It's a pleasure to be here today. In many ways it's bind of interesting because somebody would have asked. Would an internet working company be given a key note at COMDEX just two years ago. three many people in this room would have that would happen three going avoid in the front row that even with our own company we would not consider this a desktop or client/server shall with operate assistant etc.In some of the largest players at this show two year ago would nearly ignore the internet, and yet if you look today and where the products of all almost all the companies at the show will be our the next three years the devices be the high tech and low tech would have major connectivity and almost all the high productivity applications will lasorate their network in a major way. In short, we are involving to get the technologies closer and closer together, and we are changing almost every aspect of our lives as we go forward. I don't think it's too large a statement to say we are almost in a revolution if you will as we move forward. It will change literally the way we work, live, play, and learn and the way many people have not thought of. And I want to throw out the discussion refer to the internet. As you can see as you grow you get a lot of more attention in many ways most of them for the better if we wish to move forward. We want all our concerns. But also encourage people to voice interns at the night time and our voice being very successful to anyone's comer's at any point of time. But what you see is the internet and I want to define the internet not in a whole bunch of technology terms. The Internet to me is one big network. It's not the cooperate intranets, it's not the extraneous that tie together your supplies with you at work. It's not the big-internet It's all one that works because no sooner do we create the terminology than the line learn. But literally it will change every aspect of our lives the way we work. Those companies who understand how to apply the technology would get ahead of other companies, and perhaps it would determine the growth of their survival. It will change the way we play and live and the ways just started to dream about the day and perhaps children understand better than we do. And we also change the way we learn, because the people who graduate today from school will have between sit and ten jobs as they move forward. I want to very much thank COMDEX for allowing me to be have today and I also want to thank to group for alloy group bawdy that works in Europe and welcome the European crowd.
I'd like to really focus on prmaly house change the way as we move forward. But I want draw how quickly this change occurring involving almost like Industrial Revolution if you the past. When you think about it, the Industrial Revolution occurred, starting in Great Britain spread in West Europe and then the United States. It changed the way we worked lived in place many for the better. It determines which economy will take off. It also determines what was the shill sets we needed, the very simply good, what it did is it brought together machines and people in factories and changed forever our life. It was a revolution that occurred several hundred years and lured populations move from country to country and companies move from country to country based upon their ability to employ the technology in this Industrial Revolution. I don't think internet revolution is any difference. It's gone change all aspects of our way of lives. It literally will bring together the internet revolution if you will-people and information in global virtual companies and it will have the same effect that the Industrial Revolution did. But the internet moves in what we call dog-years or internet-years. One calendar year is dogs-like is really seven years. The same thing is true (in) the internet. The internet moves at the pace almost seven times faster than normal business. Just look at how much it occurred in the lost two years since COMDEX two yeas ago and discussion that work the role it place as you move forward. It's also going to be internet generation. We are all part of that. And generation does not apply to one age group. Our children perhaps understand more about the internet than many of the people in this room in terms of how to use it and how to server for it. When I talk to a number of our customers, they would say:" John, it might surprise you in the face of the strong internet." I am talking about people who are going to be consumers. And many of them said that I had the answer. Eighteen to thirty years old say:" Yes, I expect that." But fifty-five and over. The people who have extra time on their hands to have an application to learn how to use internet for such as looking up their stocks or communicate with grand-children studying to be in this area. Or internet generation also applies to companies. Those companies who understand how to employ this technology pick the right applications at the right time understand the compete advantage keep one step ahead in this now market would be those who grow and survive as you move frond before And it's also applied to the countries. Just like the Industrial Revolution dermises which country had the best standard of living over a period of hundreds of years. The internet revolution wills the same impact. Those countries who use this technology to add productivity activity to the government, who uses this technology in the way, they teach children how to employ it to be more effective not always in business but also in the way they live and play. And those countries and companies to employ would determine the future of their economies in many ways. It used to be the U.S, Europe and Japan as example. You could often tell what the economy was like in terms of internet but also the main cards. Almost no Japanese businessperson has called one had an internet address on it?
