Th F t Th F t The Future Belongs to the Educated The Future - - PowerPoint PPT Presentation

SLIDE 1

Th F t B l t th Ed t d Th F t B l t th Ed t d The Future Belongs to the Educated The Future Belongs to the Educated

ASU Education Innovation Summit Phoenix ASU Education Innovation Summit Phoenix April 16, 2012 April 16, 2012

Michael Milken

Chairman, Milken Institute

Michael Milken

Chairman, Milken Institute

SLIDE 2

“A k t h t “A k t h t “Ask not what your country can do for “Ask not what your country can do for you, but what you can do for your country.” you, but what you can do for your country.” y y

John F Kennedy

y y

John F Kennedy John F. Kennedy 1961 Inaugural John F. Kennedy 1961 Inaugural

SLIDE 3

Humanity’s Top 10 Humanity’s Top 10 Problems for Next 50 Years Problems for Next 50 Years

• Democracy
• Disease
• Education
• Democracy
• Disease
• Education

Education

• Energy
• Environment

Food Education

• Energy
• Environment

Food

• Food
• Population
• Poverty
• Food
• Population
• Poverty
• Terrorism & War
• Water
• Terrorism & War
• Water

SLIDE 4

Humanity’s Top 10 Humanity’s Top 10 y p Problems for Next 50 Years y p Problems for Next 50 Years

Education Education

• Education
• Energy
• Education
• Energy

gy gy

Nobel Laureates in Nobel Laureates in Nobel Laureates in Science/Medicine Nobel Laureates in Science/Medicine

SLIDE 5

Humanity’s Top 10 Humanity’s Top 10 Solutions for Next 50 Years Solutions for Next 50 Years

D Ed ti Ed ti

• Democracy
• Disease
• Education
• Democracy
• Disease
• Education
• Education
• Education
• Education
• Education
• Education
• Education
• Energy
• Environment
• Food
• Energy
• Environment
• Food
• Energy
• Energy
• Energy
• Energy
• Energy
• Energy
• Food
• Population
• Poverty

T i & W

• Food
• Population
• Poverty

T i & W

• Energy
• Education
• Education

Ed ti

• Energy
• Education
• Education

Ed ti

• Terrorism & War
• Water
• Terrorism & War
• Water
• Education
• Energy
• Education
• Energy

SLIDE 6

The World’s Top 10 Economies

(P t f W ld GDP)

The World’s Top 10 Economies

(P t f W ld GDP) U.S. (23.6% ) U.S. (23.6% )

Today Today

(Percent of World GDP) (Percent of World GDP) China (18.7% ) China (18.7% )

2050 2050 1820 1820

China (28.7% ) China (28.7% ) U.S. (23.6% ) China (8.7% ) Japan (8.6% ) Germany (5 2% ) U.S. (23.6% ) China (8.7% ) Japan (8.6% ) Germany (5 2% ) China (18.7% ) U.S. (16.5% ) India (11.8% ) Brazil (4 8% ) China (18.7% ) U.S. (16.5% ) India (11.8% ) Brazil (4 8% ) China (28.7% ) India (16.0% ) France (5.4% ) England (5 2% ) China (28.7% ) India (16.0% ) France (5.4% ) England (5 2% ) Germany (5.2% ) France (4.4% ) U.K. (3.6% ) Germany (5.2% ) France (4.4% ) U.K. (3.6% ) Brazil (4.8% ) Indonesia (3.5% ) Japan (3.1% ) Brazil (4.8% ) Indonesia (3.5% ) Japan (3.1% ) England (5.2% ) Prussia (4.9% ) Japan (3.1% ) England (5.2% ) Prussia (4.9% ) Japan (3.1% ) Italy (3.4% ) Brazil (3.1% ) Canada (2.6% ) Italy (3.4% ) Brazil (3.1% ) Canada (2.6% ) Mexico (3.0% ) Russia (2.7% ) Germany (2.4% ) Mexico (3.0% ) Russia (2.7% ) Germany (2.4% ) Austria (1.9% ) Spain (1.9% ) U.S. (1.8% ) Austria (1.9% ) Spain (1.9% ) U.S. (1.8% ) Canada (2.6% ) Russia (2.4% ) Canada (2.6% ) Russia (2.4% )

S

• urces: World Bank/ Angus Maddison, “ The World Economy: Historical S

tatistics” (OECD)/ PricewaterhouseCoopers/ Milken Institute/ Goldman S achs (9/ 09)

Germany (2.4% ) U.K. (2.2% ) Germany (2.4% ) U.K. (2.2% ) U.S. (1.8% ) Russia (1.7% ) U.S. (1.8% ) Russia (1.7% )

SLIDE 7

The World’s Economic Clout Moves East The World’s Economic Clout Moves East

Leading Cities Ranked by GDP Leading Cities Ranked by GDP

• More than 20 of the world’s Top 50 cities will be

located in Asia by 2025, up from 8 in 2007.

• More than 20 of the world’s Top 50 cities will be

located in Asia by 2025, up from 8 in 2007.

• More than half of Europe’s Top 50 cities will drop off

the list, as will three in North America.

• More than half of Europe’s Top 50 cities will drop off

the list, as will three in North America.

• Shanghai and Beijing will outrank Los Angeles and

London … Mumbai and Doha will surpass Munich and Denver

• Shanghai and Beijing will outrank Los Angeles and

London … Mumbai and Doha will surpass Munich and Denver Denver. Denver.

