Election 2016 Special: My Interview w/ Dr. Daraius Irani of Towson University


In September of 2016, I sat down with Dr. Dariaus Irani, Chief Economist and Vice President of Innovation and Applied Research at Towson University.  Notably, Dr. Irani directs the very influential Regional Economic Studies Institute at Towson.

During my interview, we discussed just about everything that fascinates me within contemporary economic policy debates.  We also unpacked a number of hotly discussed election issues that intersect with business and economics.  In total, we covered everything from Donald Trump, Governor Hogan, China, recessions, minimum wage, trade, public-private partnerships to the future of customized sneakers!  This was a really interesting conversation with one of the region’s most prominent economic thinkers. I hope you enjoy this lightly edited and condensed transcript of my interview with Dr. Irani.

John:  Dr. Irani, it’s a pleasure to be with you today.  I have an ambitious agenda as it relates to the city of Baltimore, the state of Maryland, and the country as a whole.  Thanks for taking the time out of your busy schedule.

Dr. Irani: Happy to do it, John.

John: Let’s begin with the results of a workforce analysis that Towson’s Regional Economic Studies Institute (RESI) recently released.  The results of the workforce analysis seem to indicate that a significant majority of occupational growth in Maryland is concentrated in the health care and construction sectors.   Given the prominence of health care institutions in Baltimore, it is not surprising that health care would continue to play a central role in the Baltimore economy.  On the construction side of the ledger, can we attribute the projected increase in construction to growth in the economy more broadly?

Dr. Irani:  It’s actually more about replacement.  Construction workers are aging out.  The average age of the construction worker is approaching 50 and there is not a sufficient pipeline of young workers moving into the industry to refill the pipeline.  All the skilled electricians and other specialized trade workers are beginning to age out of the industry.

The industry has also begun to transform itself through more efficient construction management.  And there is a shortage of construction mangers.  In Maryland, we have been filling the shortage by hiring a lot of out of state graduates and job applicants.   We are simply not able to replace the labor that we are losing in this industry across the spectrum.  This is not so much a story about increased demand for construction as it is about a shortage of construction workers.  Essentially, the ingoing is less than outgoing.

John:  Turning to the regional economy and the greater Mid-Atlantic in particular.  This region has seemed to perform better than the country as a whole when analyzing the macro-economic data going all the way back to the economic recession of 2008. Can you talk about how the region has done economically since the recession of 2008 and how you see this region positioned to do over, say, the next 5 years?

Dr. Irani: If you go back to the recession, Maryland was sort of humming along with fairly low unemployment.  At times, we showed sub-4% unemployment.   Then the financial markets crashed.  Now the good news for Maryland was that we did not have the new construction of homes that ended up laying fallow.  In states like Florida, Nevada etc. they were building homes before anybody was putting any money down.  That being said, we had a lot of people buying homes that couldn’t afford them and we ended up experiencing our own issues.

Maryland’s dependency on the federal government – we had a bit of an uptick in unemployment from 4% to close to 8% in some areas – but it was fairly tempered by the fact that about 15% of our workforce is tied to the federal government.  And another 10% of our workforce is indirectly tied to government spending.   Which is to say, we went up, but our oscillation was not as much as an Indiana or a Michigan where because of the car industry – they plummeted down.  And they have since recovered.  But we did not have the exposure that other states did.  While other states caught a flu, Maryland caught a mild cold.  And while we did not have the highs and lows of other states, we also did not see the increase in growth as the recovery set in.

John: Now can we attribute this to the fact that we simply did not experience as significant of a decline in economic activity as other states did and therefore there was no commensurate bounce back (V-Shape) as traditionally occurs after an economic dip?

Dr. Irani:  Well think about this – what significant growth industry do we have in Maryland?  Our growth engine has traditionally been government.  So imagine what’s been happening with government since 2008.  It’s been shut down, sequestered, there has been no budget passed and essentially all spending has been held constant.    We’ve actually had a degradation of our federal workforce through attrition.  So government has been a major mainstay of economic activity in Maryland and it has kept us going – but – it’s not going to grow our economy in an impactful way.  Especially given the political environment.  And so, 15% of our workforce is tied to the federal government spending and an increase in spending is a non-starter when we are budget constrained.  Additionally, if you consider that our health care spending is also tied to the federal government by Medicare payments and other medical related spending; we remain constrained in this way as well.  However, I’ll note that the Affordable Care Act has had some positive effect on spending and economic activity in Maryland.  Education spending has been fairly flat and the tourism sector has done fairly well; though I should note that tourism creates mostly lower paying jobs.

