Speaker 1: Welcome to the Bloomberg p m L Podcast. I'm pim Fox.
Speaker 1: Along with my co host Lisa Abramowitz. Each day we
Speaker 1: bring you the most important, noteworthy, and useful interviews for
Speaker 1: you and your money, whether you're at the grocery store
Speaker 1: or the trading floor. Find the Bloomberg p m L
Speaker 1: Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot Com. Joining
Speaker 1: us now is Admiral James Stavridis. He is the retired
Speaker 1: former military commander of NATO Diana, the Fletcher's School of
Speaker 1: Diplomacy at Tufts University. Also a Bloomberg opinion columnist, Admiral
Speaker 1: Stefridas a pleasure always to speak with you. What is
Speaker 1: your reaction to the war of words on Twitter between
Speaker 1: the United States and Iran? I think it's worrisome, pim um.
Speaker 1: But let's take it from Pres Trump's perspective. First, he
Speaker 1: sees um kind of an angry but actually fairly stereotypical
Speaker 1: set of rhetoric coming out from Tehran. We've we've seen
Speaker 1: that kind of language from them repeatedly. And then he
Speaker 1: launches this real screed, all in caps um. I can
Speaker 1: understand the emotion of the response, but I'll tell you,
Speaker 1: you know, to put it in a movie context, we
Speaker 1: probably need less fast and furious and a little more
Speaker 1: cool hand Luke, which is to say, slow down, analyze
Speaker 1: and understand. We want to avoid getting in a war,
Speaker 1: but we do want to change Iranian behavior. Um. Finding
Speaker 1: that balance, I think it's going to be the challenge
Speaker 1: going forward. Well, what do you recommend? What would be
Speaker 1: the next thing to do? Given that the president seems
Speaker 1: to well, I mean, if you want to, you don't
Speaker 1: carry the cool hand Luke. Analogy further, Um, it's a
Speaker 1: failure to communicate between the Iron and the United States.
Speaker 1: What a nice point. Um. So I'd do five things,
Speaker 1: I think, and I'll knock them off very quickly. One,
Speaker 1: I would focus the intelligence community more dramatically, particularly in
Speaker 1: the maritime zone. Secondly, I would increase our defensive posture
Speaker 1: in the Middle East, because if this thing is gonna
Speaker 1: go hot, we're gonna need to be ready. So that's
Speaker 1: for example, missile defenses. Thirdly, I'd go out to our allies,
Speaker 1: partners and friends in the region are Sunni partners and
Speaker 1: our Israeli partners. Fourth, I'd go to NATO. I'd go
Speaker 1: to the Europeans and try and work through our current
Speaker 1: set of tensions there to get them on board. And
Speaker 1: fifth and finally, PIM, i'd get the inter agency more connected.
Speaker 1: We need c I, a Department of Justice, Department of
Speaker 1: Treasury working more closely together. UM. We need That's a
Speaker 1: long way of saying we need a strategy g not
Speaker 1: an angry Twitter burst. Do we have any evidence that
Speaker 1: these strategies work? I think we do. UM. If we
Speaker 1: look around the world. UM, our strategy worked very successfully
Speaker 1: in Colombia in defeating an insurgency. It has worked very
Speaker 1: well in the Balkans, bringing peace to a very troubled
Speaker 1: region there. I think, uh. More contemporaneously, our strategy has
Speaker 1: worked fairly well in Asia, keeping our allies working together
Speaker 1: as we put pressure on North Korea. I commend the
Speaker 1: administration for what's happening in North Korea, and I think
Speaker 1: they took a strategic approach there. I hope they do
Speaker 1: the same in Iran. You mentioned the Sunni allies Saudi Arabia.
Speaker 1: What do you believe they want to have happened? They
Speaker 1: have a very belligerent stance towards Iran. Broadly speaking, what
Speaker 1: they want is Iran to withdraw from a variety of
Speaker 1: Arab countries where they are pushing hard at Sunni populations. Iran,
Speaker 1: of course leads the Shia bloc in the region, so
Speaker 1: that is they would like to see Iran back out
Speaker 1: of Syria, back out of Lebanon, back out of Yemen,
Speaker 1: back out of trying to interfere with the kingdom itself.
