a smarter world: human intelligence & economic growth from ... · source: ray kurzweil, “the...
TRANSCRIPT
City, Country
Month 2014
Peter BerezinChief Strategist, The Bank Credit Analyst, BCA Research
A Smarter World: Human Intelligence & Economic Growth From 50,000 B.C. To The Singularity
THE OLD VIEW
“There has been no biological change in
humans in 40,000 or 50,000 years. Everything
we call culture and civilization we've built with
the same body and brain.”
— Stephen Jay Gould
SOURCE: PROCEEDINGS OF NATIONAL ACADEMY OF SCIENCES.
HUMAN EVOLUTION HAS ACCELERATED 100-FOLD OVER
THE PAST 10,000 YEARS
© BCA Research 20140
10
20
30
40
80,000 60,000 40,000 20,000
YEARS AGO
0
“We are more different genetically from people
living 5,000 years ago than they were different
from Neanderthals.”
— John Hawks, Professor of Biological Anthropology
and Genetics, University of Wisconsin, Madison
THE NEW VIEW
1250 1350 1450 1550 1650 1750 1850 1950
1
10
100 ENGLAND: HOMICIDE RATE PER 100,000
LOCAL ESTIMATES
KENT SERIES
NATIONAL DATA
© BCA Research 2014
SOURCE: MANUEL EISNER, “MODERNIZATION, SELF-CONTROL AND LETHAL VIOLENCE. THE LONG-TERM DYNAMICS OF
EUROPEAN HOMICIDE RATES IN THEORETICAL PERSPECTIVE”, BRITISH JOURNAL OF CRIMINOLOGY (41:4), 2001.
LONG-TERM DECLINE IN HOMICIDE RATES
MARRIED
ALL
SOURCE: GREGORY CLARK AND GILLIAN C. HAMILTON, “SURVIVAL OF THE RICHEST: THE MALTHUSIAN
MECHANISM IN PRE-INDUSTRIAL ENGLAND”, JOURNAL OF ECONOMIC HISTORY (66:3), 2006.
SURVIVAL OF THE RICHEST?
ASSETS BEQUEATHED (£)
0-9 10-24 24-49 50-99 100-199 200-499 500-999 Over 1000
SU
RV
IVIN
G C
HIL
DR
EN
IN
PR
E-I
ND
US
TR
IAL
EN
GL
AN
D
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
© BCA Research 2014
SOURCE: JAY L. ZAGORSKY, “DO YOU HAVE TO BE SMART TO BE RICH? THE IMPACT OF IQ ON WEALTH,
INCOME AND FINANCIAL DISTRESS”, INTELLIGENCE (35:5), SEPTEMBER-OCTOBER 2007.
MEDIAN INCOME AND NET
WORTH OF YOUNG BABY
BOOMERS BY IQ TEST SCORE:
NET WORTH (LS)
INCOME (RS)
POSITIVE CORRELATION BETWEEN IQ AND WEALTH
IQ TEST SCORE
© BCA Research 2014
US$ US$
120,000
100,000
80,000
60,000
40,000
20,000
50,000
40,000
20,000
30,000
10,000
75 &
BELOW
80 85 90 95 100 105 110 115 125 &
ABOVE
120
IQ T
ES
T S
CO
RE
GREAT BRITAIN
NETHERLANDS
ISRAEL
NORWAY
BELGIUM
SOURCE: JAMES R. FLYNN, “SEARCHING FOR JUSTICE: THE DISCOVERY OF IQ GAINS OVER TIME”, AMERICAN
PSYCHOLOGIST (54:1), 1999.
© BCA Research 2014
THE FLYNN EFFECT
GERMANY
GREAT BRITAIN
FRANCE
ITALY© BCA Research 2014
SOURCE: T.J. HATTON AND B.E. BRAY, “LONG RUN TRENDS IN THE HEIGHTS OF EUROPEAN MEN, 19TH AND 20TH
CENTURIES”, ECONOMICS AND HUMAN BIOLOGY (8), 2010.
HEALTHIER BODIES = HEALTHIER MINDS
CM
180
175
165
160
18
66
-18
70
18
56
-18
60
18
76
-18
80
18
86
-18
90
18
96
-19
00
19
06
-19
10
19
16
-19
20
19
26
-19
30
19
36
-19
40
19
46
-19
50
19
56
-19
60
19
66
-19
70
19
76
-19
80
MEAN HEIGHT OF EUROPEAN MEN BY BIRTH COHORT:
© BCA Research 2014
SOURCE: CHRISTOPHER EPPIG, UNIVERSITY OF NEW MEXICO.
