Influencers Transcript: Eric Schmidt, April 18, 2019

ANDY SERWER: Many internet heavyweights either boast technical know or business acumen. Eric Schmidt has both. In his 20s, Schmidt got a PhD in computer science and put that knowledge to work developing software at places like Bell Labs, Sun Microsystems, and Novell. His fast rise brought him to Google, where he became CEO and grew that company into the search giant and more we know today. Now he's technical advisor for the board of Alphabet, Google's parent. He's here to talk about the internet at a moment of reckoning, and what it will mean for how we do business online.

Hello everyone. Welcome to "Influencers." I'm Andy Serwer. I want to welcome our guest, Eric Schmidt, who is a technical advisor to the board of Alphabet, former CEO of Google, renaissance man, author of a new book, "Trillion Dollar Coach" on Bill Campbell.

ERIC SCHMIDT: And a longtime friend of Andy.

ANDY SERWER: And a long time--

ERIC SCHMIDT: We've been together a long.

ANDY SERWER: That's correct, Eric. Great to see you again.

ERIC SCHMIDT: Thank you.

ANDY SERWER: So let's start with this new book, "Trillion Dollar Coach" about Bill Campbell, who I also knew a little bit, and a legendary advisor in Silicon Valley. Why did you decide to do the book?

ERIC SCHMIDT: Well my co-authors, Jonathan and Alan and I, originally, we wanted to write a book about him, because he was such a mentor to us, such a coach, and so forth. But I think we actually discovered something new. I think we discovered that coaches of teams are the way to build great companies.

And no one's ever talked about this before. They talk about individual coaching. But Bill successfully coached the entire management team of Apple with Steve in it and the entire management team at Google with Larry, Sergey, myself, in it, to multitrillion dollar valuations. It's extraordinary.

ANDY SERWER: So what did he mean specifically to you and to Google then?

ERIC SCHMIDT: Well, for me, he started off as my individual coach, and I said, well, I don't need a coach. You know, I'm like everyone else. I'm 40, and I think I'm super at everything. And my friend, John [? Door ?] said, do tennis players have coaches? And I said, well, you got me there.

So in fact, coaching is different from playing. It's a different skill set. And so once we started with Bill, he started working on structuring the board, talking to the board, talking to the management team. And what I realized was that he he was coaching the whole team. So what would happen is one of the executives would become unhappy about something, and I'd say Bill, go try to figure what's wrong there.

Let's bring them back, so they're playing on the same team as everyone else. And his basic principle was he wanted people to work on the team and with the common goals. And he would do whatever it took to get people into that framework.

ANDY SERWER: He was a behind the scenes guy, though, right? He didn't want credit?

ERIC SCHMIDT: Well, in fact, he hated press.

ANDY SERWER: I know that a little bit.

ERIC SCHMIDT: Well, you actually met him.

ANDY SERWER: Yes.

ERIC SCHMIDT: So you can describe how did he make you feel?

ANDY SERWER: Well, he grudgingly accepted our process, I think, is the way I'd describe it. He didn't want credit for what he did. And I think that was genuine.

ERIC SCHMIDT: It was genuine, absolutely. In fact, he was very upset whenever he was mentioned in any context. His whole goal was the credit of others. And I've thought a lot about how did this happen, because he was a strong-willed, creative CEO. He was the vice president of marketing who brought out the 1984 famous Apple television ad.

He worked closely, normal executive. He somehow decided, sometime in his 50s, that he had been successful enough, and he wanted to give back. And he famously refused compensation. So when he shows up in my office in 2001, I said, well, how do we pay you? And he said, don't pay me. And I said, well we'll put you on the board. He said, don't put me on the board. I can't do my job if you pay me or put me on your board. His job was to be our coach.

ANDY SERWER: Really singular guy. So at one point, there's a story in the book about how Larry and Sergey wanted to get rid of managers or, in fact, got rid of them. And then Bill convinced them to bring them back. Can you talk about that?

