hermes is screwing you etc etc

And what I don't think he was completely conscious of the fact was conscious of was the fact that Basically, he's going I am okay stealing your intellectual property. In fact, that's just part of the game And you as the consumer should just cut out the you know brand name just come to me I'll get you the same stuff the same quality for much cheaper. But in that argument what everyone was missing is

I know how to all the stuff he described all the stitching the leather all the things that Hermes had sort of figured out and said We know it now, too We know the best kind of the hardware to use the best kind of leather to use the way to stitch this stuff We've now absorbed all that we can just do it Now Hermes does not now it's not true that Hermes makes her stuff there actually But the point is that if that were all that knowledge is now in the possession of someone else aside from that company

And they can just reproduce it. And I think what's happening now is people are figuring that out.

Billy Riggs (20:32)
Yeah. Yeah, I mean, for me, the idea of transaction fees or tariffs on products really just raise prices for consumers. horrible. I mean, it's horrible from the consumer standpoint. What it does, interestingly, is it promotes degrowth, which ironically is a

is a sustainability lever. So thank you Donald Trump and the Trump administration for supporting carbon neutrality. So because you're supporting less consumption and as much as we should.

You know, it's, you know, I think we will all be, you know, that we've got a lot of Grinch memes at Christmas time because Donald Trump will have stolen Christmas from a lot of kids because there will be a lot less toys around the Christmas tree for a lot of kids because Mattel will be have vacant shelves. But aside from that little, that little sidebar, I think Vipple's, you know, you're, you're kind of

illustration on the vertical stack is really important from an automation and job standpoint because this idea that the future workforce in the automation and innovation space, it is

super diffuse and complicated and this idea of vertical integration I think is fragmenting and this idea that that you will have the master

OEM or the master kind of software developer that that is kind of the the one ring to rule them all that controls and vertically integrates everything I think is a thing of the past and I think what we are seeing is is Definitely a trend to to have Not less and less vertical integrated and more

Distributed stack.

distributed not only workforce but also different hybridization of companies and distributed workforce, distributed teams, different types of customer, like different types of companies serving in different locations with different educational types and even if we took for example the company Waymo as compared to the company Cruz as two different types of

of automation companies. this goes, one of my bread and butter automation lectures, we saw Cruz as being a very tightly vertically integrated company akin to the traditional.

traditional auto manufacturer and You know did everything from their engineering to their customer support all in-house Everything from their software stack all the way down to their vehicle retriever was all done within the company Yes, GM was an investor, but everything happened within the ecosystem now Waymo is much different. They they source their vehicles from

from Ford, Jaguar, they had a partnership. They now have a partnership with Toyota, Hyundai.

and Zeager which is actually Chinese owned so it's fairly convoluted from a hardware standpoint. They have Google Alphabet software. They actually have a partnership with a French company from operations and a customer relations standpoint. They are actually handing over a lot of their

B business to consumer side to Uber and Lyft. I actually suspect that, and I recommend, have recommended that they potentially let go of a lot of that B to C stuff long term because I think there's a lot of, I think there's a lot of profit to be made by letting go of that B to C stuff long term.

B2C stuff is a, there's a lot of costs there and it's a lot of, that's trench warfare, I always tell my students, that's a lot of high cost and potentially low margin from a revenue standpoint. So it's the same thing.

Vipul Vyas (24:23)
Yeah, sorry, was saying that being decentralized or less vertically integrated is not a bad thing and it's easier to do these days and that's why it was done. But you should be vertically integrated where laws will protect things that are yours. And if you want to vertically integrate, then be aware that the things you develop and create may not

Billy Riggs (24:39)
Mm-hmm.

Vipul Vyas (24:47)
stay yours for very long. And it's fine to outsource many things, know, that's perfectly reasonable and desirable in many cases, let people focus on what they're good at.

But they may be good at taking your stuff and making it for themselves. mean, Foxconn makes Huawei phones now, right? And I'm sure some of the expertise they developed from making iPhones was an easy transition for them. So there are implications. And just think people have to understand that.

Billy Riggs (25:02)
Yeah.

So when we think about this idea of kind of moving to new kinds of jobs and kind of different types of distributed stacks, what do we need to think about when it comes to kind of new job centers, new jobs, and kind of like this idea of like new locations? Because one of the things that you and I uncovered like last year was that like there was

We didn't know how to build boats, for example, in the US at this point, and we were basically buying our warships offshore.

Vipul Vyas (25:52)
Yeah, mean, there are, going back to what we talked about before, we don't make a lot of things that we need here and can't and don't have a path to get there. When you talk about ships, ships really is, I think other people have described it this way, building a ship is a matter of taking lots of plates of steel and putting them together.

That's mostly what it is, putting together lots of big plates of steel. And we don't have the capacity, capability, and really expertise any longer to do that at any level scale. Our shipbuilding capacity relative to, say, China is 1.35 the size. I think maybe even worse, think it's one in, they can build 350 ships in the time it takes us to build one. I think it's actually a factor of 10 or worse.

