Technology Day 2009 - "The Mind's Eye”

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MEAD WYMAN: Good morning and welcome to Technology Day 2009. And welcome to those of you who've come from afar back to visit MIT. Welcome also, somewhere out there, the web participants who are participating with us today via the internet. I'm Mead Wyman. I'm with the class of 1962. I am a member of the class of '62. And I am the Chairman of this year's Technology Day Committee. The--

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No applause is really necessary yet.

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The MIT Alumni Association ascribes great importance to the Technology Day program. There are some reasons. I'm sure there are many reasons for this, but there's one that's particularly compelling for me. We know that when you come back to MIT for a reunion, or a for a visit, or for whatever, you many times would like to have some exposure to the world class research and education which is taking place here. The Tech Day program is a principal vehicle for responding to that expectation.

Of course, it's impossible to think about giving you a comprehensive view of everything that's happening at MIT. That would simply be impossible. And so it falls to the Technology Day Committee to fashion a program which allows you, the audience, to take a look at one of, or several of, the areas of major concentration at the Institute. Today, we're going to address the areas of neuroscience and artificial intelligence.

We're very fortunate to have three outstanding professors from MIT to give presentations. As a matter of fact, I can't imagine that it would be otherwise, that we have three outstanding professors, but we're very delighted to have professors Saxe, Sinha, and Winston. These folks will lead us through the current thinking and work that's being done in their areas of specialization. And we really appreciate their willingness to participate with us today in the proceedings.

Before we start, I have a few administrative matters which I have to cover with you. As a fellow nerd, I am required, or it will be necessary for me to ask you again to check and make sure that you have turned all of your electronic devices off. Electronic devices which could possibly distract you, could distract the speakers, or your neighbors. Of course, we're talking principally about cell phones. And I should point out that we do make an exception for hearing aids and pacemakers.

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With regard to the question and answer-- question and answer period, which follows each one of the speakers presentations, we will be asking you to fill out on the index cards that were given to you at the outset here-- your questions, write them out. And the ushers, toward the end of the presentations, will come down through the aisles and collect your questions, bring them up to the front, where they'll be organized, and then pass them on up to the podium. This has worked very successfully for us. It did work very successfully for us last year, allowing us to process a larger number of questions than we could when we had people standing at the microphones.

I hope that many of you had a chance to see the video which was playing before the start of the program this morning. This is a 10-minute video, which is a very interesting portrait of MIT. I noticed that the sound was not-- it wasn't possible to hear the sound. And for those-- for that reason, and for also for those of you who may not have seen the video, we want-- we want to play that at our 30-minute intermission so that you can see it. Many of us who've seen that find that it's a very moving portrait of the Institute. So it will be shown the last 10 minutes of our 30-minute, intermission. And I could highly recommend that if you haven't seen it, you come and take a look at it.

All right, we are on a very tight time schedule today. And so I wanted to mention that my introduction of our speakers will be quite brief. We can do that in part because there are very extensive biographical information, there's very good biographical information and abstracts of the presentations in your Technology Day program. So let's get started.

One of the very special parts of Technology Day is the opportunity for us to hear and to talk with our president, Susan Hawkfield. Susan Hawkfield-- here's where you'll see the brief introduction. Susan Hawkfield is the 16th president of MIT. She is the first woman. And she is the first life scientist to be a president of our wonderful Institution. Prior to being the Provost at Yale University and President at MIT, she was, and continues to be, a professor in neurobiology.

I will-- I hope that's enough, Susan.

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Well, you beat me to the punch. I wanted to say welcome President Hawkfield.

SUSAN HAWKFIELD: Thank you so much. Thanks. Well, good morning, everyone. It's great to see you all. Mead, thank you for that kind and brief introduction. We're going to work on making it even briefer for next year. I want to also thank Mead for chairing the Technology Day Committee, and all the members of the Committee, for putting together such a spectacular program today.

The last time Mead and I saw one another was when we were joined by several hundred MIT students at the NCAA competition, where our basketball team, for the first time in its over 100 year history, had made to the NCAA. It was an enormously exciting event, set of events.

And one of my favorite stories is the first night. I think Mead was there the first night. I could only make it the second night. But the first night, the opposing team played at that school's arena. So we had several hundred, they had several hundred students. And their students, their fans, were taunting ours by holding up signs that said, your algebra won't help you now.