ERIC SCHMIDT: So one day Larry and Sergey-- this was very early Google-- had been looking at what the managers were doing and what the individuals were doing, and they decided correctly that the managers weren't in good touch with what the engineers were doing. So they decided to get rid of the managers, which caused a problem because we had 120 people, who now had somewhere they had to report to. So we gave them to report to a gentleman named Bill [? Coren. ?]

But what was interesting about this is I figured, you know, the engineers are complaining. This will work. They'll self-organize. But the engineers started to complain that they wanted management. They wanted leadership. And why? Well, they had career aspirations, or they had questions, or they had compensation problems. Or they had a fight with somebody else, or they just wanted somebody to talk to.

And so Bill came in and, ultimately, convinced everybody to bring in a different kind of management, which is in place today.

ANDY SERWER: One thing, he says-- in fact, he says a number of things that I found somewhat counterintuitive. I mean, first of all, maybe his cursing is sort of counterintuitive that he was famous for. But he said that it's the CEO'S job to manage the board. And gee, I always thought it was the other way around. What's your take on that?

ERIC SCHMIDT: Well first place, Bill was a man of his time. And so that meant he was a football coach, and, you know, he was colorful in his language and so forth, but he had an enormous heart. And his position was that the CEO was running things, and that included making sure that the board knew what was going on.

Now, ultimately, of course, the board can replace the CEO. But a talented CEO keeps their board apprised as to what's going on, and we ultimately developed a principle, which was the no surprises rule. There is never going to be a surprise in the board meeting, because either I will have told the board, or he will give them a heads up on my behalf, and that worked.

ANDY SERWER: He talked about conflict versus relationship conflict. What is that all about?

ERIC SCHMIDT: Well, there's going to be conflicts. There's going to be disagreements. But you're never allowed to attack the person. Right, it's never OK to say something terrible about a person as individual. Attack the idea. Attack-- and say look, I have a better idea. I have more data.

And he also pushed very hard-- and this, I think, was his signature achievement at Google-- to make sure that we didn't get to a consensus idea, but to the best idea. In other words, you're not done until you get to the best possible idea out of this situation.

ANDY SERWER: Some of this stuff Eric, quite honestly, sounds intuitive.

ERIC SCHMIDT: It's obvious.

ANDY SERWER: But people don't do it. Why.

ERIC SCHMIDT: I don't know. It's a mystery to me. And I can tell you one answer, which is often in our industry, the executives are young. They're not that experienced. All of us went through that. But another possibility is that people just don't have the time. I mean, the pressure on these companies and the startups-- and it was bad enough for me. But look at it today with the time critical and compression that people are dealing with.

So people feel like they have to get up and bum, bum, bum, bum, bum, bum, bum, bum, bum. Right? And the problem is that that violates the basic principle, which is the only thing that matters are the human beings. So what Bill taught us was to take a minute and say, how are you? And to mean it, by the way. Don't do it in a perfunctory, hi, you know, whatever. But listen to them.

Be present. Don't be on your phone or whatever. How is your family? What's going on in your life? And he was also interesting in that the way he managed was he started with trust, not facts. So his first question was not, what are you in charge of, but rather who are you, what do you want to achieve, how do I let you achieve that, how do I help you. And then you get into the specifics.

Taking that extra time, which isn't a lot. We're talking about five or 10 minutes. We're not talking about hours. Right? So somebody calls you, say, how are you? What are you doing? How is your life? How can I help you? Building that trust was key.

Now, it seems obvious when I say it, but one, people don't do it. But why was it useful? Because then down the line, when there would be a tough situation, like, hey, they screwed up, he could go in, and because he was trusted, and say, we need to have a conversation about this.

ANDY SERWER: Why aren't there more Bill Campbells, Eric?