Speaker 1: The Kingdom of Saudi Arabia reduce its ties with Guitar.
Speaker 1: So they see Iran as an inspansionist imperial power. They
Speaker 1: want to contain it, and under Crown Prince Muhammad bin Salomon,
Speaker 1: they will be very strong in doing so. You mentioned
Speaker 1: the maritime zone, and I of course want to mention
Speaker 1: your latest book entitled Seapower, The History and Geopolitics of
Speaker 1: the World's Oceans. When you mentioned maritime power, don't you
Speaker 1: have to think of what China wants to do. You
Speaker 1: absolutely do. And let's reflect on the fact, Pim that
Speaker 1: this region is parked almost dead center in the One Belt,
Speaker 1: one Road UH strategy that is employing in the movement
Speaker 1: of raw materials from Africa and the Middle East to
Speaker 1: them and the return flow of finished goods. So this
Speaker 1: in my view would be an area in which attempting
Speaker 1: cooperation with China might prove fruitful. China does not have
Speaker 1: preconceived notions about its relationships with Iran, and it is
Speaker 1: in China's interests and in the United States interest to
Speaker 1: keep uh that maritime flow of goods going back and forth,
Speaker 1: especially out of the Arabian Gulf. Who or what entity
Speaker 1: inside of NATO do you believe will respond positively if
Speaker 1: we want to improve that relationship to help in these
Speaker 1: issues regarding the Middle East. You know, at the moment
Speaker 1: relations between the United States and the rest of our
Speaker 1: NATO allies are quite low. Let's be honest, we had
Speaker 1: a bad summit. Um, there was finger pointing both ways. UM.
Speaker 1: I think the President is right to press on the
Speaker 1: European allies to increase their defense spending. But I do
Speaker 1: think that they have a point that Um, if they
Speaker 1: are going to go forth and operate with the United
Speaker 1: States around the world, they want to do that in
Speaker 1: a spirit of cooperation, which didn't feel like it was
Speaker 1: forthcoming at the summit in Brussels. So I think there's
Speaker 1: some fence mending to do on both sides in terms
Speaker 1: of who we're closest to, who can help us the most,
Speaker 1: it would be the United Kingdom within the Alliance UM,
Speaker 1: and we have to hope that we improve our relations,
Speaker 1: particularly with Germany, which is a significant actor both within
Speaker 1: the EU and within NATO, and that relationship is in
Speaker 1: bad shape right now. Well in that vain. The summit
Speaker 1: in Brussels was followed by the summit in Helsinki. What
Speaker 1: is your reaction, what is your analysis? Um, the summit
Speaker 1: in Helsinki was a major misstep by the President of
Speaker 1: the United States, and I think that's pretty well validated
Speaker 1: across the political spectrum. The problem was UM less about
Speaker 1: the fundamental idea of talking to Russia. I believe we should.
Speaker 1: I think we should confront Russia where we must, but
Speaker 1: cooperate wherever we can. We don't want to stumble back
Speaker 1: into a Cold war. But the problem was the atmospherics,
Speaker 1: the sense that our president was taking the side of
Speaker 1: Vladimir Putin over the intelligence community, and I think above
Speaker 1: all a kind of refusal to fully admit Russia's intrusion
Speaker 1: into our election, which is a fundamental UM violation of
Speaker 1: international law by Russia. So atmospherically didn't work, particularly coming
Speaker 1: on the heels of the twelve indictments of Russian intelligence operatives.
Speaker 1: The overall idea of working with Russia does make sense.
Speaker 1: We've got to leave it there, Thank you very much.