So I would say that we are both cursed and blessed by being in the “Washington Region” because so many of our industries are tied to the federal government.  We are tied to the hip with Washington D.C – good, bad, or indifferent.

Indeed, a lot of the private companies are tied to the federal government.  And when for example, there is a decline in defense spending, everybody has a pullback.  But we are kind of humming along.  And some believe because of the new governor being much more of a pro-business governor, which does help, even if things don’t necessarily change from a policy perspective, having a governor that is an advocate for business sends a signal that Maryland is serious about helping business.  The governor has helped to set a tone that has created the conditions for improved private sector growth over the last year and a half in Maryland.

John: How do you see the Maryland economy evolving over the next decade?  Do we have any particular areas of competitive advantage that we can leverage to fuel private sector growth?

Dr. Irani:  Let’s start with manufacturing.  It’s difficult to envision us being a large manufacturing state given the current regulatory structure.  Land is expensive and we are a union state and therefore often employers tend to go to “Right to Work States”.  Think of the VW Plant in Chattanooga where it actually becomes cost effective to invest in training the workers, bringing them up to skill etc. because labor costs are significantly lower and the total cost of doing business is less in the long run.  In so far as we can attract manufacturers, we need to take advantage of the fact that we have a highly educated workforce and can probably do high value added manufacturing – if we do participate in this sector of the economy.   We can do pharmaceutical development – but the drugs are typically manufactured in North Carolina or Delaware where costs of production are less.  So in Manufacturing, it’s going to be about finding our niche’ and then leveraging the hell out of it.

John: There has been a lot of discussion among policy prognosticators that cyber-security, health care innovation, and bio-tech have some natural roots in Maryland and therefore they may be the most likely growth areas within the state.  Do you believe that any of these three areas have promise and how do you think that Maryland’s current tax and regulatory structure is designed to allow these potential growth areas to flourish?

Dr. Irani: There used to be a saying in Maryland that if you can make it, you can tax it.  There’s been a modicum that Maryland is a traditional “tax and spend” state – whether that is true or not.  And what I think Governor Hogan has tried to do is unpack this notion of being hostile to business and campaigned on being pro-growth.  And what this has done is create a notion in the business community that Governor Hogan is unlikely to introduce policy that increases uncertainty.  Remember, business likes certainty.  So if you know the lay of the land and you know it’s not going to change – it’s easy to develop a strategy going forward.  The government won’t for example, introduce an arbitrary tax on computer services like the state of Maryland did several years ago even though it was ultimately repealed.  That certainty helps businesses develop strategies over the long-term and frees them up to make long-term investments in the state.  So Hogan’s public persona of being pro-business sends a strong message to the community that they will have certainty if they do business in Maryland.  And that is important.

As it relates to the three areas you noted, Cybersecurity is certainly top of mind.  We have such a rich playing field of universities that are focused on this topic area.  Johns Hopkins, Towson University, University of Maryland, and UMBC.  We have a Cybersecurity Center at NSA and we have the NSA itself.  So there is a natural hope that we will continue to grow this business area on the defense side of Cybersecurity and then presumably we can spin some of that off on the commercial side i.e. hardening banks – where we ensure that banks cannot be penetrated by foreign agents.  What can be tough about Cybersecurity is that it is mostly classified development when it comes to work related to the NSA and other government organizations.  You can’t commercialize this quickly given the sensitive nature of it.   What’s more, our research universities are some of the top recipients in the country of R&D funding from the federal governments – not just in Cybersecurity but across the board.  However, for the conversion of commercial applications we are in the bottom ten.   Now this is being slowly transformed to the point where we are seeing some progress in commercial conversions.

John:  This seems to me to be a critical point, Dr. Irani.  To the extent that we ask the federal government to spend discretionary funding on R&D – there is an implicit expectation that funding will be commercialized in ways that provide Americans with better lives and better jobs.  Why is the state of Maryland slow to transform academic breakthroughs into commercially viable products?

Dr. Irani: Well, many academics take a position that they are here to research – they are not incentivized to commercialize the research they conduct.  The faculty culture is a hard thing to work out.   We’ve seen that institutions like M.I.T, Stanford, the whole UC-San Diego, UCLA corridor – they’ve all been quite successful.  They’ve really worked at transforming the academic culture.  And Maryland is currently going through this process.  We are seeing positive developments in this area at University of Maryland – College Park and the UMBC Bio-Park.   But this is going to be a process that takes time.  We are seeing upticks in things like the number of patents and numbers of incubators here in the state of Maryland.  The ship is turning – but we’ve still got a long way to go in this area.

