What is infrastructure?

Welcome to the Future of Education. I'm here live with my friend Efosa Jomo, who leads the Global Prosperity Group at the Clayton Christensen Institute. Efosa and I have known each other for about seven, eight years now at this point, sir. And just an incredible thinker on all things development, but also jumpstarting innovation around the world. And so, first, thanks for hanging out with me today.

Thanks, man. It's good to be here. I've been jealous of all your other guests, but then you have some pretty impressive people, so I'm like, I'm just happy to be here.

No, no, no, no. We don't have anyone who has over a million TED views on their talk. So now we've got the big guy. But where I want to start, afosa, is this topic of infrastructure. It's obviously extremely timely right now because the Biden administration is preparing a massive infrastructure bill. But it's something that we've heard about before, you know, even in the Trump administration. It was a headline. You wrote a super thoughtful piece about what is infrastructure and why does it matter? Recently. But before we dig in on that piece, I would love to go a different direction, which is, obviously, you wrote the Prosperity Paradox with Clay Christensen and Karen Dillon, and in that book, you tell your own story about how you essentially started creating wells in Nigeria, where you're from, and how it did not necessarily turn out the way you thought it would in terms of sparking a higher quality of life for the individuals there. So I'd love you just to step back, because wells are clearly infrastructure, and so I'd love you to talk about that story and what you learned from it.

Yeah. Michael, thank you. And my goodness, it's really good to be here. I think, you know, if we focus on that story. Right. I went into a community in 2008, really poor community, and economically speaking, at least many people didn't have access to water. And it just hit me in the face. I mean, as I was going to the community, I saw some women, Washington clothes on the banks of a river. I saw kids with buckets on their heads, you know, just walking miles to get water. So we're thinking, right, if any infrastructure project is going to work, it's water. Water is necessary for sustenance of life. It's not something you have to convince people about. You know, you can debate, do we need a bridge? Do we need this? But water. Everybody pretty much agrees, right? So I was like, we're going to build a well. We're going to. We're going to raise some money, build a well, put it in the middle of this community so people don't have to run around and get water. Well, we did it. It was exciting. But the well broke after about six months. And that was sort of my first, I would say, rude awakening into this whole, you know, maybe just putting in the infrastructure, in this case, it was a water well for people in this community was not quite the answer. Maybe there were other things I needed to think about and we, generally speaking, the stakeholders that think about economic development and infrastructure need to think about. And so the well broke. There was no way, like I could fix it. There was no way people in the community could fix it. They didn't have the, the skills I had to figure out who to call to get it fixed. Anyways, cut the long story short, I didn't learn from that lesson, though. I built the organization some friends and I started, built five other wells. Virtually all of them broke. And it was after the fifth one, I was like, okay, something's wrong here. Like this. This isn't the whole story. We need to think more critically about, about what infrastructure is, why, why it's important, and how to do it in a way that's sustainable.

So where's your current thinking on that? What is the role of infrastructure? So many people. Look, let's start in developing world contexts and we'll move into the U.S. i guess, later, but starting in that context. So many people, I think, take your attitude that you had, if we just build water access, clean water, who can object to that? But even roads or even institutions, right? If you want to go one step further, schools, right? This is the future of education, that good things just happen. And yet a lot of people, then, if we look at the history of development, seem to have the same experience you did. Right? The same story in, in a variety of contexts. It's not sustainable. There's not the ecosystem around it, perhaps to support the institution on an ongoing basis. So, so what have you taken away from that? What are, what are the lessons we should learn?