S

• urce: McKinsey Global Institute (March 2011)

SLIDE 8

Where U.S. Immigrants Were Born Where U.S. Immigrants Were Born

Asia 5% Latin

1960 1960

Oth

g 2011 2011

Asia 5% Latin America 9% Other 1% Canada 2% Other 4% Canada 10% Asia 28% Europe 75% Latin America 53%

SLIDE 9

i The future of any nation can be found in its classrooms. The future of any nation can be found in its classrooms. be found in its classrooms. be found in its classrooms.

SLIDE 10

What is the most valuable real estate i th ld? What is the most valuable real estate i th ld? in the world? in the world?

k 1. New York City 2. Moscow 1. New York City 2. Moscow 3. Beijing 4. London 3. Beijing 4. London 5. Dubai 6. Beverly Hills 5. Dubai 6. Beverly Hills 7. Tokyo 7. Tokyo

SLIDE 11

What is the most valuable real estate in the ld? What is the most valuable real estate in the ld? world? world?

SLIDE 12

1957 America Computer Storage: $2 million per megabyte Computer Storage: $2 million per megabyte $2 million per megabyte $2 million per megabyte

SLIDE 13

IBM System 370/168 in 1976 IBM System 370/168 in 1976 IBM System 370/168 in 1976 IBM System 370/168 in 1976

• 8 megabytes for

$8 million

• 8 megabytes for

$8 million $

• Cost per megabyte:

$

• Cost per megabyte:

p g y $1 million p g y $1 million

SLIDE 14

Apple iPad 2 Apple iPad 2 Apple iPad 2 Apple iPad 2

• 64 gigabytes for $699
• 64 gigabytes for $699
• Cost per megabyte:

$0 01

• Cost per megabyte:

$0 01 $0.01 $0.01

SLIDE 15

1957 America International Phone Call: $12/Minute International Phone Call: $12/Minute ~$12/Minute ~$12/Minute

SLIDE 16

Cost of a 1-Minute Phone Call from the Cost of a 1-Minute Phone Call from the U.S. to India U.S. to India

1975 $10 1975 $10 2012 2012 $.01 $.01

Telecommunications cost to business Telecommunications cost to business Telecommunications cost to business approaches zero. Telecommunications cost to business approaches zero.

SLIDE 17

There are more than 6 billion There are more than 6 billion There are more than 6 billion mobile phones in the world! There are more than 6 billion mobile phones in the world!

SLIDE 18

Down on the Farm Down on the Farm Down on the Farm Down on the Farm

SLIDE 19

SLIDE 20

Blockbuster vs. Netflix - 2002 Blockbuster vs. Netflix - 2002

Market Value Market Value

Blockbuster Blockbuster

$4.5 billion $4.5 billion

28 Netflix = 1 Blockbuster

$ Netflix

$0 16 billion

Netflix

$0 16 billion $0.16 billion $0.16 billion

SLIDE 21

Blockbuster vs. Netflix Blockbuster vs. Netflix

Market Value Market Value

Netflix

$16 billion

Netflix

$16 billion $16 billion 7/13/2011 $16 billion 7/13/2011

4/16/2012

7/13/2011 7/13/2011

Blockbuster Blockbuster $0 $0

Netflix $5 6 billion

$0 $0

$5.6 billion

SLIDE 22

The Future Belongs to the Educated The Future Belongs to the Educated The Future Belongs to the Educated The Future Belongs to the Educated

• Democratization of Capital
• Building Human Capital
• Democratization of Capital
• Building Human Capital
• Building Human Capital
• Where’s Sputnik?
• Building Human Capital
• Where’s Sputnik?
• Education is the Answer
• Education is the Answer

SLIDE 23

B k l Berkeley 1964 1964

SLIDE 24

Los Angeles Under Siege Los Angeles Under Siege

SLIDE 25

P=ΣFti*(ΣHCi+ΣSCi+ΣRAi) P=ΣFti*(ΣHCi+ΣSCi+ΣRAi) P ΣFti (ΣHCi ΣSCi ΣRAi) P ΣFti (ΣHCi ΣSCi ΣRAi)

P = Prosperity P = Prosperity p y Ft = Financial Technology HC = Human Capital p y Ft = Financial Technology HC = Human Capital p SC = Social Capital RA = Real Assets p SC = Social Capital RA = Real Assets

SLIDE 26

What makes America great? What makes America great? g

SLIDE 27

Barn Raising Barn Raising a a s g a a s g

SLIDE 28

Volunteer Fire Department Volunteer Fire Department Volu tee e epa t e t Volu tee e epa t e t

SLIDE 29

National Parks National Parks Nat o al a s Nat o al a s

SLIDE 30

Universal Education Universal Education U ve sal ducat o U ve sal ducat o

SLIDE 31

P=ΣFti*(ΣHCi+ΣSCi+ΣRAi) P=ΣFti*(ΣHCi+ΣSCi+ΣRAi) P ΣFti (ΣHCi ΣSCi ΣRAi) P ΣFti (ΣHCi ΣSCi ΣRAi)

P = Prosperity P = Prosperity p y Ft = Financial Technology HC = Human Capital p y Ft = Financial Technology HC = Human Capital p SC = Social Capital RA = Real Assets p SC = Social Capital RA = Real Assets

SLIDE 32

“The most important financial innovation that I have seen the past 20 years is the automatic teller machine I wish someone “The most important financial innovation that I have seen the past 20 years is the automatic teller machine I wish someone automatic teller machine… I wish someone would give me one shred of neutral evidence that financial innovation leads to automatic teller machine… I wish someone would give me one shred of neutral evidence that financial innovation leads to evidence that financial innovation leads to economic growth. One shred of evidence.” evidence that financial innovation leads to economic growth. One shred of evidence.” Paul Volcker

Former Chairman, Federal Reserve

Paul Volcker

Former Chairman, Federal Reserve

SLIDE 33

“A country does not go bankrupt.” “A country does not go bankrupt.”

