Israeli talent is in danger of running out
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Financier Michael Milken warned on Tuesday that Israel’s $7 trillion human capital market is in danger of rapidly depreciating should the government not take the appropriate corrective steps to repair and invest in the local education system.
“Human capital” has been defined by University of Chicago economist Gary Becker as the knowledge, skills and experience of people.
“Becker estimates that human capital represents more than three-quarters of the world’s wealth – as much as $1,200 trillion in value, which is many times the total value of all the assets listed on the balance sheets of the world’s individuals, companies and nations,” Milken said at the Israel Business Leadership Meeting in Tel Aviv. “And that means the human capital of Israel is worth several multiples of the officially reported size of Israel’s assets as published by the Bank of Israel.”
Milken, in Israel for the Milken Institute’s Financial and Policy Innovations Lab for Medical Solutions in Israel, helped develop the market for bonds with low credit ratings, or junk bonds, during the 1970s and 1980s. In 1989, Milken, often referred to as the “junk bond king,” an epithet he denies, was indicted on 98 counts of racketeering and securities fraud. After pleading guilty to six securities and reporting violations, Milken was sentenced to 10 years in prison. Following a plea bargain, however, he was released after serving less than two years.
Today, Milken heads the Milken Family Foundation, whose support of the teaching profession has led to significant innovations in education and whose medical research programs have contributed to major clinical breakthroughs. Milken is also the founder of the Prostate Cancer Foundation, now the world’s largest philanthropic source of research funding for that disease.
While Milken said that Israel has the human capital necessary to allow it to take a leadership role in fighting global problems such as terrorism, energy consumption, education and poverty, he said it will not happen unless the educational system is overhauled.
READ: Financier says Israel’s ‘human capital’ in danger
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