ways of dealing with systemic or systematic disturbances and

ways social change, ways of responding in positive rather

than negative fashion.

We've heard from Jared Diamond about analyzing the way

societies and individuals and families and cultures respond.

We've heard from Gao Xiqing with his ideas about

possibilities for reform, both United States and China and the

world financial system.

We've just heard from Jennifer Corriero about using web tools

to mobilize the great energy of youth around the world.

We're going to hear now about another way of thinking about,

and dealing with questions of change and wealth, and poverty,

and development, and wealth creation.

We're going to hear about it from two people who basically

need no introduction, so I'll just give you their names.

I'd like you to join me in welcoming Eric Schmidt, the

CEO of Google, who will be in discussion with Carlos

Slim of Telmex in Mexico.

Eric Schmidt and Carlos Slim.

[APPLAUSE]

DR. ERIC SCHMIDT: Well first, on behalf of Google, thank you

all for joining us for today.

Last night, today, tonight, and tomorrow it's going to be a

great conference, and it's made special because of

all of you here.

I want to welcome Carlos Slim, my friend, who many people in

the United States don't know.

And what's interesting about Carlos is that we know

him because of the successive Telmex.

We know because of the movement of telecommunications

and technology that he's driving in Latin America.

We don't know much else about what has driven his passion and

his ideas, and I'd like to ask you a little bit about that.

Before we do that, can you tell us a little bit about

your company, Telmex?

Just introduce the company.

What does it do?

CARLOS SLIM: Good morning.

Thank you for your invitation.

When I was in high school I read a book called Mathematics

and the Imagination.

And I look, it was googol.

But we say goggle.

And I was thinking, what happened with goggleplex.

And now I know you have a place, Googleplex.

Congratulations for what you have done, and thank

you for the invitation.

Telmex is a traditional incumbent company that used to

be in Mexico and was privatized at the end of 1990.

And we make a group together with SBC-- today AT&T.

SBC Southwestern Bell, but after that they merged with six

or seven strong companies to make a U.S. national

and France Telecom.

Southwestern Bell has 10% of the company.

France Telecom: 5.1%, and the Mexican group used to have

10.4 from which we have a little more than 3%.

And through a holding: 5%.

This company mobile like all the incumbencies.

Now we're a country that have still electomechanical switches

to a very modern company.

We invest more in Mexico, more than $30 billion

just in landline.

But from there we're a second in the market company in

mobile, in cellular service.

That's called Telcel.

And we begin to grow mostly making them compete.

Actually Telmex is the smallest company, and the big

company is America Movil.

We're in all Latin America.

We have more than 170 million customers.

We grow more than 65% for 17 years.

Every year 65%.

DR. ERIC SCHMIDT: Wow.

CARLOS SLIM: This was year '67 Well, '67 [UNINTELLIGIBLE]

16 years.

Well we have service every place.

[UNINTELLIGIBLE PHRASE]

We have grown strongly in many countries.

We have pushed the pre-paid.

We believe that we developed the concept of pre-paid.

We call it in '95 or something like that, in our crisis,

the [UNINTELLIGIBLE]

plan to subsidize the concepts to sell-- [UNINTELLIGIBLE]

to sell cards.

I prepared this information.

We can see how the penetration of mobile telephony has

been in our countries.

We have now many countries with more penetration in Latin

America than U.S. Mostly Argentina and Chile

and Venezuela.

The average we have is 72% against 61% of Canada.

That's more penetration than Canada.

But quite interesting also in comparison with China.

China has grown in these five years and one quarter 169%.

And in Latin America we have grown 227.7%.

And it is interesting to make clear that still Latin America

has a bigger gross national product, gross domestic

product than China.

That's one point.

That's the mobile that we are very glad that we have done.

We are near all the countries in Latin America with

a few exceptions.

The penetration, like I'm telling is now-- will be three

out of every four people will have a mobile.

And now we are going to 3G and we're looking now how to take

in our countries the digital culture.

Instead of talking about [UNINTELLIGIBLE], talk

about digital culture.

And we have worked with MIT and Negroponte sometime.

And work with [UNINTELLIGIBLE].

We are pushing it by many ways with multiple platforms.

Looking to have convergence of broadband in our countries

so as soon as possible.

Not only for entertainment, but also for health,

education, and et cetera.

And we're pushing that and we have now formed

[UNINTELLIGIBLE]

companies.

One is Telmex, that is Mexico.

One is America Movil.

