How Technology and Free Enterprise Are Revolutionizing the World

Christopher Schroeder on the meaning of global engagement in the 21st century at the West Coast Retreat.

Editor's note: Below are the video and transcript to Christopher Schroeder's lecture at the David Horowitz Freedom Center's 2016 West Coast Retreat. The event was held April 8-10 at the Terranea Resort in Palos Verdes, CA.

Christopher Schroeder from DHFC on Vimeo.

Christopher Schroeder: Oh boy, I can't tell you what an honor it is to be with you all tonight, truly.  And deepest thanks to David and the team for having me and hosting, yet again, this remarkable gathering of you people. Because great gatherings are composed of great people. So, really, it's a pleasure to be here.

So, if this political cycle has shown us anything it is the lure of the temptation to want simple answers and narratives to help us navigate these remarkable, rapidly changing and hyperly complex days.  And the media pushes us to think about almost any issue in a soundbite these days.  They answer, "Is it a good thing or a bad thing?", "Is it right or is left?" Fair enough.  They don't push us, and sometimes I think we don't want to be pushed, to ask some big questions and to help us understand the context and, importantly, what may be happening under our noses today that will make the next 5 years vastly different than the last.  And, in fact, there's scientific studies that show that we as human beings are neurologically structured to presume that the next 5 years will be like the last 5 years.  It's kind of a defense mechanism.  But of course, as you all know, steeped in history and politics and the world around us, it almost never turns out that way.

I want to steal from a theologian named Reinhold Niebuhr, who once said that's it's only when we're unsure that we are doubly sure.  And this caution, I think, has particular residence now when all the technology at our fingertips at one level allows us to be better informed than ever before and yet, at the same time, it also allows us to build cocoons enveloped solely with people who think as we think, whether that's in business, politics or in life overall.

Narratives are important.  We cannot function, build businesses, create policies and raise our children without them, and yet nothing is more cancerous to building a future than narrative bias.  The history books and Chapter 11 courts are filled with women and men trapped in the comfort of one story or one narrative that doesn't play out.

You will hear among the most thoughtful and forward thinking conservatives in this great country.  And this will be a remarkable couple of days to look hard at the narratives that are viewed as conventional wisdom or at least that the media convinces us is conventional wisdom.

And with that I'd like to start with perhaps the greatest counter-narrative of all that David alluded to, which is that with all the doom, despair and fear we see on the media, I believe we are in fact living in the most amazing and wondrous days in world history.  In point of fact, there is no time in world history I'd rather be alive than right now.

The macro-data is with me.  We're living longer.  We're killing each other less.  We're feeding each other more.  We're seeing the universal rise of middle classes around the globe at an unprecedented level.  Macro-data, of course, can be very misleading, and it masks what David also talked about, which is the very real pain and profound challenges that we're also living in today.  But I got to tell you, this even makes me more hopeful still, because guys, I can't tell you what Syria's going to look like in a year or what a softening China will look like in 3, but I can tell you with near 100 percent certainty that by the end of this decade two-thirds of humanity will be walking around with a smart device on their person.

Now often people say, "So what? So people have smart devices."  They got better featured phones, they have better videos, they got better games, they got better apps, but that's not what I'm referring to at all.  The reality is each device right now in your pocket has more computing capacity than all of NASA had in 1969 to put a man on the moon.  Two-thirds of humanity is going to be walking around by the end of this decade with super computers in their pockets.  This means unprecedented tools of communication, collaboration, innovation, problem-solving and entrepreneurship anywhere and everywhere.  It means a real sense of empowerment, individual empowerment, not in some sort of touchy-feely way, but in the idea that if you can see someone who looks like you and lives in the world that you live in and they take ahold of a problem and solve it, you have the courage to do the same.  And if you have the courage to do the same, someone else will watch your example and they will do it at a hypervelocity because they can see it all on technology.  It is effectively a virus, a revolution of success breeding success.  These devices mean that for all intents and purposes all of human knowledge is going to be at everyone's fingertips essentially for free.