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We won that night.

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In any case, this program this morning is only part of what has been so far a spectacular weekend. I saw many of you at the Tech Night at the Pops on Thursday night. You know, I'm becoming kind of connoisseur of Tech Night at the Pops. I think it was the best we've ever had. Lots of fun, great, great performance, good program. And then yesterday, I declared the commencement was a success. It did not rain until after we finished awarding over 2,000 degrees.

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Exactly. And it is just-- it's an exciting weekend. The mood on campus is very high. And it's just wonderful to have you all here. So thank you for coming to Technology Day. You are MIT's very best ambassadors. And we hope to equip you for your ambassadorial roles by providing some of the information. As Mead said, it can't be a comprehensive overview of what we're doing at MIT, but it'll be a little insight into some of the spectacular work that's going on on campus.

And for me, as a neuroscientist, it's a little bit like getting three desserts. So I'm very much looking forward to these marvelous presentations today. Now, before we go any further with the formal part of today's program, I want to capitalize on this moment of having so many alumni here in the audience to introduce two enormously important people. One, we all need to thank, and the other we're going to welcome. So I would invite Sherwin Greenblatt and Judy Cole to join me up here.

Come on up. Don't be shy. Sherwin is-- and Judy also, these are not people who are used to being in the limelight. So as they're coming up, I'm going to talk about first Sherwin. This past year has been a year of many transitions for the Alumni Association. They moved from seven different locations in three different buildings, into one spectacular facility at 600 Memorial Drive. And I hope many of you have had a chance to see that this weekend.

This year has been a time of searching for a new leader for the Alumni Association. And through all of these transitions, the Alumni Association has been more than ably led by Sherwin Greenblatt. Sherwin in my mind is kind of the canonical MIT alumnus. He, of course, graduated from MIT. He has had a great career. He started as employee number one at the Bose Corporation. And then a couple of years ago, after a whole career at Bose, he retired as president of the Bose Corporation.

And I would say he retired, but really he tried to retire, because his retirement activity was running the Venture Mentoring Service for MIT. Which many of us wouldn't consider that to be retirement. So he's demonstrating what I found to be an almost universal characteristic among MIT alumni, the distinct failure at being able to retire. If any of you need advice, Sherwin is an expert.

So when I first started, in the summer of my first year at MIT, we needed an interim executive vice president for the Institute. And I called on Sherwin to take on that role. And when the three months that I had recruited him to serve turned into more than a year, he continued to serve ably. And then, when our new executive vice president and treasurer, Terry Stone, was found, and she started, Sherwin went back to retiring at the VMS.

But then, when we needed an interim leader as the EVP of the Alumni Association, of course, I turned to Sherwin again. But as the months went on, he became increasingly anxious to leave, because he's ready to go on to a new job, another new job, as a grandfather. So last week, he celebrated the birth of Bryce Jennings Greenblatt, his first grandchild. And so I have some gifts to thank Sherwin for his service and to get him on his way into his next job. Please join me in thanking him.

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SHERWIN GREENBLATT: That is really nice.

SUSAN HAWKFIELD: Thank you.

SHERWIN GREENBLATT: Oh, thank you.

SUSAN HAWKFIELD: And actually, I think this is also for you.

SHERWIN GREENBLATT: Okay. Thank you. I appreciate it.

SUSAN HAWKFIELD: Now, we wouldn't have let Sherwin leave, I wouldn't have let Sherwin leave, unless we knew that the Alumni Association would be in terrific hands. And so it is a very great pleasure to introduce, for those you have not already met her, Judy Cole, our new EVP and CEO of the Alumni Association.

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Now, I won't take the time to formally introduce her. I hope that you all have read her background. And I do hope that many of you will find an opportunity to meet Judy this weekend. She could not be better prepared for us. Everyone who interviewed Judy knew at once that she would "get it" about MIT. There's a kind of intensity, and humor, a devotion, an ability to work really hard. And believe me, and I hope all of you can believe me now, Judy is just a terrific new leader for the Alumni Association. So please, welcome Judy Cole to MIT and to the AA.

JUDY COLE: Great, thank you so much.