John:  I’d like to shift now to some national issues starting with energy.  It’s undeniable that fracking has become a major boon for natural gas production in the United States.  Indeed, we are now on a trajectory to be the largest energy producer in the world in the near future.  Can you talk a little about the energy sector in Maryland?

Dr. Irani:  We are not a big energy state – though we do have Calvert Cliffs which is a large nuclear plant and part of the Marcellus Shale also touches Maryland.   The nation has benefited immensely from cheap energy as it has made our manufacturing sector that much more competitive.  There has been discussion about expanded liquefied natural gas (LNG) as an export possibility as well.  And we as a nation need to decide how and if we want to make further investments in areas like these.  There are arguments on both sides regarding the costs and benefits – there are environmental concerns that must be balanced with the notion that these are typically high paying jobs.  I do not take a position on these issues – this is why we elect politicians to make these policy determinations on behalf of the American people.  All we can do as economists is provide policymakers with the best information – good, bad or indifferent.  But to conclude there is no doubt that cheaper energy has made us more competitive and that fracking has made the United States more energy independent.

John: Let’s talk about infrastructure as it is one area where there seems to be a glimmer of bi-partisan agreement.  This is an issue with a lot of promise but which typically takes some period of time for the effects to be felt.  Can you talk about the prospects for increased infrastructure spending  and the ability for it to drive positive, semi near-term growth?

Dr. Irani:  The problem with infrastructure is that there is typically a long period of planning which is typically not very labor intensive.  Then you get the guys with the shovels and the bulldozers and that part indeed is very labor intensive.  We did a study for the Maryland Highway Administration that showed that our highways contribute to quite a bit of economic productivity in the State. Highways allow for the free flow of services.  So if you are attempting to conduct a just in time inventory system, you want to make sure that your drivers are getting there just in time or are not getting stuck due to potholes in the roads.  Therefore, having a good transportation system does certainly have a productive long-term effect on productivity.   One way to do this is through public-private partnerships when government spending is not an option.  We’ve seen some upticks in public-private partnerships, particularly in states like Illinois.  And these can be a pathway for the infusion of needed capital for transportation improvements.

John:  On this topic, it seems as if many of the D.C think tanks and other policy oriented organizations have produced a lot of work on public-private partnerships as a way to get around congress in terms of providing the necessary capital to fund infrastructure across the United States.  Have we seen a legitimate uptick in public-private partnerships in this regard?  And to what extent do you believe the decline in discretionary spending for productive means such as infrastructure and R&D is problematic?

Dr. Irani: Let me start with the government side.  The problem we have in Washington is that discretionary spending continues to decline due to the amount of pension obligations the country has incurred.

Let me give you an example – if you are a police officer starting at age 22 and you can retire with full pension benefits in 20 years – that person is probably going to take more out than they took in as we live longer.  Now this is the not the fault of the police officers.  This is true negotiation.  But – this means that we basically have these huge pension obligations that prevent localities from spending money on infrastructure.  So think about the federal government – there is very little discretionary money left.  Between interest obligations, Social Security, Medicare, and Defense – there is not much more we can afford.

John:  Much has been said about the fact that federal discretionary spending as a percentage of GDP is at its lowest level in recent history.

Dr. Irani: Part of the problem is that we have made promises to our citizens and we are now in a position where we are paying for this promises as we should.  The problem is we never put in place a funding mechanism to account for this.  And we seem to not want to raise taxes – yet our pension obligations are going up.  So now all we do is cut.  And cut at the edges more specifically.  And keep on kicking the can down the road.

So to come back to public-private partnerships – this relationship allows states to get the money they need as they become increasingly cash strapped.  And with public-private partnerships, we may see increasing debates about our rights as citizens to drive at no cost.  Essentially, the question becomes is driving a right?  In other countries we see many toll roads and people pay to use those roads.  And I think if we continue to see public private partnerships expand, we’ll have a larger debate about the freedom of people to drive anywhere at any time.

And as we continue to have budgetary limitations for infrastructure spending, this is going to continue to be an option for policy makers.   Now I should mention, a few years ago I argued in front of the state legislature that now is the time to borrow for infrastructure since interest rates are low and commodity prices are also low – so why not build now?  During the recession with slack in the market – it would have been a good time for construction to fill the void and I’m sure there would have been plenty of construction firms ready to step up.