The phenomenon I'm describing is astoundingly self-teaching and bottom up.  As a friend of mine once said to me, historically, big government, big companies, big institutions have thought too often of problem-solving top down.  In the mindset of top down, individuals are problems to be solved.  In the world I'm describing, the bottom-up individuals are assets to be unleashed to innovate and solve problems because no one has a greater stake in doing so.

And to many technology is a conversation of the elite. It's a Silicon Valley thing. It's a university thing and cannot have broad impact across greater societies.  Well, I'll play a little game with you.  If I were to ask you what is the largest country on earth, in terms of dollars, doing mobile payment, moving of money through mobile devices, would you be surprised to learn that it is  -- anybody?

Audience Member: China.

Christopher Schroeder: I would have guessed that too.  Kenya.  Sixty percent of Kenyans today use a mobile texting capability called Impassa.  Over one third, nearly 40 percent of the entire GDP of Kenya, now passes through a texting cash capability, which means that people who were unbanked before it can now move money anywhere.  Businesses can now move money anywhere.  Families can share money anywhere without having to go there and risk being robbed, which has completely revolutionized the society.

Now others think that technology is a cute sideshow, kind of a great macroeconomic sideshow of the bigger issues of our time.  Now I've looked at this, and I can tell you invariably that the greatest macroeconomist of their day utterly missed the profound broader economic and societal impact of the automobile in 1910, the airplane in 1928, uniform shipping containers in 1960, air conditioning in 1965, the Internet in 1992, mobile in 2001, artificial intelligence, robotics right now.  And they all missed something more important in a way and that is the ramification today that all of this technology does now have universal access pretty much anywhere as David alluded to.

I've been spending a lot of time in emerging markets generally but especially in the Middle East, Turkey, and believe it or not even Iran.  And something enormous is happening out there that we do not hear about in Western media, and it's very important for us to consider.

Now I'm from Washington, DC. And in Washington, DC we love cocktail parties and we love cocktail conversations and we like little fun facts that people can use. So I've got a few for you and you can use them for free from me.  The same spirit of the Kenya thing.  If I were to ask you what is the largest YouTube country on earth, the country who most uses YouTube -- albeit in this case not aggregate, but per capita -- would you be surprised to know that that is --?

Audience Member: Kenya.

Christopher Schroeder: Saudi Arabia.  The largest demographic watching videos on YouTube in Saudi Arabia are women.  The largest content category women are watching of YouTube in Saudi Arabia is education.  Did you know that last month the largest ecommerce player in the Arab world got invested in by some of the best global venture capitalists at evaluation well above $1 billion?  So, just a couple of months before that, Seamless, the food delivery business of Turkey and the Gulf, was sold outright for over $600 million.  Would we be surprised to know that more people flew through the Dubai Airport last year by far than flew through Heathrow Airport forever in the first time?  Would we be surprised to know that there are hundreds of thousands maybe even millions of young entrepreneurs building scaled enterprises with technology or tech-enable because it lowers all the barriers and high costs of doing so and makes reach of customers locally, regionally, globally for the first time possible?

Now, last December, I was in Cairo, Egypt for a start-up gathering.  It was 5,000 young Egyptians in Downtown Cairo doing the things that you see on television and you or some of your kids may be doing in Silicon Valley, or Texas, or California, or Boston, whatever. It was a great gathering of startups.  More interestingly 24 hours before that gathering, a different 5,000 young people were in Beirut, Lebanon doing the same thing.  Now I can assure you that if 10,000 young Arabs were gathered in the Middle East to discuss the Muslim Brotherhood, we would all know about it.  In this case, there might have been 40 journalists there, maybe three from the West, and nobody talked about it really at all.  But this is a revolution, and I will take it to you a step further.  According to The Economist, 25 percent of these entrepreneurs that I've met, 25 percent, are women, and, by the way, that's not a number you can find in Silicon Valley even close.  You'd be lucky to find 10 percent there and it goes on.