Today it's almost socially unacceptable not to do that. The Japanese in four years have closed the advantage that the Europe and North America to have on the internet where it almost completely equal. Then understood the impact that it will have on the future of their business, the future of the country, the future of their children. So the internet generation is people, companies in countries move in an unbelievable pace as it move forward.
There are two things that are really driving this. The first is its fourth generation of technology, with each generation being dramatically bigger than the prior generation. For several decades, it was be the main trend, followed by mini-computer ,and then literally Comdex desktop and client/server applications pieces of lands. And now it is the new work generation. And it will have more impact probably them all the three prior generations combined .So as you more into the new generation technology you naturally see the explosion. But what is driving it even stronger than the technology is the business establication. It doesn't matter if you are in Germany, France, UK. US., Japan , or China. All the business organizations have the same challenges. They understand the particularly large companies organize improperly property You see the spends in control increase dramatically removal of the layers of the organizations in the impairment of the workforce. But the impairment only works if you have access to the information and you know what you surpose to be able to do. And nearly the companies you learn how to do this are going to be the one moving ahead. The average productivity or profilablity return that we get Cisco as and example is over 10% per year increase of profilability or productivity within the company because they how use the application. And average productivity is over 50% increase for the Internet application that we do. I didn't understand how quickly this was changing to more and more of chief executive bosses (offices) have realized that the internet is going to be the bey productivity towards the next decade perhaps determines their survival. An example mould be two years ago if I call exactly the chief officer of a large financial institution We had a very good conversation. They asked me the questions that the CIO and for about the first ten minutes and for the next forty minutes they discussed about investing ascos I billion dollars in cash or if I didn't want to give them the money to invest, how about making loan to me. And other words execution cannot less us about this technology. Today it's very common to meet with the whole executine management team. The talk with the leaders the financial institution about how this is going to be prime activity for the next decade for them. The talk about how they are going to use this tool as banking, and insurance, and stock recourage combine to present the board and the director why this is important to get improve of their budget and even when they key customers to meet with those customers to explain how the financial institution is going to use the technology in the way that will benefit them. And this is occurring at a increasingly fast pace. The business drivers Let's use the U.S. as an example During the prior generation of technology many computers. If you look at the total capital spending the amount of money was spent on plants equipment automobile things of that type, it was in a single date during the seventies As PC stared to take off, another desktop dient server devices, you began to see an increase. Today networking is nearly driving this increase. You are taking about in the area of capital spending in the U.S. 43% of all capital spending going to high-tech. One of the reasons our economy is so strong in the U.S. verses other economies a round the world is how this high technology is being applied and it doesn't take mathematicians very long to realize which way this trend is heading. But you can still see other countries around the world follow the similar trends or they are going to be left behind as you move forward. When you look at the network, if I were to show you a network design of what you go through a major business only an engineer would get excited about it which is cool. It is unbelievable complex. In terms of how you share information. For me, leader's point of view I look at the network I think about is my home office, my international locations, my sales offices, my key suppliers, the ability of my employees, and partners, and suppliers get access from their homes to the information entitled to or as you move around the world. But as I began to look at the complexity this represent is kind of scaring. Nearly what you want to see from customers or what customers want to see us do as venders is make this transparent to them. To mess this complexity. To compare if you will simplicity of the telephone just want to work wants to be easy to use. But what many people forget is that the telephone was in being by Graham Bell in 1876, took a hundred and twenty years to get to where we are today. And were largely one company and one company in each country that has responsibility for implementing this service and making advice work together from your home or business all the way throughout the network. We got to move from the same point in networking to where the various devices high or low tech and the versions applications have to be very tightly in customers' perspective for the networking really to explode and for us to open up the opportunities many companies represent in this room. To do that it requires a generation partnership. It is our view that those companies who don't understand how to partner, how to a line, how to a partner acquire, and do join-venture would be left behind. And when you begin to think about the partnership that you are going to need that would be the network, but one side of the network would be the devices that you need, Whether those devices, dated devices, Video, must wkly the combination of those, PCs, telephones, etc. Network computer. And you've got to interface with those in the network and seen in the same way of customers' perspective. You've got to be able to get to the date ware where it is the network is and you don't care but you incorporate internet in the World Wide Web in your suppliers of network. You've got to be able to get there very quickly whether its on main frames mini-computers, PCs services, or whatever on that side. And you've got to be able to go over a number of various services prvrclers must carve to be able to get there in the network. And at the same time the customers or system integrators giceters would have to help to malice dangerous products work more effectively together and focus on contact applications. So you are going to a generation par tnerships. For Cisco as an example we begin to look which line we will align a number of PC companies, motor companies, mini-computer companies, etc. We are going to align with the people, we think home the probability of influence these internet plans. We would do the same thing on the service side of the home. We will look at which service providers are really going to push the technology the fastest and will align the Indian strategy. We will really allow them competitive advantage lower cost of ownership in the kind of market. And we will also look at which system integrators you want to align as you move forward. How many people in this room really two years ago thought a system of integrators, whose business used to be to combine various products malice more work together would ever allow the key nender. And this is the type of partnerships that will help to mass the complexity in the industry as we move forward. And those venders and companies in our industry you understand how to do this, how to partner, align , and align will be the ones who lead the industry.
