close window 
The 21st century will be defined by the worldwide competition for human capital, said Michael Milken, chairman of the Milken Institute. “The ability to come up with new ideas, theories, forms of securities, and types of businesses will all be limited by the supply of individuals who can execute those strategies,” said Milken, who spoke to students as part of the Distinguished Speaker Series presented by the student-led Graduate Business Council at the Charles M. Harper Center on May 8.
The CEOs of hundreds of the world’s biggest companies were born outside the countries in which their companies are headquartered, he said. “I think you’ll find this is increasingly the rule, not the exception,” Milken said. “I feel very comfortable in my prediction of the worldwide competition for human capital.”
By 2050, he predicted, China will overtake the United States as the largest economy in the world; China will account for one quarter of the world’s economy, while the United States will retain 20 percent with just 5 percent of the world’s population. India will become the third largest economy, and Brazil, Russia, Indonesia, and Mexico will replace France, Italy, Spain, and Canada among the top 10, Milken said.
“Obviously we are assuming some stability in political systems,” he said. “The leading catalysts for this are the 600 million children in India and China. For every child in the U.S., there are about 4.5 children in China and 5.5 children in India. Improved education and the increase in the number of people receiving high-quality education—particularly in K-12 systems—are the catalysts in India and China for changing the world. Their education and their entering the work force should have a dramatic effect.”
Investments in areas that contribute to and meet the needs of society will yield better long-term returns, while investments in those later determined as costs to society will yield lower returns, if not the loss of those investments, Milken said.
“Democratization of capital has three parts,” he said. “First is democratization of financial assets. Once you have thousands of institutions rather than a few banks deciding who will get credit, you will have a thousand times as many companies financed. This leads to the second part – the democratization of industrial assets. And lastly, that democratization of companies creates an unbelievable democratization of career opportunities.”
Milken has contributed significantly to financial innovations that provided disenfranchised entrepreneurs access to capital; health development that links scientists, financiers, and bio-tech companies; recognition of public school educators; development of or-profit education companies; and the annual Milken Institute Global Conference, said Gary Becker, University Professor of Economics and of Sociology.
“Mike’s most important achievement is that he thinks like a Chicago economist,” Becker said. “He never studied here formally but he does things like a Chicago economist. He analyzes a problem in terms of how the incentives will operate, how you can change incentives. In school systems, he tries to give teachers a better incentive to teach better and students a better incentive to learn more.”
First-year student Nilay Shah, external relations chairman for the Graduate Business Council, said, “He’s saying to not necessarily be satisfied with the status quo and to try to understand where the U.S. economy is but where things are going globally. We need to be cognizant of that and not be caught off guard when the markets become less U.S.-centric.”
—Phil Rockrohr