I mentioned I've been to Iran twice now in the last 18 months.  It's a staggering beautiful country with remarkable history and resources and obviously a terrible government.  The youth and engineers are among the best I have seen anywhere.  Half of university graduates and graduate students are women.  Internet access is everywhere.  Access to the home and Internet connectivity is approaching U.S. figures -- 65/70 percent.  It's over 120 percent mobile penetration, which means people have more than one device or more than one SIM card.  Nearly 50 percent of people who have mobile contracts have smartphones.  There's 6½ million iPhones in Iran, which you're not allowed to get in Iran, but people have crossed the border to go to Istanbul and to go to Dubai simply to buy them at a thousand dollars a pop because they're so good. And they want what they know the rest of the world wants

In my first trip to Iran, there was probably less than a million people with access to 3G or 4G, and people were telling me that the government was going to open up private companies to roll it out, but business executives told me not a chance.  There's no way these guys are going to be willing to roll out 3G and 4G even if this other technology is true.  When I went back a year later, it was privatized to two different companies, one outside of the country, one in Iran, and there are now 20 million subscribers to 3G and 4G there.

Every kid I met was on Facebook, Twitter, Snapchat and more.  They see our movies, our videos and TV dramas. They listen to our music.  Every kid I met in their 20s or younger was taking U.S. college classes or Western university college classes on their mobile devices through Coursera.  It was a mind blow to me overall.  You can imagine remarkable startups and entrepreneurs were coming with it.

In the last 3 months, I've been to Bangkok, Nairobi, meeting with young startups, investors in all of these places.  Guys, it is all the same and moving incredibly rapidly and generationally.  I got to tell you, Columbia especially jumped out to me.  I don't know how many of you on Netflix is watching Narcos.  It's an amazing drama about the drug wars that they have been having.  Drugs wars that have cost hundreds of thousands of lives over the last decades overall.  That Narcos takes place 20 years ago, but if we were sitting here even 10 years ago and we thought about Columbia at all, we thought about it in one narrative, one story and that was still the Narco wars.  Today, Columbia is one of the fastest growing economies in Latin America.  It is an amazing jewel of the region.  Now this phenomenon does not prescribe how we should engage with the governments that are awfully, willfully stuck in the last century at best and potential direct threats to their own people and to us at worse.  But nor, I would suggest, can this phenomenon be ignored.  In it lies new solutions and opportunities.

Too often we are like the craftsman, the proverbial craftsman we all know about. Because the only tool in his toolkit is a hammer, every problem looks like a nail.  Now we have new tools.  Hundreds of millions of people have new tools. By the way, I should have mentioned before when I'm on the ground of these countries I always use Uber because Uber's in all of them or, if not Uber, a local competitor that's like it overall.  And if you want to ever believe and understand what I'm looking at on the ground, next time you're in a different country, promise me that you'll take an Uber and that you'll interview your driver.  Ask them that great Ronald Reagan question.  Are they better off today than they were 4 years ago, and you will get an earful.  They'll bitch and complain about their governments, but they're making money now in a way that they never dreamed possible before because of the technology at their fingertips.  Think about the global markets and rising consumers in worlds we once dismissed as third and what opportunity for our companies to engage, sell and expand, to mutual and coauthored benefit in these different areas.

Now what are we going to make of all this?  Look, my point is not that there aren't real and serious challenges here and around the globe.  We know that there are.  We see them every day on the news.  At the same time, the great entrepreneurship spirit that is America means that we're never to be satisfied with that, and always will and again have new tools by which we can go out and solve those challenges here at home, but also engagement in the world.  My point is not that technology won't be used by bad actors for bad ends because it will.

I am not sure Orville and Wilbur in their wildest fantasies in Kitty Hawk envisioned the fire bombings of Dresden during World War II or fanatics flying their inventions into buildings a few years ago.  My point is that there are new narratives and new tools at our fingertips to re-imagine different worlds.  We all know this.  These tools have changed all of our lives in this room.  More importantly, these tools have changed the lives of our children profoundly.  Not all good, but profoundly, and now it's happening everywhere and it's happening quickly.  It is an unprecedented opportunity for the world and thus for us if we embrace it.  This is palpably true in new markets available to engage with on their terms as well as ours and because we dwarf, at least at this moment, the world in technology and innovation, and as an ecosystem embracing entrepreneurship in our universities, our rule of law, sophisticated investment vehicles, enormous experience and success in entrepreneurs and yes, as a magnet for the best and the brightest to come here, create, innovate and build.