Now the mine majority of this discussion is talking about how it is going to change the way we work, and ways we haven't even imagine. And what I talk about today, I believe one year from new the COMDEX will seem kind of mundane. It's nearly going to change every aspect of our lives and how we work. And I wish I could tell you the reuse ten or fifteen applications that will be applied every industry across the board. There aren't. The application very dramatically about which industry and what application has the biggest pay back. There are probably two key exceptions to that, one being electronic industries and government and second being training. But let me talk specifically about the applications might apply to a number of industries of people listening to the discussion today.
Let's first talk about manufacturing. In manufacturing, the key application which networking is really going to enable is productivity and time to market and leading automobiles companies around the world twenty years ago might do that in eight years. Then people began to look how to bring it down in 5 years or 3years. And now companies in Europe in the U.S. and Japan how to do that in one. You can't do this without very tight network duplications and network devices. You have to think about how to tie together not only in entire company so all your very engineering groups around the world, all your very many affection group around the world were work together but how do you integrate through network to your keys of layers, give them access to information. And companies who are able to do this with best productivity and best time to market would be throe who grow and survive and those who do not would go the other way. Similar example in the aircraft industry. How quickly a company can bring a product to market with productivity increases we talk about before would determine winners and losers in the air space industry. One of the larger space firm nearly recently cat their planes into sections get teams working around the world in each section, the nose section, the engines, the wings, the tails, the cabinet, etc. Tie in their sapphires the key part of their team, design and now build up planes completely with paper.
The point being in many manufacturing industry, productivity and kind of market are the two areas that people focus on and would determine which company move forward if you will, and which company goes sideways and revere way as you move forward.
The other day one of the made a comment made at the front page of the journal that kind of surprise me. If basically said that it is net just the discount stockbrokers that they going to use internet to purchase stock. It's going to apply to all, at the investment industry. And well, that was an interesting statement people said how other organization that are him rigors making money, it was just an application. What it really said in the security industry the various leaders in the company have to understand what one the elements of the network can model task. Which does each company have as a short-term or long-term competitive advantage and what is stable competitive advantages they offer. And you are going to have pressure products in the face of your customers based upon where those are. And how do you keep a step head in commode. And network would be the primary that determines how quickly this is going to happen and how you really protect this advantage that you to have, how you could have access to your customers' information that they need, what you can charge, what you can not for commonly information you can go directly, go directly into the system. And you want your financial advisers to value you on top of your customers, particularly as customers become more and more sophisticated. But more important when you talk to the leaders in the in source companies or the leaders of the banks they just talk about just how they make their own company more productive, they are not talking about their traditional competitors, they are really talking about their future competitors. When I talk to the CEO insurance company their future competitors they don't mention other insurance companies, they mention other fsnaneial institutions. And it helps people who are going to use the network to provide the applications which enable their insurance agent, their financial agent, the stockbroker, if you will, with the bank teller not only to do their applications but to do the applications through a combination of the integration that allow you to service the customer with one stock touch and educate people so that when I talk to my insurance agent, he or she would not always say: John, you are eighteen year old, drive any better before than before ?¨ But be able to talk about here is the your stacks are you bought the other day based on your buying pattern, or something, she will be invested in. The mortgage is coming down you ought to think about finance your home at time, etc. And these would be the network applications with combination of human and artificial intelligence that really make it to go to determine the winners and losers as you more forward.