Speaker 1: Admiral James Stavridis, Dina the Fletcher School of Law and
Speaker 1: Diplomacy and the author of Power, The History and Geopolitics
Speaker 1: of the World's Oceans. Currency manipulation, the dollar, China, the
Speaker 1: Federal Reserve all come into focus of Vincent Signerella, are
Speaker 1: global macro strategist for Bloomberg News, joins us here in
Speaker 1: studio to figure this all out. All right, Vincent, what
Speaker 1: is going on with US officials talking down the dollar,
Speaker 1: talking up the dollar? Who are we to believe? I
Speaker 1: think you're gonna stick with Minuchin on this one. I
Speaker 1: think Trump's just firing a couple off the off the
Speaker 1: bow basically, just to get everyone a little nervous. He's
Speaker 1: very upset with Germany. So when he says the Europeans,
Speaker 1: he's really speaking about Germany. Uh, in terms of trade
Speaker 1: with Germany, we have a big deficit. So he when
Speaker 1: he's that all automobiles a big part of it as automobiles.
Speaker 1: But at the same time, I mean, it's uh, it's
Speaker 1: very specific machinery. Germany specializes in very high tech machinery,
Speaker 1: especially in the surgical space, so we we do have
Speaker 1: this broad deficit with Germany. He throws the Europeans all
Speaker 1: under the bus with it with the same stroke um,
Speaker 1: but at the same time, the Euros eighteen it's not
Speaker 1: doing anything. So I would look past any criticism of
Speaker 1: Europe and realize that this is specifically aimed at China.
Speaker 1: But is this is wait a second, but before we
Speaker 1: get to China, is this bus going to get more expensive?
Speaker 1: Which what do you mean the bus that if you
Speaker 1: want to import an automobile from Germany, is that going
Speaker 1: to get more expensive? My guess is at the end
Speaker 1: of the day, we'll reach an accord, especially on autos
Speaker 1: with the Europeans. It's a big business and he's getting
Speaker 1: a lot of pressure from the United States manufacturers as well,
Speaker 1: so I think they're gonna come together on that one.
Speaker 1: It's the same kind of squawking we hear about NAFTA.
Speaker 1: Eventually NAFTA will come back around. To believe that will happen.
Speaker 1: I believe it will happen. It's just going to take
Speaker 1: a little bit of time and a little bit and
Speaker 1: we're gonna see these gyrations in the market. Okay, because
Speaker 1: we've got John Claude Junker. I believe he's tending the
Speaker 1: White House. This is going to be really he's kind
Speaker 1: of lost some credibility on the street, to be honest,
Speaker 1: So it would be very interesting to see what he says.
Speaker 1: We'll explain that. Well, he's gone off over the years
Speaker 1: and in really odd, almost Trump like statements, so that
Speaker 1: the markets have like sort of pulled back and and
Speaker 1: and not reacted so much to what he's had to say.
Speaker 1: We're not you know, if you if you look at
Speaker 1: it in the sense it's like who is he really representing?
Speaker 1: He's going to the White House on Wednesday, all right.
Speaker 1: The move to China, China on what I would like
Speaker 1: to really really stress is this is not a currency war.
Speaker 1: This is not China trying to devalue the currency and
Speaker 1: take it back a few steps. When when Bernanke did
Speaker 1: q E and we were accused and he was accused
Speaker 1: of starting a currency war, what he was doing was
Speaker 1: keeping interest rates low, flattening the curve because of worries
Speaker 1: about the economy. China has some substantial worries about the economy,
Speaker 1: They've seen increased corporate defalse. They had a massive liquidity
Speaker 1: issue that they've just again once again did a big
Speaker 1: medium term lending facility to add to this liquidity. Whenever
Speaker 1: a central bank does a big add you see a
Speaker 1: currency weaken, so that the China's you and by default,
Speaker 1: is weakening. But it's not their aim to weaken the
Speaker 1: currency to be a pain to Trump, although he will
Speaker 1: point to that they're really pointing towards trying to to
Speaker 1: STI is a domestic issue for them, purely a domestic issue,
Speaker 1: purely liquidity issue, and it's a worry. I mean, if
Speaker 1: if you're an emerging market investor, this is a big,
Speaker 1: big worry. China's growth has been slowing and for them
Speaker 1: to to put this much money into the system is
Speaker 1: a is a real wake up call for emerging markets.
Speaker 1: It should be UM. We've seen some appreciation and emerging
Speaker 1: market currencies, but to my look, we have a lot
Speaker 1: more to go if this becomes a major economic issue
Speaker 1: for China. What is the Vincent Signarella chart tell you
Speaker 1: about the future of EM currencies such as Brazil, Russia, India.