That is a big company with this mobile growing.

And now we are developing a international Telmex--

Telmex International.

Working already in Brazil, Argentina, Ecuador, Peru,

Columbia, and other countries.

DR. ERIC SCHMIDT: So you have a reputation and a history for

being an engineer, and being very good with numbers.

One of your hobbies, as I know, is baseball statistics and you

keep it all, and you keep it all in your head.

But you have a strong view of how society will change.

You believe in a new society, not an old society.

Can you describe that for people?

What is the society going to look like over

the next few years?

CARLOS SLIM: What is clear is that advances in technology

and advances in productivity.

But it's also clear that when technology changes, change many

of the sectors of the society, you have a revolution,

a society revolution.

You have a new kind of era, a new civilization.

I think in great numbers we have four civilizations,

four kinds of society.

[UNINTELLIGIBLE]

with the hunting and the collection.

The agricultural society.

I think two steps of the industrial society.

First with the steam engine.

With the steam engine came the railways and the steam boats,

but also the industrial production, mining production,

with agricultural production, with the steam engine.

And then in the 20th century with the electricity and the

internal combustion, you have the modern society.

That changed everything.

But in the last years-- last maybe 40, 50 after the second

war, the technology was advancing so much, and the

productivity was so high that now we are getting a

society of services.

If you look, U.S. maybe 85% of the people employed is in

services, including the construction services.

And what the [UNINTELLIGIBLE]

look is that the paradigms of the old societies are very

different of the new society.

In the agricultural society new need slaves.

You need a workforce, social immobility, ignorance, and

the power were monolithic.

You have the same person, the imperador, the king,

the [UNINTELLIGIBLE]

in America, the Inca in Peru, that was with the political

power, but also came from divinity-- to have

the religious.

He was coming from divinity.

And they have also the military power and the economic power.

And these paradigms were completely different.

Now the paradigms are very general, very interesting,

very motivated.

And the way that we need these new society is

also very positive.

The paradigms today are freedom, democracy, liberty,

creativity, innovation, competition, globalization,

human rights, environment, et cetera.

And these paradigms will change these societies.

DR. ERIC SCHMIDT: So when you think about Mexico, of course,

you grew up there, you're the most prominent businessmen in

America, literally; in all of America.

How will Mexico change?

U.S. citizens who go to Mexico love the culture.

They see the wealth, they see the poverty, they see the

difference in things.

They see the drug issues, the police issues, and so forth.

Give us a sense of how Mexico with evolve.

And you're doing a lot to change it.

CARLOS SLIM: I think this new society it's very easy to

produce goods, to produce services very efficiently, very

low cost, and produce wealth.

But if you don't make the right conduction, the

change is great crisis.

And that's what we are living, and that's what-- if we don't

make a right conduction of the changes we will have

a lot of crisis.

In the industrial society, we have civil wars, we have two

world wars, and many programs.

A lot of experiments with society in the 20th century.

Social experiments, political experiments, economic

experiments because they don't know how to manage the changes.

For me it's clear that to fight poverty is not with charity,

is not with social programs.

You need to give nutrition from the mother pregnant, nutrition

for the child and for the student, health and employment.

Health and education, excuse me.

You need to bring high quality education to all

grades of education.

That's why I was talking before of digital culture.

You need to have a modern and high quality

education and jobs.

As you have a higher education you have more

diversity of jobs.

You can find jobs easier, more easier than if you only

know how to do one thing.

I think the way for Mexico and all our countries is to take

out people from poverty.

The best investment is to take people out of-- and I'm not

talking only about social issues or ethical issues

or moral issues.

It's an economic need to take out people of poverty to create

middle classes, to take them to modernity, to take

them to the market.

And as much as you can include in the market and in the

society-- 40 million people in our country, [UNINTELLIGIBLE]

out of that.

Or like China is doing with 800 million still in marginal.

Putting 30 or 40 million every year in the modernity.

That's what you need to change.

That's why we need to change.

And we need to have a economic environment, a economic

climate for investment.

Because with this investment you will have economic

activity and employment.

We need to develop employment.

And what are we doing?

Well, we are trying to work in combination with the foundation

and investing in profit and nonprofit companies.

In profit companies we are doing our job, regular job.

That means some employment and some ethics.

But others increase productivity.

Let's say mobile telephony make higher the

productivity of our people.

But the broadband and digital culture will improve the

education and modernize.

But also, look the way to increase employment.

And to increase employment you need to begin to be creative,