Google CEO: U.S. Should Invest in Education

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Eric Schmidt

Two of the heaviest hitters from different parts of the innovation economy — Google Chairman Eric Schmidt and Twitter CEO Dick Costolo — spoke about the power of technology, education and innovation as part of the New York Times' Dealbook conference on Wednesday.

Google's Schmidt weighed in on the biggest issues facing Silicon Valley — and the U.S. economy. The interview, by the Times' Quentin Hardy, drew out Schmidt's greatest concerns and best solutions

Schmidt said the U.S. economy faces three big problems: globalization ("China won't let me raise my prices"), automation, and demographic problems (an insufficient number of young people to fund old people's retirement).

"What I would like is for political leaders to solve all three at once," Schmidt said. "I would solve all these problems. I would invest more in education."

He thinks education should be the "Sputnik" moment for the U.S. to commit itself to improving education. (Read More: A Company Match for College Savings.)

If it works "for everyone, regardless of race or gender," Schmidt said. "You'll have global competition for all kinds of jobs."

What else should we be worrying about? "Eventually really evil terrorists will find really evil programmers, so you can imagine the creation of super group to play the evil military game as well as the evil cyber game," he said.

Again, Schmidt believes education is the only way to tackle that problem.

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Dick Costolo

Costolo focused on his vision for the social media company, but dodged a number of questions about Twitter's IPO plans. (Read More: Why Twitter Has No Plans to Go Public: CEO.)

"We obviously have very sophisticated forecasts about what we want to do with the business with topline revenue growth, and bottom line profit," Costolo said. "We're doing much better than we set out to do each year."

Twitter has morphed into a "global town square" with unfiltered conversation and many perspectives, he added.

However, Costolo wouldn't reveal any new growth metrics, other than saying that the company is "well above" 140 million active users, which is the last one it publicly announced. Perhaps most important, he said the company's active user base is primarily active on mobile devices.

Twitter faces a growing rift with Facebook, which yanked its Instagram's photos from Twitter cards. What this means: Instead of looking at Instagram photos within Twitter, users have to go to Instagram's site. (Read More: Instagram Pulls Its Photos From Twitter.)

Costolo said he "wouldn't worry about bothering everybody or disturbing everybody" by going into the details of how the Instagram-Twitter split went down."

But Costolo did promote just how much advertisers love his system. "It's like walking the floor with your customers every day," he said. (Read More: 13 Twitter Tweaks We'd Like to See in 2013.)

He cited an example of Tide jumping on a viral Twitter moment featuring a photo of Tide on a racetrack. And he says that the company's technology is getting better, to allow people to find the signal through the noise.

—By CNBC's Julia Boorstin; Follow her on Twitter: @JBoorstin