So what does that mean? It means for the things that we need, we are wholly dependent on others. And if I was going to characterize what we've done to ourself, it's sort of self-colonization. Colonies typically provide raw materials to the colonizer to create manufactured goods to then sell back to the colonized entity.

And that's been the colonial model for a long time. It was enriching for the colonizer. And that's not with any value judgment. That's just with the mercantile model. That's how it worked. And people did it because it did work. But essentially what we've done that we've done to ourselves is have the top echelon of the country essentially play that role in moving that capacity overseas. So now you have lumber and cardboard and paper.

leave the port of SeaTac, Seattle, and for the Far East and come back with iPhones. Now just based on that real example, that metaphor, what does that tell you about who owns who in a way? And so getting back to your point on shipbuilding, this is one step of the things that we need to do here that people aren't thinking about strategically.

So municipal leaders would say, look, this has been something that the Navy, the Department of Defense, et have all been talking about on multiple levels, both for commercial shipping and also certainly military naval vessels. And no one is rushing forward to do something about it. Now, that's not totally true. Philadelphia did. The governor of Pennsylvania, the mayor of all made an effort to get a South Korean firm to set up shop there.

But again, no one is thinking about that. Right now we're more worried about just getting poop off the street as opposed to these bigger strategic questions of we have a workforce, there are needs out there in the market, how do we align what we can do with what's needed? And of course San Francisco, the Bay Area was where you had the Liberty Ships in World War II where we're putting out one Liberty Ship every 17 days. that capacity that theoretically probably deteriorated significantly but...

That is in the DNA of the area, but not taken advantage of.

Billy Riggs (29:01)
Yeah, I think this is a problem. I think you look at like what France is trying to do, for example, with revitalizing Dunkirk and what...

what we're trying to do with Merrill Island in the San Francisco Bay Area, what the Port of LA is trying to do in San Pedro. It's a lot of it boils down to cities and kind of job centers and urban planning and kind of how you think about the way you think about job centers and economic development. And I mean, at the end of the day,

Planning a new city and planning economic revitalization is not easy. It's gotten harder because you have less tools in your quiver. You have less tools to recruit businesses. It's harder and harder to onshore businesses with less and less...

tax incentives given kind of global tax havens and less and less tools to prohibit companies from going to.

countries with tax havens and no consensus on prohibiting countries with basically zero corporate taxes. There's no global consensus on countries with zero corporate taxes. That's a big kind of global taboo right now where there's not consensus. And I think we had some consensus where Janet Yellen had actually agreed to some stuff early in the Biden administration, but that was not finalized.

So I think there's a lot that we could talk about that. I think in some future episodes, I definitely want to get into the urban planning and talk about some new cities. I want to bring in this crazy new VC city, California forward, those of you, you're not from the Bay Area. There's a...

Vipul Vyas (30:48)
Is that still happening?

Billy Riggs (30:51)
proposal to build a new Greenfield city for 500,000 people in California in the eastern part of the San Francisco Bay Area called California forever.

very interesting concept and it is yeah it's still on the still on the table it's in eastern Solano County worth talking about within the context of urban planning but we're gonna stick on this idea of jobs in the future of kind of how we reskill and and think about the future of work for a little while

We've got some couple people we want to talk to, someone from the Chamber of Commerce about kind of the future of jobs in the kind of the workforce. I think people wants to talk to one of our friends from the city from Oakland and want to want to talk to some folks about the future of E-gov and how we can be smarter in terms of how we govern over the next few episodes. But, you know, as we think about kind of

automation and jobs and rescaling in the workforce. Fipple. Final words, jobs and kind of the labor equation for today.

Vipul Vyas (31:58)
There is so much happening that can disrupt and cause displacement and disruption that it needs to be a focus of leaders in the country. You have both the change in the of the trade structure, trade order in the world globally. That's one thing. And then you have these massive technology advancements.

And so both of those things are going to be an issue. And I think people aren't focused on it so much.

Billy Riggs (32:30)
Yeah.

Yeah, and I would say the same. I would add to that is that people always forget with every automated function, human intervention is still required. The human factor is still a requirement. When a vehicle

shuts down when there is a disengagement, when a brake caliper goes out of whack, when a vehicle needs to be cleaned, when there's a flat tire, when somebody graffitis the backside of a car.

it has to be cleaned. There's a lot of human intervention that still is a requirement in now and in the future of, I think, of what we're gonna experience.

Vipul Vyas (33:31)
I mean, think, yeah, ultimately machines probably can't be accountable.

They can't own it.

Billy Riggs (33:36)
There we go. There we go.

Machines can't be accountable, that may be the solution to the labor equation.

Vipul Vyas (33:44)
Yep. Cool.

Billy Riggs (33:46)
Thanks,

people. Have a good rest of your day, and thank you all for hanging with us, and we'll see you next time.