Two quick, remarkable notes.  While Germany, Japan and other great powers are aging right now, most of these markets I'm describing to you have one-third or one-half of their population under the age of 30.  Now that they can find economic opportunities is essential, and it is not guaranteed and can have enormous negative ramifications there at home and can foster resentment and worse towards us in the dangerous ways that we're all familiar with and that you'll talk about in length over the next couple of days.  However, never has there been greater ability to create new economic futures, whether it's a young university student starting an enterprise or a crafts woman who can move money safely and reach customers more easily and affordably beyond the square mile that was her existence even a few years ago.  Nothing that I see in traditional efforts in business or in government offers close to this potential.  And as many of you know, and again, you'll talk about, much of what has been tried simply utterly fails.  No reason to keep doing it again.

Second, technology, innovation and entrepreneurship is what we are universally admired for.  Let me be clear.  This is not to call it ours.  Vice President Biden has this annoying ability, particularly when he's abroad, to talk about entrepreneurship as our greatest export.  Let me assure you, these are stunningly entrepreneurial societies often going back to the Bible. And we are known though, at the same time, for being very good at this for our success and the spirit that we bring to it.

In another visit to Cairo, I did almost a year ago, I went to a shared work space.  A very large campus where lots of different businesses and startups and big businesses like Intel and Google, they all office out of this.  It's a very vibrant place.  This day there is a gathering, maybe more like a thousand young people, and I looked off in the distance and I saw photographs of men on the walls and I said, "Oh, there he goes.  Sisi, he's already taking credit for this one.  He's going to go put up his poster and it's going to be a government thing because that's what government does whatever it is over there." But as I got closer, it wasn't government officials that were on that wall in Cairo, Egypt a year ago with a thousand young people.  Put on the wall by Cairinians and Egyptians were photographs of the founder of Twitter, Jack Dorsey, Elone Musk, Steve Jobs, Mark Zuckerberg.

We all know, and you'll talk a lot about in the next 2 days, that strength in the face of our enemies is undebatable, that bad actors will need to be matched in unequivocal ways, but that to me is tactic.  Now take it further, that to me is 20th century tactics.  I have yet to meet a serious military figure, and I have many friends in this area, who believes that this alone will help us to have a more sustainable peaceful world or allow us to lead in the rapidly change new century we have entered.  We have invented the tools and the playbook for an era that can unleash individuals, not only their dreams, but their ability to actualize these dreams.  It's an ability to bring new tools to problems and opportunities that once felt like they might take a generation to fix.  Tools in the hands everywhere of that very generation that will not wait a generation, will not be denied and will start to solve them with software and technology right now. 

It is my prayer that we will do everything we can to get behind these kids here at home and around the globe.  It is my prayer that we will focus much more on these new narratives concentrating on the massive opportunities as well as the legitimate fears we have as well.  It is my prayer that we will lean forward heavily into the 21st century that is well upon us and that we helped invent rather than repeating the mistakes and tactics of the 20th century.  Because in a world of this speed of tech adoption, to fall behind might mean to fall behind for good because the new generation, their tools will do it with or without us because there is no going back.  Think about this a world of unleashed individual potential and innovation regardless of failed leaders and failed states.  Think about this: A world of unleashed entrepreneurship everywhere that can embrace the cycle of new growth and economic prosperity that that entrepreneurship we all know here in America fosters.  That to me is a 21st century foreign policy that, to put it another way, is a true 21st century global engagement.  An engagement of coauthorship and creativity on our terms and theirs. One in line, I believe, with the deepest principles of admiration and love for the individual and the individual spirit that I suspect most of us in this room share very profoundly.

As some of you will remember, some of you are too young to remember, the first great president of Czechoslovakia, Vaclav Havel, who came in after the Berlin Wall fell, he makes this wonderful distinction between hope and optimism, which I use quite often, but quite frankly, I think about it every day, and he points out that hope is not the same thing as optimism at all.  It is not the conviction that something will turn out well, but the certainty that something makes sense regardless of how it turns out.  Not that something will turn out well, but the certainty that something makes sense regardless of how it turns out.  Because of you, because of what I see around the world, what I see happening despite some of the very real challenges and mediocre debate that is sometimes reflected by them, I could not be a more hopeful man.

Thank you very much for including me today.