City, Country Month 2014 A Smarter World: Human Intelligence & Economic Growth From 50,000 B.C. To The Singularity Peter Berezin Chief Strategist, The Bank Credit Analyst, BCA Research
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
HUMAN EVOLUTION HAS ACCELERATED 100-FOLD OVER THE PAST 10,000 YEARS 40 30 20 10 0 BCA Research 2014 80,000 60,000 40,000 20,000 0 YEARS AGO SOURCE: PROCEEDINGS OF NATIONAL ACADEMY OF SCIENCES.
THE NEW VIEW 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
LONG-TERM DECLINE IN HOMICIDE RATES 100 ENGLAND: HOMICIDE RATE PER 100,000 10 1 LOCAL ESTIMATES KENT SERIES NATIONAL DATA BCA Research 2014 1250 1350 1450 1550 1650 1750 1850 1950 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.
SURVIVING CHILDREN IN PRE-INDUSTRIAL ENGLAND SURVIVAL OF THE RICHEST? 4.5 4.0 3.5 MARRIED ALL 3.0 2.5 2.0 1.5 1.0 0.5 BCA Research 2014 0-9 10-24 24-49 50-99 100-199 200-499 500-999 Over 1000 ASSETS BEQUEATHED ( ) 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.
POSITIVE CORRELATION BETWEEN IQ AND WEALTH US$ 120,000 100,000 MEDIAN INCOME AND NET WORTH OF YOUNG BABY BOOMERS BY IQ TEST SCORE: NET WORTH (LS) INCOME (RS) US$ 50,000 40,000 80,000 60,000 40,000 30,000 20,000 20,000 10,000 BCA Research 2014 75 & BELOW 80 85 90 95 100 105 110 115 120 125 & ABOVE IQ TEST SCORE 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.
IQ TEST SCORE THE FLYNN EFFECT GREAT BRITAIN NETHERLANDS ISRAEL NORWAY BELGIUM BCA Research 2014 SOURCE: JAMES R. FLYNN, SEARCHING FOR JUSTICE: THE DISCOVERY OF IQ GAINS OVER TIME, AMERICAN PSYCHOLOGIST (54:1), 1999.
1856-1860 1866-1870 1876-1880 1886-1890 1896-1900 1906-1910 1916-1920 1926-1930 1936-1940 1946-1950 1956-1960 1966-1970 1976-1980 HEALTHIER BODIES = HEALTHIER MINDS CM 180 MEAN HEIGHT OF EUROPEAN MEN BY BIRTH COHORT: 175 160 165 BCA Research 2014 GERMANY GREAT BRITAIN FRANCE ITALY 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.
IQ TEST SCORE IQ AND DISEASE BURDEN 100 IQ VERSUS BURDEN OF INFECTIOUS DISEASE IN 184 COUNTRIES 90 80 70 60 BCA Research 2014 2.5 3.0 3.5 4.0 4.5 DISEASE BURDEN SOURCE: CHRISTOPHER EPPIG, UNIVERSITY OF NEW MEXICO.
END OF THE FLYNN EFFECT? US$ 11,000 REAL EXPENDITURE PER PUPIL* (IN DOLLARS) (LS) NAEP AVERAGE SCALE SCORE FOR MATH AND READING** (RS) 330 10,000 9,000 320 8,000 310 7,000 6,000 300 BCA Research 2014 1980 1984 1988 1992 1996 2000 2004 2008 2012 * 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.
LET S JUST FIX THE SCHOOLS : A REALITY CHECK 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
THE RISE OF THE MACHINES
1900 1905 1910 1915 1920 1925 1930 1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 CALCULATIONS PER SECOND PER $1,000 THE POWER OF EXPONENTIAL CHANGE 10 14 10 12 10 10 ELECTROMECHANICAL SOLID- STATE RELAY VACUUM TUBE TRANSISTOR INTEGRATED CIRCUIT PENTIUM 4 CORE I7 (4 TH GEN) CORE 2 QUAD PROCESSING CAPACITY OF A HUMAN BRAIN PROCESSING CAPACITY OF A MOUSE BRAIN 10 8 10 6 10 4 10 2 1 COLLOSSUS UNIVAC I DEC PDP-1 IBM 1130 COMPAQ DESKPRO 386 ALTAIR DEC APPLE II PDP-10 PENTIUM III PENTIUM II IBM PC IBM AT-80286 PENTIUM CORE 2 DUO OPTICAL, QUANTUM, DNA, COMPUTING? 10-2 10-4 HOLLERITH TABULATOR ANALYTICAL ENGINE IBM TABULATOR NATIONAL ELLIS 3000 IBM SSEC BELL CALCULATOR MODEL 1 IBM 704 SOURCE: RAY KURZWEIL, THE SINGULARITY IS NEAR: WHEN HUMANS TRANSCEND BIOLOGY, P.67, THE VIKING PRESS, 2006. DATAPOINTS AFTER 2000 REPRESENT BCA ESTIMATES.
SMARTER AND SMALLER
THE GENETIC REVOLUTION
HOBBIE-J LOOKING UP MURINE
SEQUENCING COSTS HAVE PLUMMETED $100,000,000 SEQUENCING COST PER GENOME $10,000,000 $95,000,000 $3,000,000 $1,000,000 $100,000 $10,000 $5,000 BCA Research 2014 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.
INVESTMENT CONCLUSIONS 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)