John: Raising the Minimum Wage – The Democratic Party has made this a cornerstone issue this election cycle.  And it’s really hard to parse through the academic and policy work on this issue and come to a clear notion of the optimized minimum wage salary point whereby aggregate demand and supply side concerns are in harmony

Dr Irani: So I think we have to step back and really take a look at what the minimum wage’s function in the economy is which is to provide a minimum standard of living.  And of course we need to understand that this going to differ from city to city.  The cost of living in Birmingham, AL is going to be quite different than in San Francisco.  One of the problems we have now is that we have politicized the minimum wage.  In many countries the minimum wage is not political – it’s like setting your electrical rates.  I know my electrical bill goes up every year so why should we not expect labor to get more expensive every year?  Now that being said, what we’ve done is made this issue into a political football. Undoubtedly, we’ve allowed the minimum wage to erode and its purchasing power has declined over time.  Now if it was set by a non-partisan committee and business had certainty that it was going to increase at a steady pace – I think that would be fine.  Certainly, as a business, what you don’t want to have happen is that you all of a sudden have a major, unexpected spike in the minimum wage that you can’t absorb.  But if you knew every year that it was going up 3-4%, then you know with certainty how you must structure your business – and that certainty allows business owners to plan accordingly.  I don’t think businesses would begrudge their employees more money, but I think what they want to know is that just like my BGE bill, just like the cost of my raw hamburger – prices go up over time.   What we’ve done here is that we are toying with the idea of large spikes in the minimum wage.  And we truly don’t know what is going to happen.  But if you knew that the minimum wage was being set by something like the Consumer Price Index (CPI), just like we do for Social Security, businesses could plan for a moderate increase in this expense to their business.  Now I think what you would not want to do is what Baltimore City planned to implement – a $15 minimum wage.  And remember everywhere else in the state was at $10.  This means if you are on the fringe of the city – it incentives business to incorporate in the surrounding counties.  Worse yet, it drives labor away from county businesses as workers move to the city to earn more money.

In summary, the academic data has been mixed on this issue.   Undeniably, with some of these large spikes it forces business to look at capital rather than labor.   Perhaps this hastens things like automated dispensers for retail service displacing labor.  You could see things like touch screens to facilitate ordering.  So – businesses will optimize however this plays out.  Businesses are very bright – otherwise they wouldn’t be in business.  And as long as the minimum wage is used as a political football, we will always have these jump ups and jump downs and this whole thing where it becomes a political rallying cry and it’s hard to develop good policy.  And if we could agree that the minimum wage should be a legitimate, minimum standard of living and every year it’s going to increase with CPI – we could be done and I think business and citizens would be happy.

John: Secular stagnation and slow growth.  In my opinion both parties have failed to offer an imaginative economic growth platform that could bring about significant growth amid tepid GDP rates over the last 8 years.  What do you think has the potential to deliver this kind of transformative growth, if anything?

Dr. Irani: If you wind back America to the 1950’s through the 1970’s, we were in a post-war boom.  We were going like gangbusters.  We were by far the strongest global economy.   But what has happened since – is that the world has caught up.  China is now a powerhouse and has quickly become the second largest economy.  We are no longer the only game in town.  And we can no longer assume that if advanced manufacturing is in our minds – it’s not also on the minds of the Chinese and Germans.  The world has flattened and most advanced counties have equal access to technology.  For example, many of the newest Chinese cities are much more modern and have greater access to broadband internet.  So we can no longer assume that game changing growth areas like 3D manufacturing will necessarily be ours.   And we do not as a nation have a unified industrial policy.  We are leaving it to the market to solve these problems to a large extent.

John:  And just to push you on this issue regarding industrial policy, understanding that counties like China can put 15 technocrats in a room and quickly prioritize national investments, the United States does not have an industrial policy (intentionally) and our political system often makes it difficult to allocate public and private capital in those areas deemed most critical to future growth.  Is our model still the best model moving forward?  It often feels like China’s system while unaccountable to voters, does have the advantage of speed and decisiveness which can be important given the pace of technological and market changes.

Dr. Irani: I do not think China is appropriating capital all that effectively.  If you look at what China is doing, they are building a lot of ghost cities.  It is essentially cheaper to just lend money and have people working than have people not working and restless.  So in that sense, capital is not allocated efficiently.  As it relates to America, the extent to which markets allow for the most efficient allocation of capital still seems to me be the best course of action.  Now, free markets depend on the accuracy of information about those markets.  And if you look at the mortgage crisis during the 2008 recession, we saw a situation in which capital was not allocated effectively due to the imperfect nature of information about those markets.