SUSAN HAWKFIELD: You're welcome. Thank you.

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Okay, now my task is to give a comprehensive tour of what's been going on at MIT this year. Mead described how we don't have the comprehensive in Technology Day, but I feel I've got to touch a lot of things. So it's going to be a whirlwind tour. I apologize. The punch line of the race across the campus this morning is that it has been, as you all know, a very demanding year. But we have had a great year here at the Institute.

I want to be sure that I leave sometime to hear your questions. So let me just kind of lay out the three things I want to talk about. The first is MIT's role serving in these difficult times. The second is I'll give you an update on how we're coping with the financial downturn, including where we are on our campaign for students. And then I will describe one important critical source of our momentum for the future.

So while the pattern of activities at the end of the year has a kind of timeless nature to it, that timelessness and the sameness of the events, the wonderful repetition of the events, is thrown up against the really extraordinary difference that we face this year. Just one measure of where we are this year compared to last year.

On June 6th this last year, the Dow was at 12,200. On Friday, it was at 8,760. And as I said, I'm going to talk about the impact of that downturn on MIT in just a little while. But despite the rigors of dealing with that, we have been on an enormously productive track. The new administration in Washington has very articulately stated that it values science, analysis, research. These are the things that MIT values.

On inauguration day, our lecture halls were filled with people watching the inauguration remotely. And at the point when President Obama said that it was time to restore science to it's rightful place, everyone leaped to their feet and applauded. And my guess is there are not too many places in America who received those words the way they were received here at MIT. What I often say about this administration, and my great hope is, it will be cool to be smart, what a relief. And--

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And the hope in this is that the values that MIT holds so dearly will become more mainstream as our nation grasps the importance of science and technology, innovation, entrepreneurship for our future. More substantively on April 27th, President Obama gave a speech at the National Academies. And he made a very strong declaration of his support for science. And I'm just going to read one passage from what is a truly amazing speech. And I would recommend it to all of you.

He said, "At such a difficult moment, there are those who say we cannot afford to invest in science. That support for research is somehow a luxury at a moment defined by necessities. I fundamentally disagree. Science is more essential for our prosperity, our security, our health, our environment, and our quality of life than it has ever been." We believe this here.

And perhaps most important, President Obama embraces a knowledge based innovation economy. This is the principle of growth economics that was laid out so cogently by Professor Robert Solo, a Nobel Prize winner here in our economics department. Restoring the economy of the country will demand the same kind of fuel that powered the information technology and biotechnology revolutions. And the basic concept is as you invest at the federal level as generously as you can in research, that research turns into innovations. Those innovations are taken off campuses, out of research labs, to start new companies. And out of those companies come entirely new industries. This is a perfect assignment for MIT.

We have many opportunities to serve in Washington right now. And we're doing so in a number of ways. Members of our faculty have been secunded from our campus down to Washington to have leadership roles in the OMB, on the Council of Economic Advisors, at the Department of Defense. As I said, many of our faculty, but also many of our alumni are serving in government roles. There are a large number-- there's a large number of people from the PhD program in our Department of Economics serving in the administration.

Two members of PCAST, The President's Council of Advisors on Science and Technology are MIT faculty. And I participated with President Obama in a briefing on green technology opportunities in mid-March. Following that, we hosted on campus Congressman Ed Markey, Carol Browner, and the Science Advisor, John Holdren, for a session on the energy legislation that has been moving through the House. And in mid-April we hosted-- sorry, the beginning of this month-- we hosted Secretary-- of May-- in May we hosted Secretary of Energy Steven Chu who gave the Coral Taylor Compton lecture here. Now both Secretary Chu's lecture and the session with Markey, Holdren, and Brown are available on MIT World, if any of you wants to watch that, as is my event with President Obama at the White House.

Now MIT is primed to serve in other ways, not just in Washington, but here on campus. And I will briefly review where we are on two of our large initiatives. One on energy and the other, at this wonderfully interesting interface, where life sciences is joining the physical sciences and engineering. For this audience, I don't need to describe the four urgent reasons why we need to be very serious about tackling the energy challenge. In terms of energy demand, we are on track to double energy use worldwide by 2050 and perhaps earlier.

