Warsh’s Waiting Game, EU Merger Rules, Robotic Surgeons

26:31the purpose of keeping up with, or at least not falling further behind, the U.S., or whether the thing holding the development of European tech champions back has had little to do with competition policy, but turns much more on deeper integration of the European Union itself. The argument that they're putting forward is that that merger will make a bigger firm and therefore make some kind of European champion. That's actually not typically how we've seen the champions in other parts of the world emerge. If you think about Google or Microsoft or IBM back in the day, they didn't come from a merger.

27:09They came from very fast growth of an innovative firm. And so a lot of what the Draghi report talks about is not in fact mergers, but is about the barriers to the single market being really effective. If you start up a company in the Netherlands, how quickly can you sell across all 27 member states, 500 million people. If you could do that as fast as can happen in the United States, because we have free commerce between our states, you could grow really fast. Up next, robotic surgery is a rapidly growing segment of healthcare. Johnson & Johnson got its start helping surgeons 140 years ago. Now it has its own approach to using robots in the operating room.

27:50Can it catch up with the leaders in the field?

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30:33This is a story about losing the race, at least at the beginning. Inventors become household names when they do something for the first time. Thomas Edison and the light bulb, the Wright brothers and the first manned flight. With time, their names have become synonymous with their innovations because of the leaps in technology that made their products viable. Everyone always wants to be first. But can it sometimes pay off to be slower out of the gate? Johnson & Johnson hopes so, at least in the fast-growing field of robotic surgery.

31:08I want to introduce you to Otava. Last week, Johnson & Johnson got the green light from the FDA to take its robotic surgery device, Otava, to market. It's the latest move by a company whose legacy traces back to the 19th century. Johnson & Johnson was founded by three brothers in 1886 when they created ready-to-use sterile surgical dressings. But the original Johnson brothers could not have anticipated how far surgery would come over the next 140 years. Otava is Rocco DeBarnardis' baby. He has been with the MedTech division of J &J for 14 years. De Bernardes gave us a first-hand look at what the new platform can do at J &J's campus in Santa Clara.

31:56The ergonomics was an important element. Definitely there's an improvement where you move as a surgeon from bedside to behind the console. Meet Otava. J &J has traveled a long road to get to the newly approved version of Otava. Although it has sold robotic systems for other procedures, it started its pursuit of soft tissue robotic surgery 11 years ago when it teamed up with Alphabet to create Verb Surgical, which it ultimately took over. In 2019, the company bought robotics surgery startup Auras Health for$3.4 billion and subsequently invested billions more in the effort. Then came its first version of Otava with six arms, but suffered a$900 million delay before getting approved in a simpler form by the FDA.

32:45It's not been a linear journey, you know, for us. But, you know, I'm really proud of what we have accomplished, particularly over the last five years, how the technology has evolved and what we're going to be bringing to market anytime soon. We acknowledged that there were some technical challenges at that time. and we went back to the surgeons that I was talking about, and we are very happy with the decision we made at that time. While Johnson & Johnson has been developing its version of soft tissue robotic surgery, others have forged ahead. The leader in the field is Intuitive, whose da Vinci system was first approved in 2000 for urologic surgical procedures.

33:30Global data estimated that Intuitive held around 80 % of the market in 2024, with the rest shared by firms like Medtronic and CMR Surgical. J &J knows it's starting from behind in the race, but it believes Otava is a very different kind of competitor, one that will help it move up the leaderboard. As you know well, you're not first into this space. There are other people who are fairly well entrenched. Are you happy with your position of being second or third or fourth? Well, first, we're very happy that we're bringing a new category defining innovation to the market. Hani Abul-Halka is in charge of the company's surgical technologies, including Otava.

34:12That group falls under its MedTech division, which made up a third of Johnson & Johnson's overall revenue in 2025. If you look at globally, there's maybe 40 companies with robots, but all of them are either stuck in two different architectures, either modular or boom. and the biggest difference here is our robot is the table. The arms are integrated, you walk into the OR, if they're not deployed you don't see it and when it's needed it comes on and you'll tell me is that a big deal? I can tell you when I started my career in J &J I remember the first day I was in OR and I felt it's without even noticing it there is tension and friction between the surgical team and the machines and I've always had this idea that we can do better and we should do better and I believe we did.

35:01Johnson & Johnson believes it has a better way to address robotic soft tissue surgery, one that will appeal particularly where space in the operating room is at a premium. But it also sees the overall robotic surgery market as being in its early stages, providing an opportunity for its product to grow as the market does. Robotic surgery, if you look at the total addressable market, the way we look at it, has 8 % penetration around the world. It's a fast-growing segment of the market, definitely one that we see more and more adoption for. And there is more and more companies like us willing to contribute and bring meaningful solutions to market.