Even in a market like say, tax policy, tax policy drives business behavior.  Think of Apple’s situation in Ireland.  The reason that Apple held money in Ireland was to reduce its tax burden.  So imagine the amount of energy that is being spent on tax avoidance.  This is not the optimal allocation of capital.  We’ve created a tax system with an implied rate of about 25% but an effective rate of 15-18% because we create all these tax loopholes.

However, getting back to your point about creating a free market, I think the American market still does this better than any set of human beings can.  I do not think that locking 15 bureaucrats in a room for them to try and plan the allocation of capital is a good idea.

But I think the more important question has to do with education.  More than industry policy,  how we do we align education so that we prepare a workforce that is prepared to drive economic growth?  And let’s go back to our earlier point about Maryland’s construction industry – if people are prepared to be construction workers and construction managers in tomorrow’s economy that means they will consume. And consumption comprises 2/3 of gross domestic product (GDP).  And so the point is, if we agree that we are not going to have an industrial policy than how we do construct an education policy that leads to optimal economic outcomes.  Education is going to drive the workforce, and the workforce is going to drive productivity in the various sectors.

John: On this point of aligning education to the growth sectors in the economy, can you talk about how we are doing in this area today?  Moreover, given the political chasm between the two parties both at the state and federal level, how do we develop a bi-partisan, holistic approach to education and workforce development that prepares America to compete effectively in an increasingly complex global economy?

Dr. Irani: Let me start by saying that we’ve created a political system that is “gerrymandered”.   We’ve got districts that are extremely safe on either the left or the right and as a result the candidates that get elected in these districts end up being more extreme.  It becomes very difficult to find common ground.  And this is a fundamental fear of mine and something that has to change for us to get back to a place where we can have our differences while still finding common ground to work together.  And I would argue that this election has made the polarization even worse.  Come November 9th you are going to have an American public and a group of elected politicians that have undergone this cathartic exercise and I’m not sure how we move forward with the two parties so viscerally opposed to each other.  And this is where I think that Governor Hogan has done a fairly good job and is quite popular because he’s tried to not go too far to either side.

Now with Donald Trump, he has talked about not accepting the results of the election and therefore there is concern about whether or not his voters will accept the legitimacy of the results if he does not win.  What’s also interesting is the issue of certainty with Trump.  Markets like certainty and as the non-traditional candidate there are a lot of questions about what policies he would pursue in office.  Day to day things seem to change.

Now with Hillary, people will say he’s a continuation of Obama – but in this instance I know with fairly good certainty that she will pursue policies that broadly align with Obama’s.  And I can then plan accordingly.  I don’t have to worry about a candidate potentially raising import barriers or tariffs.  And if I’m a business and I’m importing my windshield wipers from Mexico, my alternators from Germany and my tires from China – they all have to come together at once.  And now if someone is telling me that there is a 24% tariff with China, how does that affect my production line?  So these are the kinds of things that in an economy that is global and has a global supply chain are problematic and worry U.S. businesses.

John: And that brings us to the issue of trade.  You have two candidates that have come out against the largest recent new free trade deal in the Trans Pacific Partnership (TPP).   And to me this sends a signal that America is unwilling to acknowledge that we are living in an increasingly globalized economy.  Now, undoubtedly there has been job displacement within the manufacturing sector in which trade and globalization have a role.  However, I am of the opinion that we have to figure out how to shape the global economy and take advantage of our strengths in areas like services which will increasingly become the fruits of American international trade.  And, there are strategic reasons for America aligning with many Asian-Pacific signatories to the TPP.  If you would, please talk about America’s future as it relates to global trade and how you see international integration playing out in global markets over the next generation?

Dr. Irani: So, let me start by saying I believe that trade is unambiguously good.  Trade is good for consumers and it’s good for workers.  Think about the ways in which trade has altered our lives.  The rise of Walmart is directly related to the rise of China.   The fact that we can eat produce 365 days a year is a testament to the international free trade system.  Now if you cut that off – you can’t get your oranges in NYC in January.  And remember – we have driven this demand.  We being the consumers.