ERIC SCHMIDT: I think partly because he was a unique talent. You know, he was not a technical person. It's very rare for technical people without any technical background to end up in the kind of role that he's in. But I think, also, because the discipline of coaching is not appreciated. I believe that Bill invented a new Silicon Valley product, which is executive coaching of this style.

I believe that our book is his playbook. The only reason he didn't write the playbook is he didn't want any press. Right, but what he should have done is he should have written the book about his theories, which we hope we have exemplified by interviews with 80 people, including all the people in Silicon Valley, who everyone knows.

ANDY SERWER: Let's talk about you a little bit, Eric, in your background. You grew up in Italy a little bit. Your parents were academics. What about that shaped you and got you out to the Valley?

ERIC SCHMIDT: I think, in my case, I was born and raised as an intellectual, you know, reasonably soft spoken. And you know, an ideas person and a scientist. And I was fortunate, and I think one of the things that Bill and I talked a lot about was the role of fate, right, and luck. And he would teach, start by saying, that you're lucky, that you're lucky to be here. You're lucky by birth. You're lucky by this generation. Imagine, if you'd been born 500 years ago. Just think dentistry, you know, alone.

And so we're really lucky to be where we are. And I was particularly lucky to be at the beginning of the computer science revolution.

ANDY SERWER: You had a hand in the discovery of Bell Labs as an intern. Did that also help spur you and give you confidence?

ERIC SCHMIDT: Well, at the time-- it's hard to remember. This is more than 40 years ago. There was no computer science as we know it. The field was just sort of being designed. You couldn't major in computer science. They were mostly mathematicians. And many of the top people were at Bell Labs and at a place called Xerox Palo Alto Research Center, which had been formed in the mid 60s and late 60s.

Bell Labs had been around for a long time because it was a monopoly out of the original Bell AT&T monopoly. And it's the place where transistors and other things were invented, television, all sorts of extra astrophysics things and so forth. So in my case, I had the good fortune of working at Bell Labs as an undergraduate and wrote a program called [? lex. ?]

And this was back when the Unix community was 10 people. Today, when you use any form of computing, you're using the grandchild of that team of 10 people, and that grandchild is open source Linux.

ANDY SERWER: Right, pretty amazing. Can you talk about mentors that you had, say, besides Coach, for instance Scott McNealy helped you out, other people like that?

ERIC SCHMIDT: I always worked with somebody who was brilliant and smarter than I was. So as an undergraduate and graduate student, as an undergraduate I worked with a guy named [? Jeff ?] [? Ulman, ?] who's now at Stanford. As a graduate student, I worked with a guy named Bill Joy who did much of the Unix work. As a graduate student, I worked with Butler Lampson, who's now at Microsoft, but-- these are brilliant people.

And I was particularly good at working with them to take their ideas and turn them into reality. So I always say, they're the smart one, and my ability was a translational ability. So it's interesting that in my years of [? sun, ?] Bill was my business partner. Scott was our boss and so forth.

But my job was really to translate what they wanted. So when I showed up at Google, it was the same thing. It's Larry and Sergey younger than me, but far smarter, far more brilliant than anybody I'd worked with. My job was to translate their vision into reality.

ANDY SERWER: What was Google like in those early days? When you talked about Larry and Sergey, there was Marissa Mayer, Tim Armstrong later, Susan Wojcicki, I mean, there just an amazing group of stars of tech, really, right?

ERIC SCHMIDT: Well, it's interesting. I wonder, you know, these people were so smart then. But they were super young. And so the first rule you say is that you really need to work with people who are incredibly high potential, which they were. But they were also shaped by the experiences that happened around them.

So Tim Armstrong, for example, had not done very much in sales. He was sort of a sales executive [INAUDIBLE] hired him. But he had an opportunity to run our US sales force and build this extraordinary ad business, which he then went on to run, you know, companies in the rest of world, including AOL.

So Tim is a good example of somebody who is an extraordinary racehorse, who then needed to run the races and learn how to win and so forth. And you need both. Marissa is the same way, Sheryl Sandberg, the same way. You could sense when they were young, that they had that that ability to see beyond where they were, and they had the ability to lead.