There are a few lessons. Right. The first thing is I can empathize with people who go into a community. And you want to build infrastructure and improve it. Well, the reason is one of the first things that hits you when you go into a community, a country, a state, wherever that doesn't have infrastructure is the lack of infrastructure. It just slaps you in the face. And because infrastructure in the context in which many of us live is so important, we can't think of our lives without infrastructure. I Mean, when I went to that community, I was like, how do you live without water next door? I mean, if I want to drink water right now, I go downstairs because it slaps you in the face. You have this sort of visceral reaction that I have to provide the infrastructure. So I empathize with that, where I've graduated to. And I got to thank our dearly beloved Professor Clay for this. Thinking is infrastructure serves a purpose and we have to start there. What is the purpose of infrastructure? What is it? When you begin to ask yourself that question, you realize, hold on a second. Infrastructure as we've now defined it, is the most efficient mechanism society has developed to either store or transport value. It's the most efficient mechanism society has developed to store a transport value, like roads. It's the most efficient way we've figured out to transport these things called cars, and the cars that have people and goods and so on. If you take rail, it's the same thing, right? It's the most efficient mechanism we found to transport really heavy duty goods, a lot of it, and so on. So you apply that thinking to any infrastructure, even your legal system, your education system, healthcare. It's the most efficient mechanism we've found figured out to store or transport value. Now that's incredibly important. When you define it that way, a few things begin to become clear. Number one, you realize if I don't have value to store or transport, this infrastructure I'm building is not going to serve me very well. Right? That's number one. Number two, whatever value I am storing or transporting on this infrastructure must be able to pay its way. In other words, if you use a really simple example and say my home is the infrastructure where I store myself, I keep myself well, I gotta be able to pay my rent or my mortgage. I have to be able to be creating enough value that enables me pay my home and my rent. I'm not going to go to a bank and say, Please give me $10 million to buy this new home. And they say, oh, how much do you make a year, folso? You make $5,000. Sure. Infrastructure is a good thing. Housing is a good thing. Here's the loan. And I think we have this view of infrastructure, that it's just going to fix everything. No, no, no, no, no. When you, when you take those two things into consideration, then you see the inextricable connection with infrastructure and, and value. And a lot of value we get is through innovation. The other thing, I'll sort of land a plane here. The other thing that I've been thinking a lot about more recently is this notion of where did infrastructure even come from? Because that word connotes so many different things to people. When you hear it, it's like big public government spending, sometimes even free, you know, like, why do I need to pay for like driving on the roads? Right. You know, we have a lot of issues with tolls. Except you go to Texas, they know how to toll their roads over there in Texas, but. And many other countries actually. But, but anyways, there's this notion it's free. Right. We don't really see it, but a lot of infrastructure had their genesis, or the technology behind the infrastructure had their genesis with innovators who were trying to solve problems. And so let's just take the rail, for example. We look at the industrial revolution in the UK and people had figured out this thing called coal. There was a lot of value we could extract from it. It's very dirty and so on. That's not, let's stick with the story. That's not the point, you know, but there's a lot of value we could attract from it. Well, you got to go into a coal mine and then you figure out how to grab as much of the thing as possible you can and get it out. And we're like, look, how can we more efficiently do this? They built rail cars, railways, and put cars on top of them. Very rudimentary in the beginning. And they put the coal and they were able to get it out more easily. And then they saw we could, we could, we could do this above ground and transport things. And so we have to be very, very clear on what infrastructure is the connection to innovation and value. Not to say big infrastructure expenditures aren't good, but they don't by themselves fix a society or create prosperity or so on. Right.

So you raised a number of fascinating points there. And I'm trying to think through where to go next a little bit because there's a lot of avenues we could. One thing I pull out in the immediate term is who pays for the infrastructure, which is to say, at least in the last example, you just gave a lot of the innovators, they realized the only way they could be successful was if they vertically integrated into other parts of the value chain or value system to build what then became infrastructure later on. And so you, you know, railroads are a great example of that. They had to build their own railways. That in the US the challenge, as I understand it became then all the tracks were different gauges of width and so forth. And so there was an interoperability problem that I think the government had to then get in to help solve as it crossed state lines. And that was sort of the, the, the mechanism by which they were able to correct it. But it does raise an interesting thing which is that the innovators themselves could be asked to spend more upfront on this, which, which perhaps gets into a different challenge of like our notion of capital efficiency these days and how we're sort of short, we're a little too short term thinking and don't allow firms to always vertically integrate in ways that might be beneficial for them but also beneficial for the folks giving the capital and beneficial for society. So that's one thing I think of is like who spends on it. The thing that occurs to me is this notion of value and how do you project whether something will be really used or not? And so like a classic example of this right now is the notion of large high speed rail systems in the US right? Like the people who are against it say well, there's no market for it. And the people who are for it sort of say, well there will be once we can, you know, have Chicago to Dallas or whatever or San Diego to San Francisco on a high speed rail system like you, you just, you have to build it and then they'll come. How do you, how do you know? How do you project? Because, you know, certainly the evidence right now is on the detractor side, but, but maybe it's a market that we don't know yet. How do you know?