Walter Wriston Walter Wriston — Walter Wriston Former CEO of Citibank — Walter Wriston Former CEO of Citibank

Source: New York Times, September 14, 1982.

SLIDE 34

Sovereign Debt Defaults Sovereign Debt Defaults Sovereign Debt Defaults Sovereign Debt Defaults

Argentina Argentina Ecuador Ecuador Paraguay Paraguay Romania Romania Turkey Turkey Uruguay Uruguay

1830 1830 1832 1832 1827 1827 1876 1876 1876 1876 1915 1915

• 1830

1830

• 1890

1890

• 1915

1915

• 1832

1832

• 1868

1868

• 1911

1911

• 1827

1827

• 1874

1874

• 1892

1892

• 1876

1876

• 1915

1915

• 1940

1940

• 1876

1876

• 1891

1891

• 1915

1915

• 1915

1915

• 1933

1933

• 1981

1981

• 1915

1915

• 1930s

1930s

• 1982

1982

• 1911

1911

• 1914

1914

• 1931

1931

• 1892

1892

• 1920

1920

• 1932

1932

• 1940

1940

• 1978

1978

• 1915

1915

• 1933

1933

• 1983

1983

• 1981

1981 1982 1982

• 2001

2001 1931 1931

• 1982

1982

• 1999

1999 1932 1932

• 1986

1986

• 2003

2003 1983 1983

• 2003

2003

S

• urces: S

turzenegger and Zettelmayer (2006), Moody‘ s, Milken Institute.

• 2008

2008

SLIDE 35

America Goes to Work

U S d F t 500 E l t

America Goes to Work

U S d F t 500 E l t U.S. and Fortune 500 Employment U.S. and Fortune 500 Employment

200 200 180 180

U.S. = +62 million jobs U.S. = +62 million jobs

New financial New financial

180 180 160 160 140 140

j

New financial technologies are fully implemented New financial technologies are fully implemented

140 140 120 120 100 100 100 100 80 80 60 60

Fortune 500 = minus 4 million Fortune 500 = minus 4 million

Modern capital markets begin Modern capital markets begin

00 00 95 95 90 90 85 85 80 80 75 75 70 70 60 60

Index 1970 = 100 Index 1970 = 100

SLIDE 36

Ted Turner Ted Turner Craig McCaw Craig McCaw Bill McGowan Bill McGowan g Steve Ross Steve Ross Steve Wynn Steve Wynn Reg Lewis Reg Lewis

SLIDE 37

The Future Belongs to the Educated The Future Belongs to the Educated The Future Belongs to the Educated The Future Belongs to the Educated

• Democratization of Capital
• Building Human Capital
• Democratization of Capital
• Building Human Capital
• Building Human Capital
• Where’s Sputnik?
• Building Human Capital
• Where’s Sputnik?
• Education is the Answer
• Education is the Answer

SLIDE 38

2011 U.S. Household Balance Sheet

$

2011 U.S. Household Balance Sheet

$71 Trillion Total $71 Trillion Total

Insurance Insurance R R Shares Shares and and Securities Securities 37% 37% Loans Loans <1% <1% Reserve Reserve Funds 19 Funds 19% % Other Other Financial Financial Assets Assets 1% 1% Real Real Estate Estate 26% 26% Other Other Deposits and Deposits and Currency Currency

S

• urce: Federal Reserve Flow of Funds, Q3 2011

Tangible Tangible 7% 7% Currency Currency 10% 10%

SLIDE 39

Q3 2011 Human Capital in the U.S. Q3 2011 Human Capital in the U.S.

U.S. Financial U.S. Financial

$229 Trillion Total $229 Trillion Total

Assets 24% Assets 24% Human and Social Capital Human and Social Capital 76% 76%

S

• urce: Derived from Kevin Murphy and Federal Reserve, Flow of Funds Q3, 2011

SLIDE 40

Human capital Human capital Human capital is our most valuable asset. Human capital is our most valuable asset.

SLIDE 41

The 21st Century will see The 21st Century will see The 21 Century will see a worldwide competition The 21 Century will see a worldwide competition a worldwide competition for human capital. a worldwide competition for human capital. for human capital. for human capital.

SLIDE 42

Apple vs. Sony 1997 Apple vs. Sony 1997 pp y

Market Value

pp y

Market Value

Sony

$34 3 billi

21 Apple = 1 Sony

$34.3 billion

l Apple

$1.65 billion

Apple

$1.65 billion

SLIDE 43

Sony: Five Decades of Innovation Sony: Five Decades of Innovation

• Tape recorder and transistor radio (1950s)
• 5-inch micro TV (1962)
• Tape recorder and transistor radio (1950s)
• 5-inch micro TV (1962)
• Trinitron Color TV (1965)
• U-matic video tape system (1969)
• Trinitron Color TV (1965)
• U-matic video tape system (1969)
• Beta-Max (1975)
• Sony Walkman (1979)

C t di d l (1982)

• Beta-Max (1975)
• Sony Walkman (1979)

C t di d l (1982)

• Compact discs and player (1982)
• Handycam 8mm video camera (1985)

(Sony sales and profits triple during the 1980s)