Let's talk about how you going to go to the consumer, Let's talk about what company used to consider as a key competitive advantage in the market place. You used to consider as a key competitive advantage in the market place it how many locations you had, how large an inventory you had In each of those locations. And when a consumer came in your ability to direct them to the product they wanted or you certainly suggest to them at time. You look at the largest book stores in our country. Perhaps as many as thousands that was, tens of thousands of employees, billions of dollars of sales, but think how this is going to change as the network comes about! Their key competitor of the larger company is small company or called Andock Come. And Andock come has 2.5 minion books that they can access to. And perhaps dramatically a better price. So all of a sudden all the book stoles have to think about what I have consider advantage in terms of employees and the actual inventory level that I had has to begin to think about what aid do I have when someone knocks at my store that I can get our the network. That's the transition they have to make our next 3or 5years. They will also sell the product through network then they will get the watch how to handle the channel distribution issues is other words, understanding where they aid is the stable compatible advantage, a temper competition advantage in the commodity of time.
A similar comparison could be drawn as you look forward to other industries. Toys come up to the holiday seasons. How many of you really love to go shopping in the crowds of the holiday season? I mean it's a thrill, isn't it! Finding lines, finding parking place, waiting in lines to buy toys that children told you what you want to buy only to find by the time you got there the toy isn't there, or you look at toy and it's for the wrong age what your child is. Most of us know what toy you want ahead of time. And most of us don't consider that a particular enjoyable experience. And then you get to bring them home and get them wrapped and bring them down to the post office to see them off to your families around the rest of the country. Think how this is going to change in term of your ability of all of a sudden you can order toys on line! And not only could you order them on lines through easy process, you could use products being developed by a number of people in this room in terms of video PC applications, the visualized products, see what aged people was for, get look at the ways we are not acceptable, even avers a couple of years ago. You could stop by the toy store, pick up them on the way home, or you get it where you want. Now we can argue if this it going to happen in just a period of one year one five years. My answer is yes, somewhere within that range. And companies who don't understand how they've got to make their toy stores more attractive, and convenient to shoppers we command in the place we experience and reason to go there if all we do is picking up some we already know we are going to acquire over time in a different way we have never thought of before. And it applies to big items as well. Car dealership, .How many people in this room like to go buy car? I mean isn't a fun! You know what car you want you know what color it is, you know what interior you want, and you spend the next four airs, having the sales person convince you, you don't want their car, you want the car that they have on the lot. Or you are high price going to for a very ling period of time. You are going to see the same movement. You've already seen companies like general motors begin to go on lines with their systems. As our technology by the devices represented in this room today, and connection, the application to the internet that it will get better, you'll be able to get almost all the information used to get from the dealership over the network. And dealership has to think how they are going to change in the future. Again you are going to argue what's going to happen in 3 years or 10years, but will all very rapidly this way. And their competitive advantage of dealerships is going to change, perhaps more to service and support. They've got to make that an enjoyable experience when you come to see the door, not something in this room will actually regret have to do. The point that I am making is that the advantages many of us consider our business to be a key stable advantage just five years can be disappeared because of this technology ad you more forward. Lots of companies talk and will we are really proud of this success we had Cisco in the fastest, most profitable computer company history. We talk about that in due to our focus in our customer, setting almost impossible stretch goals, learning how to be number one or number two but often people don't understand what perhaps the key reason, the break copartners. It was how we are our own technology, and network we have been able to applications. One of the top five to six factors that really allow this occur. We saved last year alone of an expense 2 billion dollars, two hundred and fifteen dollars. And just five applications. The number was actually larger than that. That's twelve and a half percent increase in productivity. last year alone, similar increase in prior years and I am going to be able to more even aggressive as you see what goes forward. The number was larger than that. Though if you will share that large number with customers. I am not sure how many of them would believe it and secondly if I want my board director this year the budget I want to improve and told him how much I am saving and I would like to improve the budget. What I'm really saying is the opportunity almost unless if you select the right applications. And this goes back to gain 5-10 application each industry very important for us. Interfacing the customer had the biggest payback. It is very expensive interface transitionally dawn it. And the majority way we use our sales support people are partners. Support people on the field are just answer in very basic questions about technology. The functionality of the product, when is the delivery day going to take place what about you next release day etc. And we realize if we auto-make that, not only would our fewer force be more effective, our partner's force be more effective, our partner's force be more effective as well as our supports which more getting 3000 cost amount of project to now cost amount to be more effective.