Energy security is a pressing problem. We depend on undependable countries for a lot of our energy supply. And as far as the climate, there is general agreement that we are contributing to global warming. And there is recent data from MIT professor Ron Prinn's work and the MIT Joint Program on Science and Policy of Global Change that's showing a marked acceleration beyond what had been predicted in terms of global warming. By the way, you can get to Ron Prinn or the Joint Program's website very easily and see the data that they've been studying.

And now, of course, we have the added incentive, shall we say, of economic downturn. And I believe that fundamental economic growth is really the only path to getting our nation out of the economic difficulties we're in right now. MIT's Energy Initiative, we call it MITEI, was officially launched two and a half years ago. The first phase of this, we relied mostly on industry partnerships. And we've raised over $200 million to fund research and education in energy. The Energy Initiative, from its very beginning, has been radically cross disciplinary. This means it reaches across all of our five schools, maybe not every department, but wow, close to every department is participating in some way.

At this point Ernie Moniz, the director, and Bob Armstrong, the deputy director of the Energy Initiative, estimate that about 20% of our faculty are participating in the Energy Initiative. Our students are, as you might anticipate, wildly excited about this. There is a mostly graduate student led Energy Club, one of several student energy organizations. The student led Energy Club, the last time I talked about it, I was told it had 1,500 members, but that data was a week old. And some student shouted from the audience-- no, it's 1,700. It's a lot, there are a lot of members.

Most are students. And these are graduate students who intend to be energy professionals. It's an inspiring group. So the Energy Initiative takes us from policy and economics to concepts for new buildings and cityscapes, to, of course, basic science and new technologies. We have roles to lead, both in policy and in research, but also in education. For those of you who are interested in some of our policy pieces, if you get to the METEI website, you can get the link to the policy pieces we've already done on the future of coal, the future of nuclear, the future of geothermal.

There's a new report evaluating the cap and trade system in the EU. And we've got a couple of new reports underway, one on the nuclear fuel cycle, which will be absolutely critical, understanding what we're going to do with nuclear waste if nuclear is going to be part of the energy solution going forward. Another study on natural gas and one on solar. And those new studies will be coming out in the next year or so. On the research frontier, there are no silver bullets. We do not believe that there is a single technology that is going to get the world from our current mix of use to a mix of use that will actually sustain the new demand and will reduce the amount of CO2 we push in to the atmosphere.

So we are pursuing a portfolio of technologies. We divide them into the transitional and the transformational. There are technologies that we use today that simply have to be improved. And they can be improved in the short term. And we're working very hard on those kinds of technologies. And the transformational are all those marvelous alternative technologies that we dream about using, but we're not ready yet to use them at scale.

Now, while I say there are a lot of different technologies under development, over these last couple of years, the focus of the Energy Initiative has really come to rest on solar. And solar, both in terms of materials for conversion, and, of course, the wonderfully exciting area here at MIT is the development of new storage technologies. There are over a dozen new battery technologies under development now at MIT.

Now people say, well, why solar? I mean, besides that it's such a great challenge. I say, well, Willie Sutton robbed banks because that's where the money was. And solar, that's where the energy is. And one of our faculty who does work on solar said, well, we should be using all that energy for doing something more than just heating asphalt. I think we can figure that one out.

I mentioned the huge student interest. In the education domain the Energy Initiative has a task force on education that brought forward this year a very exciting new minor in energy. Most of our majors and minors at MIT exist in departments or in particular programs. The energy minor, the governance of which was approved by the faculty at our May meeting, stretches across, again, all five of our schools and reaches into many, many departments. And will provide our future energy professionals with the kind of education that will support them from the economics of energy, to the science of energy, to the design of energy. And they will be able to really lead, we believe, as they leave MIT. That minor will be rolled out this fall.

As I mentioned, the first stage of the Energy Initiative was largely powered through industry partnerships, because we didn't have confidence at the time that we could secure the kind of funding that we would need from the federal government. So we had wonderful industry support. I mentioned over $200 million. The Department of Energy has changed its direction, happily. And we are doing a very good job at securing the new funding that's coming from the Department of Energy. We have also been the enormously grateful recipients of some important philanthropic gifts.

