WEBVTT - Daycare Closures Imperils US Workforce Gains 0:00:01.360 --> 0:00:05.680 This is Bloomberg Business Wait inside from the reporters and 0:00:05.880 --> 0:00:09.440 editors who bring you America's most trusted business magazine, plus 0:00:09.520 --> 0:00:13.680 global business, finance and tech news. The Bloomberg Business Week 0:00:13.720 --> 0:00:19.080 Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio. 0:00:20.800 --> 0:00:23.560 Tim, one of the things the consequences of the pandemic, 0:00:23.600 --> 0:00:26.280 that's maybe one of the more positive bits that's come 0:00:26.320 --> 0:00:27.920 out of the past couple of years is that women 0:00:28.000 --> 0:00:31.680 in the United States have made historic gains in terms 0:00:31.720 --> 0:00:35.040 of labor force participation in recent months. The participant pation 0:00:35.200 --> 0:00:38.440 rate for women aged twenty five to fifty four in particular, 0:00:38.560 --> 0:00:41.440 hit seventy seven point eight percent in June. That is 0:00:41.440 --> 0:00:45.440 an all time record since that data was started to 0:00:45.440 --> 0:00:48.720 be collected back in the nineteen forties. But now all 0:00:48.760 --> 0:00:52.280 of that might be at risk because twenty four billion 0:00:52.320 --> 0:00:56.240 dollars in pandemic era government aid for takecare providers is 0:00:56.240 --> 0:00:57.639 set to run out at the end of September. 0:00:57.920 --> 0:01:00.000 That's bad news, really bad news. 0:01:00.080 --> 0:01:03.440 I mean, it's such an important part of keeping women 0:01:03.520 --> 0:01:04.959 in the workforce, and so for that I want to 0:01:04.959 --> 0:01:08.120 bring in Read Pickert. She wrote this great story we 0:01:08.200 --> 0:01:10.880 have out on Bloomberg dot com in the Bloomberg terminal. 0:01:10.959 --> 0:01:13.639 Right now, she's the US Economy reporter and she joins 0:01:13.720 --> 0:01:18.039 us from our Washington DC bureau. Read first, tell me 0:01:18.200 --> 0:01:21.880 why are daycares so on the edge and so dependent 0:01:21.959 --> 0:01:24.600 on this twenty four billion dollars worth of funding that's 0:01:24.600 --> 0:01:26.120 set to run out at the end of September. 0:01:27.120 --> 0:01:29.200 So if first of all, thank you for having me on. 0:01:29.280 --> 0:01:31.440 But if we rewind the clocks back to the start 0:01:31.480 --> 0:01:35.600 of the pandemic, So when we saw daycares clothes, schools clothes, 0:01:35.680 --> 0:01:39.959 and suddenly parents, both mothers and fathers were scrambling to 0:01:39.959 --> 0:01:41.560 try to figure out what to do with their kids. 0:01:41.880 --> 0:01:47.160 We saw this huge decline in workforce participation among women 0:01:47.240 --> 0:01:50.400 ages twenty five to fifty four. And what you saw 0:01:50.600 --> 0:01:53.200 as we moved on into twenty twenty one, we saw 0:01:53.240 --> 0:01:56.800 the American Rescue Plan really step in with this billion, 0:01:57.120 --> 0:01:59.800 you know, twenty four billion dollar set of you know 0:02:00.120 --> 0:02:02.840 money for these childcare providers to help them keep their 0:02:02.880 --> 0:02:05.840 doors open. And childcare providers could use this money in 0:02:05.880 --> 0:02:07.960 a lot of different ways. So some of the main 0:02:08.000 --> 0:02:10.799 things that you saw, for instance, were you know, keeping 0:02:10.919 --> 0:02:14.000 up with the rising costs as inflation, you know, pushed 0:02:14.040 --> 0:02:16.000 up the cost of a variety of different bills that 0:02:16.040 --> 0:02:19.800 these providers had. You saw, in the case of paying 0:02:19.800 --> 0:02:22.840 their workers more or hiring more workers to open up 0:02:22.840 --> 0:02:26.519 more spots, just because you know, a lot of lower 0:02:26.520 --> 0:02:30.200 paid sectors started seeing some pretty significant wage increases in 0:02:30.240 --> 0:02:33.160 the tight labor markets. So childcare providers had a really 0:02:33.200 --> 0:02:37.720 hard time hiring and retaining their workforce. And so that's 0:02:37.800 --> 0:02:41.200 kind of the ways that these these providers have