• Compact discs and player (1982)
• Handycam 8mm video camera (1985)

(Sony sales and profits triple during the 1980s)

Akio Morita

Co-founder

Akio Morita

Co-founder

• Sony Play Station (1994)
• Sony Play Station (1994)

Co founder Sony Corp. 1921-1999 Co founder Sony Corp. 1921-1999

S

• urce: “ Historical Review of S
• ny's Innovations and Future S

teps” (Masanori Hachiya/ S loan S chool of Management)

SLIDE 44

“Innovation has nothing to “Innovation has nothing to g do with how many R&D dollars you have. When g do with how many R&D dollars you have. When y Apple came up with the Mac, IBM was spending at y Apple came up with the Mac, IBM was spending at least 100 times more on R&D. It's about the people least 100 times more on R&D. It's about the people you have [and] how you're led.” you have [and] how you're led.”

• Steve Jobs
• Steve Jobs

SLIDE 45

Apple vs. Sony 2012 Apple vs. Sony 2012

30 S 1 A l

pp y

Market Value

pp y

Market Value

30 Sony = 1 Apple

Apple

$547 billion

Apple

$547 billion Sony Sony $547 billion $547 billion Sony

$18 billion

Sony

$18 billion

Date: 4-16-12

SLIDE 46

Do human capital strategies work? Do human capital strategies work?

Per Capita GDP Per Capita GDP 1960 1960 2011 2011

p g p g

Si Si

1960 1960

$50,714 $50,714

2011 2011

$2,271 $2,271

Singapore Singapore

,

Jamaica Jamaica

$ 5,376 $ 5,376 $2,255 $2,255

Jamaica Jamaica

S

• urce: International Monetary Fund (2011 US

D)

$ , $ , $ , $ ,

SLIDE 47

There are three ways to There are three ways to There are three ways to build human capital: There are three ways to build human capital: p

Education

p

Education Education Health Education Health Health Immigration Health Immigration Immigration Immigration

SLIDE 48

Addressing the Issues

(Non Profit Organizations)

Addressing the Issues

(Non Profit Organizations) (Non-Profit Organizations) (Non-Profit Organizations)

Milken Family Foundation (1982)

• Education reform/ teacher recognition/ medical research

g

The Milken Institute (1991)

• Economics/ public-policy research and conferences

Prostate Cancer Foundation (1993)

• World’s leading philanthropic source of support for research

FasterCures (2003)

• Removing barriers to progress on all life-threatening diseases

Melanoma Research Alliance (2007)

• Advancing research on the most-deadly skin cancer

SLIDE 49

The Future Belongs to the Educated The Future Belongs to the Educated The Future Belongs to the Educated The Future Belongs to the Educated

• Democratization of Capital
• Building Human Capital
• Democratization of Capital
• Building Human Capital
• Building Human Capital
• Where’s Sputnik?
• Building Human Capital
• Where’s Sputnik?
• Education is the Answer
• Education is the Answer

SLIDE 50

Where’s Sputnik? Where’s Sputnik?

• Energy

Energy

Where s Sputnik? Where s Sputnik?

gy gy

• Housing

Housing

• Entitlements

Entitlements

• Entitlements

Entitlements

• Education

Education

• Immigration

Immigration

• Health

Health Health Health

SLIDE 51

SLIDE 52

President Jimmy Carter on the energy crisis President Jimmy Carter on the energy crisis y gy y gy and proposed energy legislation and proposed energy legislation

“This difficult effort will be “This difficult effort will be the ‘moral equivalent of war’ the ‘moral equivalent of war’

• - except that we will be

except that we will be uniting our efforts to build uniting our efforts to build d t d t ” d t d t ” and not destroy.” and not destroy.”

SLIDE 53

D f di th P i G lf f 1976 2007 D f di th P i G lf f 1976 2007 Defending the Persian Gulf from 1976-2007 has cost $7.3 trillion. Defending the Persian Gulf from 1976-2007 has cost $7.3 trillion.

• Aircraft carriers
• Aircraft carriers
• Foreign aid
• Foreign aid
• War on terrorism
• Wars in Iraq/Afghanistan
• War on terrorism
• Wars in Iraq/Afghanistan
• Intelligence operations
• Oil price volatility
• Intelligence operations
• Oil price volatility

q g

• Maintain troops overseas

q g

• Maintain troops overseas

p y

• Homeland security

p y

• Homeland security

S

• urce: S

tern, R.J., United S tates cost of military force proj ection in the Persian Gulf, 1976–

• 2007. Energy Policy (2010), doi:10.1016/ j .enpol.2010.01.013

SLIDE 54

Where’s Sputnik? Where’s Sputnik?

• Energy

Energy

Where s Sputnik? Where s Sputnik?

gy gy

• Housing

Housing

• Entitlements

Entitlements

• Entitlements

Entitlements

• Education

Education

• Immigration

Immigration

• Health

Health Health Health

SLIDE 55

Fallacy: Fallacy: y “Any loan to real estate is a good loan … ” y “Any loan to real estate is a good loan … ”

SLIDE 56

Home prices don’t go up forever

Ch i h i i 121

Home prices don’t go up forever

Ch i h i i 121

WWI WWI WWII WWII Great Depression Great Depression 70’s Boom 70’s Boom 80’s Boom 80’s Boom Latest Boom Latest Boom 30% 30%

Change in home prices in 121 years Change in home prices in 121 years

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WWI WWI WWII WWII p 20% 20% 10% 10% 0% 0%

• 10%
• 10%

1990 1990

S

• urces: Robert S

hiller, Milken Institute.