part II: http://blackjimmy.music.hexun.com/M2231437.html
But more important thing I want to, to take them 3000 cost amount to 12000 cost amount in 1991-1992 would be all the head I had appeared for the whole company. I wouldn't have any engineers, and I wouldn't have any engineers, and I wouldn't have any sales people as is in other fields, in other word. Even of productivity increase I wouldn't have done it and my customers would suffered so instead we build up a system put on LAN to where didn't go from 3000 cost amount, it went from 3000, not to 12000, but 700000, and 2/3, over 2/3 of those on line by the system, without touching the human being, and the customers satisfaction on 5 point scale, the less couple amount is gone over 4.3 actually high than talking to human being. Say the works of Engineers, we took the thousands of engineers instead putting them in support. We put them in R & D. We build up product space to report. And you begin to get a lot, the next that I want to talk about is I think this is going to grow much faster than people realize, early this year. Even some of the best projection industry place the value that would converse at $5 billion this year. They missed, they place the 20 to as high as 300 billion by year 2000-2001, most of those could be offered a long way. Cisco alone that is owning around $3.2 billion in that commune. In 8.1996, we started an internal order of the world. 30% increase of productivity for us and 20% increase of productivity for our customers. It is going by almost 10% per month in terms of acceptance of the technology. Now, why this commerce will be primly business to business over the next couples of years was probably 85% plus in the business-to-business area. It will spread to business consumer. And business consumers what you read about a handful lot is business to business will determine the leaders and where the majority will own over the next several years. And it will be either Cisco or our competitors that by the year 2000-2001 there will be doing 15.20 or 25 billions themselves over the network. A shared us as an example begins to interface all the member will make the numbers of 20 million is very small. My own view is that the high numbers as much as fire-fold, one of the challenges is how you keep your culture.
As the environment changes, and if we only talking to each other, we are going to lose our culture. With the answer you can't train, you can talk to your employer as frequently as you want. You can have the internet to do that. If we thought we have now employees. It cost several million dollars and training is one area that world determinate whether or not we can stand the leadership of our industry when doing wide broadcast you can all the thing, the same time of training for nearly l0 and thousand dollar or how you communicate your employees how you do the training would much easier for the leaders in terms of the culture they want.It will allow you to share your culture with employees.