35:45One of the big benefits of the robot is that it is collecting a lot of the surgeon information. Dr. Christy Hawley is an assistant professor of surgery at the University of Colorado and just recently led the department's annual robotic acute care surgery course. Robotic surgery definitely adds another element of complexity to general surgery training. The resident physicians are being asked to not only learn open operations and laparoscopic operations with straight sticks, but now they are also being asked to learn how to operate on a robotic console. At my institution, I'm the director of robotic surgery education for about 80 general surgery residents.

36:32And so really thinking about how to train them on the platform is challenging. Another challenge for robotic surgery is the misnomer of the role of the robots. Dr. Hawley says they don't perform surgeries on their own. They are meant to be used by human surgeons. I often get asked whether robots are going to take over our jobs as surgeons. And I believe that would be very difficult to accomplish. Being a surgeon involves patient selection, diagnosing a patient, and ensuring that you've built that trust with a patient to go to the operating room. But I also think that there's the possibility of these robots performing components of the operation.

37:17I'll give you one example. A simple task like suturing. If a program was able to actually see different pieces of tissue and you as a surgeon sitting at the console, say, I'd like to suture this to this and point to the robot and show it, then maybe it's possible that that component of the operation could be done by a robot. But that's certainly not something that's going on today. So I wouldn't say that every surgery necessarily should be robotic. I think it takes a very well-trained surgeon in both robotic surgery, laparoscopy, and open operations to decide patient selection. So which patient is going to benefit from the robotic platform for what type of surgery.

38:02Robotic surgery may not be right for every procedure, but where it is used, Dr. Hawley says, it fills a gap for both patients and the hospitals that use the new technology. There have been multiple studies showing that laparoscopic and minimally invasive surgery do have many benefits to patients. One of the biggest benefits is decreased pain. As you can imagine, an open operation requires a large incision and can be very painful. So if you have less pain, you can recover more quickly, go back to work more quickly, and get out of the hospital faster. And so one piece is that minimally invasive surgery can actually decrease your hospital length of stay, which is very important to both patients and hospital administrators.

38:51Overall, when choosing robotic surgery specifically, it really depends on patient selection, the operative team you have available, if the platform is available in your center, and of course, how well the surgeon is trained on the robotic platform. If I do not have a resident, I'm an academic surgeon, and so we have residents in our operating room to help us operate as the attending surgeon. And it's very beneficial that if a resident's not available on the robotic platform, there are less needs for assistance. It's a lot easier to just place the ports on your own and then operate robotically.

39:35I have spoke to many surgeons in the community or in rural settings who don't have surgical trainees or their systems really can't afford surgical assist. And so the robotic platform can be another way to make us more autonomous and be able to rely on ourselves to perform operations in totality. Johnson & Johnson is hopeful, not just that it can catch up in robotic soft tissue surgery, but that it can make a large and successful business of it. That will require further FDA approvals for specific procedures down the road. But Johnson & Johnson is confident that those will be forthcoming. The FDA have been incredible partners on this journey.

40:15We've been back and forth with them. The people at the FDA have been incredible professionals from day one. They're trying to do what's best for patients and for healthcare. And from our perspective is we're trying to move with precision and with speed. Our intention is to be a leader in surgical robotics. And to do that, we need incredible technology innovation, which we have. Then our next submission we announced was an inguinal hernia. And subsequently after that, we're going to have multiple submissions to be able to bring, again, multiple geographies and multiple specialties and that's what we're planning to do.

40:47If you just take one step back and understand that we chose to come to the US first for a couple reasons. One, it's the largest robotic market. Two, it's a sign of confidence of our program and how differentiated it is that it can take something that's been there for a while. As you know surgical robotics is not new, Otava is and that's why we're coming here first and hopefully we'll expand quickly after that to key markets like Japan and Europe. So give me a sense, again, in success, how big this could be for Johnson & Johnson. How do you measure that? First of all, start with you're starting in the United States.

41:23What is the potential of the United States as opposed to outside the United States? I mean, as I said, it's incredibly exciting for us, for J &J. In terms of from a financial perspective, we expect this to be material towards the end of the decade. As the saying goes, the pioneer takes the arrows, but the settler takes the land. Sometimes we're not first, but when it's said and done, we're best. We brought innovation that no one can really match. And what excites me here is that this is still early, and we're bringing something that's completely differentiated, and it's going to help us take robotic surgery to the future.

41:59Up next, the U.S. leads the world in think tanks, those non-profit idea generators. But what do they really do, and do they make a true difference?

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42:52Visit otcmarkets.com slash moon. Moon ATS is operated by OTC Link LLC, a FINRA-registered broker-dealer. Support for this show comes from public.com. If you're actively involved in your portfolio, you probably catch yourself repeating the same actions, buying the dip, manually sweeping idle cash, putting on a hedge. On public, you can now create AI agents that handle all these tasks on your behalf. Just describe what you want to do in plain English. Like if the VIX hits 25, buy a put option on the S &P 500. Or if my cash balance goes above$20 ,000, move the excess into my direct index. You approve of the workflow and your agent handles the risk.

