| The first half of the twentieth century was an absolute disaster in human affairs , a cataclysm . We had the First World War , the Great Depression , the Second World War , and the rise of the communist nations . And each one of these forces split the world , tore the world apart , divided the world . And they threw up walls , political walls , trade walls , transportation walls , communication walls , iron curtains , which divided peoples and nations . It was only in the second half of the twentieth century that we slowly began to pull ourselves out of this abyss . Trade walls began to come tumbling down . Here are some data on tariffs : starting at 40 percent , coming down to less than 5 percent . We globalized the world . And what does that mean ? It means that we extended cooperation across national boundaries . We made the world more cooperative . Transportation walls came tumbling down . You know in 1950 the typical ship carried 5,000 to 10,000 tons worth of goods . Today a container ship can carry 150,000 tons . It can be manned with a smaller crew , and unloaded faster than ever before . Communication walls , I do n't have to tell you , the internet , have come tumbling down . And of course the iron curtains , political walls have come tumbling down . Now all of this has been tremendous for the world . Trade has increased . Here is just a little bit of data . In 1990 exports from China to the United States -- 15 billion dollars . By 2007 , over 300 billion dollars . And perhaps most remarkably , at the beginning of the twenty-first century , really for the first time in modern history , growth extended to almost all parts of the world . So China , I 've already mentioned , beginning in 1978 , around the time of the death of Mao , growth -- ten percent a year . Year after year after year , absolutely incredible . Never before in human history have so many people been raised out of such great poverty , as happened in China . China is the world 's greatest anti-poverty program over the last three decades . India , starting a little bit later , but in 1990 , begetting tremendous growth . Incomes at that time less than 1,000 dollars per year . And over the next 18 years have almost tripled . Growth of six percent a year . Absolutely incredible . Now Africa , Sub-Saharan Africa , Sub-Saharan Africa has been the area of the world most resistant to growth . And we can see the tragedy of Africa in the first few bars here . Growth was negative . People were actually getting poorer than their parents . And sometimes even poorer than their grandparents had been . But at the end of the twentieth century , the beginning of the twenty-first century , we saw growth in Africa . And I think , as you 'll see , there 's reasons for optimism . Because I believe that the best is yet to come . Now why . On the cutting edge today it 's new ideas which are driving growth . And by that I mean it 's products for which the research and development costs are really high , and the manufacturing costs are low . More than ever before it is these types of ideas which are driving growth on the cutting edge . Now ideas have this amazing property . Thomas Jefferson , I think , really expressed this quite well . He said , " He who receives an idea from me receives instruction himself , without lessening mine . As he who lights his candle at mine receives light without darkening me . Or to put it slightly differently , one apple feeds one man , but an idea can feed the world . Now this is not new . This is practically not new to TEDsters . This is practically the model of TED . What is new is that the greater function of ideas is going to drive growth even more than ever before . This provides a reason why trade and globalization are even more important , more powerful than ever before , and are going to increase growth more than ever before . And to explain why this is so , I have a question . Suppose that there are two diseases . One of them is rare , the other one is common . But if they are not treated they are equally severe . If you had to choose , which would you rather have ? The common disease or the rare disease ? Common . The common . I think that 's absolutely right . Why ? Because there are more drugs to treat common diseases than there are to treat rare diseases . The reason for this is incentives . It costs about the same to produce a new drug , whether that drug treats 1,000 people , 100,000 people , or a million people . But the revenues are much greater if the drug treats a million people . So the incentives are much larger to produce drugs which treat more people . To put this differently , larger markets save lives . In this case misery truly does love company . Now think about the following : if China and India were as rich as the United States is today , the market for cancer drugs would be eight times larger than it is now . Now we are not there yet , but it is happening . As other countries become richer the demand for these pharmaceuticals is going to increase tremendously . And that means an increase incentive to do research and development , which benefits everyone in the world . Larger markets increase the incentive to produce all kinds of ideas . Whether it 's software , whether it 's a computer chip , whether it 's a new design . For the Hollywood people in the audience , it even explains why action movies have larger budgets than comedies . It 's because action movies translate easier into other languages and other cultures . So the market for those movies is larger . People are willing to invest more , and the budgets are larger . Alright . Well if larger markets increase the incentive to produce new ideas , how do we maximize that incentive ? It 's by having one world market , by globalizing the world . The way I like to put this is , one idea , ideas are meant to be shared , so one idea can serve one world , one market . One idea , one world , one market . Well how else can we create new ideas ? That 's one reason . Globalize , trade . How else can we create new ideas ? Well , more idea creators . Now idea creators , they come from all walks of life . Artists and innovators , many of the people you 've seen on this stage . I 'm going to focus on scientists and engineers because I have some data on that , and I 'm a data person . Now , today , less than 1/10th of one percent of the world 's population are scientists and engineers . ( Laughter ) The United States has been an idea leader . A large fraction of those people are in the United States . But the U. S. is losing its idea leadership . And for that I am very grateful . That is a good thing . It is fortunate that we are becoming less of an idea leader because for too long the United States , and a handful of other developed countries , have shouldered the entire burden of research and development . But consider the following : if the world as a whole were as wealthy as the United States is now there would be more than five times as many scientists and engineers contributing to ideas which benefit everyone , which are shared by everyone . I think of the great Indian mathematician , Ramanujan . How many Ramanujans are there in India today toiling in the fields , barely able to feed themselves , when they could be feeding the world ? Now we 're not there yet . But it is going to happen in this century . The real tragedy of the last century is this : if you think about the world 's population as a giant computer , a massively parallel processor , then the great tragedy has been that billions of our processors have been off line . But in this century China is coming on line . India is coming on line . Africa is coming on line . We will see an Einstein in Africa in this century . Here is just some data . This is China . 1996 , less than one million new university students in China , per year . 2006 , over five million . Now think what this means . This means we all benefit when another country gets rich . We should not fear other countries becoming wealthy . That is something that we should embrace -- a wealthy China , a wealthy India , a wealthy Africa . We need a greater demand for ideas , those larger markets I was talking about earlier , and a greater supply of ideas for the world . Now you can see some of the reasons why I 'm optimistic . Globalization is increasing the demand for ideas , the incentive to create new ideas . Investments in education are increasing the supply of new ideas . In fact if you look at world history you can see some reasons for optimism . From about the beginnings of humanity to 1500 , zero economic growth , nothing . 1500 to 1800 , maybe a little bit of economic growth . But less in a century than you expect to see in a year today . 1900s maybe one percent . Twentieth century a little bit over two percent . Twenty-first century could easily be 3.3 even higher percent . Even at that rate by 2100 , average GDP per capita in the world will be 200,000 dollars . That 's not U. S. GDP per capita , which will be over a million . But world GDP per capita , 200,000 dollars . That 's not that far . We wo n't make it . But some of our grandchildren probably will . And I should say I think this is a rather modest prediction . In Kurzweilian terms this is gloomy . In Kurzweilian terms I 'm like the Eeyore of economic growth . ( Laughter ) Alright what about problems ? What about a great depression ? Well let 's take a look . Let 's take a look at the Great Depression . Here is GDP per capita from 1900 to 1929. Now let 's imagine that you were an economist in 1929 , trying to forecast future growth for the United States , not knowing that the economy was about to go off a cliff . Not knowing that we were about to enter the greatest economic disaster certainly in the twentieth century . What would you have predicted not knowing this ? If you had based your prediction , your forecast on 1900 to 1929 you 'd have predicted something like this . If you 'd been a little more optimistic , say based upon the roaring 20s , you 'd have said this . So what actually happened ? We went off a cliff but we recovered . In fact in the second half of the twentieth century growth was even higher than anything you would have predicted based upon the first half of the twentieth century . So growth can wash away even what appears to be a great depression . Alright . What else ? Oil . Oil . This was a big topic . When I was writing up my notes oil was 140 dollars per barrel . So people were asking a question . The were saying , " Is China drinking our milkshake ? " ( Laughter ) And there is some truth to this in the sense that we have something of a finite resource . And increased growth is going to push up demand for that . But I think I do n't have to tell this audience that a higher price of oil is not necessarily a bad thing . Moreover , as everyone knows , look it 's energy , not oil , which counts . And higher oil prices mean a greater incentive to invest in energy R&D . You can see this in the data . As oil prices go up , energy patents go up . The world is much better equipped to overcome an increase in the price of oil today , than ever in the past , because of what I 'm talking about . One idea , one world , one market . So I 'm optimistic so long as we hew to these two ideas : to keep globalizing world markets , keep extending cooperation across national boundaries , and keep investing in education . Now the United States has a particularly important role to play in this -- to keep our education system globalized , to keep our education system open to students from all over the world -- because our education system is the candle that other students come to to light their own candles . Now remember here what Jefferson said . Jefferson said , " When they come and light their candles at ours , that they gain light , and we are not darkened . " But Jefferson was n't quite right , was he ? Because the truth is , when they light their candles at ours , there is twice as much light available for everyone . So my view is be optimistic . Spread the ideas . Spread the light . Thank you . ( Applause ) |