Building Meaningful Lives2017MilkenInstituteHamptonsDialogues

Obesity Technology

Aging

Housing

DemographicsLeveling the Playing FieldEntitlements

Education

What is a meaningful life?

High Tech / High Touch

“Hightech/hightouch.Theprincipalsymbolizestheneedforbalancebetweenourphysicalandspiritualreality.”

‐ JohnNaisbitt

Tom Friedman: Thank You for Being LateTom Friedman: Thank You for Being Late

U.S.SurgeonGeneralVivek Murthy:WhatisthebiggestdiseaseinAmericatoday?

Answer:“It’snotcancer.It’snotheartdisease.It’sisolation.Itisthepronouncedisolationthatsomanypeopleareexperiencingthatisthegreatpathologyofourlivestoday.”

Why Do People Play Video Games?Why Do People Play Video Games?

Why Do People Play Video Games?Why Do People Play Video Games?

"Onceyougetpastair,food,water,shelter,yougettosocialconnections,senseofbelonging.Yougettoself‐esteem,overcomingchallengesandbuildingself‐worth.Andyougettoself‐actualization.

“Weareprovidingself‐actualizationforagreatmanyofourplayers."

‒AndrewWilson,CEO,ElectronicArts

Source:Gamesindustry.biz

What is a Meaningful Life?What is a Meaningful Life?

“Deprivedofmeaningfulwork,menandwomenlosetheirreasonforexistence;theygostark,ravingmad.”

‒FyodorDostoevsky

Opioids by the NumbersOpioids by the NumbersDaily‐Morethan650,000opioidprescriptionsdispensed237Millionperyear

Daily‐ 3,900peopleinitiatenonmedicaluseofprescriptionopioids1.4Millionperyear

Daily‐ 580peopleinitiateheroinuse211,700peryear

Daily‐ 78peoplediefromanopioid‐relatedoverdose28,470peryear

Source:IMS,SAMHSA,CDC(2015).

Opioid Addiction

ThecostofopioidaddictiontotheU.S.economy– throughlostworkerproductivity,absenteeismandpoorjobperformanceorrelatedtocrimeandhealthcare– was$78.5billionin2013.

‐ NationalInstituteonDrugAbuse

What is a Meaningful Life?What is a Meaningful Life?

“Thepurposeoflife,afterall,istoliveit,totasteexperiencetotheutmost,toreachouteagerlyandwithoutfearfornewerandricherexperience.”

‒EleanorRoosevelt

Maslow’s Hierarchy of Needs

60%:Myco‐workers

59%:Interestinwork

Source:ConferenceBoardJobSatisfactionSurvey2016(WallStreetJournal,July19,2016)

What is most important at your job?

“Yes,theplanetgotdestroyed,butforabeautifulmomentintimewecreatedalotofvalueforshareholders.”Source:TomToro

Median Income in the United States

Source:U.S.FederalReserve(2016pricelevel)

Inflation‐Adjusted

1999 $57,900

2016 $56,516

1999 $40,696

2016 $56,516

Source:GlobalWealthDatabook 2016,CreditSuisse

Wealth Patterns in Selected Countries

Country Average Median <$10K >$1MAustralia $375 $163 11.1% 6.2%

France $244 $100 26.1% 3.3%

Greece $81 $53 22.9% 0.8%

Italy $104 $104 22.7% 2.3%

Japan $231 $96 9.3% 2.7%

UnitedKingdom $289 $108 21.6% 4.5%

UnitedStates $345 $45 34.6% 5.5%

2016wealthperadultin1,000U.S.dollars(rounded)

Vulnerability of Today’s Families

Source:Fed’sReportontheEconomicWellbeingofUSHouseholds(May19,2017)

44%ofU.S.householdscouldnotcoverahypotheticalemergencyexpensecosting$400withoutborrowingorsellingsomething.

23%ofU.S.adultscannotpaytheirmonthlybillsinfull.

25%skippedamedicaltreatmentlastyearbecausetheycouldn’taffordit.

28%havenoretirementsavingsorplan.

U.S. Median Income

Source:U.S.Censusdatafor2015;MilkenInstitute.

$70,000+$60,000<$50,000

Donald Trump Hillary Clinton

U.S. Election

Sources:CORRECT

Social Determinants of HealthThehealthandeconomicburdenofsocial

determinantsmustbereduced.