And the reason why private philanthropy is so important for the Energy Initiative is there are areas that industry, and frankly, the federal government just are not interested in supporting. We don't get a lot of support for education. So the energy minor is going to really rely on private philanthropy. And the other place where it's hard to get support from either industry or the government is support for new professorships. We have, believe it or not, some gaps in where our professors cover, and so we would like to have five more, five new professorships in energy, two of which have been generously funded by alumni. So that's a very quick tour of the Energy Initiative.

Let me turn next to this exciting area, where the life sciences is coming into conversation with the physical sciences and engineering. And it's happening all over campus. About a third of our faculty in the School of Engineering are either using the tools of life sciences or collaborating with the life sciences in some way. And it is not all about biomedicine. One of the most exciting battery projects that we have going on is a project that Angie Belcher is leading, from the Department of Material Sciences and Engineering and the Department of Biological Engineering, that has discovered a way to make viruses incorporate battery materials and then self assemble into the anode and cathode for batteries. Just one example of tools of the life sciences being used outside of biomedicine.

One place that is very much in the biomedical domain, where this convergence with life sciences, and engineering, and the physical sciences is happening in our new cancer activity. Those of you who have walked along Vassar and Main, see another big building going up. That is the Koch Institute for Integrative Cancer Research. It's a very exciting part of campus. If you look at the buildings that sit around it and what goes on inside them, this is really where the life sciences and engineering are coming into conversation. It's between the Ray and Maria Stata Center, where the Department of Engineering and Computer Science sits, and the Department of Biology, in the Koch Biology Building. It is in the center of what I call "the Great Circle."

This new building is a very interesting advance on what MIT has done in cancer. People often don't know that MIT has worked in cancer. But our Center for Cancer Research was established in 1974. The leader then was Salvador Luria, a phenomenal biologist, who had already won the Nobel Prize. Luria, with the Department of Biology, recruited 12 biologists into the Center for Cancer Research. Of those 12 biologists, four have won the Nobel Prize so far.

In addition to great science appreciated by the Nobel Prize committee, the fundamental discoveries underlying the new targeted cancer drugs came out of MIT's Center for Cancer Research. But when I spoke with Tyler Jacks, now Director of the Center for Cancer Research, or was the Center for Cancer Research, about where the future for cancer research at MIT was moving, he described incredible, exciting activity that was going on, where the life scientists and engineers were beginning to talk to one another in incredibly productive ways.

So it will not surprise you that the Koch Institute for Integrative Cancer Research, which now puts the Center for Cancer Research in our history, will be populated by about a dozen cancer biologists and a dozen engineers, who are interested in helping us figure out how to diagnose, treat, and prevent cancer in new ways. It's very, very exciting. It's exciting for the faculty. The students have enormous interest. And we believe that this is an approach that really is almost uniquely MIT, and we have a unique way to approach it.

People have asked me, why do we think this combination of biology and engineering can really help in our fight against cancer. And one of my responses, of course, is well, we're already doing it and making huge advances. But another is that it's been done in other fields. If we look at heart disease and stroke, over the last 25, 30 years, in the United States, we decreased death from heart disease and stroke by 63%, an astonishing product of investments, mostly out of the National Institutes of Health. And if we look at what were the critical discoveries and the critical advances, it's both biology and engineering. It's been both drugs and devices. The biology was understanding the metabolism of cholesterol and developing drugs to make cholesterol metabolism work better in those who didn't, so the statins. And it's also devices, drug eluting stents, these devices that prop open clogged vessels. So we believe that the same kind of approach in cancer will result in the same kind of wonderful advances.

The building, as I said, is rising fast. This afternoon, there's going to be an event for a wonderful plan to raise some money to help us support that building. And we do need a lot more support to get that building up and get it working well. Part of that building will be the Swanson Class of 1960 Biotechnology Center. We're going to be celebrating that at an event this afternoon. I invite you to join us. It's going to be at the Broad Institute at 3:30. And what the Swanson Biotechnology Center will be is a celebration of the life of Bob Swanson, as I said, and MIT alumnus, the founder of Genentech, and truly a 20th century legend. As I said, if you'd like to join us, please do.

Let me now turn to the question that really is on everyone's mind, although there are other things that are so fascinating. And it's this question of the economic downturn and our finances. Of course, it affects MIT. In December, I was describing a situation where all of our revenue streams would be compromised. Now I say that most of our revenue streams will be compromised. Certainly, we are anticipating decreased revenues from our endowment, from tuition, and from gifts. But one of our revenue streams clearly has not, and doesn't look likely to be compromised, at least in the near term. And that's research.

