FAST FORWARD, READY OR NOTFAST FORWARD, READY OR NOT

January 12, 2005January 12, 2005

CHANGECHANGE IS THE NEW REALITYA World Constantly Remade

CHANGECHANGE IS THE NEW REALITYA World Constantly Remade

1984Nuclear War / Japan Inc.

China, India, USSR not players

8% U.S. PC Penetration MacIntosh introduced

~ 0 Internet users

The only jobs our kids will get are “selling McDonald’s

hamburgers & sweeping up around Japanese computers.”

8MHz CPU, $2,500

CHANGECHANGE IS THE NEW REALITYA World Constantly Remade

CHANGECHANGE IS THE NEW REALITYA World Constantly Remade

1984 1994Nuclear War / Japan Inc.

China, India, USSR not playersOklahoma City / NAFTA

8% U.S. PC Penetration MacIntosh introduced

24% U.S. PC Penetration

~ 0 Internet users 2% Internet users

Mosaic brand new

The only jobs our kids will get are “selling McDonald’s

hamburgers & sweeping up around Japanese computers.”

NAFTA will create a “giant sucking sound of all our jobs leaving for

Mexico.”

CHANGECHANGE IS THE NEW REALITYA World Constantly Remade

CHANGECHANGE IS THE NEW REALITYA World Constantly Remade

1984 1994 2004Nuclear War / Japan Inc.

China, India, USSR not players

Oklahoma City / NAFTA Terrorists / “Benedict Arnold CEOs”

8% U.S. PC Penetration MacIntosh introduced (8MHz

CPU, $2,500)

24% U.S. PC Penetration 58% U.S. PC Penetration

(2.66GHz, $600)~ 0 Internet users 2% Internet users

Mosaic introduced~ 160M online US

> 650M online worldwideThe only jobs our kids will

get are “selling McDonald’s hamburgers & sweeping up

around Japanese computers.”

NAFTA will create a “giant sucking sound of all our

jobs leaving for Mexico.”

“From a superpower to a third world country, the U.S. is in rapid decline.”

20002000

Bubble Collapse

Global Recession

Terrorist Attacks

Corporate Scandals / Iraq War

20012001 20022002

NEW ENTRANTS… China, India, Eastern

Bloc enter global economy

NEW TECHNOLOGIES… Digitization and networking

create productivity revolution, any job anywhere

NEW PRESSURESNEW PRESSURES… … Pressure to innovate, Pressure to innovate,

customize, & be first-to-customize, & be first-to-market… blue & white market… blue & white

collar workcollar work

THE NEW DRIVERS OFTHE NEW DRIVERS OF CHANGECHANGECyclical AND Structural Changes…Cyclical AND Structural Changes…THE NEW DRIVERS OFTHE NEW DRIVERS OF CHANGECHANGE

Cyclical AND Structural Changes…Cyclical AND Structural Changes…

Japan has the world’s fastest super-

computer

SOUTH KOREA #1 IN SOUTH KOREA #1 IN BROADBAND… over BROADBAND… over

70% citizens @ 70% citizens @ >1Mbps>1Mbps

Shrinking Share of: Global R&D S&E graduates Global patenting

THE NEW DRIVERS OFTHE NEW DRIVERS OF CHANGECHANGE...Combined with Better Global Competition…...Combined with Better Global Competition…

THE NEW DRIVERS OFTHE NEW DRIVERS OF CHANGECHANGE...Combined with Better Global Competition…...Combined with Better Global Competition…

Years to 25% Years to 25% U.S. AdoptionU.S. Adoption

Source: McKinsey

THE NEW DRIVERS OFTHE NEW DRIVERS OF CHANGECHANGE… Are Coming At An Accelerating Pace…… Are Coming At An Accelerating Pace…

THE NEW DRIVERS OFTHE NEW DRIVERS OF CHANGECHANGE… Are Coming At An Accelerating Pace…… Are Coming At An Accelerating Pace…

There will be more change in the next 30 years than in all of the 20th Century.

Disruptive Disruptive TechnologiesTechnologies

GlobalizationGlobalization

ConvergenceConvergence

Rising CompetitorsRising Competitors

THE NEW DRIVERS OFTHE NEW DRIVERS OF CHANGECHANGE… And Will Come Even Faster…… And Will Come Even Faster…

THE NEW DRIVERS OFTHE NEW DRIVERS OF CHANGECHANGE… And Will Come Even Faster…… And Will Come Even Faster…

COPING WITH COPING WITH CHANGECHANGECreating New Opportunities & ChallengesCreating New Opportunities & Challenges

COPING WITH COPING WITH CHANGECHANGECreating New Opportunities & ChallengesCreating New Opportunities & Challenges

Consumer AcceptanceK-to-Gray Learning Environments

Regulatory Flexibility

Evolving Business Models

“It is not the strongest of the species that survive,

nor the most intelligent, but the ones most responsive

to change.” Charles Darwin

WORKERS / COMPANIES / REGIONS / NATIONS

COPING WITH COPING WITH CHANGECHANGECan We Move Fast Enough?Can We Move Fast Enough?

COPING WITH COPING WITH CHANGECHANGECan We Move Fast Enough?Can We Move Fast Enough?

HELP PEOPLE HELP PEOPLE TRANSITIONTRANSITION

MAXIMIZE OUR MAXIMIZE OUR COMPARATIVE COMPARATIVE ADVANTAGESADVANTAGES

ENGAGE THE ENGAGE THE WORLDWORLD

IMPROVE IMPROVE EDUCATIONEDUCATION

Promoting American

Competitiveness

COPING WITH COPING WITH CHANGECHANGE How Do We “Pick Up The Pace”?COPING WITH COPING WITH CHANGECHANGE How Do We “Pick Up The Pace”?

WHAT DO WE DO ABOUT IT? Help People Transition BetterWHAT DO WE DO ABOUT IT? Help People Transition Better

Improve and fund retraining & adjustment programs

Credits for proactive investment in human capital

Encourage Saving Explore wage insurance

& health care portability Improve systems for

Lifelong Learning

Fight for Market Access

Protect IPR globally

Prevent Non-Tariff Trade Barriers

Expand the Pie

WHAT DO WE DO ABOUT IT?Engage the World

WHAT DO WE DO ABOUT IT?Engage the World

INNOVATION

America must never compete in the battle of America must never compete in the battle of who can pay their workers the least.who can pay their workers the least.

WHAT DO WE DO ABOUT IT? Reinvest in our Comparative Advantages

WHAT DO WE DO ABOUT IT? Reinvest in our Comparative Advantages

ENTREPRENEURSHIP INFRASTRUCTUREEDUCATION

IMMIGRATION & STUDENT VISAS

K-TO-GRAY LEARNING

ENVIRONMENTS

Grow, Attract & Retain the Best & BrightestGrow, Attract & Retain the Best & Brightest

TECH-LITERATE

WORKFORCE

TEACHERS ABLE TO

INTEGRATE TECHNOLOGY

WHAT DO WE DO ABOUT IT?Improve Education

WHAT DO WE DO ABOUT IT?Improve Education

THANK YOUTHANK YOUTHANK YOUTHANK YOU

ARE YOU READY? ARE YOU READY?