Yeah, no, that's a good question. Let me start with who pays, right? Who pays for it first? Well, the answer to that one is it depends. Now if you're in a wealthy country where you have systems that, that for the most part work and what I mean by that is you can depend on the bureaucracy in your government. You can depend on the systems, right? The education system, by and large will, if you put something in, it'll come out on the other end. Healthcare seems to work. Now it's not to say these systems are perfect, but it's like, you know what, they work for the most part, right? In that case, in countries like that, infrastructure expenditures typically are borne by the government directly. Now that's because. And not all infrastructure. We talked about Texas tolls a second ago and driving on the Massachusetts interstates, we pay our tolls easy pass. So not entirely, but, but by and large the governments pay for it and they manage it, right? The construction and maintenance and so on. But the question is like how, where does the government get the money? Well, it turns out in the US when you and I drive our cars and we fuel it and buy new tires and so on, we pay gas taxes, we pay tire taxes, and those go towards fixing our roads. Now remember we talked about the value that the infrastructure transport distributes or stores. Well, the cars that we buy when they're taxed, part of that goes to paying for the roads. And so if Americans are not buying enough cars and are not driving a lot, our infrastructure, our road infrastructure at least is going to suffer. All right? And so you can actually see how the more fuel efficient cars we get in the US it's impacting our ability to raise money to fund our infrastructure. Yeah, unintended consequence of being fuel efficient. I think that's, you know, that's the right way to go. But we're going to have to figure out how to tax electric vehicles, for instance, so that we can pay for infrastructure in maybe I would say emerging economies. It's not that simple. Now, it's not that simple to say it's the government's job to build the roads, to build the schools, to build the hospitals, and to build all the infrastructure. Here's why. Number one, when today's rich countries were poor, a lot of the infrastructure development did not originate. And we're not for the most part funded by the government. Doesn't mean the government didn't fund some infrastructure. But a majority were not really funded by the government, funded by the private sector innovators, whatever you want to call them, industrialists who decided to build many of these infrastructures to move goods and services that could help them. Right, so, so that's one. And so I think there's sort of a mismatch there because the narrative today is, oh, it's the government's job to build this stuff. Look at how they're building it in America, in Sweden, in Norway. Why can't the government in Ghana, Bangladesh, India build it? Right? So that's not quite a fair comparison. The second thing I'd like to say is when you look at how much the United States or a rich country, the average sort of typical rich country spends per citizen per year. And so it's a simple math. You know, just take their budget divided by how many people live in that country and you get a number, right? The US Federal government, now we're not even talking states, so.

Not even talking states.

Okay, yeah, over $20,000 per person per year. The Norwegian government spends over $35,000 per person per year. You go to Finland, they're spending upwards of $25,000 per person per year. Now, that's their budget, right? So they got to spend on defense, health care, education, all those things. Federal government. When you start to go to emerging economies, then things start to get interesting. If you take a country like say, Botswana, one of the richest African countries, really small, it's got diamonds, they're spending roughly $2,500 per year. And the country's got only maybe a couple million people, Right.

So an order of magnitude less than Western. Yep.

You go to my country, Michael. Nigeria. We got a lot of people in Nigeria. Over 200 million people. Well, we really don't know how many people we have, but the estimates are roughly 200 million. We're spending $200 per person per year.

So two orders of magnitude now, last.

Thank you. Right. $200 of that, we're spending about 50 to $60 paying our debt or interest, servicing our debt. So when someone says, what is wrong with the Nigerian government? Why can't they fill in the blank, build infrastructure like America? Why can't they this. Why are they allowing this country? Maybe it's China come in and do this. We have to have realistic conversations that take into account what does the government bring in, how much does it have? And the financial resources that a country has is a proxy for the managerial talent, the technical talent, the level of institutional efficiencies that country has. And that's important because that means if I decide to build a mile of road in Nigeria, chances are it'll cost me way more than if I decide to build a mile of road in.

The US because of all that's interesting though, right? Because people, I suspect, listening would think the opposite, that, well, it's lower costs in Nigeria, labor is less expensive. They probably aren't thinking about the raw materials equation, but they might say it's equivalent. So you just said something interesting, which is that the inefficiency means it's going to be more, not less expensive, despite what I think would be the popular narrative around that.

Yeah, yeah. No, no. Yes, it will be. Now it may. It may come out to be the same amount in absolute terms.

Right, but now. So in absolute terms, but now, relatively, that's.