Source:TBD

Transportation

Clean water

Sanitation

Housing

UnemploymentEducational Opportunity

Hunger and food instability

Access to health care

Stigma and discrimination

Poverty

P=Fti*(HCi+SCi+RAi)HumanCapital

SocialCapital

RealAssets

Productivity: Skills Education Training Experience Creativity Habits Values

Ruleoflaw Propertyrights Publichealth Universaleducation Religiousfreedom Police/fireprotection Culturalresources Universalsuffrage Protectionofcreditors Rigorousfinancial

reportingstandards Transparentmarkets Regulatorycontinuity

Cash Receivables Realestate Factories Capital

equipment Roads Buildings Infrastructure

FinancialTechnology

Innovativeprocesses&componentsincluding: Convertiblebonds Preferredstock High‐yieldbonds Collateralizedloans Collateralizedbonds Equity‐linked

securities Securitizedobligations

(mortgages,creditcards,etc.)

Derivatives

U.S. and Fortune 500 Employment

America Goes to Work

60

80

100

120

140

160

180

200

1970 1975 1980 1985 1990 1995 2000

Modern capitalmarkets begin

New financial technologies are fully implemented

U.S. = + 62 million jobs

Fortune 500 = minus 4 million

In1955,theBig3automakersintheU.S.produced94%ofallautomobiles.

FromAlgeriatoVietnam,morethan50nationsnowproducecars,andtheU.S.producesfewerthan15%.

Automotive Industry Dominance

Sources:OICA;Wikipedia

Federal Spending Priorities

FDA CDCNIH

Education

HousingSubsidies

$0

$100

$200

$300

Sources:FDA,CDC,NIH,DOE,andOfficeofManagementandBudget.Note:EducationreflectstotalDOEbudget.Housingsubsidiesreflectestimatedforgonetaxrevenuesfromdeductionsforimputedrent,mortgageinterestandpropertytaxes.

Annual, in $ billions

(forgonetax

revenue)

Sources:IHSGlobalInsight,Corelogic,MilkenInstitute,1/20/2016.

Home prices don’t go up forever

WWI WWIIGreat

Depression70’sBoom

80’sBoom

LastBoom

Changeinhomepricesin125years

‐20%‐15%‐10%‐5%0%5%10%15%20%25%30%

1890 1902 1914 1926 1938 1950 1962 1974 1986 1998 20102016

Degradationofenvironment

Divorce Spousalabuse Drugabuse Alcoholism Hypertension Depression

Social Effects of Overly Large Houses

33%Housing18%Transportation13%Food11%Insurance/pensions6%Healthcare5%Entertainment4%Apparelandservices

23%Food

10%Housing8%Clothing8%Other6%Transportation5%Healthcare5%Communication

Consumer Spending

Source:U.S.BureauofLaborStatistics/CLSA

U.S. Asia

2%SupplementalEducation

15%SupplementalEducation

Entitlement and Non-Defense Discretionary Spending

0%

2%

4%

6%

8%

10%

12%

14%

1970 1976 1982 1988 1994 2000 2006 2012 2018 2024

Source:CongressionalBudgetOffice,2016.

Entitlementspending

Non‐defensediscretionaryspending

When a City Declares Bankruptcy …

SanBernardino:Bondholdersreceivea“60percenthaircut”;settles$40millionclaimwithcityfirefightersfor$2.7million– lessthan10%.

Stockton:Bankruptcysettledwithnopensioncuts.FranklinTempleton,whichhadloanedStocktonabout$35million,endedupwithlessthan$7millioninthereorganization.

Source:Reuters,2/3/16

Longer Life Expectancy; Longer Retirements

1970 1980 1990 2000 2010 2020 2030 2040 2050

95

85

75

65

55

LifeExpectancyatage65

WomenMen

RetirementAge

14.4 18.322.0 26.5

26.2 30.828.6 32.9

Source:OECDAgeingandEmploymentPolicies,France2005

France

Human capitalis the largest asset class.

Education

Immigration

Health

Three Ways to Build Human Capital

Skilled and Unskilled Jobs in the U.S.

Sources: Bureau of Labor Statistics, O*NET, Social Security Administration (2014).

60%

20% 20%

Unskilled Semi‐skilled Skilled

1950

12%18%

70%

Unskilled Semi‐skilled Skilled

Today

Source:EdwardGordon,“WinningtheGlobalTalentShowdown”

The Jobs Problem

123,000,000high‐skilledU.S.jobswillbeavailablein2020

50,000,000Americans

willqualifyforthosejobs

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

U.S. Education: Perception vs. Reality

29%ofAmericansratedU.S.K‐12STEMeducationas“aboveaverage”or“bestintheworld.”Yet…

Source: PC World

Sources:PewResearchCenterreport,PublicandScientist’sViewsonScienceandSociety, 1/29/15;AmericanAssociationfortheAdvancementofScience;ProgramforInternationalStudentAssessment(PISA)rankings