Now I got to work with our engineers in their working, and know they are still call the services some present that you know as a little bit heavier and as quite as much air from outside, so talk with engineer we but the point that are maker is till the day araila today, You are beginning to think about the virtual company, look quarter on San Francisco, these is their system business and for other things we did a point time we stop you and IAS. It was in 1992 there was engineering more products put back in supporting our customers better and broke away at faster and faster pace so this just unkind excepts we talking about the time is the way business is going to be done, and those companies know employees technologies and select the application throughout times would be once win and those who don't left behind, regards where you are in this global economy. Let's talk about how businesses is going to change, today I talked earlier if you talk any employs. I have to change the organization structure, but if you are imply employees and they don't have access the information that you needed make decisions, they can make their decisions, and yet the employees' ability to yet information their own company, how many it is easy to get assistant, large staff of five people to go to get forming and yet you impair people if you don't give them access information, they make no decisions. We ever get customers' ability to really get access to information quickly instead requiring a number of talk to our sales people, often when all they want to know was shift of product to tell me about the new product in terms of definition. You want to use is very expensive and valuable resources of your own and your apartment average voles. You really gone talk about how do you break down this very information as you impair your employees. As you give access to your customers most information in their work. As you truly become a vintners company, will you can tell my affecting for my suppliers for myself will be one virilers company to the organization as you look forward as to you partners as well. And the company knows how to do this again will become you leave. The textbook warden about virtues company at years ago will happen the next decade. And this will be the company that you should go forward. It isn't just large businesses that really change on this side. It will change what people consider to be advantages. If you look at U.S. as an examples, it projected that 25% of what they formal is small businesses will be connected to the Internet at now. And 15% of the medium size businesses will be connected to the Internet at now. For those small or medium size businesses interface to large companies their supply to other businesses until almost all will be connected by 2000 in my opinion. And about 2000, you will go to see the interface that consume the structure to take off, is each of to get the technology in to our home, lose the fear how to use it and be able to use for one application which were brought at home and for many other applications across the whole family you should know forward. I'd like to give you an example how a very small company with a very limited number of employees in one major really compete with largest players in their industry.
Now to tell you that all our customers are but what you really thought was a small company with a couple handfuls of employees. They learned to have low became of resources across the country, and appear to very large company in each location. Their competes who have large amount of resources each location. They can't low became at an effective way, could be at a tremens price disvanteye. They have to think what the be wish to I have the small company not blame. And that is one can work in three thongs the application in our company about example across all small and medium size businesses move forward. I want to switch the second third the way that work change the way me and play and the way that year never imageries our chief officer couple years ago his home switch the every one winch my home now to every room. Our whole family use that work the internet feel well. It was brought in to home for businesses reasons for meet the applications extess to the number of each evening access to critical counts key information, etc. But once was there will to the way never imagine, my soon who is 18 years old also coach sour far to 9 years old, he communicate the sour over the internet. He communicates the parents of this prides over the internet he was it to do school work my daughter when she applied collage uscel to look for information about each college, asp scores teacher and student ratio and boys and girls ratio witch took me understand what's important. But she used it now to communicate to all her friends all over the country as they went different college. My wife has learn and how to use in terms of interfacing to an interior decorate and fortune very expensive option. You want to figure out some way to screen certain information coming in your how that I got to yet have to work that more effectively and technology will be their. My father who was computer illeterator 2 years ago. 73 years old ever use the piece in his life can all the serve the internet more effectively then I can. I got to relationship. He is my best friend. We communicator all the time, but now you often tell me the phone call as you tell me computers doing, has made about my company and suggest how ought to run the company better with information. I hadn't even seen and points that I'm making the change every aspect of our life across all of the generation. At the same time, more and more the parents around the world are working, either the single parents are still working parents 60% of the children in the U.S. under 6 and yet 60% of the parents read the daycare canter is a poor. Think of how internet working could ever change, the compote. And strong employees how are the employees think about the daycare center, think of your look and your has the capability to go internet to look what your child is doing. Those is one daycare center did in outside New York city. They install cameras around daycare center search to see all the locations. The internet on the web side every 30 seconds the number of young people there mere over 200. This became so popular way of looking alarm the parent a piece of man looking at the children. At any point, there would be any question on the granelporents to be all to be looked after. But they double the business had to open the second daycare center. And the point that are making is this is going to change. The way business done, the way play and learning the ways. But now my