1890 1890 1900 1900 1910 1910 1920 1920 1930 1930 1940 1940 1950 1950 1960 1960 1970 1970 1980 1980 2000 2000 2010 2010

• 20%
• 20%

SLIDE 57

Average Size of American Houses Average Size of American Houses

2 500 2 500

square feet square feet

2 469 2 469 2,135 2,135

2,500 2,500 2 000 2 000

2,469 2,469

2,000 2,000 1 500 1 500 1,500 1,500 1 000 1 000

2009 2009 1970 1970 1980 1980 1990 1990 2000 2000 2006 2006

1,000 1,000

S

• urce: National Association of Home Builders / U.S

. Census Bureau

SLIDE 58

Home Sizes: U.S. vs. Asia Home Sizes: U.S. vs. Asia

2,500 2,500

square feet square feet

2,469 2,469 2,500 2,500 1 500 1 500 2,000 2,000 1,000 1,000 1,500 1,500 1,200 1,200 500 500 Hong Kong Hong Kong

S

• urce: Mr & Mrs Asia - CLS

A

Japan Japan South Korea South Korea India India China China Singapore Singapore U.S. U.S.

SLIDE 59

Consumer Spending Consumer Spending

Housing 33% Housing 33%

U.S. U.S. Asia Asia

Food 23% Food 23% Housing 33% Transportation 18% Food 13% Housing 33% Transportation 18% Food 13% Food 23% Supplemental Education 15% Housing 10% Food 23% Supplemental Education 15% Housing 10% Insurance/pensions 11% Healthcare 6% Entertainment 5% Insurance/pensions 11% Healthcare 6% Entertainment 5% Clothing 8% Other 8% Transportation 6% Clothing 8% Other 8% Transportation 6% Entertainment 5% Apparel and services 4% Supplemental Education 2% Entertainment 5% Apparel and services 4% Supplemental Education 2% Transportation 6% Healthcare 5% Communication 5% Transportation 6% Healthcare 5% Communication 5% pp pp

S

• urce: U.S

. Bureau of Labor S tatistics/ CLS A

SLIDE 60

Where’s Sputnik? Where’s Sputnik?

• Energy

Energy

Where s Sputnik? Where s Sputnik?

gy gy

• Housing

Housing

• Entitlements

Entitlements

• Entitlements

Entitlements

• Education

Education

• Immigration

Immigration

• Health

Health Health Health

SLIDE 61

When Social Security was introduced in When Social Security was introduced in 1935 the average life span in the U S was 1935 the average life span in the U S was 1935, the average life span in the U.S. was 1935, the average life span in the U.S. was 61.7 years. 61.7 years. In 2009, life expectancy in the U.S. In 2009, life expectancy in the U.S. reached 78.1 years. reached 78.1 years. reached 78.1 years. reached 78.1 years.

S

• urces:

National Center for Health S tatistics, Nat ional Vit al S t at ist ics Report s, vol. 54, no. 19, June 28, 2006. U.S . Census Bureau, International Database.

SLIDE 62

Longer Life Expectancy; Longer Retirements

F

Longer Life Expectancy; Longer Retirements

F

95 95

France France

Life Expectancy Life Expectancy

Women Women Men Men 85 85

Life Expectancy at age 65 Life Expectancy at age 65

28.6 28.6 32.9 32.9

75 75

14.4 14.4 18.3 18.3 22.0 22.0 26.5 26.5 26.2 26.2 30.8 30.8

65 65 55 55

Retirement Age Retirement Age

1970 1970 1980 1980 1990 1990 2000 2000 2010 2010 2020 2020 2030 2030 2040 2040 2050 2050 55 55

Source: OECD Ageing and Employment Policies, France 2005

SLIDE 63

Pensions for Greece’s Most Dangerous Jobs Pensions for Greece’s Most Dangerous Jobs

• High-risk workers are eligible for early retirement:
• High-risk workers are eligible for early retirement:
• Full government pension benefits
• Age 50 for women, 55 for men
• Full government pension benefits
• Age 50 for women, 55 for men

Age 50 for women, 55 for men

• Who qualifies?

Age 50 for women, 55 for men

• Who qualifies?
• 580 job categories
• 700,000 workers (14%
• f workforce)
• 580 job categories
• 700,000 workers (14%
• f workforce)

S

• urce: NY Times, 3/ 11/ 10.

SLIDE 64

High-Risk Occupations in Greece High-Risk Occupations in Greece

Coal Mining Coal Mining Bomb Disposal Bomb Disposal

S

• urce: NY Times, 3/ 11/ 10.

SLIDE 65

High-Risk Occupations in Greece High-Risk Occupations in Greece

Radio Hosts?

(“Bacteria on microphones”)

Radio Hosts?

(“Bacteria on microphones”)

Hairdressers?

(“Exposure to hair dyes”)

Hairdressers?

(“Exposure to hair dyes”)

S

• urce: NY Times, 3/ 11/ 10.

( Bacteria on microphones ) ( Bacteria on microphones ) ( Exposure to hair dyes ) ( Exposure to hair dyes )

SLIDE 66

Where’s Sputnik? Where’s Sputnik?