16%ofscientistsrankedU.S.STEMprogramsaboveaverage

U.S.15‐year‐oldsrank27th inscienceand35th inmath U.S.studentsrank27th inmathand20th inscienceamongOECDnations

• Singapore 564• Japan 532• Canada 527• Korea 517• Russia 494• UnitedKingdom 492• OECDAverage 490• UnitedStates 470• Israel 470• UAE 427• Qatar 402• Jordan 380• Tunisia 367

How 15-Year-Olds Score in SchoolMath

• Singapore 493• Japan 538• Canada 528• Korea 516• UnitedKingdom 509• UnitedStates 496• OECDAverage 493• Russia 487• UAE 437• Israel 467• Qatar 418• Jordan 409• Tunisia 386

Science

Source:OECDProgramme forInternationalStudentAssessment2015

Lower-Wage Jobs More Likely to Be Automated

Source:U.S.BureauofLaborStatistics;FreyandOsborne(2013);CEAcalculations

MedianProbabilityofAutomationbyMedianHourlyWage

83%

31%

4%

<$20/hour $20‐ $40/hour >$40/hour

1. Nanyang TechnologicalUniversity Singapore2. HongKongUniversityofScience&Tech. HongKong3. KoreanAdvancedInst.ofScience&Tech. S.Korea4. PohangUniversityofScience&Tech. S.Korea5. CityUniversityofHongKong HongKong6. MaastrichtUniversity Netherlands7. UniversityofCalifornia,Irvine U.S.8. HongKongPolytechnicUniversity HongKong9. UniversityofCalgary Canada10. Universitat Autónoma deBarcelona Spain

Source:QSQuacquarelli SymondsLtd.(UniversitiesLessthan50yearsold)

Top Universities Founded in Last 50 Years

TheonlyotherU.S.universitiesintheTop50areUCSantaCruzandtheUniversityofTexasatDallas.

MENA Literacy Rates

71.7%75.8%

79.6% 81.1%86.3%

94.1% 94.8%97.8% 98.0%

Note:Israel’sratefor2011,allotherratesare2015.Source:WorldBank.

1. Tunisia 6,0002. SaudiArabia 2,5003. Russia 2,4004. Turkey 2,1005. Jordan 2,0006. France 1,7007. Morocco 1,2008. Lebanon 9009. Germany 76010. UnitedKingdom 760

Fighters Joining ISIS by Nation

Sources:NationalBureauofEconomicResearch(NorthwesternUniversityandHebrewUniversity);CityLab 8‐10‐16

AcademicScholarships

SupportforInternships

AnnualSummit

NetworkofStudentsandProfessionals

Academic/CareerExplorationFund

OngoingCareerCounselingandSupport

431Scholarssince1989

108bornoutsidetheU.S.

41countriesoforigin

333ScholarshaveparentsbornoutsideU.S.

114collegesattended

63aremarried

92childrenofMilkenScholarsJuly2017

Immigrants Seek Strong Social Capital

Throughouthistory,peoplehavesoughttoliveinnationsthatprovidethefreedomsthatcomewithvibrantsocialcapital– especiallytheRuleofLaw.

Inthe19th century,50millionEuropeansemigratedtoAmerica.

Where U.S. Immigrants Were Born

Asia5%

LatinAmerica9%

Canada10%

Europe75%

Other1%

Sources:MigrationPolicyInstitute,U.S.Census,UnitedNationsPopulationDivision,2015Note:2015figuressumto101%duetorounding.

1960 Today

Asia28%Latin

America54%

Canada2%

Europe12% Other

5%

States with Majority “Minority” Toddler Populations

Sources:BrookingsInstitution(analysisofCensusBureauPopulationEstimates/2013);GSV

6. Nevada 36.9%

7. Arizona 39.1%

8. Maryland 42.2%

9. Florida 42.8%

10. Georgia 43.1%

PopulationUnderAge5withEuropeanAncestry

1. Hawaii 15.2%

2. NewMexico 24.9%

3. California 25.1%

4. Washington,D.C. 27.1%

5. Texas 31.1%

Universalsuffrage Ruleoflaw Educationandhealthcare Policeandfireprotection Religiousfreedom Culturalresources Propertyrights Protectionofcreditors Financialreportingstandards

Examples of Social Capital

Moving Abroad

Source:Barclays,TheWallStreetJournal

5%

6%

16%

20%

23%

47%

India

U.S.

HongKong

U.K.

Singapore

ChinaPercentageofhigh‐net‐worthindividualsfromselectedcountrieswhosaytheyplantomoveabroadinthenextfiveyears:

Obesity Rates Worldwide

U.S.

Mexico

U.K.