As an example, my first visit in New York was on 9/11 in 2001, and I met Tim Armstrong, and then 9/11 happened, and I watched him work with our employees, of which they were 20, right, to deal with this sort of tragedy of the people being in the middle of Manhattan during this horrendous thing.

You could see his leadership skills as a young executive. They just have them. So I think one of the things to remember is that you need both, you know, a sort of great general and a great war, whatever metaphor you want to do, to create this. You need both. In my case, I was, frankly, lucky to be at the right time.

ANDY SERWER: Maybe a little bit more than lucky, Eric. What makes people succeed? Maybe you touched on this a little bit, but what makes people succeed in Silicon Valley?

ERIC SCHMIDT: I always tell people that there's a whole bunch of examples. But the easiest example about engineering is when I walk up to an executive who's in engineering, I expect them to listen to difficult recruiting problems, difficult product delays, employees who are screaming at them over one thing or another, very needy people, and enormous competitive pressure. And I expect them when I walk into them to be able to answer the question right now, how are you, what are your issues, what are you doing to fix them.

So that's a good example of what it takes to be successful. In sales, when I started a long time ago, we didn't have this. But today, sales is an analytical function, that we know what our yield is for the quarter. We know how much money we're going to make. We know what our customers are going to give us. We have a complete understanding, at least in the very short term in sales, about what's happening in our sales engine.

And we have tools, now, that didn't exist decades ago, that allow us to run sales analytically. With marketing, we can measure the impact of our marketing ideas. You think your ad is great, and I think my ad is great. We can test that now.

ANDY SERWER: Right.

ERIC SCHMIDT: So management today in Silicon Valley is a science in the sense that it's measurable. Now there are aspects of artistry, so for example, recruiting, understanding the exceptional people over the very good people. And that's still an art, and deciding exactly who to promote and how to do budgeting and so forth is still an art.

But there are so many analytical tools that I didn't have when I was a young executive.

ANDY SERWER: And you're expected to know them, no question about it. You can't you can't succeed, to your point, without knowing them.

ERIC SCHMIDT: When I look at the young, what I consider to be young executives now in the valley, and I'm thinking of Sundar and his generation of leaders, and remember, I was a generation earlier, and then I followed a generation that preceded me. When I look at them, this generation is impossibly faster.

ANDY SERWER: Yeah.

ERIC SCHMIDT: Right, their ability to make decisions, identify challenges, organize teams, put things together-- we would spend months discussing what we would do, and these guys, boom.

ANDY SERWER: They have to be, right?

ERIC SCHMIDT: And the question is is it the horse or the jockey? Are they forced to, or are they just so much better? In other words--

ANDY SERWER: It's a yin and the yang, right?

ERIC SCHMIDT: Yin and a yang. I don't know, and maybe this is what happens as you get older, I don't know if I were their age now, would I be as good. I know they're better than I was then. What I don't know is what the circumstances have brought me up to their level.

ANDY SERWER: Yeah, I mean, I can tell you the pace is relentless. I mean, it really is.

ERIC SCHMIDT: You see this, by the way, in journalism.

ANDY SERWER: Right.

ERIC SCHMIDT: I mean look at the journalists, your journalism career and editing career compared to what's going on today. And one of the underlying points about life is that everything has gotten so much faster, faster than we think it has.

ANDY SERWER: Yeah.

ERIC SCHMIDT: Do you remember the time when you were not spending all your time on your smartphone? Well, let remind you that smartphones started in roughly 2008. And you're older than 10 years old.

ANDY SERWER: Yeah, right.

ERIC SCHMIDT: So the fact is you do. You just don't remember it now. Do you remember a time before you had a cell phone? Right, I do.

ANDY SERWER: Right.

ERIC SCHMIDT: And by the way, we got through life.