• Energy

Energy

Where s Sputnik? Where s Sputnik?

gy gy

• Housing

Housing

• Entitlements

Entitlements

• Entitlements

Entitlements

• Education

Education

• Immigration

Immigration

• Health

Health Health Health

SLIDE 67

Between 1870 and 1950, Americans added Between 1870 and 1950, Americans added Between 1870 and 1950, Americans added almost one year of education each decade. Between 1870 and 1950, Americans added almost one year of education each decade. By 1960, the highest average grade level in the U.S. exceeded every other nation by two By 1960, the highest average grade level in the U.S. exceeded every other nation by two years. years. Since 1960, we have made no progress and several other nations have surpassed us. Since 1960, we have made no progress and several other nations have surpassed us.

S

• urce: Claudia Goldin and Lawrence Katz / The Race between Education and Technology

SLIDE 68

“If f i dl “If f i dl “If an unfriendly foreign power had tt t d t i “If an unfriendly foreign power had tt t d t i attempted to impose on America the mediocre d ti l attempted to impose on America the mediocre d ti l educational performance that exists t d i ht h educational performance that exists t d i ht h today, we might have viewed it as an act of ” today, we might have viewed it as an act of ” war.”

• 1983

war.”

• 1983

SLIDE 69

Skilled and Unskilled Jobs Skilled and Unskilled Jobs

1950 1950 T d T d

Skilled and Unskilled Jobs Skilled and Unskilled Jobs

1950 1950 Today Today

60% 65%

Skill d

20% Skilled

20% Semi-

60%

Unskilled

20% Semi-

Skilled

15%

Skilled

skilled skilled

Unskilled

SLIDE 70

The Jobs Problem The Jobs Problem (It Isn’t Jobs – It’s Trained Workers) (It Isn’t Jobs – It’s Trained Workers)

Millions

125 125 100 100

Millions

123,000,000

hi h kill d j b 75 75 50 50 high-skilled jobs will be available in 2020

50 000 000

50 50 25 25

50,000,000

Americans will qualify for those jobs

Source: Edward Gordon, “Winning the Global Talent Showdown”

j

SLIDE 71

Chi Chi

• Parents spend an average
• Parents spend an average

China China

Parents spend an average

• f 15%
• n their children’s

education … and only 10% Parents spend an average

• f 15%
• n their children’s

education … and only 10%

• n housing.
• 55%
• f parents in China
• n housing.
• 55%
• f parents in China

55%

• f parents in China

send their children for extra lessons in English. 55%

• f parents in China

send their children for extra lessons in English.

SLIDE 72

Beverly Hills Beverly Hills Beverly Hills High School Beverly Hills High School

46th percentile in math 46th percentile in math

87.7%

• f students

rank “proficient” or 87.7%

• f students

rank “proficient” or

34th percentile in math 34th percentile in math

rank proficient or above in math. rank proficient or above in math.

Sources: City-Data.com / Global Report Card (Jay Greene and Josh McGee)

SLIDE 73

We must not be afraid of We must not be afraid of f f competition. f f competition. We must be ready to We must be ready to We must be ready to compete. We must be ready to compete.

SLIDE 74

Eddie “The Eagle” Edwards Eddie “The Eagle” Edwards

• 1988 Calgary Olympics
• 1988 Calgary Olympics

Eddie The Eagle Edwards Eddie The Eagle Edwards

• Britain’s first (and last!) ski

jumper

• Britain’s first (and last!) ski

jumper

• Last place finish with a jump
• f 253 feet
• Last place finish with a jump
• f 253 feet

The gold-medal jump was 412 feet.

SLIDE 75

Eddie “The Eagle” Edwards Eddie “The Eagle” Edwards

• 1988 Calgary Olympics
• 1988 Calgary Olympics

Eddie The Eagle Edwards Eddie The Eagle Edwards

• Britain’s first (and last!) ski

jumper

• Britain’s first (and last!) ski

jumper

• Last place finish with a jump
• f 253 feet
• Last place finish with a jump
• f 253 feet

Eddie “The Eagle” Rule: Eddie “The Eagle” Rule:

Olympic qualifiers must compete in international events and place in the Top 30 percent or Top 50 competitors. Olympic qualifiers must compete in international events and place in the Top 30 percent or Top 50 competitors.

SLIDE 76

M lti l th M lti l th

• Multiple career paths
• Ongoing applied professional growth
• Multiple career paths
• Ongoing applied professional growth
• Instructionally focused accountability
• Performance based compensation
• Instructionally focused accountability
• Performance based compensation
• Performance-based compensation
• Performance-based compensation

National Institute for Excellence in Teaching (NIET)

SLIDE 77

• 284 Scholars since program began in 1989
• 284 Scholars since program began in 1989

p g g

• 80 born outside the United States
• 34 countries of origin

p g g

• 80 born outside the United States
• 34 countries of origin
• 34 countries of origin
• 205 Scholars have one or more parents born
• utside the U.S.
• 34 countries of origin
• 205 Scholars have one or more parents born
• utside the U.S.
• 99 colleges attended
• 54 are married
• 99 colleges attended
• 54 are married
• 54 are married
• 48 children of Milken Scholars
• 54 are married
• 48 children of Milken Scholars

SLIDE 78

Selected colleges and universities in the Milken Scholars program: Selected colleges and universities in the Milken Scholars program:

52 to Harvard 34 to Stanford 52 to Harvard 34 to Stanford

• 11 to Penn
• 11 to M I T
• 11 to Penn
• 11 to M I T

Milken Scholars program: Milken Scholars program:

34 to Stanford 25 to Yale 21 to Berkeley 34 to Stanford 25 to Yale 21 to Berkeley

• 11 to M.I.T.
• 8 to Princeton
• 6 to Brown
• 11 to M.I.T.
• 8 to Princeton
• 6 to Brown