used 0:02:41.200 --> 0:02:44.160 that money. And so fast forward to now, the Century 0:02:44.200 --> 0:02:48.399 Foundation estimates that you know, more than seventy thousand providers 0:02:48.440 --> 0:02:52.600 could be forced to close. But you know, I think 0:02:52.760 --> 0:02:56.840 even putting that number even more in perspective, closing is like, 0:02:57.400 --> 0:03:00.920 you know, the worst case scenarios. So in ordered before 0:03:01.080 --> 0:03:04.040 a childcare provider clothses, they're going to try all different 0:03:04.400 --> 0:03:08.239 types of things to plug that hole. Whether that's raising 0:03:08.280 --> 0:03:11.320 tuition for parents that are already struggling to pay it, 0:03:11.919 --> 0:03:15.400 whether it's reducing hours, which you know is something that 0:03:16.080 --> 0:03:19.760 has already limited a lot of parents' ability to you know, 0:03:19.800 --> 0:03:22.600 really participate in their jobs in the workforce, and where 0:03:22.800 --> 0:03:26.600 flexible working has really stepped in, or have to have 0:03:26.720 --> 0:03:31.000 less staff, which means way less childcare spots available for 0:03:31.120 --> 0:03:32.680 children across the United States. 0:03:33.000 --> 0:03:33.200 Read. 0:03:33.240 --> 0:03:35.480 One thing that was so surprising to me, as somebody 0:03:35.480 --> 0:03:38.520 who pays so much money every month in childcare costs, 0:03:39.040 --> 0:03:43.000 was how little childcare providers get paid. There's this value 0:03:43.120 --> 0:03:46.680 chain that occurs when a parent pays a childcare provider, 0:03:47.240 --> 0:03:49.840 and I don't know where that money is going because 0:03:49.880 --> 0:03:51.800 the people who work there are not getting paid much. 0:03:51.920 --> 0:03:54.080 What's happening here, So. 0:03:54.320 --> 0:03:58.280 You're exactly right. Childcare is a profession that most people 0:03:58.320 --> 0:03:59.880 are in it for the love of the job, not 0:04:00.080 --> 0:04:03.880 for the pay. According to Bureau Labor Statistics data, the 0:04:03.920 --> 0:04:07.320 average childcare worker made fourteen dollars and twenty two cents 0:04:07.360 --> 0:04:11.480 an hour last year, which, for perspective, a lot of jobs, 0:04:11.480 --> 0:04:14.400 for instance, somewhere working at Target, for instance, the starting 0:04:14.440 --> 0:04:17.599 pay you know, may start at fifteen to twenty four 0:04:17.640 --> 0:04:20.280 dollars an hour, and so you can really see how 0:04:20.320 --> 0:04:23.400 these childcare providers it's difficult to you know, hire and 0:04:23.480 --> 0:04:26.359 keep these folks. But a lot of this, you know, 0:04:26.480 --> 0:04:29.560 goes into this idea of this broken system that we've 0:04:29.600 --> 0:04:34.240 heard people across the aisle talk about, and it really, 0:04:34.320 --> 0:04:37.760 you know, is this system where parents are paying really 0:04:37.800 --> 0:04:42.599 can't paign anymore. The providers are trying their best to 0:04:42.640 --> 0:04:44.920 pay their workers more. They want to pay their workers more, 0:04:44.960 --> 0:04:47.560 but they're paying a lot in terms of insurance and 0:04:47.680 --> 0:04:51.839 overhead and renting the space that they're in and then 0:04:51.920 --> 0:04:53.400 at the end of the day, you end up in 0:04:53.400 --> 0:04:57.120 this situation where kind of no one's quite happy. And 0:04:57.160 --> 0:05:00.520 it's part of the reason that we've really seen more 0:05:00.680 --> 0:05:04.400 band aid type efforts when it comes to the you know, 0:05:04.720 --> 0:05:08.600 Congress's role in terms of providing funding, just because the 0:05:08.600 --> 0:05:11.680 inherent system doesn't quite work economically well. 0:05:11.720 --> 0:05:15.440 Tell me about the change from before these this money 0:05:15.480 --> 0:05:18.680 was initially doled out. Was this supposed to just kind 0:05:18.720 --> 0:05:22.760 of bring these childcare providers through this tough period or 0:05:22.880 --> 0:05:24.760 was it, you know, was it to allow them to 0:05:24.760 --> 0:05:26.760 get back on their feet, or was it did it 0:05:26.760 --> 0:05:30.599 truly bring childcare to people who weren't able to afford 0:05:30.640 --> 0:05:34.240 it for their families before and was that the intention? 