Oh, yeah, because we have to think of cost of capital, cost of borrowing. The American government can borrow at, you know, zero. Well, maybe not 0% interest, not these.

Days, but yeah, but sure, yeah.

The Nigerian government cannot. Then we gotta think about the talent to build the road, right? To design the roads and so on. That's you know, when you're talking about infrastructure that is. Or goods and services that are, I would say, world class. Right. So things like roads, rail, airports or ports, you can't really design an airport in Nigeria for significantly less money than you would say an airport in, in.

The U.S. that's fascinating.

These are things that are. Yeah, yeah, it's. It's sort of like an. If you think about like buying an, an iPhone. Right. It's like that requires a certain level of engineering talent similar to building a road. And so you can't discount it that much. Right? There might be some discounts, but you can't really discount it that. That much. So when you think about. Yeah, so yeah, I was going to say.

No, no, no, stay with me then here. Because like, so, so that has clear implications because from a relative perspective, that is a huge percentage of those dollars per citizen that they're capable of spending. Not even, you know, forget about actually spending, like capable of spending. And so that, that has obvious implications. So then where do you choose to place your bets to the question I was asking about high speed rail before, like that airport in Nigeria, Not a lot of planes fly. I mean that's, that's a bad example, perhaps, but, but, but Right, like where do you make those bets? Where or, or, you know, do you need data that shows that something is actually there? We know that doesn't work because it's hist. How do you know?

Yes. So, I mean, Clay was famous for teaching us that we don't have data about the future. We only have data about the past. And so we have to use theory. Right. And so if you asked the question about high speed rail, and I think it was sort of specific to the US how do we build? Where do we build? And so I think there are a few things we can think about when we begin to try to answer that question. The first is how have we built infrastructure that connects two different locations in the past and what kind of economic activity has that generated? Right. So, so it's like at one point, Southwest Airlines, for example, did not exist. And then it starts to exist in Houston, Dallas. Yeah. Texas area. And then we can get to understand, okay, it was a lot cheaper for people to move around, like Texas. Let's estimate, like what kinds of economic activity did that generate, what kinds of jobs, what kinds of new businesses and so on and so forth. So we can estimate there. Because the thing about infrastructure is we know certain things. We know how much it's going to cost us, and we know through as an economist out of Oxford, I believe, Ben Fliberg, and he writes about mega projects and he says, look, infrastructure. And he studies a lot of infrastructure, megaprojects in rich countries, right, where they have systems that work. And he says 9 out of 10 of these are going to be over budget, 9 out of 10 are going to be late, and 9 out of 10 are going to under deliver on the economic projections. So we already know that. And so in some ways, to answer your question, the infrastructure, the high speed rail, will most likely under deliver based on Flyberg's research. But for it to under deliver as little as possible, then we really have to think about what innovations is this thing going to move, right? So we do the math. Okay, let's estimate it moves 25% more people from here to there. Why is this a tourist area? Are there jobs here that it can fill? How much are people going to pay? Like we can do some of those calculations now. There are going to be unintended consequences that happen as a result of new infrastructure rising up. But I think we can do some math to give us an idea before we say high speed rail is the answer.

That's actually interesting because what you said, I pull out two principles from it. One is the Southwest example. Let's take a small example of where this is working and see if we extract out from it. Are the circumstances a the same and what, what assumptions do we build from it? And obviously Southwest Airlines, you could have used that to say, okay, do we invest in regional airports around the country that create a network of these things, right, in addition to the major hubs? And you would have seen that there's economic value there and so you might have made that calculation. But then the second thing that you would ask is what problem are you trying to solve? What's the job to be done, if you will, and, and if there's already a super efficient means of transporting people back and forth and you know, and hard goods perhaps, and whatever else you might say, yeah, not, not so sure. It's clear, sounds great, but maybe it's not actually solving a meaty problem. So I think that helps me. I want to shift to a third area that, that seems implicit in something you said, which is you gave a super interesting definition of infrastructure. And I'm going to put it back up there. Infrastructure is the most efficient mechanism that we currently have to store or transport value. I think that's important because as people have noted, like roads, pipes, sewers, we often think, okay, yeah, sure, that's infrastructure in the Current conversation right now. A lot of other things are being called infrastructure as well, some of which actually might work based on your definition and some of which may be a bridge too far to use a bad analogy. But, but I think that's. But I think this is a helpful way to frame it. I guess what I'm curious about is, well, a takeaway I'll have from this is it's actually not worth arguing over whether schools are or are not infrastructure. We should apply this test. And sometimes they might be and sometimes they might not be. But I guess the question I would instead ask is how do we get like hedge against betting on a technology or a system that like has historically served us well from one that is the future? And I'll say it in this way, like I'm on the record on this. Free community college is a big idea right now in the US among certain quarters. Yeah, I've been super skeptical of it for several reasons. One, free college in other countries has not worked well. It's led to disinvestment in the higher ed system and actually caused their systems to serve fewer people over time because they start to restrict supply. But secondly, community colleges don't get great outcomes today by any metric that we look at. So I'm not quite sure why we're trying to replicate a system that doesn't do well for individuals. And I'm much more interested in next gen systems like a duet college in Boston that partners with a competency based online program. Southern New Hampshire University puts coaching around that. And like, as best I can tell, the return on investment for learners is like 8 to 10 times better than a community college investment at least. So I get really nervous. But I think it's a bigger question of when do you worry about lock in because you make an investment in infrastructure versus like. Yeah, Michael, you may be right. 20 years from now there's a great technology that's going to obviate this. But like there are people who are like need livelihoods now. So how do you make that trade off? Do you have any insights on that?