revolutionary is next year COMDEX will consider of course be honor you do that. It will also allow to be more effective work because the thing we all worry about is our children and how they were doing. I wish I could figure out the way to use the similar technology to trace 18 or 20 years old and what they are doing. How we learn, how many people in this room know how to use the slide rule. Put on your resume when you look for another job? Now you don't, I was agreed with the shale rule I was recompleco the Electra but commit another technology come along. The way we are training our children in case of 12 and university around the world, it is not that generation was earner, we have to rapidly change, we have to use the network as the now to train them. We have to cash them how to use the network to do the research papers, how to do in the coop well of the money taken me a week to research. Most the universities in the U.S. around the word over next couple of years were tied internet to individual dorm rooms. Thus make paper on the internet. Be able to get the information in the library no longer be the library. On compose will be world wide web from out side of the house. And much the education for those of us will go a change job to gradually the day. 6-10 times in our career to continue the education would be done by distance learning for university would probably have many people. In the NBA class, if it will, the distame learning in virtues classroom will be naturally NBA schools themselves and we are talking about the U.S. about wiring schools. There were 64% schools in the internet connection. And we are being talking about how do we teach our young people how to use this technology. Let's get some in this area, we got to get the wire to each classroom, we got to teach the teachers how to use this technology more important how to teach outside. As you know going to get over. We would also get people there to support because the real cost of the products are departed on themselves is actually the support of the products, as we more forward. But we you begin to look at where the job is on the day you realize the education system is not preparing for students whether jobs or not . And how to take alone 19000 jobs openings, 19000 and the average high tech wages force the rest of the private sector is 73% higher in U.S. than the other private sector jobs are, and yet we can't feel the responds . And over 70% of the company's representatives in this room will tell you perhaps the most critical factor that limits the growth of their ability to get quality ----employees. And you might think it's only high-tech phenomena. That is not true. The exact same thing is true of manufacturing operation world-wide. If you use example of American manufacturing, the chairman of the National Association of Manufacturers the other day made a very blunt statement.
He basically said the finding qualified employees was the number one challenge facing American manufacturing not high tech. America manufacturing across the board. The same will be true in the other countries whether in Europe or in Japan. And he also followed up with the comment. The lesson learned is very simple: either we get to learn how to train our employees and prepared our employees better, or high technology and production will go to other economics around the world. It is a matter of survival. In short, we got to do a better job are. Our university system in this country want the best in the world. But our key through 12 is broken. His broken, when the 11th and 12th grader writing scores continue to decrease, the tipsy key scores have decreased since I graduated 30 years ago. The average 4th and 8th grader in this country, 40% of the 4th and 8th graders can't even achieve the leases level of skills in mathematics and testing from that side 29% of young people. That go to the college have to do remedial classes in universities. Now that's was in our country as far has preparing the students for the future. But if you haven't addressed anything else, think about how this internet haven't generation is going to change in terms of the world wide global economy where the jobs will more to wherever the work force is. Now we can agree that is gonna happen in fine years and in is years. The answer is it's not gonna take 100 or 200 years like the industrial revolution. And as you begin to look about the global economy. Companies are gonna move the employees because they have to either those states with the best education and the employee are or to those countries. And the us will not be competitive even though we might have the best productivity tools have because over time all the other companies around the world who are growing are about to love them.
So the countries, when we read, we spend 300 billion dollars a year by the way in education, third out of the top 41 industrial countries in terms of percentage GNP spent on education, and yet our student rank 17th science and 27th in math. We are going to impair our your people, or workers employees with tools. Americans have the basic skills to know what question to ask and how to interpret the results. We have to change this. Business has leaded the way. There is no special interest group that put pressure or business on this. Business has the say the way we are training our young people is unacceptable, is unacceptable for the future employees. But it's also our over 1 issue of our existing employees that their children are not getting good education. And we have to do three things: we have to push to get testing; we have to be able to compare, not only from state to state, but country to country. Secondly, we got to introduce competition in choice. And the choice has to occur to all our students, regardless of income level, not just for those who can afford it. And third you get the tell the results reward as you move forward. And business has to think about that in this room. Otherwise the business could move to other countries around the world from that in where the educated work force is. As the world move forward, and groups such as technology in network I think can if we are successful to play a key note in this area. But I encourage you to play yourselves. Now let me talk about one thing that Cisco is doing this kind of unique. When we talk about when we are in the classrooms. It isn't the cost of connection and isn't the cost of wires the buildings where your real expenses are. Your real expenses over time how to mention the systems and how do you train students in the case through 12th they aren't going to the voltage for the future. I'd like to assure shat we are doing is a number of classrooms around the United Sates.