1. FAST FORWARD, READY OR NOT January 12, 2005

2. CHANGE CHANGE IS THE NEW REALITY A World Constantly Remade 1984 Nuclear 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

3. CHANGE CHANGE IS THE NEW REALITY A World Constantly Remade 19841994 Nuclear War / Japan Inc. China, India, USSR not players Oklahoma 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.”

4. CHANGE CHANGE IS THE NEW REALITY A World Constantly Remade 198419942004 Nuclear 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 users2% Internet users Mosaic introduced ~ 160M online US > 650M online worldwide 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.” “From a superpower to a third world country, the U.S. is in rapid decline.”

5. 2000 Bubble Collapse Global Recession Terrorist Attacks Corporate Scandals / Iraq War 20012002 NEW ENTRANTS… China, India, Eastern Bloc enter global economy NEW TECHNOLOGIES… Digitization and networking create productivity revolution, any job anywhere NEW PRESSURES… Pressure to innovate, customize, & be first-to- market… blue & white collar work THE NEW DRIVERS OF CHANGE Cyclical AND Structural Changes…

6. Japan has the world’s fastest super- computer SOUTH KOREA #1 IN BROADBAND… over 70% citizens @ >1Mbps Shrinking Share of:  Global R&D  S&E graduates  Global patenting THE NEW DRIVERS OF CHANGE...Combined with Better Global Competition…

7. Years to 25% U.S. Adoption Source: McKinsey THE NEW DRIVERS OF CHANGE … Are Coming At An Accelerating Pace…

8. There will be more change in the next 30 years than in all of the 20 th Century. Disruptive Technologies Globalization Convergence Rising Competitors THE NEW DRIVERS OF CHANGE … And Will Come Even Faster…

9. COPING WITH CHANGE Creating New Opportunities & Challenges Consumer AcceptanceK-to-Gray Learning Environments Regulatory Flexibility Evolving Business Models

10. “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 CHANGE Can We Move Fast Enough?

11. HELP PEOPLE TRANSITION MAXIMIZE OUR COMPARATIVE ADVANTAGES ENGAGE THE WORLD IMPROVE EDUCATION Promoting American Competitiveness COPING WITH CHANGE COPING WITH CHANGE How Do We “Pick Up The Pace”?

12. WHAT 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

13.  Fight for Market Access  Protect IPR globally  Prevent Non-Tariff Trade Barriers  Expand the Pie WHAT DO WE DO ABOUT IT? Engage the World

14. INNOVATION America must never compete in the battle of who can pay their workers the least. WHAT DO WE DO ABOUT IT? Reinvest in our Comparative Advantages ENTREPRENEURSHIP INFRASTRUCTURE EDUCATION

15. IMMIGRATION & STUDENT VISAS K-TO-GRAY LEARNING ENVIRONMENTS Grow, Attract & Retain the Best & Brightest TECH- LITERATE WORKFORCE TEACHERS ABLE TO INTEGRATE TECHNOLOGY WHAT DO WE DO ABOUT IT? Improve Education

16. THANK YOU ARE YOU READY?