21 to Berkeley 14 to Columbia 21 to Berkeley 14 to Columbia

• 6 to Brown
• 5 to Cornell
• 6 to Brown
• 5 to Cornell

SLIDE 79

More than More than More than 30,000 students More than 30,000 students

SLIDE 80

Mike’s Math Club in China Mike’s Math Club in China

SLIDE 81

2012: More than 2 500 teachers 2012: More than 2 500 teachers 2012: More than 2,500 teachers 2012: More than 2,500 teachers

SLIDE 82

Return on Human Capital Investment Return on Human Capital Investment

Preschool Preschool

“The rate of return to a dollar investment made while a person is young is higher than the rate of return to the same “The rate of return to a dollar investment made while a person is young is higher than the rate of return to the same

Return Return Programs Programs

dollar made at a later age.” dollar made at a later age.” Nobel Prize Economist James Heckman Nobel Prize Economist James Heckman

School School

Opportunity Cost of Funds Opportunity Cost of Funds

Job Training Job Training Age Age

S

• urce: James Heckman, University of Chicago

SLIDE 83

Ability to learn Ability to learn b l ty to lea Love of learning b l ty to lea Love of learning Love of learning Love of learning

SLIDE 84

Knowledge Universe Knowledge Universe

SLIDE 85

Knowledge Universe International Knowledge Universe International

Singapore, Malaysia, India, United Kingdom Singapore, Malaysia, India, United Kingdom

SLIDE 86

Where’s Sputnik? Where’s Sputnik?

• Energy

Energy

Where s Sputnik? Where s Sputnik?

gy gy

• Housing

Housing

• Entitlements

Entitlements

• Entitlements

Entitlements

• Education

Education

• Immigration

Immigration

• Health

Health Health Health

SLIDE 87

Highly skilled, entrepreneurial Highly skilled, entrepreneurial and educated immigrants are l and educated immigrants are l crucial to prosperity. crucial to prosperity.

SLIDE 88

Building Human Capital Through Immigration Building Human Capital Through Immigration

Albert Einstein Albert Einstein Jerry Yang Jerry Yang Madeleine Albright Madeleine Albright (Germany) (Germany) (Taiwan) (Taiwan) (Czechoslovakia) (Czechoslovakia) Sergey Brin (Russia) Sergey Brin (Russia)

• Alex. Graham Bell

(Scotland)

• Alex. Graham Bell

(Scotland) Gustavo Dudamel (Venezuela) Gustavo Dudamel (Venezuela)

SLIDE 89

Doctorates Awarded in the U.S. Doctorates Awarded in the U.S. Doctorates Awarded in the U.S. Doctorates Awarded in the U.S.

• 1/3 of all doctoral students in the U S
• 1/3 of all doctoral students in the U S
• 1/3 of all doctoral students in the U.S.

are foreign born, up from one in ten 30 years ago

• 1/3 of all doctoral students in the U.S.

are foreign born, up from one in ten 30 years ago years ago.

• 84% of their doctorates are in

years ago.

• 84% of their doctorates are in

84% of their doctorates are in engineering and the sciences. 84% of their doctorates are in engineering and the sciences.

S

• urces: National S

cience Foundation/ Div of S cience Resource S tatistics

SLIDE 90

Immigrants in Silicon Valley Immigrants in Silicon Valley

• More than half of Silicon Valley’s science and

engineering workforce is foreign born

• More than half of Silicon Valley’s science and

engineering workforce is foreign born engineering workforce is foreign-born.

• More than 15 percent of Silicon Valley start-

engineering workforce is foreign-born.

• More than 15 percent of Silicon Valley start-

p y up companies were founded by immigrants from India. p y up companies were founded by immigrants from India.

• Another 13 percent had CEOs from China or

Taiwan

• Another 13 percent had CEOs from China or

Taiwan

S

• urces: Vivek Wadhwa, Duke University

Taiwan. Taiwan.

SLIDE 91

60%

• f the nearly 1 million Chinese

people with assets over 10 million yuan 60%

• f the nearly 1 million Chinese

people with assets over 10 million yuan people with assets over 10 million yuan ($1.6 million) are thinking about emigrating to the U S or Europe people with assets over 10 million yuan ($1.6 million) are thinking about emigrating to the U S or Europe emigrating to the U.S. or Europe. emigrating to the U.S. or Europe.

S

• urce: U.S

. Department of Homeland S ecurity (WS J 2/ 22/ 12 “ Plan B for China’s Wealthy: Moving to the U.S ./ Europe)

SLIDE 92

Where’s Sputnik? Where’s Sputnik?

• Energy

Energy

Where s Sputnik? Where s Sputnik?

gy gy

• Housing

Housing

• Entitlements

Entitlements

• Entitlements

Entitlements

• Education

Education

• Immigration

Immigration

• Health

Health Health Health

SLIDE 93

Half of all economic growth in the l i b d Half of all economic growth in the l i b d last two centuries can be traced to medical research advances. last two centuries can be traced to medical research advances. to medical research advances. to medical research advances.

SLIDE 94

Three Solutions Three Solutions Three Solutions to Healthcare Challenges Three Solutions to Healthcare Challenges

• Prevention
• Prevention
• Cost reduction
• Cost reduction
• Research leading to cures
• Research leading to cures

Research leading to cures Research leading to cures

SLIDE 95

Lifestyle Makes a Difference Lifestyle Makes a Difference y

70%

• f health-care spending –

about $2.5 trillion – is spent on lif l l d di 70%

• f health-care spending –

about $2.5 trillion – is spent on lif l l d di 30% is spent on hereditary diseases 30% is spent on hereditary diseases lifestyle-related diseases. lifestyle-related diseases.