The Provost, Rafael Rife, and I, and Terry Stone, the EVP and Treasurer, have been focused very much on our research volume, which was frankly declining for many years. This year, for the first time in I think about five years, we have an increase in research volume, by about 6%, very good news. And that's before the kinds of programs that are coming out of the ARRA or the stimulus bill, or the really great new budgets that the administration has put forward for the science agencies.

Let me talk a little bit about our endowment. All large institutional endowments have lost value. We have been planning for an endowment decline on the order of 30%. Last year, July 1st, our endowment stood at about $10 billion. So we have been operating toward an endowment that would be $7 billion. The fact is, we got a report from our Chief Investment Officer, Seth Alexander, this week, and he says, right now, we're tracking about 20%, maybe 25% down. That's very good news. Because a couple months ago, it really was 30%. And we don't know we're going to finish there. But we're going to continue with the planning assumption of an endowment value loss of about 30%.

This means, in practical terms, that we have to take $150 million out of a $1 billion General Institute budget. And our plan is to do that in two or three years. We are going to take 5% out. We have taken 5%, actually almost 6% out for the year going forward. And we have a number of activities going on to get the next 10% out, including something called the Idea Bank. Many of you may have actually contributed to the Idea Bank. This is a web tool where people can enter their ideas for how we might do things better, more efficiently, more economically. And you can then vote on ideas. It's been a very interesting online conversation.

We also have put together, have charged a task force for budget planning. The task force has almost 200 people on it. They come from across the Institute-- faculty, staff, and students. And the task force has nine working groups, each of which is focused on a particular area of our activities. And they really do span everything we do across campus. The initial report from that group will come out at the end of this month. The final report in October. So that we can implement some of those, or hopefully, many of the ideas that are coming out of the task force for the budget for FY11.

Let me talk about tuition a little bit. The financial need of our students, obviously, is increasing. Last year, kind of midway between semesters, about 20 students came forward because their families had suffered a decline in their financial situation. This year about 40 students did. We're planning to increase our financial aid budget for next year by about 10%, to make it just over $80 million. So we expect that we will be increasing our expenditures in financial aid, even while the funding that supports it has been declining.

In the realm of gifts, obviously we rely so, so deeply on private philanthropy. Gifts fund any number of things that we do that we just can't fund any other way. And I would say the good news is not as bad as we expected this year. So thank you, all of you, you have been generous in ways that I would say I could not have anticipated. Last November, December, it has really been an extraordinary year.

We measure our philanthropic progress in two ways. We look at cash that's come in. And then we also look at pledges for new gifts, pledges for future commitments. In terms of cash, we're down only about 5% from last year. So this is very good. Most people are fulfilling on the commitments they've made in the past. But as I look forward, I'm a little bit more nervous about looking forward, because our new gifts and new pledges for those gifts are down on the order of about 25% from last year.

Now I say that, but you have to remember last year, we had an extraordinary year. So if we compare where we are with gifts and pledges to a three year average, we are down on the order of 8% or 10%. So we're doing fine, but we have to really think-- incorporate into our budget planning an anticipated less powerful stream of gifts than we have in the past. There have been stories of just extraordinary generosity this year that are enormously heartwarming and enormously encouraging.

One of our alumni, who is enormously generous for his capacity, every year he gives us $1,000. And it is-- we have considered this at the limit of his capacity, actually a little bit beyond it, wrote a lovely letter to us in December saying that the economic downturn caused him to really think about what was most important to him, what really mattered in the world. And so this year he sent us $2,000. Amazing.

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And one thing that has come through many of these stories this year is that while a lot of markets have lost in value, the market for meaning has really increased in value this year. And MIT, I think, really does deliver on real value. I talked about our response to the budget reductions. I have to tell you, and you will all know this, this is not easy. We're putting, I think, a very important positive face on it. We think it's an opportunity to do things that we couldn't do before. We just didn't have reason enough to do before. But it just is simply, it's an unhappy process.