Speaker 1: I think EM is gonna stay under the gun. I
Speaker 1: think we're going to see Trump continue this pressure through
Speaker 1: the midterm elections in November. This plays well to his
Speaker 1: political base. Even if there's short term pain for US manufacturers,
Speaker 1: which is in this rust belt, in the place he's
Speaker 1: trying to aim at. From a political standpoint, there's a
Speaker 1: there's a great deal of long term support and a
Speaker 1: great deal of play that he gets out of that. Um,
Speaker 1: it doesn't have a lot else to hang his hat on,
Speaker 1: you know, other than I mean he's got tax cuts
Speaker 1: as well, So we may see another round of tax
Speaker 1: cuts hit the US before November. But in and in
Speaker 1: the end, that should keep the dollar a little bit alive.
Speaker 1: It should see pressure in the UM. Do you look
Speaker 1: at the price of copper? I do. What does the
Speaker 1: price of copper which has been yeah, falling, un volatile
Speaker 1: and following yes, what does that tell you about let's
Speaker 1: say the economy of a place like Australia. Well, I
Speaker 1: think what it says again, um, what's going on with
Speaker 1: the China situation and how that impacts Australia and then
Speaker 1: eventually obviously copper. If these are the the the base
Speaker 1: metals that feed into production, and when you have the
Speaker 1: the main buyer of those products stumbling a bit, then
Speaker 1: the input to that main product stumbles, and that's what
Speaker 1: we've been seeing in copper, and we're also seeing any
Speaker 1: Australian dollar. What's the biggest mistake that you see currency
Speaker 1: traders make in an environment like this? Reacting to the
Speaker 1: immediate news, we saw something hit the markets this morning
Speaker 1: about how Mexico's economy minister says we're going to aim
Speaker 1: to get an after done by the end of August.
Speaker 1: Paso strengthened immediately off of that, a couple of big
Speaker 1: figures told news he actually said that yesterday. Um. And
Speaker 1: then the piece of immediately weakens when everybody wakes up,
Speaker 1: or actually I squawked it and said, by the way,
Speaker 1: this is yesterday's news. Uh, and then it immediately turned around.
Speaker 1: The odds of getting NAFTA done by August are really
Speaker 1: really tight. And then the bigger picture is, even if
Speaker 1: we get an agreement of sorts, needs to be ratified
Speaker 1: by Congress, which at this point unlikely to get done
Speaker 1: in two thousand and eighteen. So even if we had
Speaker 1: a agreement at arms length, we still need to go
Speaker 1: through the congressional process. Not happening this year, So reacting
Speaker 1: to news like that is always going to come back
Speaker 1: to buy two ten seconds. Tell people how they can
Speaker 1: follow you on Squawk. If you have a Bloomberg terminal
Speaker 1: and you're just type esquq, you you'll see a launch
Speaker 1: bad come up for a Squawk go and what we'll
Speaker 1: do is we will speak live breaking news. Uh down
Speaker 1: your terminal. Thanks very much, Thank you, Vincent Signarella, Global
Speaker 1: macro strategist for Bloomberg News. Well, one of Colorado's largest
Speaker 1: recreational pot companies is planning to bring Willie Nelson's marijuana
Speaker 1: brand to Canada and then go public in Toronto. Here
Speaker 1: to tell us about raising capital in the cannabis industry
Speaker 1: is Kevin Murphy. He's the chief executive of Acredge Holdings.
Speaker 1: Kevin Murphy, thanks very much for being with us. Tell
Speaker 1: us about Acreage Holdings and your capital raise and what
Speaker 1: that tells you about the appetite that investors have for
Speaker 1: the industry. Bamn and Lisa, thanks so much for having
Speaker 1: me on the show. And uh. Acreage Holdings today is
Speaker 1: the largest US cannabis provider UM now with thirteen states
Speaker 1: and to be fifteen states. UM I'll our footprint covers
Speaker 1: a hundred and fifty million people in this country, and
Speaker 1: our goal is to raise enough capital to be an
Speaker 1: aggregator into space. And this would be the last round
Speaker 1: of financing that we will do before accessing the public
Speaker 1: markets here in the fall. All right, before we get
Speaker 1: to the public markets, Acreage owns cultivation, processing, and dispensary operations. Correct,
Speaker 1: that is correct. We are vertically integrated in every state,
Speaker 1: um or striving to be vertically integrated in in every state.
