Milken Institute Global 2000 Conference Attracts Over 42 Countries with 1300 Attendees To Address Issues Of The Changing Global Landscape.
Beverly Hilton Hotel, Los Angeles, CA
March 8-10, 2000
By Elaine Morris Palmer
Prominent business leaders, media executives, financiers, economists, strategists, researchers, technology innovators, venture capitalists, top academicians and senior policy officials from governments around the world crowded the Beverly Hilton Hotel in Beverly Hills last week for an elegant three day conference hosted by the Milken Institute headquartered here in Santa Monica <www.milken-inst.org>.
The conference centered around the dynamics of world economic growth with a focus on technology and its impact on the way we live, work and do business.
Some of the world’s most distinguished thinkers including nine Nobel Laureates, CEOs, government and economic advisors, executive editors, bank chairmen, and leaders in foreign affairs ran panel discussions, general and breakout sessions all punctuated by keynote addresses from Michael Milken, Milken Institute’s Chairman. Milken himself is said to have revolutionized the modern capital marketplace and over the past 30 years has helped build thousands of companies around the world.
Today, Milken’s efforts are underscored by both the Institute’s significant research, external activities and publications such as the quarterly Milken Institute Review and his eat healthy cookbooks containing recipes to help fight cancer.
The Case For The New Economy.
The most revealing aspect of the new economy is the growth in productivity not in innovation. After all, novelty is not new. The telegraph and the commercialization of electricity were novelties in their time. The pivotal factor is the adoption life cycle or rate of “digestion” of these innovations. Case in point: it took 30 years to illuminate and effectively change the American factory.
The 70’s economy was moving toward information technology, it just took 20 years to “digest” or diffuse into the increased productivity derived from the improved capital investment that became available in the private sector.
The market created by these “discontinuous innovations” or what has recently been termed paradigm shifts, are what characterizes today’s “new economy.” Luckily today’s low unemployment, low inflation and high productivity are all encouraging signs and incentives to keep the expansion going. We are in a period of strong supply and even stronger demand and there is tremendous consumer confidence. 8.4% of all adults in this country are starting a new business. That’s the highest number in the world. The United States has more flexible regulatory networks and easier access to capital. We make it easier here for people to take a chance on an idea.
Alan Greenspan, who, it is rumored, does his best thinking in the bathtub, must find a way to let the air out of the asset/price bubble, pushing gently through this wealth effect and being cautious not to allow the demand side run ahead of the supply side.
Factors that could impact this economic growth are:
- the Middle East and oil prices
- Social issues such as the need to sustain an older population and
- Skill Shortages
The Age Of Digital Froth
Network Economics tells us that the set of costs is determined by the size of the audience. But as one economist said, “the future has arrived it just hasn’t been evenlydistributed.” Has any other pursuit drained more billions of dollars in the past few years as the pursuit of the Web as an entertainment medium? Mark Curcio himself, ex-Disney executive, CEO, Artisan Entertainment and producer of the Blair Witch Project, is staying away from content creation for the Web. “People are going to lose a lot more until there is ubiquitous broadband.” 26 million people went to the Blair Witch website because it enhanced their theatre experience, not because it was entertainment in and of itself. It was a component of entertainment — which, it turns out, may change the way all advertising builds brand affinity…from now on.
When all is said and done economic value creation is where the wheat separates from the chaff. And according to Jack Grubman, Managing Director and Head of Global Telecom at Smith Barney, 98% of the money in this economy will be made in Business to Business industrial strength, carrier class markets.
Marc Benioff, Chairman, salesforce.com (Halsey Minor’s latest pet project) bought the domain, you.com in 1996 because of his certainty that ME — highly personalized and built around a database — was the focus. Today, he believes that the Internet is catalyzing a consumer to business trend not the other way around. Ask yourself where the inefficient areas are inside your business and that’s where the Internet comes in.
Whichever case rules, the US market is large and flexible but often characterized by regression analysis. that is, looking at the past to help predict the future. Alternatively, it makes more sense for forecasters to use the adaptive feedback approach to avoid costly mistakes. Understanding this phenomenon is key:
statistical technique + interpretation =
knowing the future holds surprises, what are our possible reactions?
Consolidation – Build A Better System, Then Pray.
Some consolidation is financial engineering and others are about arrows in your quiver. The real answers aren’t known. Only that now, technologies, products, services, and content – as overlays of higher value are de rigeure.
Between the pipes and the content the question remains: Who owns the customer? An intermediate answer might be have a global market share with broadening and deepening relationships. Example, since the AOL/Time Warner deal, Bert Roberts, Jr., MCI WorldCom’s Chairman, says, combined with Sprint, it will play and increasingly larger role in the services AOL will provide. Again, the most serious challenge is regulatory.
Leonard Riggio, Chairman, Chief Executive Officer, Barnes & Noble believes that the Internet has liberated a consumer-driven economy. It is a broadcast channel, a facilitator, a mall in your home where the content is the product and people are spending more money than imagined in this “trickle-up” economy. And in case there was any question, the wider the base, the taller the tower can become. “The Internet and the retailer are mutually nourishing and supportive, not competitive.” Riggio asks any land-based retailer, “Why not follow the customer into their homes? Why not buy them a computer?”
“Rise Early, Work Hard, Strike Oil.” J. Paul Getty
Predictions: The Internet portends —
- Greater levels of tolerance and compassion driven by greater levels of communication.
- Greater global export potential.
- Greater young generation philanthropy and charitable intent that will have an real impact for society.
- Growth of services (versus products) available over the Internet
- A national sales tax for internet users.
- Software is dead.