ANDY SERWER: Yeah. Oh I know. It's amazing. So do you need-- does one need to be a CS person to run a Google or an Alphabet or a Facebook or a Cisco? I mean, do you have to have that background?

ERIC SCHMIDT: You don't have to have a computer science degree, but you have to have an analytical bent. You have to be able to work with the numbers. And by numbers, I don't mean deeply numbers. But you have to think analytically. If you think in terms of metaphor and in terms of vision and in terms of ideas, you're going to not be able to run these companies.

There's just too many things you have to organize. But let me give you an example. Craig McCaw, history major from Stanford, incredible analytical manager. Steve Jobs didn't graduate from college.

ANDY SERWER: Studied calligraphy.

ERIC SCHMIDT: Studied calligraphy and of course, did it very well, did everything well, the smartest of them all.

ANDY SERWER: Right.

ERIC SCHMIDT: So another observation is that the competition around leadership now is such that I think we're getting people who are ably capable at everything. You know, the old rule about capability is there are people who are just maddeningly better than you at reading and writing and arithmetic and whatever. There are people their processors are, if you will, better. And I think they tend to be right. They're more likely to rise to the top now because it's so meritocratic now.

ANDY SERWER: So why is the bloom off the rose for the technology industry in the eyes of so many Americans?

ERIC SCHMIDT: I'm not sure I agree with that comment. I think that's a perception that the press has. All the studies I've indicated are that people really like our products.

ANDY SERWER: Mm-hmm.

ERIC SCHMIDT: As a general statement. And we know that because they use them more and more and more. So I'm not sure I would jump to that conclusion quite the way you said it. There's clearly issues. Going back to the topic of the book, what would Bill say in this situation, and we don't know. But I can suggest that he would say let's stick to our values and let's organize the teams that are necessary to go work on these problems.

It's the way he would have thought about it to say, here's a problem, here's a perception, here's a regulatory problem or what have you. Let's figure out if we have the smartest people, let's get them organized, figure out our values, and let them figure out some solutions.

ANDY SERWER: What is Alphabet in Google? How would you describe the company to an 8-year-old nephew or niece?

ERIC SCHMIDT: Well, I think of these companies, the collection of companies as companies that do systematic innovation. And that, Google, for me, was always a place where I didn't quite know what the innovation would be, but I knew how to systematize it, to regularize it, to make it more predictable, that the innovators would bottoms up, and things would happen.

What Larry and Sergey have done with Alphabet is they've replicated that with companies. So now there are five or six Alphabet companies that are of scale. There are more on their way. One is in self-driving cars. That's clearly going to be hugely successful. Another one is in medical diagnostics and medicine, in general. And that's [? Verily. ?] That's clearly already successful. And there are others coming.

ANDY SERWER: I want to drill down a little bit, Eric, in this sort of $64,000 question, which is the problems of tech, the problems that are facing Google and Facebook and Twitter, the platforms. So there are myriad problems, which you acknowledge. I mean, there's problems of bad actors getting onto the platforms. There's problems of free speech, questions about free speech on platforms like YouTube, for instance. Then there's antitrust concerns as well. How should Americans think about this? How should the tech executives think about it? How should Washington think about it? How can we get to some sort of resolution?

ERIC SCHMIDT: Well, I think these issues are ongoing, because these are human-based systems. And so humans will continue to use them. They will continue to do unexpected things. They will continue to be surprises. And I've often thought that one of the things that scale brings you is the ability to detect aberrant behavior.

So if I go back to YouTube, when YouTube was started, there were some copyright issues.

ANDY SERWER: Yeah.

ERIC SCHMIDT: And there was a lawsuit with Viacom, which has since been solved and so forth. And we began to build tools that would make it very difficult for user uploaded technology to be copyright violating. Today, that technology is extraordinarily powerful.

So I think all of these platforms that are human centric will have to have a component of them, which is sort of, if you will, watching what the users are doing and making sure they're consistent with their terms of service and the law.