I mean, it's tough. It's a tough one, Michael, because infrastructure is often not simply an economic sort of investment, right?

What do you mean by that?

There's politics behind it, right? So if you're the politician saying no free community college, you may not get, you may not get elected. If you're the politician saying, you got to pay for this, we got to change this, you may not get elected. So I think we have to appreciate that now. Two, Quick responses with regard to what you just said. When do you make the ship? The first thing is there is no such thing as free anything. Free community college, free college, free health care, free education, universal basic, free. This. There is no such thing. Every single thing in the world that can be consumed must be paid for by somebody. Right? And so I think one of the struggles with infrastructure, and we sort of alluded to this earlier, is there's this notion that it should be free or we should. No, no, there's no such thing as free. Somebody, somewhere some entity is paying for it. So that's. That's the first sort of struggle I have with that free community college. The second is we have to ask again, really simple questions. What is community college? Why did it emerge? Why did it become popular? Why did it work at one point? What were the circumstances? What did it teach the community, if you will? When we begin to unpack those questions, then I think we can extract the purpose of what a community college was, is, should be. And the community college could be the home of these. It should be the place where we are integrating these new technologies, these new styles, these new ways of educating so that we can create value in society. But the equation, the infrastructure value equation, no matter how you define infrastructure, that never changes, right? And so I don't care if you make, think about, you make, you build a road and you make it free, right? You don't have to pay anything, you know, but that road is not moving any value. It's not doing anything. Nobody really needs it. It's not adding more to society. It's going to be defunct after a certain period of time. And so we have to use that same kind of thinking when it comes to, you know, education, community college and so on. It's really difficult, though, I must confess. It's really difficult. Cool.

So I'm going to cut you off there just because we're getting a bunch of questions coming in on YouTube and I'd actually love to have you answer them. So the first one is from our friend Jay Gerhardt. So, hey Jay, if you're still on, which is. He asks, how should the US Think about expanding broadband access to underserved rural areas and to populations who struggle to afford it when available? Which is a. Both are certainly timely topics during the last year of the pandemic and seeing how many people don't have access, I've come to the view that government should much more aggressively support these. I'm curious your take. The one thing I will quickly offer is I actually Think using the framework you've introduced here around value, we could actually make the case that from education perspective, health perspective, you look at the services being delivered over telehealth, online learning, et cetera, that actually the value equation would justify that. And we could do some pretty simple, actually back of the envelope calculations on the savings that that will create in other parts of society from having a more educated population, a healthier population with the dollars available to perhaps make that make sense. And we see that the use case is there. So there's not a question of purpose or job to be done, is my quick instinct. But where would you go?

I look, I agree, I agree with you. I mean, I would answer that question different than I would answer it if somebody in Brazil were asking it. Or you know, this is the richest country in the world by a mile. We are still the powerhouse of innovation globally. There is no reason why the richest country in the world should not have this essential technology available to the average person in this country in America. So I think in America, in the United States, absolutely, the government should figure out how to fund it. I mean, we spend more on defense than the next like five to 10 countries combined as defense, I think that's still. Right. So we can provide Internet access to the average person, to rural communities and so on. We should be able to. The second thing on that is there are some private sector companies actually doing some amazing stuff. So Comcast has this program called, I believe it's Internet Essentials, where they provide broadband access to many people who cannot afford it. Now, geography wise, I don't know if they go into real deep rural areas, but I know low income, they provide access and they realized, look, providing Internet is not enough. We might need to provide like a computer as well.