Any decision we make will not be greeted unanimously with approval. And I think the community has done a wonderful job of just being quite practical and quite hardheaded about the things we need to do. We want to come out of this with an Institute that is leaner and stronger, that is more strategic. We have to preserve our core strengths and values. It's an opportunity for us to actually think about what those are.

I will call out just two of them. One is financial aid. We are committed to retaining our policy of need blind admission and need based aid in meeting the full need of our admitted students. We have to do that, because one huge source of strength at MIT are the remarkable students we bring to the campus. We also are going to continue to hire faculty. Because it is important to refresh our faculty by bringing young people into the Institute. And that's something we're going to continue to do as long as we possibly can.

How do we sustain this kind of activity? Obviously, I've been talking about your generosity, but private philanthropy has been a huge part of it. We launched our Campaign for Students last October, just as the market was starting to tank. They tell me every time that MIT launches a campaign, that's what happens. We should stop doing that. The Campaign for Students was designed as a birthday present for our 150th birthday in 2011. We're actually doing quite well on it. We've raised about 65% of our target, which is $500 million. And I know that many of you have been generous in contributing to the campaign. And I really can't thank you enough.

The campaign's target is students. We're raising money for undergraduate financial aid, for graduate fellowships, for money to enhance our educational environment, and also for the living environment for students. We've got a lot of work to do on all four of those areas. And the Campaign for Students will accelerate it.

So let me just close with a description of one huge source of our momentum. And that is our spectacular students. We have now admitted our class of 2013. The numbers scare any one of us who got into college years and years ago. Applications this year went up 17%, to a record high. Good news in terms of the world seeing MIT as a place that's going to pave a path to the future. What that means, of course, is that our admission rate was very low. We admitted 10.6% of the students who applied.

Yield, 65% of the students we offered admission to have decided to come to MIT. And this is quite amazing, considering the environment. A number of our competitor schools have stopped using any kind of early admission program, which means students are applying to more and more schools. And so the face off when they've been accepted in a lot of schools, to decide for MIT and not another school is very, very much tougher. And also, as you all know, there are some very generous, very aggressive financial aid policies in some of our schools, which frankly, we just can't match for some of our students.

Any way you described this class takes your breath away. 90% of them graduated in the top 5% of their classes. 20% are academic all stars, meaning that they won some national or international competition. 20% are stars in music, the arts, or athletics. But my favorite statistic, always, is this one. 19% of next year's freshman class are the first in their families to go to college.

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Now this year's class, as you know, is the first class that I admitted as freshmen. So I know a whole lot of them. And as they came up to shake my hands yesterday, it was all I could do to keep from just saying, can you please, you're so wonderful, can you stay. But no, the world needs you, go ahead. But they are remarkable students. And I can tell you, I've met a lot of those 19% who are the first in their families to go to college. And these are remarkable people. And I often say, and many of you have heard me say this, that MIT is a place where the American dream comes true.

And they come to MIT. MIT changes their lives. And then they go out and change the world. This year's graduating class showed me that again and again. This year's Student Awards are breathtaking. In terms of the elite national awards, we have had a year like none other in the past. Two of our students won Rhodes Scholarships, four won Marshall's. 13 won Fulbrights. We've never had a year like this. It just shows you that the world appreciates the kind of student that comes out of MIT.

Four Marshall's, let me just give you a sense of that-- that's 10% of the Marshall Scholarships awarded this year, came to MIT students. These students just heighten our sense of mission, and responsibility, and stewardship. And to serve them and those to come, we have to maintain an unwavering focus on producing the innovations and the innovators, even in, or I would say, especially in difficult times like these today.

In pursuing that mission, we depend absolutely on the loyalty, the enthusiasm, the generosity of our alumni. You are indeed our information army. You carry the spirit, the values, and the good of MIT into the world. And I can't thank you enough for that. Let me stop now and take some questions. Thanks for coming to Technology Day.

[APPLAUSE]

Yeah.

MEAD WYMAN: [INAUDIBLE]

SUSAN HAWKFIELD: Whatever you say, Mead. Short, okay, one word answers, yes and no questions. Yes, sure.

MEAD WYMAN: The first question, I'm going to go from the general to the specific, the first question is, strategically, as we look ahead, will MIT continue to concentrate in these two areas of energy and integration of bioengineering, or do you have some new ideas?