IQ AND DISEASE BURDEN
IQ VERSUS BURDEN OF INFECTIOUS
DISEASE IN 184 COUNTRIES
2.5 3.0 3.5 4.0 4.5
60
70
80
90
100
IQ T
ES
T S
CO
RE
DISEASE BURDEN
300
310
320
330
6,000
7,000
8,000
9,000
10,000
11,000
US$
1980 1984 1988 1992 1996 2000 2004 2008 2012
REAL EXPENDITURE PER PUPIL* (IN DOLLARS) (LS)
NAEP AVERAGE SCALE SCORE FOR MATH AND
READING** (RS)
© BCA Research 2014
* FOR ELEMENTARY AND SECONDARY STUDENTS. IN CONSTANT 2011-12 DOLLARS. SOURCE: U.S. DEPARTMENT OF EDUCATION, NATIONAL
CENTER FOR EDUCATION STATISTICS (2012), DIGEST OF EDUCATION STATISTICS, 2011 (NCES 2012-001), TABLE 191 AND CHAPTER 2 .
** SCALE FROM 0 TO 500. SOURCE: NATIONAL ASSESSMENT OF EDUCATIONAL PROGRESS, U.S. DEPARTMENT OF EDUCATION, INSTITUTE OF
EDUCATION SCIENCES. BREAK IN SERIES REFLECTS SHIFT TO REVISED ASSESSMENT FORMAT.
END OF THE FLYNN EFFECT?
“The panel did not find any empirical studies
that reached the rigor necessary to determine
that specific turnaround practices produce
significantly better academic outcomes.”
– U.S. Department of Education,
May 2008
“LET’S JUST FIX THE SCHOOLS”: A REALITY CHECK
10-4
19
05
19
10
19
15
19
20
19
25
19
30
19
35
19
40
19
45
19
50
19
55
19
60
19
65
19
70
19
75
19
80
19
85
19
90
19
95
20
00
20
05
20
10
20
15
20
20
20
25
BELL
CALCULATOR MODEL 1NATIONAL
ELLIS 3000ANALYTICAL ENGINE
HOLLERITH
TABULATOR
IBM TABULATOR
COLLOSSUS
IBM SSEC
IBM 704
UNIVAC I
DEC PDP-1
IBM 1130
DEC
PDP-10
APPLE II
IBM PC
IBM AT-80286
PENTIUM
CORE 2 DUO
CORE I7
(4TH GEN)
CORE 2 QUADPENTIUM 4
PENTIUM III
PENTIUM II
COMPAQ
DESKPRO 386
ALTAIR
PROCESSING
CAPACITY OF A
HUMAN
BRAIN
PROCESSING
CAPACITY OF A
MOUSE
BRAIN
ELECTROMECHANICAL SOLID-
STATE
RELAY
VACUUM
TUBE
TRANSISTOR INTEGRATED CIRCUIT
OPTICAL,
QUANTUM,
DNA,
COMPUTING?
10-2
1
102
104
106
108
1010
1012
1014
SOURCE: RAY KURZWEIL, “THE SINGULARITY IS NEAR: WHEN HUMANS TRANSCEND BIOLOGY”, P.67, THE VIKING PRESS, 2006.
DATAPOINTS AFTER 2000 REPRESENT BCA ESTIMATES.
CA
LC
UL
AT
ION
S P
ER
SE
CO
ND
PE
R $
1,0
00
THE POWER OF EXPONENTIAL CHANGE
19
00
$95,000,000
$3,000,000
SEQUENCING COST PER GENOME
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
SOURCE: NHGRI GENOME SEQUENCING PROGRAM. AVAILABLE AT: WWW.GENOME.GOV/SEQUENCINGCOSTS.
ACCESSED SEPTEMBER 3, 2014.
© BCA Research 2014
$5,000
SEQUENCING COSTS HAVE PLUMMETED
$10,000
$100,000
$1,000,000
$10,000,000
$100,000,000
• Focus on BRAIN stocks
(Biotech, Robotics, Artificial Intelligence,
Nanotechnology), as well as:
• Areas that are being transformed by
emerging information technologies
(Transport, Energy, Manufacturing)
• Prepare to live forever (Immortality has
arrived; we just don’t know it)
INVESTMENT CONCLUSIONS