Speaker 1: But you are absolutely correct. We control the entire um
Speaker 1: the life cycle of the plant from seed to dispensary.
Speaker 1: And on your advisory board you have former Massachusetts Governor
Speaker 1: William Weld as well as former House Speaker John Bayner.
Speaker 1: That is correct. We couldn't be more proud to have
Speaker 1: those two gentlemen standing shoulder to shoulder with us at Acreage.
Speaker 1: Why if you could raise a quarter billion dollars, two
Speaker 1: hundred and fifty million, why did you then just raise
Speaker 1: a hundred nine million. Well, we had initially sit out
Speaker 1: to raise fifty million dollars, but we had so much
Speaker 1: enthusiasm for the raise that we ended up raising as
Speaker 1: much as a hundred and nineteen million dollars, which is
Speaker 1: the largest rays ever done in the United States for cannabis.
Speaker 1: We also anticipate raising additional capital in the fall, and
Speaker 1: so we wanted to leave a little bit room in
Speaker 1: order to do another financing this year. Now you intend
Speaker 1: to launch on the Canadian Securities Exchange. Why in Canada, Well,
Speaker 1: that is correct, and we go where every we are welcome,
Speaker 1: and today the Canadians are with open arms welcoming us
Speaker 1: um to the Canadian Exchange. In Canada, it is federally legal. Unfortunately,
Speaker 1: in the United States, cannabis is still a Schedule one drug,
Speaker 1: which is defined by having no medicinal value. Now that
Speaker 1: would preclude us from being on the New York Stock
Speaker 1: Exchange or the NASDAC, but we do hope soon to
Speaker 1: be able to list on one or the other here
Speaker 1: in the US. What kind of financial gain are let's say,
Speaker 1: taxpayers missing out on by having the federal government still
Speaker 1: regard cannabis as a Schedule one drug. This business, in
Speaker 1: this industry is estimated to be by two thousand and
Speaker 1: twenty five one hundred billion dollars in size. Compared to
Speaker 1: other consumables. It is a very very large marketplace. We
Speaker 1: at acreage, advocate for a banking, we advocate to pay taxes,
Speaker 1: and at the end of the day, I believe that
Speaker 1: it could have a major impact on um this country's
Speaker 1: opay crisis. We'd love to be taxed and have a
Speaker 1: lot of those tax dollars go to reducing opiate use
Speaker 1: in this country. That tax revenue is currently unavailable to
Speaker 1: the federal government. What is holding this up the fact
Speaker 1: that it's a Schedule one drug today again being defined
Speaker 1: as having no additional value. And at the end, we
Speaker 1: believe that this drug needs to be de scheduled. The
Speaker 1: majority of this country believes that cannabis should be legal,
Speaker 1: and we're hopeful that Congress will essentially vote with their
Speaker 1: constituents to make that a reality, and we believe it's
Speaker 1: going to happen sooner than later. Just give you a
Speaker 1: thirty seconds. Does it strike you as ironic that cigarettes
Speaker 1: and alcohol are legally sold in the United States and
Speaker 1: tax but cannabis isn't. Every industry goes through a change,
Speaker 1: and we believe that the change is now for cannabis.
Speaker 1: We've seen prohibition in this country with alcohol, and from
Speaker 1: our vantage point, we are on the cusp of sea change.
Speaker 1: And with Speaker Banker being a naysayer historically and now
Speaker 1: having the courage to change his mind, we believe others
Speaker 1: will as well. And that's why we believe we're well
Speaker 1: positioned to be a dominant force in the cannabis space
Speaker 1: when it is federally illegal to us. It's not an if,
Speaker 1: it's a matter of when. Kevin Murphy, Chief Executive Acreage Holdings.