0:05:35.760 --> 0:05:38.200 So a mixture of all of these things. So I 0:05:38.200 --> 0:05:41.600 think the importance of talking about childcare is the pandemic 0:05:41.680 --> 0:05:45.760 shed a lot of light on how stressed this sector was. 0:05:46.480 --> 0:05:50.600 But it's been a challenging spot well before the pandemic, 0:05:51.240 --> 0:05:53.640 and I think, you know, in the case of looking 0:05:53.680 --> 0:05:57.040 at what this money in particular, did it really helped 0:05:57.080 --> 0:06:01.080 address the immediate problems Econnie was facing. The economy saw 0:06:01.160 --> 0:06:05.919 this soaring, soaring prices, and so from a childcare perspective, 0:06:06.440 --> 0:06:09.520 that meant higher costs for rent, higher costs for utilities 0:06:09.560 --> 0:06:13.840 and electricity and groceries that they're providing the children at 0:06:13.880 --> 0:06:17.320 their daycare. It meant a tight labor market where it 0:06:17.400 --> 0:06:22.160 was even harder to offer someone such a low wage 0:06:22.200 --> 0:06:24.760 in comparison to all of these other sectors and expect 0:06:24.800 --> 0:06:28.800 them to stay. And so, you know, this was a 0:06:28.880 --> 0:06:31.840 measure that was meant to help in the short term. 0:06:31.960 --> 0:06:35.359 But the reality that we're living in economically hasn't changed 0:06:35.400 --> 0:06:38.920 a lot. Prices are still really high, the labor market 0:06:38.960 --> 0:06:41.920 is still quite strong, and yet this money that helped 0:06:41.960 --> 0:06:43.599 them get through there isn't there anymore. 0:06:43.760 --> 0:06:46.640 Yeah, sorry to interrupt there, read, but I mean, why 0:06:46.680 --> 0:06:49.240 don't politicians just look at this and say, Wow, this 0:06:49.320 --> 0:06:52.400 is something we didn't know how much this money was 0:06:52.440 --> 0:06:57.280 going to do. Can't we, on a bipartisan basis, just 0:06:57.680 --> 0:07:02.160 fulfill this twenty four billion dollar measure? Why are politicians 0:07:02.839 --> 0:07:04.840 why is this, I guess even coming up, why are 0:07:04.880 --> 0:07:07.320 we facing this childcare cliffs as it's been called. 0:07:08.839 --> 0:07:11.960 So, like a lot of things in Washington, it's not 0:07:12.000 --> 0:07:15.160 so simple. This childcare is an issue that is a 0:07:15.200 --> 0:07:19.120 bipartisan issue and one that's widely supported by Republicans and Democrats. 0:07:20.000 --> 0:07:24.160 The way that folks feel that the sector should be 0:07:24.200 --> 0:07:27.200 supported differs based on who you ask. You know, one 0:07:27.320 --> 0:07:30.000 kind of promising thing that we've seen is we've seen 0:07:30.480 --> 0:07:35.640 a bipartisan childcare Caucus start to form with Representatives Rocanna 0:07:35.760 --> 0:07:40.040 and Nancy Mace bringing more awareness to this childcare cliff 0:07:40.200 --> 0:07:44.360 and this affordability challenge. But you've also seen, in terms 0:07:44.360 --> 0:07:47.720 of the appropriations bills that are now kind of getting 0:07:47.720 --> 0:07:52.200 caught up in the broader government shutdown mess, there is 0:07:52.240 --> 0:07:55.840 an increase in funding for what's known as the Childcare 0:07:55.840 --> 0:07:58.760 and Development Block Grants, which is a program that's been 0:07:58.800 --> 0:08:02.320 in place for a while. But the increase is, you know, 0:08:02.960 --> 0:08:06.560 nowhere close to the twenty four billion dollars that we 0:08:06.560 --> 0:08:08.880 saw on the American Rescue Plan, but certainly will help 0:08:08.920 --> 0:08:11.360 to some extent, but is no way offsetting that. 0:08:11.600 --> 0:08:13.000 So read just in the last minute that we have 0:08:13.040 --> 0:08:15.800 with you based on your reporting. And I know it's 0:08:15.840 --> 0:08:18.840 not your job to make predictions, but I'm a parent 0:08:18.880 --> 0:08:21.400 who pays for childcare. Right now, give me a prediction 0:08:21.440 --> 0:08:23.000 of what you think happens at the end of the month. 