StartingBloc Presentation: A Vision for the World in 50 Years

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The last two Saturday mornings of my life have been spent on Powerpoint. But it was worth it.

So I’m standing in front of 150 social entrepreneurial peers at Yale on Saturday, attempting to set the scene for why I think we can actually end poverty, hunger, genocide, warfare, and preventable disease in our lifetimes.

First, I start with the challenges.

This is a continuation of the last post “The Great Challenge of our Generation.” The material comes from my StartingBloc presentation on Saturday, “The Immense Opportunity our Generation Has.”

First, let me take a step back and take a shot at some of the major the causes of this economic decline. Some of these causes may be controversial or debatable, but it’s a stab.

The Major Causes of the Economic Decline

1. De-regulation of financial industry in 1999 (Glass-Steagall)
2. Low interest rates to stem 2001-2002 recession
3. Easy credit to unqualified home buyers from 2002-2007
4. Lack of consumer savings in the U.S.
5. Over-leveraging of trading accounts
6. Over-derivitization of securities, de-linked from their underlying assets (CDOs, credit swaps, MBSs)
7. The collapse of key counterparties to risk

And the resulting effects of the declines…

The Effects of the Economic Decline

Mar 2008 – Forced Sale of Bear Sterns to JP Morgan
Jul 2008 – IndyMac Bank collapses
Sep 2008 – Bailout of Fannie Mae, Freddie Mac, and AIG, Forced Sale of Merrill Lynch and Wachovia, Collapse of Lehman Brothers
Oct 2008 – $700 billion U.S. government TARP
Feb 2009 – Unemployment rises to 7.6%, over 3.6 million jobs lost, DJIA down 50% from Oct 2007 peak, $787 billion U.S. government stimulus package

I showed graphs showing of the rise in collateralized debt obligations…

the decline in NASDAQ to levels not seen since 1998…

the decline of the DJIA to the lowest levels since 1996…

the decline of the Brazil-Russia-India-China ETF down 61.47% since June 2008…

the rise in unemployment to the highest level since 1992…

the rise in U.S. foreclosures…

and the drop in IPO pricings, down 84% in 2008…

Finally, I listed the key global challenges we currently have:

Key Global Challenges

1. Extreme hunger and food distribution
2. Water sanitation and distribution
3. An $11 trillion U.S. government debt and unfunded liabilities in Medicare, Medicaid, and Social Security
4. Lack of access to childhood education
5. Infant mortality, Malaria, measles, TB, diarrhea, HIV/AIDS
6. Human rights violations and sex trafficking
7. Climate change causing increasing temperatures
8. Nuclear proliferation
9. Major conflicts in Congo, Palestine, Sudan, Afghanistan, Iraq
10. Lack of transparent leadership in Zimbabwe, N. Korea, Somalia

And the wonderful graphic I showed next to illustrate just how scary these challenges are…

Yes, this baby has good reason to cry.

And to transition to the section on opportunities I started by showing…

I showed the DJIA over a 40 year period to show a longer term perspective…

I showed the DJIA from 1969 to 1982 to show another 13 year period that was flat…

Then showed what happened to the DJIA in the thirteen year period from 1982 to 1995 (from 900 to 4700)…

And showed Yale Economics Professor Robert Schiller’s P/E10 ratio that shows Price to Earnings ratio over a 10 year period to give a longer term perspecitve, showing that the P/E10 today is 13.38 down from 43 in May 2000.

And showed the 13.38 P/E10 lower than the long term average since 1881 of 16.84 indicating it may be a good time to buy.

And showed that only 23.5% of the world population (only 1.5B people so far) have access to the Internet today and that this percentage is rapidly expanding, which may provide a great coming power from a connected humanity that can communicate…

Showed that infant mortality has been cut in half in the last 45 years via the chart from Bill Gates’ annual letter…

Talked about the old model of government-to-government bi-lateral aid…

And shared three case studies of non-profits that are following a new model of aid, Aid 2.0, that could make a huge impact…

And finally listed all the great entrepreneurial opportunities there are in the world that entrepreneurs can work to solve–all of which could generate a billion dollar business…

Key Global Entrepreneurial Opportunities

1. Agricultural production yields
2. Food distribution and logistics
3. Water collection, sanitation and distribution
4. Wireless electricity distribution
5. Wireless mesh broadband networks
6. Ending conflict through trust and communication
7. Leadership transparency consulting
8. Improved education and reform
9. Improved preventative health care and reform
10. Clean tech/alternative fuel (the coming Green Revolution)

And finally ended with…

Perhaps, it’s time to invest long in our futures.

A Vision for the World

So, with these great challenges and opportunities in mind, I’d like to work with each and every one of you over the next fifty years to shape a world that addresses the great inequities of opportunity in the world all based on the principle that all human lives have equal value. A world in which…

1. There is no killing of humans on a mass scale (genocide or warfare)
2. All humans have access to the basic human needs of clean water, nutritious food, shelter, and primary education
3. We end preventable diseases like malaria, TB, and measles
4. We are environmentally sustainable

Is this possible?

Some may laugh.

But there’s no legitimate reason why humans have to kill thousands, tens of thousands of humans on a mass scale. Especially not in an age of increased communication and hopefully increased trust. Is there?

There’s no legitimate reason why if we have the logistical ability to get a package to Shanghai by the morning that we can’t create a system that enables basic, inexpensive food to be produced and distributed to starving children in the developing world, especially not in an age of increased grain yields. Is there?

There is no legitimate reason why preventable diseases can’t be prevented in the next 50 years. By definition. Is there?

And there is no legitimate reason why we cannot find alternative energies to fossil fuels that don’t destroy the world. Is there? We already have them. They’re just a bit more expensive per KWh than fossil fuels. This price doesn’t include the true cost of the externalities caused by the fossil fuels currently being paid by society. As Tom Friedman talks about in Hot, Flat, and Crowded, once we scale the usage of alternative energies, their price per KWh will quickly come down to be sustainable from an economic and environmental standpoint.

We’ve had bigger challenges before. In 1962 in the midst of the Cuban missile crisis. In 1943 in the midst of World War II. In 1930 in the middle of the Great Depression when unemployment was at 25%. These are challenges our generation can overcome if we make the right sacrifices and investments in education, infrastructure, leadership, and sustainability.

People laughed at Edison when he said he had a device that recorded sound.

People laughed at Marconi when he claimed had a device that wirelessly transmitted sound.

People laughed at Yunus when he said he could lend to poor women with no assets.

Your thoughts? Is this world possible?