Speaker 1: They've raised nearly a hundred and twenty million dollars in
Speaker 1: their latest financing round, with plans to go public at
Speaker 1: the of the year in Canada. This is Bloomberg Markets.
Speaker 1: I'm pim Fox. My next guest knows all about the
Speaker 1: modern economy in a world where everything can be copied.
Speaker 1: In other words, control C control V. We all know
Speaker 1: about it, but how do you deal with it? He
Speaker 1: is Howard You. He is the legal Professor of Management
Speaker 1: and Innovation at the I M d School of Business
Speaker 1: in Switzerland, and his new book is called Leap How
Speaker 1: to Thrive in a World where Everything can be Copied?
Speaker 1: How are you? Thank you very much for being with us.
Speaker 1: Maybe you could just start off by telling us a
Speaker 1: little bit about why you decided to write this book.
Speaker 1: In many ways. The book concept really came from my
Speaker 1: conversation of executive and manager home I had run conferences
Speaker 1: and workshop and one of the key topic, or one
Speaker 1: of the biggest complaint they always have. They would say,
Speaker 1: my product is getting commoditized, meaning they find it very,
Speaker 1: very hard to differentiate in marketplace. They subject to all
Speaker 1: kinds of pricing pressure, and whenever they launch or introduce
Speaker 1: a new type of innovation, those product features get copy overnight,
Speaker 1: and so that becomes the crux or the thrust for
Speaker 1: me to dive into this inquiry. Now, as you decided
Speaker 1: that this was a focus of attention, did you notice
Speaker 1: that this is an issue that had been going on
Speaker 1: for a very long time. I mean, we may think
Speaker 1: that this is just something to do with technology, but
Speaker 1: you know, you go back even to let's say the
Speaker 1: founding of the United States and and the industrialization of
Speaker 1: the United States. UH, factories in the U S were
Speaker 1: copying European goods even then. Absolutely, I thought that's pretty
Speaker 1: much a contemper phenomena. But as I died dig into
Speaker 1: the historical past, it turns out things getting copy was
Speaker 1: a repeated complaint across era, across industry, across continent as well.
Speaker 1: In fact, once a point in time in Switzerland there
Speaker 1: is no pattern law for chemistry or chemical product. So
Speaker 1: in the land of counterfeat the Swiss were basically copying
Speaker 1: the German to produce drugs, and that had historically two
Speaker 1: years ago the biggest complained by the German drug manufacturer. Well,
Speaker 1: let's talk about leap and what did you discover? How
Speaker 1: can companies deal with copying in an age where it
Speaker 1: is as simple as a control C movement on the keyboard. Yeah,
Speaker 1: in many ways, executive always dream about building up a
Speaker 1: competitive possessioning that they could stay away from global competition.
Speaker 1: That turned out to be pretty much a mirage. In
Speaker 1: many ways, competition is almost like mountaineering. So the pioneering
Speaker 1: company would try to reach the mountain peak and the
Speaker 1: lake comer would also try to reach the same altitude. Now,
Speaker 1: when the knowledge underpinning the industry stays tgnate, the lake
Speaker 1: comers sooner or later would reach the same height. No
Speaker 1: value proposition can stay unique forever. No blue ocean can
Speaker 1: stay blue forever. Eventually blue ocean turn red. What I
Speaker 1: discover is pioneering company can play a different game. They
Speaker 1: can leap from one knowledge discipline to the next and
Speaker 1: then the next. And when the underlying knowledge of an
Speaker 1: industry continued continue to leap forward. Then climbing the mountain
Speaker 1: is as if there's constant mudslide pushing everyone down. In
Speaker 1: that scenario, it turns out it's the most experience, the
Speaker 1: most pioneering company stand a better chance to stay on
Speaker 1: top of competition. Can you give us some examples of
Speaker 1: companies that are able to do this? Sure? Um. One
Speaker 1: of the prime examples I use in the book is
Speaker 1: the pharmaceutical industry I briefly mentioned earlier. So it turns
Speaker 1: out in the beginning of the pharmaceutical industry two years ago,
Speaker 1: everyone come up with new drugs based on organic chemistry.