0:08:24.320 --> 0:08:26.560 So at the end of the month, nothing's going to 0:08:26.560 --> 0:08:29.640 immediately happen. This is a slow burning challenge that over 0:08:29.680 --> 0:08:32.120 the next six twelve months is when we start to 0:08:32.120 --> 0:08:36.800 see these centers start to close. But for parents it means, 0:08:37.040 --> 0:08:41.000 you know, particularly mothers, it means things such as cunning hours, 0:08:41.520 --> 0:08:45.600 switching to jobs that are less difficult, less productive, less 0:08:45.600 --> 0:08:48.760 time consuming and therefore often pay less, or dropping out 0:08:48.760 --> 0:08:51.920 of the workforce entirely, which would be really sad at 0:08:51.920 --> 0:08:54.760 a moment where women have really been leading this recovery. 0:08:55.240 --> 0:08:57.560 I encourage you everybody to check out this story thread 0:08:57.559 --> 0:09:01.360 of seventy thousand daycare closures in perils US workforce gains 0:09:01.400 --> 0:09:04.360 serious economic implications when we cannot take care of children 0:09:04.440 --> 0:09:07.920 in this country. The story by Reid Pickart and Kelsey Butler. 0:09:08.000 --> 0:09:10.080 Check it out on the Bloomberg Terminill, of course, also 0:09:10.240 --> 0:09:12.000 at Bloomberg dot com. 0:09:12.160 --> 0:09:15.679 If you're listening to the Bloomberg Business Week podcast, catch 0:09:15.720 --> 0:09:19.079 us live weekday afternoons from three to six Eastern Listen 0:09:19.160 --> 0:09:22.640 on Bloomberg dot com, the iHeartRadio app and the Bloomberg 0:09:22.679 --> 0:09:25.280 Business app, or watch us live on YouTube. 0:09:26.920 --> 0:09:27.120 Now. 0:09:27.200 --> 0:09:30.080 I've just recently returned from the Persian Golf where I 0:09:30.200 --> 0:09:33.720 was correspondent there for about three and a half years. 0:09:34.040 --> 0:09:36.200 And frankly, since the start of the pandemic, there is 0:09:36.559 --> 0:09:39.560 no part of the world probably that's flexed its financial 0:09:39.679 --> 0:09:44.280 muscle like the golf. You bankers have been chasing sovereign 0:09:44.280 --> 0:09:46.920 wealf cash. In Dubai, you know, you have a wave 0:09:46.960 --> 0:09:49.200 of Russians pouring in with their own assets hedge funds, 0:09:49.200 --> 0:09:49.960 ccrypto firms. 0:09:50.679 --> 0:09:51.719 But at the same time, you. 0:09:51.640 --> 0:09:54.280 Know, you look farther out across the Middle East and 0:09:54.320 --> 0:09:56.640 into Africa, and the pandemic and the war in Ukraine 0:09:57.000 --> 0:10:02.000 created sort of these devastating sustainability challenges for much, frankly 0:10:02.080 --> 0:10:05.480 larger populations. And that's why I'm so excited to have 0:10:05.640 --> 0:10:08.960 Norse Suade with us. She's founder and managing partner at 0:10:09.000 --> 0:10:13.120 Global Ventures, and she makes investments in the Middle East 0:10:13.120 --> 0:10:15.920 and Africa. She's normally based in Jubai, but Nor's joining 0:10:16.000 --> 0:10:19.600 us now from London, so Nor talk to me a 0:10:19.600 --> 0:10:23.160 little bit about some of the top investment themes for 0:10:23.480 --> 0:10:25.400 global ventures right now. 0:10:27.160 --> 0:10:28.800 So, first of all, thank you so much for having 0:10:28.800 --> 0:10:31.800 me and taking the time for us. As we see 0:10:32.160 --> 0:10:33.840 our part of the world, we take a look as 0:10:33.840 --> 0:10:37.640 you mentioned all of midlist in Africa, we are sector agnostics, 0:10:37.640 --> 0:10:40.680 so we invest across all sectors. What's really exciting to 0:10:40.760 --> 0:10:43.440 us right now are two key sectors at this point 0:10:43.440 --> 0:10:46.400 in time. The first is anything related to supply chain 0:10:46.440 --> 0:10:49.440 disruption and the second is anything that related to food 0:10:49.480 --> 0:10:53.320 security or agritech. And our investment theses are always really 0:10:53.360 --> 0:10:56.640 thinking through five years from now, which industries are massively 0:10:56.640 --> 0:10:58.920 