Right?

We might need to. So, so there are some programs that do it. But I think to Jay's, to Jay's question, we should be able to do that in America. And to your point, because we live in such a dynamic economy, we have that we can make that infrastructure innovation value like equation work, right? Like you can have somebody who lives, lives in a tough environment, get access to the Internet, study, learn a new skill and get a job in America and can justify that expense. Many other countries you may not be able to, but in the richest country in the world, I think you can.

One other thing, I'll just say specifically also in Jay's question is the E Rate program, which is a tax essentially on our telecom bills that we pay, that creates a funding source, has historically been used to fund say telephone services and recently broadband in schools specifically. What we are now seeing is that education, we've always known this. But you know, from a policy perspective, education is not limited to the four walls of your school. And so a modernization that allows you, I would argue, to use E rate to get critical broadband infrastructure or connectivity or devices into homes themselves for those who cannot afford it. And in rural areas seems like something that should be able to be done. There's some great case studies, North Carolina for example, doing it in rural areas that with schools. And I suspect you could apply that to then extending that same funding source, extending that to individuals. I want to get to our friend Christopher oh Williams corporate question. And obviously we know him, HBS alum and doing some cool stuff. He says here the logic of job to be done, the need to create value and the economics to justify the investment, all present and clear in the usa. But we also have a political roadblock. How do we overcome that? I'll defer to you on that.

How do we overcome that in the.

U.S. i think that's the question.

Well, you know, Clay, Clay, Clay always said the strength of a good theory is in its applicability in, in sort of other sectors. If you can apply. I mean you wrote, you wrote Disrupting Class with him around the same time. He published Innovators Prescription, we published Prosperity Paradox, he published CN Worsenet. And he took these theories in a place, applied it to just different sectors and technologies and so on. So Chris, I would say what do the theories have to say about the politics of it? What is the job to be done of a politician? Right. We know a job to be done has a social, functional and emotional component to it. And we just have to be realistic. Now I'm not going to criticize or moralize somebody's job to be done. If a politician's job to be done is, you know, I want to just keep getting reelected and I want to block everything you do. I mean if we look at the way politics is in America now, we realize some things that the Republicans liked. You know, the minute a Democrat says hey, can we do that, it's a problem.

All of a sudden it's toxic right now.

Yeah. If we understand that, then that has to impact how we approach these issues. Right. So maybe I don't. My politics words are not great. Maybe I don't create.

Well, I think where you're going resonates is a smart thing, which is, and frankly we don't see enough of this these days, in my judgment, which is Politicians deflecting attention where it gets someone else something that allows them to do some things.

Something.

I'm reading a biography right now of President Eisenhower's time in the White House, Ike, by Evan Thomas. And the chapter I'm on right now is Civil Rights, Ike and civil Rights. And there's a popular perception that Ike didn't do nearly enough for civil rights. Some of that I think is justified and some of that Evan Thomas makes. The argument is actually completely unjustified. Just that Ike was really good at giving people like LBJ credit for things that he in fact pushed. And you know, I don't know that that's something that would be as likely to happen in this day and age with that sort of. My side. Your side. But I think you're pointing to if you can read the dynamics of the electorate, if you can understand how it fits into their job to be done not just from a functional perspective, but from a social and emotional perspective, um, you can fit these things in a little bit more neatly perhaps than the nuance that we have today. We're last set of questions. Just because I want to be sensitive to time and you and I do this and we go for like hours. So I, but, but I want to be sensitive. So Kerry Connor asks a couple questions. One, I hear you on equity limits, but considering and I'm going to screw this up but prep, prep. They got the cost down for Africa using an equity based approach. First world markets pay more. Is that possible here? I'm hoping you can interpret, interpret a little bit here. And then the second sort of follow up question is. Or a Goodyear tire decreases in cost with every tire produced. Could Africa get the 3.0 version? If the 7.0 version road is not much better to build, build quickly. Can you do that? Does that make sense?

Say, say just repeat one more time and it might make.