Now the downside of trade has been the dislocation of workers.  In the long-run, you hear economists say that equilibrium will bring a net gain from trade.  The problem is the time period from the start of this transformation to when we create an economy that does more for these displaced workers – many people are simply out of work for too long.  So one of the things that did not happen during this transformation is that if you were one of these workers with a high school degree and you were bolting on wheels on Oldsmobile’s and now those jobs went to Mexico –  it’s hard to find a job that pays similarly without the skills to compete in the current economy.

The other problem is that manufacturing has changed.  We have dramatically increased productivity with far less labor.  Technology has obviously played a large role in this transformation as well.  And I should note, China has actually lost more jobs in manufacturing than we have.  As labor has become more expensive in China, you are seeing corporations move into lower labor countries like Vietnam and Bangladesh.   People need to remember that Walmart is putting the thumb on you and saying, look, I want these t-shirts at 19 cents a dozen and you can only make them at 25 cents a dozen – they are going to go where the labor is cheaper.  Historically, if you think about the textile industry in North Carolina that has all been pushed out to other places.

So when Trump talks about bringing all these jobs back, I ask how?  Are you going to take the old style factory that had 100 people on the factory floor?  Because today you may only have 10 women managing machines that are not actually engaged in the assembly themselves.    In this case, you lost 100 jobs to China but you gained 10 highly paid, highly technical manufacturing jobs.

John:  To this point, could we be doing more to retrain and retool workers that have lost their jobs to trade?  It seems to me that policy makers need to be more creative when it comes to developing a broad based solution to addressing this issue.

Dr. Irani: The answer is yes.  We have workforce development and economic development and they often don’t talk to each other – but they need each other desperately.  Economic development is about creating the conditions for businesses to be successful in a certain geographic location.  Workforce development is about training workers so that they are prepared to succeed in the modern economy.  And these two areas are interconnected and often operate in stovepipes much to the detriment of broader economic growth.  Indeed, much of this attributable to federal policy and regulations.  You have to train people for jobs that are currently within a given geographic location as opposed to the jobs that may be coming to that location in the future.  This has to change.  We have to devise policy that incentivizes training in economic areas that may be in the short or medium term future and not necessarily those that are only part of the current economic landscape.

We are also seeing a trend where manufacturers are relying on temporary workers.  There was some data that came out last year that showed that in places like the Toyota Plants in the American South – manufacturers’ are relying much more on $10 an hour temporary workers.

John:  Is it fair to say then, that we are coming to the end of the “Detroit Economy” whereby factory workers make $25 an hour with a pension?  Can American corporations be competitive globally with any notion of the old unionized workforce in manufacturing?

Dr. Irani: We are probably not going to have many unskilled manufacturing jobs anymore.  Everything we do has to have a high value added component.  For example, we can do things like high-end medical devices.  Now it’s not going to be hundreds of thousands of people, it’s probably going to be a small cross-section of highly skilled labor.  And the challenge with this is that there is not a booming market for medical devices like there is for say, cars.  So we are going to have to live with the fact that we are simply not going to be doing as much manufacturing which requires large amounts of traditional labor.

John:  The economic data coming out over the last year has indicated that productivity in the U.S economy has been weak.  What do you attribute this to?

Dr. Irani: Yes – the numbers have been flat.  It’s hard to generate productivity gains in the current economy.  Now we saw some gains in the 1990’s with computing and so on, but we are at a point where major productivity gains seem increasingly difficult.

John: Could automation and the ability of machines to replace major parts of the traditional American workforce drive the types of productivity gains that we saw in past boom periods?

Dr. Irani: Potentially.  And as with anything, a transformation of this type would have costs and consequences.  For example, if we have autonomous vehicles in mass, we may not need major freeways because autonomous vehicles allow for 30% more of the road to be utilized as you pack cars closer together.  Now maybe you have a new industry repairing or working on autonomous vehicles because this is a different type of car – with no steering wheel and only a bench seat in the back for passengers.  Furthermore, perhaps you see semi-automated cars produced in small batches for consumption on side roads.  Customization is something that I think will continue to expand and we are seeing this with 3D printing.  For example, you could imagine people buying customized shoes with specific soles and styles produced on the spot by a 3D printer.  Or imagine at any drug store, you stick your feet into a machine and you walk away with a custom in-sole.  So customization – customer shoes, custom in-soles, custom hats and all of the things that we buy off the rack could be customized.  I think customization allows us to do things that we have truly not done before and 3D printing is the start of it.

John: Dr. Irani – thanks so much for taking the time to speak with me today.  I enjoyed it and learned a lot in the process.

Dr. Irani: Thanks – it was my pleasure, John.