different to five years ago. So where are we at 0:10:58.960 --> 0:11:03.920 inflection points? What's interesting? Where can cutting edge technology impact 0:11:04.160 --> 0:11:06.760 one hundreds of millons of lives in a very meaningful 0:11:06.800 --> 0:11:09.280 and financially awarding way as well. So when we think 0:11:09.320 --> 0:11:12.400 about supply chain and what's happened over the last two years, 0:11:12.720 --> 0:11:15.079 we think about it all the way from material science 0:11:15.200 --> 0:11:18.720 manufacturing where we still important ninety percent of everything and 0:11:18.760 --> 0:11:22.280 we want to start importing us through to logistics, so 0:11:22.480 --> 0:11:26.480 drone logistics on a commercial level versus using old trucks 0:11:26.480 --> 0:11:29.520 on rickety roads So when we think about the whole 0:11:29.600 --> 0:11:32.839 value chain of supply chain, our reckoning is if we're 0:11:32.840 --> 0:11:34.840 going to build manufacturing for this part of the world 0:11:34.960 --> 0:11:37.560 right now, if we're going to really disrupt supply chains, 0:11:37.679 --> 0:11:40.160 we're going to do them the way of twenty twenty three. 0:11:40.200 --> 0:11:42.040 We're not going to do them the way of the nineties. 0:11:42.400 --> 0:11:44.000 We're not going to build manufacturing. 0:11:43.600 --> 0:11:44.360 Facility that they're old. 0:11:44.400 --> 0:11:46.959 It's going to be three D printing at differ manufacturing. 0:11:47.400 --> 0:11:49.880 That's really one of the key areas right now is 0:11:49.920 --> 0:11:52.680 how do we come into our own when it comes 0:11:52.720 --> 0:11:54.000 to manufacturing and supply chains. 0:11:54.080 --> 0:11:56.199 Okay, so you talk management manufacturing and supply chains, but 0:11:56.240 --> 0:11:58.360 you also said another area of interest for you is 0:11:58.440 --> 0:12:01.800 anything that has to do with food accessibility, food security. 0:12:02.559 --> 0:12:05.520 Talk to me about how you are able to or 0:12:05.600 --> 0:12:07.600 working to grow food in the desert. I mean, I mean, 0:12:07.880 --> 0:12:09.600 what are the companies that you're investing in that allow 0:12:09.679 --> 0:12:09.920 for that. 0:12:11.200 --> 0:12:12.880 So there's a few, and you know, one of them 0:12:12.920 --> 0:12:15.200 is very exciting because it's really at that intersection of 0:12:15.240 --> 0:12:18.120 food and energy. So one of the company's red Sea, 0:12:19.000 --> 0:12:22.360 really has found a way to reduce energy consumption for 0:12:22.400 --> 0:12:24.120 the purpose of virtical farming. 0:12:24.440 --> 0:12:27.080 By ninety five percent by the way they desell a water. 0:12:27.600 --> 0:12:29.800 And this is really at the crux of everything because 0:12:30.200 --> 0:12:32.240 where we are there isn't ourble. 0:12:31.960 --> 0:12:33.439 Land, so you want to do vertical farming. 0:12:33.760 --> 0:12:36.480 Five years ago, vertical farming was something that was in 0:12:36.559 --> 0:12:39.560 proof of concept. We reckon five years from now, a 0:12:39.600 --> 0:12:41.800 lot of the food that's you know, being served in 0:12:41.840 --> 0:12:44.160 the region is going to be farmed in the region 0:12:44.280 --> 0:12:46.520 in these new innovative ways. And yet one of the 0:12:46.559 --> 0:12:50.200 biggest impediments to that was how much energy costs and 0:12:50.200 --> 0:12:51.600 how much energy consumption. 0:12:52.000 --> 0:12:53.839 Well to explain that, because I don't think everyone knows 0:12:53.880 --> 0:12:56.400 what vertical farming is, it's the idea that you're you know, 0:12:56.400 --> 0:12:58.840 you're stacking these crops on one another rather than laying 0:12:58.880 --> 0:13:01.440 them out on the ground. And they're greenhouses oftentimes, and 0:13:01.559 --> 0:13:05.080 you know, you need the lights and water in order 0:13:05.080 --> 0:13:06.920 for them to grow, right, And that's what makes some energy. 0:13:06.679 --> 0:13:09.439 And water is often the biggest energy consumer. 