43:34Monitoring the market, watching for your conditions, and executing your strategies exactly as defined. An investing platform driven by your intent, not just your clicks. You can also get full read and write access to your account via the public API. Go to public.com slash market and fund your account in five minutes or less. That's public.com slash market. Paid for by Public Investing. Brokered services by Open to the Public Investing, Inc., Member FINRA and SIPC. Advisory services by Public Advisors, LLC, SEC Registered Advisor. Complete disclosures available at public.com slash disclosures. And now, another appliance triumph from our friends at Grand Appliance.

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44:44This is a story about return on a different kind of investment. An investment not in plants and equipment, but in ideas. is. We hardly go through a day without getting a new report or policy proposal from a think tank, from the Council on Foreign Relations or RAND or Heritage or Brookings, all supported by wealthy individuals and corporations. But do they make a real difference? And how do we tell? For that matter, how do they tell? I've been intensely interested in this question, what I call the business of ideas. Carolyn Elkins studies think tanks at Harvard Business School. How do ideas get formulated?

45:22How do they make it in the marketplace? How do we value them? And more importantly, what influence and impact do they have on the society in which we live? Elkins says that there are between 8 ,000 and 10 ,000 nonprofit organizations worldwide that deal in the business of ideas. And the U.S. has 20 % of them. The five biggest think tanks in the U.S. brought in roughly$1.3 billion in their latest reported fiscal years. But their rise has been a long time in the making. They go back, you know, really all the way into, at least in the United States, into the Second Industrial Revolution. And they really take off after World War I.

45:59Brookings is among the first. And then we have the Council on Foreign Relations. And then we see another uptick again in these think tanks in the post-Second World War period. And that's when we have institutes like the Aspen Institute coming into fruition. A lot of them focusing on, you know, sort of big sort of geopolitical problems like the Randa Corporation and others. And these think tanks were really meant to bridge this kind of research for research sake, which is really what universities were doing, with practical implementation, decision makers. One of the most prominent of these nonprofit idea generators is the Aspen Institute.

46:34Dan Porterfield took over leadership of the Institute in 2018 and has just stepped down to become CEO of the Jack Kent Cook Foundation. There's a lot of different models for being a so-called think tank. Many think tanks that are well-known, like the Brookings Institute or the American Enterprise Institute, assemble scholars who then write reports that are meant to be very relevant about issues facing our country or the world. In the case of the Aspen Institute, we're less of a think tank than a do tank. We don't sit around and go up to Capitol Hill. We don't have any lobbying at the Aspen Institute.

47:09We don't tell the government what it should do. We're more likely to build the table around which many players sit so that they together can sort out how to frame and address a problem. When you went to lead the Aspen Institute, what did you feel you needed to accomplish? What were your goals? Probably two big things to start. The first was that the Aspen Institute, led by Walter Isenson, had taken off as an organization, had seeded many fantastic programs in leadership or in collective problem solving around the country. And part of my responsibility as CEO was to develop an enterprise strategy so that the collection of programs would fit well together and so that they all would benefit from a robust and sustainable enterprise.

47:54The second part of my work when I started was to figure out ways that we could get younger as an organization, to be more relevant to a changing world. Looking back at it now, what do you feel like you did accomplish? We have a stronger understanding of our identity. We have more cooperation and collaboration across the organization. We're able to propose bigger concepts for bigger donations, for bigger impact, because we're using all of our enterprise muscles. That's one thing. The second thing is I think we developed a logic in the institution to compete confidently to go make a difference. And, of course, these are challenging times because there's so many events that have happened even in the eight years I've been CEO that you wouldn't have predicted in our society from a pandemic to the killing of George Floyd to more.

48:41And so I think that competing confidently means taking all of those moments of societal anxiety and difficulty and disagreement and saying, okay, this is our moment to contribute and to lead by bringing people together, by using our strength in the service of what society needs. All worthy goals for Aspen and for others, but can one measure progress toward them? Elkins says her study of organizations like the Aspen Institute has convinced her that there are ways to measure success even in the generation of ideas. We can optimize, and the way in which we measure that is we have all kinds of ways that we can count.

49:23The very basis of Aspen, the PEPK's vision, was to create a good society, to cultivate human flourishing. And I think it's one of the things that we're looking at in society today. How do we cultivate empathy? How do we cultivate judgment? How do we cultivate ethics? How do we cultivate leadership? And by the way, I should say these are precisely the things that folks like Sam Altman will tell us AI won't do for us. So it's very difficult in some ways to measure it other than to say they're very good at it. And I would measure it in perhaps in one way that does actually come to mind is what are the kinds of people, who can they bring around the table?