ANDY SERWER: Is there a role for Washington DC?

ERIC SCHMIDT: It's generally better to let the tech companies do these things. The problem is if you write a rule, inevitably, you fix the solution on a specific solution, but the technology moves so quickly.

ANDY SERWER: Is there an example of a self correct by maybe not even just tech, but any business where they've seen these sort of-- I don't know-- systemic problems or problems with the business model that were unanticipated, where they've been able to address them, do you think?

ERIC SCHMIDT: Well, certainly, Google did not understand, certainly, when I was running it how serious some of these issues would be. We didn't fully understand the scale of these problems, certainly when I was CEO. And so our response is, in my view, been very strong. Today, we have all sorts of software that enforces policies of one kind or another. And people complain about the rules, but the fact of the matter is the rules are published.

ANDY SERWER: Right. And last question on this point. Is this ultimately something that's going to mean, say, lower margins for companies? I mean, does it entail a greater spend in terms of humans and/or computing power?

ERIC SCHMIDT: There's no way to predict that. I mean, in software, in what we do, your profitability your revenue growth is completely determined by your level of innovation. So it's easier to think about it in the following way.

Eventually, markets, over a long period of time, stabilize, and eventually, there is sort of zero sum competition, and eventually, margins compress, and things become more commoditized. Look at the steel industry as an example. We are not anywhere near that. We are decades from that. We are maybe a century from that. So we're all using all of the old concepts into the creative side of technology and, in particular, software is not appropriate.

There are startup after startup with new ideas that will have different margin structures and different ways of solving problems. We're still in the early stage of that.

ANDY SERWER: OK. Did you have any idea when you first got to Google that it would turn out to look even anything like this?

ERIC SCHMIDT: No, not at all. I actually wanted to go to Google, because it was a one building company, because I had worked at Novell, which was a multi-building company, and I actually wanted to have when building where everyone was in it so I could actually hang out and talk to them and have a really good time. And boy, was I wrong.

ANDY SERWER: Right.

ERIC SCHMIDT: But I joined a one building company that was extraordinary.

ANDY SERWER: And so what are the limitations for a company like Google, or are there any for Alphabet? Should there be any? I mean, at some point, you have to be-- I Sundar's big job is sort of allocation and deciding the path forward in a way.

ERIC SCHMIDT: Well, Sundar has many jobs. He has recruiting jobs, and he has marketing jobs.

ANDY SERWER: But ultimately, isn't that sort of figuring out where to go? I mean, maybe it's presumptuous of me. Go ahead. You talk.

ERIC SCHMIDT: I think, as a general statement, we don't know where the limits of this current tech boom is. People have talked about it, you know, topping out for years. If you ask anyone, they'll say oh, the next nine to 18 months. But they've been saying that for a decade. So I think we don't know.

This year, we have various significant IPOs of new companies that are of scale companies, new platforms with more expected. I don't think we know.

ANDY SERWER: It's so interesting that Uber-- I remember Eric, the first time that I put Uber and Google in the same sentence as competitors and just how shocking that was, what a preposterous thing. And now, of course, it's just that of course, they're competitors and partners.

ERIC SCHMIDT: We're also super close partners.

ANDY SERWER: Right. But it's just, you thought that these companies had nothing to do with each other was my point, and of course, that's not the case at all.

ERIC SCHMIDT: But a better way to think about Uber is what's the best use of a mobile phone that has a GPS and a map on it.

ANDY SERWER: Right.

ERIC SCHMIDT: Turns out one of the best uses is the ability to summon the things that you care about to where you are and watch them come to you. So this notion of Uber for everything, that is a metaphor is a very powerful one.

ANDY SERWER: Maps, people are talking about that as being a super app a la what's going on in China. Have you explored that at all?

