Michael Milken: A happy and healthy new year. I’m pleased to be able to speak to you today as part of the 15th annual Asian Financial Forum. I wish I could be with you in person in Asia. And hopefully later this year or next year, we can all get together in person together. Over the past few decades, the Milken Institute has hosted thousands of gatherings around the world, with tens of thousands of attendees, speakers. And at each one each year, ESG has played a larger and larger role. Not just at the planning level at the Milken Institute, but in questions and efforts by our attendees to address issues going forward.
I was often wondering, when did I first get interested in this concept of ESG and the environment? It probably was in 1957 when they had sent back pictures of earth from space. And I wrote a letter to the president of the United States that I was ready to run the space program. Unfortunately, I never had a response. In the 1960s, we saw colored pictures of earth. It was then that I’ve realized how unique our planet was in not only our solar system but possibly the universe. This little pale dot, as a planetary scientist, Carl Sagan referred to earth. Sagan and the other members of the Voyager team wanted humanity to see the earth, how vulnerable it was, in that our home is this tiny spec in the cosmic ocean of space. Today, those images of earth continue to burn brightly in my mind, as we focus on how financial institutions, industries, philanthropists, and governments can both protect our unique fragile planet and create meaningful lives for its citizens.
The past two years as the COVID pandemic spread throughout our small planet, it reminded that 50% of all economic growth in the last two centuries can be traced to public health and medical research. Science has moved quickly. It was only 63 days, nine weeks until the first vaccine. In this case, Moderna, went into a human being. Many years ago when we formed our medical foundations at the institute, faster cures particularly, we were focused on this concept that science was like a train and in numerous countries around the world today, trains can travel at more than 400 kilometers per hour, but in other countries, including the United States, trains traveled today at similar speeds that they traveled a hundred years ago, less than a 100 kilometers per hour. It had nothing to do with the technology involved with trains. It had everything to do with tracks.
And as we reflect on the lessons of the past two years, it wasn’t that science deploying all the advantages that technology has brought and the investment of billions of dollars by both governments and industries didn’t bring forth potential solutions, but it was the tracks. It was our ability to distribute. It was our ability to communicate. And many of these issues, every time we face challenges, come to fore. Why am I so focused on this little blue planet? Well, as we all know, or most of us know, the closest solar system is four light-years away. Unfortunately, our knowledge of space travel and speed probably will not allow any of us in our lifetime to be able to travel to any other planet similar to earth.
And that is why we have to focus on protecting it. And not only was it the tracks, our infrastructure, our distribution, our communication that held back changes to deploy what science had discovered to deal with this pandemic. But it was the realization that so many communities around the world were not only food deserts, where people could not get healthy food where they lived, but we’re also financial deserts where we could not get funds to distribute to shore up those communities. And also health deserts where people could not be treated or access quality healthcare.
So our challenges in ESG are not just the issue of the environment, but an issue of equal access to finance, to healthcare, et cetera. The three areas I want to briefly touch on today are first health and medical research. Technology has afforded us amazing things that we can do today. We can measure the nutrients in plants. We’ve developed ways to extend the life of food so that we can let plants grow to their full level of nutrients. This concept of healthy planet, healthy human is one that the institute has been focused on, particularly in the last decade and the relationship to people living healthy, meaningful lives, and also our planet be healthy. As we look at the things that are causing dramatic change in climate and the environment, almost 50% of the top 20 of them relate to food. Growing more than 70 billion animals a year to provide food and protein to people on the planet.
The movement to a plant-based healthy diet not only will change the environment dramatically, but will change the health of the citizens of planet earth. We see in many parts of Asia today, traumatic increases in diabetes, traumatic increases in cancer due to the fact that they’ve moved from plant-based diets to a more meat-based diet or Western diet. And the movement of fast food restaurants as they’ve moved throughout Asia has caused a dramatic increase in some areas that no one even studied diabetes 30 or 40 years ago. And today, they are among the highest level of diabetes in the world.
A healthy planet and healthy humans in the future are totally interacted. And there’s many other areas that we could touch on so we don’t have to cut down rainforests in order to have grazing for animals in the future. But science has brought us enormous technology. The sequencing of the human genome, more than $3 billion today, a few hundred dollars and less than an hour, has allowed us to see the relationship between what we eat, the microbiome, and the health and the quality and length of our life.
Finance and the important role that finance plays. In 1965, I wrote down a formula which showed that in order to have prosperity in society, finance served as a multiplier effect on the world’s largest asset, human capital. On the world’s second largest asset, social capital. And the world’s assets that you find on balance sheets, the real assets, factories, accounts receivable, inventory, et cetera.
In order to unleash entrepreneurs, we have to find a way to create financial freedom and access to capital around the world. And many of the discussions in FinTech over the past decade and the increasing use of FinTech to get capital into the hands of people, even in the lowest social economic or the remotest villages has provided great hope in the future, both for new technologies related to the environment, but also to grow new businesses and create new opportunities. The cost of a transaction going from hundreds of dollars to less than a penny in US has afforded the opportunity to reach hundreds of millions or billions of people and to help us find opportunities that will work to improve the quality of life and the environment and the planet we live in.
Lastly, education. And as the formula pointed out, when we talk about human capital, there’s two key ways to create human capital. One, health and medical research, increasing the length and the quality of your life. And second, education, increasing your own productivity and opportunities that will be open to you. There is no substitute for continued investments in education. And one of the things we’ve learned here from COVID and science is we need to provide knowledge and education, both as it relates to the environment, both as it relate to nutrition, both as it relates to the promise of science. Just developing new technologies and new techniques that are effective, COVID has showed us is not enough. We have to make sure that it is communicated, so the billions of people on the planet can fully understand, use, and have access to these technologies. Once again, I’m sorry I couldn’t be with you today and thank you for your time.