50:03I know of no one that has the kind of convening power that Aspen has. People trust the Institute to have closed doors, Chatham House rules to discuss not just thorny issues, but issues that really are impacting society everywhere from Vivian Schiller's work in media. And I love the way she approaches problem solving, which is precisely how Aspen in general does, which is, is this an important problem or question that we should be answering? Another way to measure success is by what others in the field say about the work and whether they step up to share the burden. Romy Drucker is director of the education program at the Walton Family Foundation, which has given millions of dollars to the Aspen Institute.

50:45The Walton Family Foundation recently conducted a study in partnership with Gallup about opportunity and what's going to help opportunity flourish in America. And there were some really interesting findings, including that most Americans are really excited to invest in their communities to give back. But the number one obstacle they cited was who's going to listen to them? No one is there to really receive their ideas, to help uplift them. I think when we think about think tanks and forums that are convening people and ideas and resources around new ideas and innovation, it's about overcoming that barrier.

51:28I think what's been really powerful about Aspen is their unwavering commitment to fostering a dialogue across lines of difference as well as intergenerational change. You will find in every conversation at Aspen differing perspectives. You will find an openness to disagreement. We are a foundation that believes in evaluation, and we have our own way of measuring ROI. And so we want to see not just powerful convening, but ideas that make their way into the zeitgeist. And we have tools to measure that. So we work with our partners to develop those outcome measures. And if we're going to push for systems change and Bowles ideas, we have to have clear goals.

52:19This is one of the things about philanthropy where sometimes, you know, we are working in a gray area in terms of social impact. And financial support from wealthy individuals and foundations in itself can be an indicator of success. Recently, the Bezos Family Foundation created a Center for Rising Generations at Aspen, contributing$186 million and leading others, like the Walton Family Foundation, to join in. This is a critical step in Aspen elevating its commitment to young people, believing in them as future shapers, investing in their leadership skills. We think that bringing together all of Aspen's youth work under one umbrella is going to be a really powerful signal about what it's going to take for both Aspen as an institution itself to evolve, but also for it to evolve its influence in the world.

53:17While think tanks like the Aspen Institute focus on goals that may be hard to put numbers to, like the free exchange of ideas, others are driven by more specific, measurable results. The last 50 years have seen the rise of the explicitly partisan think tank devoted to getting things done in Washington. Since the 60s and 70s, what we've really seen is a shift in them becoming much more political. And then we have Ed Fulner in the basement of Congress. He was just a young sort of staffer, I believe, at the time, and frustrated by the fact that the American Enterprise Institute refused to release its report on, and I think it was supersonic jets, to the Senate because it didn't want to influence policy.

53:58And at that point, we see a real turn, certainly with the Heritage Foundation and others, saying actually what we want to do is to really influence policy in a particular political direction. And we see that coming to fruition, as we know, in the 80s when the Reagan administration adopts the Heritage Report as the Bible of the Reagan administration, adopting two-thirds of its 2 ,000 recommendations. It was extraordinary. And they really have played a very large role in shaping American society. Recently, the Heritage Foundation has made a name for itself with its Project 2025 blueprint for the second Trump administration, something Mr.

54:32Trump disavowed during his campaign, but much of which has since come to fruition. There's no denying the impact of the Heritage Foundation's approach and its demonstrable successes. But Elkins says there remains an important role for organizations like the Aspen Institute. I felt very strongly that that institute has the potential of playing an outside role in society. I've sort of borne witness to the fact that we have moved away from sort of exploring ideas just for the sake of exploring ideas to being really quantified, metrics, being asked all the time, sort of what we call sort of the audit culture, which is in some ways reflective of this kind of culture of efficiency that we all live in.

55:11And in many ways, the Aspen Institute, their direction isn't necessarily headed that way. What they're asking, as I said, is the question, what makes for great human flourishing? And so what that means is they're not looking to sort of necessarily change policy directly or being prescriptive about policy. What they're looking to do is to cultivate a good society. But accomplishing even the most important goals requires resources and difficult decisions about where to direct those resources. Perhaps the most important job of a CEO of a for-profit company is allocating capital. It strikes me you're allocating capital as well if you're running the Aspen Institute.

55:51It's money, but it's also time and talent. When you decide, yes, we're going to do something like the Bezos Initiative, or we're going to cut back perhaps in some other places, how do you decide how to allocate that capital? It's a big deal. Make sure you have a clear purpose statement so people know what it is you do and what you don't do. We worked with a consulting company, SY Partners, from here in New York to really drill down over the course of six months. Why are we here? What is the reason this institute even exists? But that allocation of capital, of time, talent, and resources is critical because an organization can't do everything and it shouldn't try.

56:31That does it for us here at Wall Street Week. I'm David Weston. See you next week for more stories of capitalism.

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