France

Germany

China

Japan

Source:WorldHealthOrganization2014

MENWOMEN

3.2%

8.0%

24.0%

18.5%

29.2%

34.7%

3.4%

5.9%

23.8%

21.9%

26.9%

32.6%

33.1%22.8%

WorldHealthOrganization

Thedirectcostsattributabletohealthconditionscausedbyobesityandbeingoverweight,includingthevalueofshortenedlifespans,total$1.4TRILLION.

Economic Impact of Weight Gain

Source:FatAmerica:TheHealth&EconomicImpactofObesity/MilkenInstitute2016

Whathappenswhenyoucutdownsugarinakid’sdietforninedays?

Source:Obesity journal(February2016)RobertLustig

BloodPressure LDLCholesterol Trigylcerides Insulin

4.3%

12.5%

46%

53%

Technology: Innovation and Disruption

1. Agriculture/FoodProduction2. Communications/Media3. Education/Research/BigData4. Energy/PowerfromtheSun5. Environment/Air/Water6. HealthCare/MedicalResearch7. Retail/Distribution8. TheSharingEconomy/Uber/Airbnb9. Transportation

The Old Infrastructure

The New Infrastructure

52

The World’s Largest Companies by Market Cap

1. Apple $813Billion2. Alphabet $636Billion3. Microsoft $558Billion4. Facebook $486Billion5. Amazon $460Billion6. Alibaba $428 billion7. Tencent $397billion8. Johnson&Johnson $356Billion9. ExxonMobil $325Billion10. JPMorganChase $319Billion

Source:YahooFinance8‐20‐19

Enterprise Value Per Employee

Source:ThomsonReuters(7/19/2017).Notes:MeasurebasedonlatestEVandlatestfull‐timeemploymentnumbers.

Macy’s $83,000Walmart $118,000Sony $384,000IBM $464,000

Amazon $1.4millionMicrosoft $4.6millionApple $7.0millionAlibaba $7.8millionGoogle $8.1millionFacebook $25.8million

Walmarthasappliedforapatentonafloating,blimp‐stylewarehousethatwill: Flyatheightsbetween500and1,000feet Containmultiplelaunchbays Operateautonomouslyorbyremotehuman

pilot

Walmart Challenges Amazon on Drone Delivery

Source:Fortune8/20/17

NOTE:AmazonwasgrantedasimilarpatentinApril2016.

Source: UnitedNations.Note:LatinAmericaincludestheCaribbean,dashedvaluesareprojected.

21st Century Population Growth Will Be in Africa

0

1,000

2,000

3,000

4,000

5,000

6,000

1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100

Millions

Africa

Latin America

EuropeNorth America

Asia

“Theproblem[inAfrica]isnotgettingcapital.It’sdevelopingentrepreneurs.”

‐ StriveMasiyiwaFounderandChairman

Econet Wireless

Equipsyoungprofessionalsfromdevelopingeconomieswithtools/experiencetodevelopcapitalmarketsintheircountries.

Inaugural2016classcomprises18membersfromsub‐SaharanAfricaandIndia.

Activealumninetworkwillfosternextgenerationofleaders.

IFC–Milken Institute Capital Markets Program

Today is the best day of their lives

AsiaCenter CaliforniaCenter FasterCures CenterforFinancialMarkets CenterfortheFutureofAging CenterforJobsandHumanCapital CenterforPublicHealth CenterforStrategicPhilanthropy

Aging and Longevity  Education/Human Capital  Energy/Environment  Finance/Access to Capital/MI Center for Financial 

Markets  Government/Leadership  Public Health and Medical Research  Industries  Job Creation  Media, Entertainment, and Technology  Philanthropy/Impact Investing  Cities, States and Regions of the World 

April 28 – May 2, 2018Los Angeles

PhilanthropyAdvisoryService:acustomizedapproachtodevelopingaportfoliothatwilladvanceprogressagainstdeadlyanddebilitatingdiseases.

TheFamilyProgram:off‐the‐recorddiscussionsamongindividualsandfamiliesoncriticalissuesthatdefinegoal‐settingandshapegivingstrategies.

TheChairman’sCircle:anaffinitynetworkofkeyphilanthropistsdesignedtospurreal‐timesharingofexperiencesandinsights.

September13‐15 MilkenInstituteAsiaSummit October5‐7 PCFScientificRetreat October23‐24 FutureofPublicHealthSummit November6 PCFNewYorkDinner November8 MilkenInstituteCaliforniaSummit November14 FasterCures’PartneringforCures November17‐19 PCFPro‐AmTennisTournament December4‐5 MilkenInstituteLondonSummit

UpcomingEvents2017

February7‐8 MilkenInstituteMENASummit March16‐18 PCFPro‐AmTennisTournament April28– May2 MilkenInstituteGlobalConference

2018