ERIC SCHMIDT: I can't speak for the specific plans, but people care an awful lot about what's going on on the earth. Right, so hyper local behavior, hype-- if you look at the set of startups around hyper local, they're very, very interesting. All of these were enabled by a phone with a GPS on it.

And by the way, the majority of those phones are Android phones.

ANDY SERWER: Right. We were talking a little bit off camera about our political system and the dysfunction, and you were talking about maybe some thinking about why that exists. So I want to ask you about that and what you would look for in the next political leader or political leadership for this country.

ERIC SCHMIDT: I'd rather not answer the political question, but I'd like to answer the system.

ANDY SERWER: OK.

ERIC SCHMIDT: You're beginning to see writers who analyze the way our political systems work point out that the incentives are driving the behavior.

ANDY SERWER: Meaning what?

ERIC SCHMIDT: That basically if you're on one side, you're not incentivized to work across the aisle, you're incentivized to work away from the center, because that's how your money gets-- that's how you get your votes. That's how you get your attention. And the more outrageous you are, the more attention you can get on, again, on any-- I'm not passing any value judgment here. It's just true as a system function.

So whether it's money or attention, right, the incentives are there. We also know, from research, on social media, like Twitter and Facebook, that things which are outrageous are more likely to be shared and tweeted and recent and so forth than things which are reasonable.

So our obsession with this fight and our reaction to it and the way we as citizens play in it is driving it harder away. Right, so we want the politicians to somehow sit-in the middle. But in fact, the system is forcing them, and they will privately complain about this.

So if we want this to change, we have to start by what's the nature of the system driving their behavior.

ANDY SERWER: And what is that? I mean, well you explained it. But how do we address those negative implications, then, if that's what we want?

ERIC SCHMIDT: Well, it's not it's not my area of expertise, but someone's got to come up with a better proposal.

ANDY SERWER: Yeah. The end of the book, you talked about Eric 3.0. What does Eric Schmidt 3.0 mean?

ERIC SCHMIDT: Well, it's interesting that writing books, as you know, because you've done your share, really does sort of change you. You really do think about it. And in my case, I'm extremely interested now in working on talent and working on leadership. And in my private foundation work with something called Schmidt Futures, I'm really trying to identify this next generation of talent to work with them to develop them.

ANDY SERWER: So talk about how you want to use your influence on the world. Maybe that's a part of it. But this show is called "Influences." What do you think about in terms of how you can use your talent and your knowledge to impact humanity writ large?

ERIC SCHMIDT: Well, one of the things to remember is that we're here because of the technological revolution. And the technological revolution is the primary source of economic growth, and the primary source of economic growth is the primary source of health and well-being globally.

So in the last 20 years, globalization has brought 2 billion people out of poverty. All of this narrative starts from science and innovation and entrepreneurship. In our country today, we are not increasing our spending on science, and we're not increasing our spending on education, both of which we need desperately.

As we face the great global challenges, as for example, China continues to grow and continues to be super successful, what will America's response be? It has to be more of what we're good at, more science funding, more entrepreneurs, more immigrants, right, at least high-skilled immigrants, more PhD programs, more startups, more innovation.

The American universities are 18 of the 20 top of universities in the world are American. But if you look, for example, in artificial intelligence, the Chinese universities are now producing extraordinarily good research. So all of a sudden, we have a competitor in China. And we've always had competitors in Europe.

We need to get our act together. We got here, as this great country of America, because our forefathers worked really hard, for example, to create the Land-Grant universities, Universal High School. Where is our focus on STEM education, on reforming education, on getting more people to the table, getting more smart people, getting them assembled in teams, building companies?

Think about the wealth that has been created by Silicon Valley, and remember how much taxes that is, how much that actually funds the US government's aspirations, which are many and important.

ANDY SERWER: Eric Schmidt, thank you so much for your time and congratulations on your book.

ERIC SCHMIDT: Thank you very much, Andy. Good to see you.

ANDY SERWER: You've been watching "Influencers." I'm Andy Serwer. We'll see you next time.