0:13:09.520 --> 0:13:11.640 So if you want to desalinate water, because a lot 0:13:11.640 --> 0:13:14.200 of these are hydroponics, so you need a lot of water, 0:13:14.280 --> 0:13:16.160 and a lot of the water that gets desalinated uses 0:13:16.200 --> 0:13:18.320 a lot of energy, and that's often. 0:13:18.120 --> 0:13:19.280 The biggest cost factor. 0:13:19.480 --> 0:13:21.880 So as we move from a world where you know, 0:13:22.000 --> 0:13:24.439 vertical farms or indoor farming and the way you stack 0:13:24.480 --> 0:13:27.720 them in hydropronics is still improved a concept and commercially unviable, 0:13:28.040 --> 0:13:29.839 and you want to take that so that that's actually 0:13:29.840 --> 0:13:32.559 how you produce most of the food. You really need 0:13:32.600 --> 0:13:36.120 to reduce energy consumption, and that's actually something that's across 0:13:36.160 --> 0:13:38.880 the region. So when we think about energy consumption, you 0:13:38.920 --> 0:13:40.800 have seven hundred and sixteen million people in the world 0:13:40.840 --> 0:13:43.720 without power, of which seven hundred million are in Africa. 0:13:44.360 --> 0:13:46.800 So when we think about how we consume energy and 0:13:46.840 --> 0:13:50.520 how we go down, you know, building businesses that require 0:13:50.600 --> 0:13:53.040 less energy, not because we you know, we care about 0:13:53.040 --> 0:13:55.160 the planet, which we obviously do, but because it's a 0:13:55.160 --> 0:13:57.440 better business because you cannot scale if you're consuming his 0:13:57.760 --> 0:14:00.440 huge amount of energy. And now that we've crack some 0:14:00.520 --> 0:14:03.240 of these things, red Seat Farms is exporting their technology 0:14:03.280 --> 0:14:07.520 and retrofitting farms in the US farms in Europe. Is 0:14:07.520 --> 0:14:08.400 this simply better tech? 0:14:09.280 --> 0:14:10.960 Yeah, But I guess one of the challenges that you 0:14:11.000 --> 0:14:15.280 always face, especially for technology that would most benefit places 0:14:15.360 --> 0:14:19.040 like Africa, places outside the Gulf in the Middle East, 0:14:19.080 --> 0:14:23.400 is that this is the return is not necessarily there 0:14:23.520 --> 0:14:26.480 to put in a lot of R and D to 0:14:26.560 --> 0:14:32.000 produce food, uh from places that don't have a lot 0:14:32.040 --> 0:14:35.480 of water, or to electrify places in Africa that have, 0:14:35.720 --> 0:14:38.800 you know, very low standards of life. I mean, can 0:14:38.840 --> 0:14:40.960 you talk to me about some of the ways that 0:14:41.040 --> 0:14:43.840 you are getting past some of these challenges. 0:14:45.360 --> 0:14:47.120 So I think that's where the opportunity sit. 0:14:47.200 --> 0:14:49.480 So for us, as we think about these technologies that 0:14:49.520 --> 0:14:51.840 are available globally, and there is R and D in 0:14:51.880 --> 0:14:53.360 our part of the world a little bit, not as 0:14:53.440 --> 0:14:54.640 much as we'd like, but a little. 0:14:54.480 --> 0:14:56.760 Bit, there's that opportunity to leap frog. 0:14:57.320 --> 0:14:59.920 So when we think about vertical farming, if we had 0:15:00.080 --> 0:15:01.960 wanted to do that the traditional way or the way 0:15:01.960 --> 0:15:04.000 that it was done even just ten years ago in 0:15:04.040 --> 0:15:06.720 North America or in Europe, that consumed a lot of energy, 0:15:06.760 --> 0:15:08.760 a lot of water which wasn't available, so we had 0:15:08.760 --> 0:15:11.120 to leap frog and think how can we do this better? 0:15:11.240 --> 0:15:13.720 And the irony is that these are two scientists, one 0:15:13.720 --> 0:15:16.000 British and one American, that were sitting in Saudi Arabia 0:15:16.080 --> 0:15:18.560 in the desert and discovered that the way that the 0:15:18.600 --> 0:15:21.480 cactus plant Pisani's water is much more energy efficient and 0:15:21.480 --> 0:15:24.880 emulated that. But the concept of leapfrogging is something that's 0:15:24.920 --> 0:15:28.040 really important. So we don't have incumbents in our industries 0:15:28.040 --> 0:15:30.760 because industries are still nascent. When you think about something 0:15:30.800 --> 0:15:34.680 like financial inclusion, just five years ago, eighty five percent 0:15:34.680 --> 0:15:37.160 of the people in the region were not financially included. 