SUSAN HAWKFIELD: Yeah, so these two ideas are very big ideas. And I think these two ideas will continue for, my guess, is a decade or more. But even while these are two of the major initiatives that reach across campus, there are probably hundreds of fantastically interesting and important projects going on. And so we shouldn't think that these are the only things that MIT is doing, nor that they will be the only initiatives going forward.

You will hear about some exciting stuff that's going on in the brain sciences, in the intelligence world, and everywhere around us there are brilliant new activities cropping up.

MEAD WYMAN: Thank you. I'm going to try to do this one, because I think it's the least controversial. There was a lot of interest in the energy information that you provided. Here's a question, which is, if we're convinced about global warming and are considering a major alteration in the economy, and the production of greenhouse gases through cap and trade, why doesn't MIT advocate for a serious study of a contrarian view, to see if there are other ways that we might improve the output or reduce the output of greenhouse gases?

SUSAN HAWKFIELD: So this is a bit controversial, and I don't mind talking about it. But I always preface this by saying, I am not the expert. So I rely on the experts at MIT. For those of you who are deeply interested in the science behind this, I recommend the website for the Joint Program on Climate Change. It has lots of data, lots of analysis by very, very interesting and thoughtful scientists.

In terms of other approaches, the other thing I'd recommend in terms of what kind of economic and policy approach should be taken, Denny Ellerman did a study-- I mentioned this-- on the EU cap and trade, which is very interesting. Obviously, the purpose of the study was to determine whether it can be effective, whether that's the direction we should apply at MIT. So the energy, the MITEI, the website has a huge amount of data on it. And we are interested in pursuing any number of alternatives, because we don't know that we have a single right answer yet.

MEAD WYMAN: Okay, fine, thank you. The last question then would be, it seems that the transformational approaches to alternative energy are on a very long time frame for development. What can be done to accelerate that?

SUSAN HAWKFIELD: So what can be done to accelerate it is to fund the research. They are on it a long time frame. Everyone dreams about an all solar to all electric energy equation. We're a long way away from that. We're a long way away from it because the conversion technologies are too expensive and insufficiently developed. Storage technologies are not ready for prime time yet either. One of the things that I find on sobering is the national investment in energy research.

The budget for basic R&D annually at the government is $4.5 billion. That's a lot of money, you can say. But the kinds of really world changing innovations that have come out of the health sciences come out of an NIH budget that now is about $30 billion a year. So our investments have been small and they've been episodic. So we've been on a roller coaster of federal investments in energy research. And you just can't make progress that way.

So we have to commit to a sustained, high level of funding of R&D. The companies aren't going to do it. The federal government has to do that. But on the industry side, we also have a fascinating anomaly. That if you look at the investments of, let's just say, pharmaceutical companies in R&D. They spend somewhere between 15% and 20% of revenues on R&D. And a lot of innovation comes out of those investments. If you look at the energy sector, on the other hand, energy companies, American based energy companies, invest one quarter of 1% of their revenues in R&D.

So we have, on the one hand, if you look at what has happened in biomedicine over the last 30 years, it is miraculous. But to get those kinds of miraculous changes, you need to invest, federally at the level of about $30 billion a year, and the companies also need to be investing. In the energy domain, we just haven't had the kind of focused, sustained investments, either in the private sector or in the government to really change the game. So follow the money. We really as a nation have to commit to changing this.

I'll tell you one other sobering insight into our country's interests in changing the energy equation. Of the 14 or so companies that have signed up to be our industry partners that are funding the kinds of research that I think we need to make solar viable, to come up with new kinds of storage devices, new kinds of batteries, only two of those companies are American based. And it's not that we haven't been approaching the American based energy companies as aggressively as we've been approaching the non-American companies.

So just as a nation, we really haven't focused on this in a way that would create the kind of transformation that I believe we need. We need it for the economics, as well as-- just put climate change aside, there are plenty reasons that we need to change the energy equation.

MEAD WYMAN: I'm afraid we have to stop. It's such a pleasure to have you spend time with us. And I wish we could spend more time, but I'm afraid we have to--

SUSAN HAWKFIELD: Thank you, Mead, it's always a joy.

MEAD WYMAN: Thank you very much for coming.