Alexander Brunner - Switzerland: Freedom to innovate

Transcript

[Applause] thank you well for the next 20 minutes I want to talk about something I guess all if you're interested in it's Innovation but I want to take a little bit a different angle I want to ask about what is good and what is bad Innovation and how can Switzerland compete globally on a scale and I have a few interesting slides so this is Sunday afternoon you're here on a quite nice day in a Sunday afternoon so it shows your dedication to Innovation congratulation to all of you of making it that far and I got to ask a few questions I hope you don't mind but Innovation is a buzzword every politician every entrepreneur every CEO is using the word and I was wondering

why you're in that sector why do you care about Innovation some people want to get famous uh become a p celebrity some people want to save the world some people want to make money maybe I'll just go a quick show of hands who's into Innovation because they want to get rich all right okay yeah I be honest that's perfect I like that I like I'll come back anyone wants to save the world okay yeah yeah oh multiple wonderful more people saving the world anyone becomes yeah sure and and anyone become famous maybe famous that's that's interesting the famous beers in Switzerland like I know I'm okay with money perfect perfect so I I I like your

your a bit engaged so I'll I'll I'll keep it that way and I'll get back to you you want to add something sorry you're I wonder possible to get one interesting question interesting I don't know we can debate maybe we can create into q& day interesting question but my key point this afternoon is and that's sort of the title of my presentation I strongly believe that it matters a lot where Innovation happens and congratulations I think you're in one of the best places to make sensible Innovation or good inovations and that's what I want to show to you so I truly believe that it's important where it happens so let me try to convince you so you know as a bit of appr question can

Innovation be good or bad and anyone thinks that Innovation can be let's say I think a lot of you believe it's going to be good anyone think it can be bad too someone no no notu no it's always ah someone it's always both yeah it's always both I like that I like okay yeah because normally it's like yeah Innovation you know like uh okay so we'll I'll I'll I'll come back to that and the other question that if you believe that it matters and I'll try to convince you that it's important where Innovation happens I think Switzerland is a great place for Innovation I'll prove it to you but my question is when you look at us in the last year they invested $ 42.5 billion in AI alone the entire sector in Switzerland uh VC

funding last year was below 4 million I think the peak was 4 billion last year it was lower how can we as Tiny Little Country compete on that scale I'll I'll try to come come back to that but I think it's an important question if you believe that's important where uh Innovation happen and what I like to show is like Everyone likes some of you guys want to get rich Everyone likes numbers have have you seen that Saudi Arabia wants to invest 40 billion into AI you seen that and they also want to develop AGI so I try to make my first point why it matters um where Innovation happen so I I choked to my wife and said if they going to develop autonomous cars or any typ of tech what kind of data do they

have they will only have data from male drivers why because on very recently in Saudi Arabia women were not allowed to drive furthermore as you know if you get punish in Saudi Arabia they're still chopping off hands and hanging people what kind of AGI comes out of a country that's that data said ever thought about that just think about it I'm not saying it's gonna happen but it maybe makes you think about hey maybe it's important where it happens but then you know as you guys like numbers it's like poor Saudi Arabia 40 billion what about s trillion like what s we put 7 trillion to work into AGI so again the US you know never shy of out competing anyone puts those massive numbers out

there I I know it's debated if he said that or not but I think the direction is clear so how can we compete in the future with the US and does it matter you know we say hey it's okay the US are all fine or does it matter where Innovation comes from and as we are a crypto conference I'd like to show that you know sometimes bad things happen you know even in us you know who who thinks that 25 years for Sam Oldman is not enough anyone thinks he should go to jail forever okay one some people think it's too too long okay some okay some and anyone thinks that years is is is right what right okay interesting there we go

but but obviously so there's a lot of debate how many people have got hurt or not but the only thing I'm trying to say is innovation can go both both ways as you said you know but more interesting when we talk about us and that's one of the first interesting points and I have I'm interested what you think about it it seems like quite often things go bad in us no I mean you got uh Elizabeth Holmes from tanos you got Adam Newman there you can debate how how bad it was or not from wew work we got Sam Bank mfried we got Silicon Valley Bank so it seems at least when something goes wrong in the US the outcome is pretty darn big but the question is when you talk about