0:15:37.440 --> 0:15:40.120 Now that's down to fifty five percent. And we didn't 0:15:40.160 --> 0:15:42.600 get there by building banks. We got there with cutting 0:15:42.640 --> 0:15:46.120 edge fintech. When we think about healthcare, we have one 0:15:46.200 --> 0:15:48.880 doctor of per thousand people and mean now compared to 0:15:49.000 --> 0:15:52.880 four per thousand in North America or Europe and zero 0:15:52.880 --> 0:15:54.880 point two per thousand and South So hoar in Africa, 0:15:55.000 --> 0:15:57.200 we're never going to have enough hospitals, We're never going 0:15:57.280 --> 0:15:59.800 to have enough doctors. The question becomes how do you 0:15:59.840 --> 0:16:03.440 use technology to give healthcare access? And therefore you have 0:16:03.560 --> 0:16:07.440 the adoption of tech in a much faster way, especially 0:16:07.520 --> 0:16:10.760 given sixty percent of the population is under the age 0:16:10.760 --> 0:16:15.120 of thirty, so your digital adoption is instant and media. 0:16:15.240 --> 0:16:18.800 There are no incumbents or lobbies from the healthcare industry 0:16:18.800 --> 0:16:21.560 of the finance trying to stop these tech companies and 0:16:21.600 --> 0:16:24.840 their regulators actually want these solutions, right, so you end 0:16:24.920 --> 0:16:26.640 up on a world Sorry. 0:16:26.440 --> 0:16:28.320 Go ahead, Well, nor we only have a couple minutes left, 0:16:28.320 --> 0:16:29.320 and I want to make sure we get to the 0:16:29.360 --> 0:16:32.400 fundraising aspect of this, because you know, we talk a 0:16:32.400 --> 0:16:35.720 lot about venture capital funding drying up over the last 0:16:35.760 --> 0:16:39.160 couple of years, and I'm wondering, from your perspective, as 0:16:39.360 --> 0:16:42.680 the founder and managing partner at Global Ventures, how much 0:16:42.680 --> 0:16:46.960 of your time is spent fundraising and how hard has 0:16:47.000 --> 0:16:48.600 it been to raise money for funds. 0:16:50.680 --> 0:16:53.360 So we are on our third fund now, which we've 0:16:53.760 --> 0:16:56.000 managed to successfully raise most of this year, so we're 0:16:56.040 --> 0:16:58.440 very fortunate. I think our part of the world is 0:16:58.480 --> 0:17:01.040 still a great opportunity company is because of the lack 0:17:01.080 --> 0:17:03.120 of the quantum of capital. So last year was our 0:17:03.480 --> 0:17:05.440 peak year in terms of venture funding at three billion 0:17:05.520 --> 0:17:07.760 dollars for all of the Mena region, which is still 0:17:07.800 --> 0:17:10.760 a drop in the bucket of global venture. So anything 0:17:10.760 --> 0:17:13.960 about three billion dollars was all deals all year across 0:17:14.000 --> 0:17:15.000 all the Mena countries. 0:17:15.359 --> 0:17:16.800 So it's an nazing ecosystem. 0:17:16.840 --> 0:17:20.000 It's fast growing, it's a very young population, and it's 0:17:20.040 --> 0:17:22.479 an emerging and growing economy. So most of our investors 0:17:22.480 --> 0:17:25.439 are actually international investors in institutions in the US and 0:17:25.440 --> 0:17:28.400 in Europe that want access to growth markets, and by 0:17:28.440 --> 0:17:30.560 coming in and looking at a venture in the region, 0:17:30.840 --> 0:17:33.359 they find companies that are much more capital efficient because 0:17:33.359 --> 0:17:34.920 of the lack of capital and the ecosystem. 