U S Economy U S Economy

hereditary diseases. hereditary diseases.

U.S. Economy $14.6 trillion U.S. Economy $14.6 trillion

S

• urces: CIA Handbook / Centers for Medicare and Medicaid S

ervices (2009)

SLIDE 96

SLIDE 97

Obesity Prevalence Among U.S. Adults

1991

Obesity Prevalence Among U.S. Adults

1991 1991 1991

>15% >15% <15% <15%

S

• urce: Centers for Disease Control and Prevention

SLIDE 98

Obesity Prevalence Among U.S. Adults

2011

Obesity Prevalence Among U.S. Adults

2011 2011 2011

25-30% 25-30% > 30% > 30% 20-24% 20-24%

S

• urce: Centers for Disease Control and Prevention

SLIDE 99

Obesity Rates: U.S. vs. World Obesity Rates: U.S. vs. World Obesity Rates: U.S. vs. World Obesity Rates: U.S. vs. World

2002 2005 41.8% 41.8% 36.5% U.S. U.S. MEN WOMEN WOMEN 24 2% 24 2% 21.6% U.K. U.K. 34.3% 34.3% 24.0% Mexico Mexico 20.4% 20.4% 24.2% 24.2% 7 8% 20.9% F Germany Germany 1 9% 1 9% 6.6% 6.6% 1.6% 1.6% 7.8% China China France France

S

• urce: World Health Organization / Estimated obesity rates for people aged 15 years and older / 2005

1.5% 1.5% 1.9% 1.9% 1.8% 1.8% Japan Japan

SLIDE 100

The Supersize Investment The Supersize Investment

For only 67 cents you can step up For only 67 cents you can step up

A Negative Return A Negative Return

Yet, every time you supersize, it costs Yet, every time you supersize, it costs For only 67 cents you can step up to a larger order of French fries and a 32-ounce soda … For only 67 cents you can step up to a larger order of French fries and a 32-ounce soda … Yet, every time you supersize, it costs you $8 in extra lifetime spending on food, gas and medical care to sustain a heavier body. Yet, every time you supersize, it costs you $8 in extra lifetime spending on food, gas and medical care to sustain a heavier body. heavier body. heavier body.

S

• urce: Journal of the American College of Nutrition

SLIDE 101

SLIDE 102

Only in America Only in America y

SLIDE 103

Chronic Disease Study Chronic Disease Study

Failure to address chronic diseases Failure to address chronic diseases adequately costs the U S th adequately costs the U S th U.S. economy more than $1 trillion annually. U.S. economy more than $1 trillion annually.

SLIDE 104

“We shall pa an price bear “We shall pa an price bear “We shall pay any price, bear any burden, meet any hardship in order to assure “We shall pay any price, bear any burden, meet any hardship in order to assure hardship … in order to assure the survival and the success

• f liberty.”

hardship … in order to assure the survival and the success

• f liberty.”

y

John F. Kennedy

y

John F. Kennedy 1961 Inaugural 1961 Inaugural

SLIDE 105

Do Do We We Have the Will? Have the Will?

• Energy

Energy

Do Do We We Have the Will? Have the Will?

gy gy

• Housing

Housing Education Education

• Education

Education

• Entitlements

Entitlements

• Immigration

Immigration

• Health

Health Health Health

SLIDE 106

• Finance
• Finance
• Education
• Philanthropy
• Education
• Philanthropy

April 28 – May 2, 2012 April 28 – May 2, 2012

• Health
• Climate/Energy
• Health
• Climate/Energy
• Government
• Regions
• Government
• Regions
• Industries
• Media
• Industries
• Media
• Successful Aging
• Successful Aging

SLIDE 107

The Future Belongs to the Educated The Future Belongs to the Educated The Future Belongs to the Educated The Future Belongs to the Educated

• Democratization of Capital
• Building Human Capital
• Democratization of Capital
• Building Human Capital
• Building Human Capital
• Where’s Sputnik?
• Building Human Capital
• Where’s Sputnik?
• Education is the Answer
• Education is the Answer

SLIDE 108

Short term Stimulus Short term Stimulus Short-term Stimulus Short-term Stimulus

SLIDE 109

Education is the long term stimulus Education is the long term stimulus Education is the long-term stimulus. Education is the long-term stimulus.

SLIDE 110

“Education is the most powerful weapon “Education is the most powerful weapon powerful weapon which you can use to change the world ” powerful weapon which you can use to change the world ” change the world.” change the world.”

• Nelson Mandela
• Nelson Mandela

SLIDE 111

We are creating a legacy for the next We are creating a legacy for the next generation. generation.

SLIDE 112

“I h d “I h d “In your hands, my fellow citizens, more “In your hands, my fellow citizens, more than in mine, will rest the final success or than in mine, will rest the final success or failure of our course.” failure of our course.” John F. Kennedy 1961 Inaugural John F. Kennedy 1961 Inaugural 1961 Inaugural 1961 Inaugural

SLIDE 113

Th F t B l t th Ed t d Th F t B l t th Ed t d The Future Belongs to the Educated The Future Belongs to the Educated

ASU Education Innovation Summit Phoenix ASU Education Innovation Summit Phoenix April 16, 2012 April 16, 2012

Michael Milken

Chairman, Milken Institute

Michael Milken

Chairman, Milken Institute