Innovation it's about failure no we all know things can go wrong so the question I think that's a society question and coming back to my point it matters that we have a discussion is how much downside do you want to have when you do Innovations how how big of a downside are we as a society comfortable and the interesting thing the US is they seem to be quite comfortable with pretty big downsides because the upsides are so big no the more the upside the more you accept the downside so the interesting question here is and it's a bit also a sand B Bank from fre you know what kind of innovation you want to have you want to move fast and break things you just fake it until you make it how much you want that and how much do you say hey actually we don't want those extreme

outcomes and I come back to that because it has to do with with Switzerland so what I'm trying to say I'm trying to prove the point that Innovation can go both both ways and probably as the gentl here said you always have a bit of both you never quite know it depends you know before he went to jail Sam bankman freed he met you know Biden he met he met the cftc he was very highly regarded all for son he's in jail anyhow coming back to my point why it is important where Innovation happens have you seen that very recently I think dated 28th of March uh the SEC got in a Core case now got the permission to Sue coinbase I know coinbase is suing the SEC as well it's an interesting dance have you seen that because it's

interesting what they're saying they're saying they got the permission now to sue coinbase because they now believe that staking is a service that's a security service and then the SEC is in charge and they say it's an unregistered uh activity it should be registered so it's very interesting and as you I'm sure all of you aware this is the SEC then the CFC the other regulator has a different View and they like to Feud about it so this is insane you know it's literally insane to watch how a big country like the US get something like that so wrong where one of the regulator the two Regulators are feuding who's in charge and what it is and they're suing each other or suing uh um a a a big player let me contrast to to Switzerland

who has seen that uh end of last year the FMA their regulatory change changed its practice on staking who who's aware of that a few okay a few great well it's very interesting and now my point why it's important where Innovation happens fimma put out a proposal last year about how to treat staking service providers and they focused very much on what happens in a bankruptcy case how directly can you access your coins and to be frank in the light of FTX and some others it's a valid question no but they were a bit restrictive they basically the result was you had to be a bank and that was very bad for a lot so a lot of the industry got together that's the Swiss blockchain Federation the lobby

organization and they had a discussion with fimma and fimma updated their staking provision and was I understand from most of the service provider that's something they can live with and it shows a quite contrast to the US do you agree you know the US is suing without giving clear guidelines and here there's a debate going on it's co-creation again it matters where Innovation happens and someone whom whom you all like I'm sure I hope here this year on conference is is vitalik and he worries a lot about Innovation too and he worries about cars who's aware of that that he's worrying about cars interesting okay following him because there's a key term in there privacy he worries about cars because

autonomous cars or semi autonomous cars collect a lot of data a Tesla has six cameras and collects up to 19 terabyte of data every day s us processes LM musk set and use it for AI whatever they do with it your data you are collecting when you drive a Tesla you're collecting data not about yourself but your entire surrounding he worries about that I do too and privacy is obiously something a value that's embedded Innovation you can ignore it or say hey it's important so he worries a lot about that he wores a lot about it he recently had a blog post that's end of last year where he's contemplating because there's two opposing forces one is privacy I think anonymity is the wrong word it

should be PR privacy and you have to have sort of compliance you want to prevent Bad actors using certain things you know that's the sanction list and that's something you need to find a balance and he worries a lot about it read read up and he published a paper with the University of Basel interesting why the University of Basel because University of Basel is in Switzerland and we Swiss care about privacy again makes a big impact if you do this here or somewhere else it matters where Innovation happens and sorry to keep pushing but that end of last year who has seen that he wants there you go a few who knows what a cyer punk is and I'd just like to say I'll come back to

that you have to be very careful about the spelling it's y pH it's not B okay so it's cyber Punk it's not cyber punk I saw on the agenda someone talks about cyberp Punk it's a wrong thing sorry I have to be a stickler because it's important so he wants ether to become more cyer Punk so anyone knows what a cyer punk is or the concept anyone yes I I don't have a micro I think you can shout I have I have to stand here do you do you want to answer Cor perfect you got it you nailed 100 points

and why is it important because Bitcoin we don't know 100% who invented it but the first transaction happened in California Among The Cypher punks the whole crypto movement the whole Bitcoin movement is Cypher Punk if you don't know about it read up about it because it's the DNA of all what we're here for and he cares about it and I care about it because that's the point as you correctly said Cypher Punk is it's a technology movement and they care about cryptog cryptography do you want to make things private you want to protect certain information it's privacy enhancing and it's about social and political change but first and foremost it's the worry that the state becomes omnipresent with

the data and the technology now available to the state that's the Cyber Punk movement you want to have check and balances it's not about total anonymity I mean some some are maybe libertarian but basically it's giving the tools to us so we can protect ourselves from an overreach from go governments yes comment I think concept that one of the key points is that they consider privacy as a human right correct and all philosoph correct perfect but it's a human right that you can protect yourself it's p privacy from

overreach from the government all right interesting coming back to switzland who knows David sha he's one of the Cy he's a cyer punk he was very he was instrumental he created e e- money or ecash excuse me that was a predecessor to bitcoin he's a cryptographer and a lot of the cryptographers in us are cyer punks because they want to protect and he recently talked about privacy in pilot uh for wholesale cbdc I know wholesale cbdc CBC is not everyone's favorite topic but he did that with the Swiss National Bank and now look at what the Swiss National Bank said about the pilot what does it start off is a board member privacy is an

