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Speakers at the Moore School

John Bachmann's Speech at May 2008 Hooding Ceremony

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[Address given by John W. Bachmann on May 8, 2008, at the University of South Carolina Graduating Moore School of Business Masters' Students Hooding Ceremony]

Thank you, Dean Teegen.

And congratulations to each of you who are graduating as well as to family and friends who have supported you!

We are here to symbolically mark the end of one journey and the beginning or continuation of another.

The future holds major challenges, opportunities, and – yes – problems.  They are not the agenda of one country or even one continent, they are big, they are global and they are known.  This is not a time to wonder about the unknown.  It is a time to address the known.

Peter Drucker tells us that the critical organ of any organization is management.  Only able management can make an organization effective.

All of this underscores the value of your Moore education in two ways:

1. The international scope of the program gives you a broader view of the issues.
2. You have been educated in the skills and tools of the manager.

In speaking of the future -- and you know the future -- I would suggest there are two ways to view it.

First is to stand in the present and look forward.  In doing so, most of what you see is obstacles and a future that is badly blurred.

For a much clearer view, step forward ten years.   Looking back, what you see is far clearer.  Trends become more apparent.  Solutions become, in many cases, obvious.

Now … What do we know?

1.  Demographics tell us the size, shape, and economic status of the population, as well as trends.

• The economically developed world is shrinking and aging.
• The developing world is thriving and growing economically.
• The Third World remains largely in darkness.

The developed world needs workers while the developing world is a voracious consumer of commodities.

2.  Global energy demand is at an inflection point.

• Fossil fuels are being consumed at accelerating rates. 
• With costs increasing and unlikely to come down, many new, non-fossil sources are urgently needed.
• Nuclear, wind, tide, hydrogen, and biofuels all must be a part of any solution.
• New patterns in mass transit and urban living will emerge.

Years will pass before a new equilibrium in commodity prices will emerge.

3.   Life sciences -- both plant and animal -- are the world's new frontier.

• Genetically engineered plants, which have been vilified with no scientific basis, will emerge as critical factors in feeding the planet.
• Plants with deeper roots offer drought tolerance in arid locations.
• Protection against root worm and insects offers healthier plants and permits less-frequent herbicide application.
• Soybean oil can be made to contain Omega-3 without the fish oil taste.  It can also be designed to reduce or eliminate unhealthy trans-fats.
• Cassava can be engineered to reverse river blindness in young Africans.

In a time of rising commodity prices and food riots, world hunger transcends specious argument.

Animal-Human Research is moving forward at a dizzying pace.

• DNA research offers tailored and targeted therapies for illness  and disease.
• Stem-cell research is a most promising area in many fields, whether for regeneration of tissue or cancer therapies.

The question is not whether stem-cell research will take place, but where.  As Missouri seeks to criminalize it, California has passed a $1 billion bond issue to finance it.  Singapore offers qualified researchers $250,000 salaries along with a lab and staff.  These vitally important fields hold such promise that society can no longer afford the luxury of politicizing them.

4.  Globalization is feeling a backlash as the economy slows, and one hears talk of protectionism.

• The importance and the fruits of foreign direct investment have never been greater. 

Taxes and tariffs are ultimately taxes on one’s own economy and on the future.

• The jet engine and distributive information technology have altered and shrunk the world in irreversible ways.
• Free trade is not a zero-sum game.

Does any country want to protect yesterday's jobs at the cost of tomorrow’s?

5.  Immigration is a problem because jobs and workers are too often in  different places.

• Commerce Secretary Carlos Gutierrez spoke at the Moore  School about the tale of two valleys a few hundred miles apart.
• • Silicon Valley needs highly educated scientists and engineers, while the San Joaquin Valley needs laborers to complete the harvest.
  • Can we watch crops rot in the fields and tomorrow's jobs go offshore because we lack a rational immigration policy?

6.  Education is creating a bipolar society.

• If, as Walter Wriston would say, information is the currency of the future and knowledge gives value to information, then education is priceless.
•  Massive dropout rates and schools that do not teach are  unacceptable in a modern society.
• Greater emphasis must be placed on mathematics and  science.

Here, your peers are taking action.  TeachForAmerica shows that the idealism and selflessness of our brightest young people are at work, helping many struggling schools.

7.  Climate change and the "green" revolution are real if for no other  reason than customers and governments want it.

• Consumers are demanding environmentally friendly  products and services.
• Concerns about our carbon footprint reframe discussion of  issues, including nuclear power.

While it is fashionable in some circles to simply dismiss climate change, what if the talk show hosts are wrong?  Who loses?

8.  Social insurance in the economically developed world is broken.

• Retirement (Social) Security was poorly designed.   Contributors did not put in enough, people are living  longer, and there are proportionately fewer young people.   It was never actuarially sound but was a wealth transfer.
• The issue needs reframing from "I want mine" to "I do not  want to bankrupt the grandchildren".
• The solution has two parts:
  1.  Adjust contribution, qualification, and withdrawal criteria.
  2.  Encourage individual retirement savings through tax policy.  That is the role of the IRA, 401(k), 403 (b), and profit sharing.

Sadly, this issue has been so demagogued that most elected leaders are too timid to face it.  Medical insurance, much like Social Security, is trapped in its past.  But unlike Social Security, which is relatively straightforward, medical insurance is extremely complex. 

Issues include:

• Costly advances in therapies
• Uneven access to care
• Inefficiencies, including archaic record-keeping and legal  challenges regarding access

Today's failure to address each  of these issues is a tax on the future.  Delay in addressing will simply add to cost.

9.  Capitalism is increasingly under fire in much of the world.  Joseph Schumpeter warned that the risk to capitalism's survival would not be its failure, but its success.

• While we see market-driven economics thriving, with those  at the bottom improving, the gap between rich and poor  appears to be growing.
• Excesses, such as runaway executive pay, are easy targets for capitalism's foes.

If you care about capitalism's future, do not take it for granted. 

You and others like you will shape the future … not as individuals but as the leaders in organizations.  Whether a business, social, government or academic organization, it is management that renders effectiveness to each.

Your ability to lead … and to follow ….. is your passport.

I urge you to use both wisely.