Yeah, sorry, yeah, I hear you on equity limits, but considering. But consider prep P. And then. So it's a capital P. And I apologize.

If I'm not mistaken. I think it's a health care thing.

Yes, you're. You are correct.

Yep. Yeah. Okay. Yeah, it's sort of. I think it's prevention for hiv.

Yeah.

Yeah.

Okay. Thank you, Carrie. Thank you Kerry for clarifying for us who are confused here and not up to speed. So go ahead first if you want to try to frame it.

Yes, yes. So this is the point I was trying to make earlier about sort of the. When you make a good. That has this sort of global. That requires. I would call it global scale, right? So to make a drug or something of that level, you can't discount it, right? Like if it, if it takes a certain amount of biological skill manufacturing prowess, like the vaccines right now, right, you can't say, oh, we're going to make them in Nigeria, it'll cost less. Well, we don't have the technical manufacturing logistics capability to do it. So similar with prep. And this is where, right, we have to have some honest conversations, right? This is where we say, look, these countries don't have the capabilities to make these or consume these products as is right now. So we have to ask ourselves the question, these questions, right? How do we, how do we get them there, right? One option is we make them, we subsidize, we donate, and the case closed. The other option is we do those things with the mindset that in five years, 10 years, whatever the time frame is, we stop while we're doing it, we build the capability so that these countries are now able to produce at that level or they can now afford these products. So it's not an easy, like, you know, there's no easy answer to all these questions, oh, just do this, just build that. But at the end of the day, if people in a particular region cannot create enough value that enables them afford certain products on the market, then their consumption of those products depends on the largesse, the generosity of others. Right now, those who are being generous, providing the medication and so on, what I'm asking them to do is say, look, that can't be the end goal. That's really the beginning of the journey. How do we get it to a point where we don't need the prep program anymore, right? That's the kind of thinking that we need to do. And it's happened, right? Look at China, where it was, look at where it is, look at South Korea, where it was, look at where it is today. This is not an impossibility, it's just an incredibly difficult thing.

It's interesting, by the way, it does occur to me that the vaccine example is an example that's qualitatively different from some of the other infrastructure examples in that the vaccine is used and then you keep creating, right, to continue to use it. Whereas, yes, you need to maintain a road or things like that, but the fixed, there's something that's fixed structurally going to stay there, which does seem qualitatively different from my uninformed view. And I think the reason that's important is, is it actually might be easier to do the vaccine with a notion of building up capacity underneath it in the long run. Whereas it might be harder to plop down a road, hope capacity gets there to be able to maintain and use it. And then 10 years later there's a degrading road that you're on the hook for. Whereas the vaccine, you're not necessarily now the system to deliver it, as you've pointed out with the COVID vaccine. Vaccines is another piece of this because while we can get the vaccines to different countries, delivering it actually has proved quite costly and inequitable in a lot of these African countries.

Absolutely. I tell people a vaccine is not the same as vaccination. A vaccine is a product. We can make that in Boston. Here in Moderna, vaccination is a system that is healthcare workers, logistics, refrigeration, that is, that's just an entire system. And unfortunately, many countries don't have the capabilities to vaccinate people or as many people as we want quickly enough. So it's. Yeah, I think there was a second part to the question, but I sort of.

No, I think, I think, you know, Kerry's other part was the Goodyear tire. Decreases in cost with each tire produced. Economies of scale. They're right there in KadAfrica. Get the 3.0 version. If the 7.0 version road perhaps is not much better to build quickly. Can you do that? So maybe not the most cutting edge infrastructure, but the way I think I would answer for you is infrastructure that is ready for that context answers, thumbs up. Yes, go for it. Infrastructure that's still not ready for that context, even if it's a more an earlier version. It just is what it is. And you have to think about all those other costs and use cases and value that will or won't be used on the infrastructure as you're considering this.

Absolutely, yeah. Cool.

Folks, I always learn a tremendous amount talking to you today has been no exception. I hope others did as well. It gave me a framework for thinking through a lot of these sticky questions, not just in the US but worldwide. And Kerry says you answered the question brilliantly. And so we appreciate the save though Kerry also. And for all you tuning in, I hope you've enjoyed this version of the future of education. It was something that's been important to me to understand more deeply and afosa you've done that. So thanks for joining us.

Thanks a lot, Michael. Always good to chat with you, brother. It's good to see you.

Absolutely. And we'll be back next time.

All right.