important user requirement but it's difficult to solve and he goes on about this balance between privacy and compliance you have to do this but what I'm trying to say again the Swiss care about privacy if you go to sou Sou Saudi Arabia would you expect the same statement I don't know I will guess not so it is important that we do it here so sort of coming to the second Point how can we compete Switzerland is the world Innovation Champion there's different stats the UN has done the world intellectual property oranization but why is so in in Innovative and is that enough for us to influence post positive change when it comes to technology well we have a bit of a track record and in uh June last year we were awarded as the

number one crypto Hub in the world by coin coindesk it says Z but basically they meant swis Switzerland but now something totally different who has watched the Nvidia GTC conference okay so this is Jen Wang founder and CEO of Nvidia and he's on stage with robots which robot is real do you know one robot two or three you see four robots one is real the other are sort of projections anyone ideas any guesses Paul Paul knows we have a microphone here that's okay the little one the little one little one yes yes that's on stage in Silicon Valley

last month let me show you that's what I taped last month at at and cich if it if it runs 30 minutes from here that thing was developed by Disney research lab Disney research lab develops uh here in s with eth this robot that robot was on stage the real robot that was on stage was made in syc it's Tech developed in Switzerland that it's Cutting Edge we're really cutting edge I think that's the point I'm trying to make here uh yeah that's little F fellow my my girls even touched touched it they

were very excited um so F finalize how can we compete and another gentleman who started in in Switzerland ATR is Albert Einstein he said creativity is intelligence having fun so what do you need for innovation in Innovation is experimentation it's about trying out things we all agree you know trying new things but things fail but it's two parts you also need sort of certain guidelines of certain things you don't want to happen you know when it gets too bad but the Innovation bit is creativity first and for that you need freedom and I think this is the contrast to other uh like when you do something innovation in Saudi Arabia and China certain things you're not allowed to do because the government doesn't want to do that no

because it's not Switzerland is very free and one of the reasons why we world champion is this the human Freedom index I think for 10 years consecutively we're the freest country in the world Switzerland you're living in Paradise if if you will if you like freedom and we're here so we're at the Forefront of that but I think there's one thing missing if we want to compete on a global scale and that's my key message beside that you you're all in the right location is we have to improve with one thing and I think one thing that we have a Swiss become better and I like that a lot of you raised your hands when it is about making money because I recently I'm doing I'm writing a book about AI based on interviews and I

interviewed this gentleman he's Stefan gin he's ex Google Silicon Valley he has a startup here cradle. boo uh they're doing uh genes sequence in know pro protein development with AI and he said the problem with Switzerland is this is like first time Founders or swiss Founders they think about the product we Swiss like quality we like the best product we like to be amazing like this little robot on stage it's amazing the interesting thing is I asked the guys what's a commercial application is going to be starring in film they said no it's ccgi is better what about the theme parks well you need to control it you know we don't know yet so those researchers had no clue how to make money out of it's super tech but it's like no clue how to make money and they

literally said that's the guys in the US they're going to figure out how we're going to make money out of this thing which was a very Swift statement because this uh what he said the second time found think about distribution how to sell your product and I do believe that Americans think about distribution first they think first how can we sell it and then they develop the tech the Swiss we develop the tech and then we have the the product but I think to summarize and finish up if we as a Swiss country need to go out against the big guys whoever you think that is if it's us or sa Arabia we are free to innovate we have the creativity it's our secret Source but I think we have to learn how to become better at commercializing and at

selling products at scale it's my belief I've been a consultant for more than two years I was executive in in in different uh startups I've seen it again and again and I hope that you get inspired to really go on this product Journey I'm happy to have conversations if you want to learn something about it and I think as Swiss we have to punch above our weight the freedom and Innovation bit we have sorted out I don't worry about innovation in Switzerland we have World Tech uh coming out of Switzerland we have to become Bolder and better in commercializing and then we can compete and create Tech that's not AGI from Saudi Arabia I hope with that thank you very [Applause] much love it impressive we have

questions right away I'll give you the microphone phone hi I I'm sorry I walked in late to your talk I'm not sure if you talked about ma but you mentioning go ahead I I know in the description it was uh yeah well but but but what I did hear you say was the influence of us regulatory uh apparatus on crypto globally but the reality is MAA actually are a set of regulations that the EU has issued and I find Switzerland to be in an interesting situation because you you know it participates in the EU Common Market but it actually is not part of the EU so it doesn't have any influence over the decisions but in a lot of ways it's be become constrained right without having a voice at the table and I think