0:17:35.560 --> 0:17:36.639 A court of our portfolio is. 0:17:36.640 --> 0:17:39.879 EBADA positive, which for a Series A investor is highly 0:17:39.920 --> 0:17:43.000 unlikely in most other markets. And you're using technology to 0:17:43.000 --> 0:17:45.800 solve real world problems. So yeah, really the commreation of 0:17:45.800 --> 0:17:46.439 that has. 0:17:46.359 --> 0:17:48.520 Enabled growth rather than a shrinkage so far. 0:17:49.320 --> 0:17:51.640 Look, I'm just quickly here because we only have about 0:17:51.640 --> 0:17:54.720 a minute left. But I mean, look, there's so much 0:17:54.760 --> 0:17:59.280 money coming out of the Gulf right now, and you, 0:17:59.280 --> 0:18:01.439 you know, being based and deb see that probably have 0:18:01.480 --> 0:18:06.840 access to that that others don't. I mean, what priorities 0:18:06.960 --> 0:18:10.760 do you have in funding projects or what part does 0:18:10.760 --> 0:18:13.240 those investors have in funding projects that other investors you 0:18:13.280 --> 0:18:15.760 know elsewhere sitting in the United States or elsewhere don't. 0:18:17.840 --> 0:18:20.639 So you know, when we're funding projects, we're looking purely 0:18:20.680 --> 0:18:24.000 at the technology. Our investors, as I mentioned, are sixty 0:18:24.040 --> 0:18:25.760 percent of our capital does not come from the region. 0:18:25.800 --> 0:18:27.720 It comes from the US and Europe, and. 0:18:27.840 --> 0:18:30.320 People are really looking for where there are growth areas 0:18:30.320 --> 0:18:32.159 in the world where we can use tech to impact 0:18:32.200 --> 0:18:34.000 hundreds of wons of lives to get the returns we're 0:18:34.040 --> 0:18:37.520 looking for. Our founders are globally competitive, and yet the 0:18:37.560 --> 0:18:40.480 market's so nascent and young and small that valuations make sense. 0:18:41.280 --> 0:18:43.480 So I think that that applies to regional investors to 0:18:43.480 --> 0:18:46.280 global investors. I think people are just looking for great 0:18:46.440 --> 0:18:49.800 entrepreneurs building meaningful companies in growing markets. 0:18:50.160 --> 0:18:53.160 Nor Suede is founder and managing partner at Global Ventures. 0:18:53.280 --> 0:18:56.240 Joining us this afternoon from London, or I should say 0:18:56.359 --> 0:18:58.640 this evening from London. Nor thanks so much for taking 0:18:58.640 --> 0:19:00.480 the time. Really do appreciate. 0:19:02.240 --> 0:19:05.800 You're listening to the Bloomberg Business Week podcast. Catch us 0:19:05.840 --> 0:19:09.840 live weekday afternoons from three to six Easter on Bloomberg Radio, 0:19:10.040 --> 0:19:13.320 the Bloomberg Business App, and YouTube. You can also listen 0:19:13.440 --> 0:19:16.520 live on Amazon Alexa from our flagship New York station, 0:19:16.960 --> 0:19:21.320 Just say Alexa play Bloomberg eleven thirty. 0:19:22.000 --> 0:19:24.320 Well, there's this great column from Bloomberg Opinion Today. It's 0:19:24.320 --> 0:19:27.479 written by a professor at Fordham University's a theology professor, 0:19:27.560 --> 0:19:30.160 Michael Pepper. It's all about jenerative AI in the classroom. 0:19:30.200 --> 0:19:32.320 So when he first experimented with the Chat GPT, he 0:19:32.359 --> 0:19:35.600 writes that he was not impressed, but that was before 0:19:35.600 --> 0:19:39.000 he played the GPT four, which was released back in March, 0:19:39.320 --> 0:19:42.480 and he actually found the newest version of openii's multimodal 0:19:42.680 --> 0:19:45.760 LM Large Language Model can now produce papers that are 0:19:45.800 --> 0:19:50.160 better than the average students. So that's just between different 0:19:50.280 --> 0:19:52.680 versions of Chat GPT. So it raises a lot of 0:19:52.760 --> 0:19:55.520 questions about the role that jenerative AI should play in 0:19:55.520 --> 0:19:58.440 the classroom. How should teachers use it, how should students 0:19:58.520 --> 0:20:01.520 use it? How worried should pair be that our kids 0:20:01.520 --> 0:20:03.679 are not going to learn how to do anything because 0:20:03.680 --> 0:20:07.280 of chat GPT. Hopefully Chris Callison Birch has the answers. 0:20:07.280 --> 0:20:10.240 He spent years studying generative AI. He's Associate Professor of 0:20:10.240 --> 0:20:13.200 Computer information Science at the University of Pennsylvania School of 0:20:13.240 --> 0:20:16.919 Engineering and Applied Science. He's a Sloan Research Fellow, and 0:20:16.960 --> 0:20:20.000 he's gotten faculty research awards from companies we talk about 0:20:20.000 --> 0:20:24.320 every day at Google, Microsoft, Amazon, Facebook, Roadblocks and more, 0:20:25.040 --> 0:20:27.560