Speaker 1: The first blockbuster in the world is in fact called
Speaker 1: ant hip hiring is a fever reducing drugs, and it
Speaker 1: is this chemist making chemical die for the textile industry
Speaker 1: discovered this municipal medicinal benefit to to solve human issues.
Speaker 1: Now you might remember after people talk about Alexander Flaming
Speaker 1: who discover peninsillin the first an hipolytics roughly around the
Speaker 1: Second World War. So after the Second World War, all
Speaker 1: the pharmaceutical industry moved from the study of chemistry to microbiology.
Speaker 1: They want to find out the more potent fungus, to
Speaker 1: find out the next pay dirt, to find out the
Speaker 1: more potent ant hibiotics. So the knowledge discipline really moved
Speaker 1: from organic cam street to the study of microbiology. Today
Speaker 1: it's all about genomics and DNA and genetics. So looking
Speaker 1: back to the long history of pharmaceutical industry, the salient
Speaker 1: features of this particular sector is the leaping of knowledge
Speaker 1: from one to the next, from organic chemistry to microbiology
Speaker 1: to genomics. But that doesn't that beg the question that
Speaker 1: you need to have confidence in order to do that,
Speaker 1: because if you don't have the confidence, you're gonna try
Speaker 1: to build a bigger moat around your mountains so that
Speaker 1: no one even gets the climb on top of it.
Speaker 1: How do you help build that confidence? Yeah, this is
Speaker 1: a tricky question because on the verge of leaping from
Speaker 1: the old knowledge to the next, oftentimes those require investment.
Speaker 1: Is very very hard to pinpoint through the traditional financial
Speaker 1: and analysis. I give you a concrete example on the
Speaker 1: virtue of launching the targeted cancer drugs called Clevick by novartists.
Speaker 1: At the time, this CEO was facing a paradox in
Speaker 1: many ways. This new targeted drugs solving a rare form
Speaker 1: of leukemia cancer called CML. The target market is relatively small,
Speaker 1: so all the executives around him basically said we should
Speaker 1: allocate the corporate resources to more larger diseased class like
Speaker 1: prostic cancer, breast cancer and so on. But the CEO
Speaker 1: at the time, Daniel Vanzella, when he reviewed back the
Speaker 1: early clinical trial, he thought, it's not so much about
Speaker 1: increase of revenue, but it really pioneering of a new
Speaker 1: way for drug discovery using genomics. No how and he
Speaker 1: basically told the team money doesn't matter. We have to
Speaker 1: move ahead. So every time when I look back to
Speaker 1: historical analysis that companies successfully leap from one knowledge to
Speaker 1: the next, there is certain top down intervention has to happen,
Speaker 1: going beyond the traditional financial analysis that we all know
Speaker 1: very well. That was Howard you. He is Lego Professor
Speaker 1: of Management and Innovation at the I M d School
Speaker 1: of Business in Switzerland. His new book is entitled Leap
Speaker 1: How to Thrive in a world where everything can be copied.
Speaker 1: And to just give some more uh well pertinent information
Speaker 1: related to this, you know, the food and us Food
Speaker 1: and Drug Administration. Just last week it announced what it
Speaker 1: called something called the bio Similars Action Plan, and the
Speaker 1: idea is to improve the efficiency of the biosimilar and
Speaker 1: interchangeable product development and approval process, basically making it the
Speaker 1: easier and uh faster for companies to create biosimilar drugs.
Speaker 1: And already we know that about a dozen approvals for
Speaker 1: bio similars have made it through the f d A,
Speaker 1: and they have started this effort to accelerate the development
Speaker 1: and adoption of these particular drugs. Thanks for listening to
Speaker 1: the Bloomberg P and L podcast. You can subscribe and
Speaker 1: listen to interviews at Apple Podcasts, SoundCloud, or whatever podcast
Speaker 1: platform you prefer. I'm pim Fox. I'm on Twitter at
Speaker 1: pim Fox. I'm on Twitter at Lisa Abramo. It's one
Speaker 1: before the podcast. You can always catch us worldwide on
Speaker 1: Bloomberg Radio.