these conflicts are going to become more acute uh Financial regulation is another example of that as well um as you know even though you know uh crypto is uh flourishing in Switzerland like the Swiss banking regulations are very compliant with us regulations and EU regulations so uh how do you think about MAA and the kind of very aggressive stance it's taken on a lot of issues very thorny issues in crypto I had on Friday a chat an opening chat with clouded son about that I know in the description says what M there's two views very CH answers I think this crossb issue in finance as Swiss we've had it for many years it's in traditional finance and still we have

the biggest wealth manager in the world based in Switzerland so somehow we're Swiss and that's sort of my answer to your question we're very good in creating ties with other e ecosystems and if you look at that so we're actually a home of blockchain Association we're running we're really building ties with Dubai with Singapore UK I think we always as smaller country we need to obviously look what the big guys are doing but we also need to build ties with other countries and why this is something that we SS very good at there's so many International companies based here that help us reach out so I the downside is you know yes MAA will have effects you know we can't ignore it but I think we've been historically very clever in sorting out how to still

access those those markets so I'm not as as gloom and doom as some people are and there's some workarounds you can go through Lin potentially without going into details but I think it's not the end of the world we like lonstein it's a wonderful place it's gateway to Europe yeah but I going push back here because I'm not just American I live in Switzerland and it's not easy to open a make it account as an American in Switzerland right and so it's not it's not this sort of like Switzerland will have to cooperate with trading partners like the EU and with the us and it already does and it already does have a significant amount of restrictions so unless we actually think through these harder problems around how to balance right uh uh for example privacy pools

like you mentioned I don't think it's going to have just saying I don't think it's going to have as much fre freedom to uh to uh say not comply with these jurisdictions within which it is nested in and within which it's trading as you might think I think that's true I mean Americans in in Switzerland bank accounts that has a long history going back to the financial crisis that's unfortunately very unique problem uh it's not that the banks don't want American clients it's just that reporting is a nightmare when you have American clients sorry to hear that you're not the only one uh but but and and my my general observation maybe admit more the crypto libertarian view of mine is I agree and I think you know I agree that you have to compli with

certain um with certain standards in certain countries and MAA you can't ignore I mean but the interesting bit about the interesting break about blockchain and crypto is it's decentralized it's very hard to pin down where things happen so I actually I always said you know a lot of what is happening in defi is sort of not regulated it doesn't fit in MAA doesn't talk about defi when it comes to stable there's a lot of gaps in there but the pure existence that there's an alternative out there is sort of what I call the Poke the bear effect and it's good that someone is poking the bear and maybe Switzerland sometimes also poking the bear we did it last time with Libra on DM we got really repr premounted by the us but we have a bit of a tendency to every now and then poke poke the bear

and I think even as crypto and ethereum Community sometimes you have to do things that are not completely you know thought through by the government because then you push Innovation forward so I think without those Alternatives then we would be totally lost because then we locked in so I agree that we need to mostly be compliant but sometimes you know certain things get developed and then The Regulators to figure out what to do with it and I think AI is a very good point in case you know no one has really figured that out and but because it's there we start P we start thinking about it and Switzerland can do that yeah powerful one more question please I'll come to you right the last question then we more that's powerful um I was just

wondering so so you're suggesting that we need to be compliant and what's I feel like in defi or building stuff on feater what's the point of being compliant like that's the the whole purpose of cyberp punk is not being compliant right and things like just building a simple software like tornado cache these it's just a simple protocol somehow they really go after those Developers and put them in prison just like you know what's the whole point of it you'll answer I have you know I've been in crypto for seven eight years I've met v f so I have as a I'm a I'm not Li ter but I'm I'm a liberal person

so I like that that some people are doing things that are just not fully th th th through I think the reality is uh if you really want to get depressed besides torado cash on um unbank the podcast recently Paulo or what's his name the the the tether CEO I keep forgetting his family he he he gives an an an interview and he States very clearly you know a lot of people think tether is you know not regulated out he says in the podcast they work with the SEC and the FBI directly so the Americans have a pass pass through so unfortunately that is happening but the it's too comp Tech it's such a complicated and fast moving spectrum

that sometimes the regulator just doesn't catch up and I think that's still good I I still remember in 2018 I was on stage it was when the Ico guidelines came out then someone said something very simple or very similar he said oh we decentralized we don't care about a regulator and I still remember a lawyer friend of mine got up and he said yes the blockchain protocol doesn't care you know the algorithm doesn't care that's true but if the police shows up in the morning at your house and knocks at the door you're not decentralized you know so that's sort of a bit the problem that exists but the world has enough Pockets where things and you can't put the chy back in the bottle you know no one even China has tried to kill crypto I think six times when I count it correctly they have managed so you know

my hat hats off to everyone who's trying and really it's it's a political societal mission to keep pushing that and not giving up and sometimes you have some hard experiences