Financier Michael Milken warned on Tuesday that Israel's $7 trillion human capital market is in danger of rapidly depreciating should the government not take the appropriate corrective steps to repair and invest in the local education system. "Human capital" has been defined by University of Chicago economist Gary Becker as the knowledge, skills and experience of people. "Becker estimates that human capital represents more than three-quarters of the world's wealth - as much as $1,200 trillion in value, which is many times the total value of all the assets listed on the balance sheets of the world's individuals, companies and nations," Milken said at the Israel Business Leadership Meeting in Tel Aviv. "And that means the human capital of Israel is worth several multiples of the officially reported size of Israel's assets as published by the Bank of Israel." Milken, in Israel for the Milken Institute's Financial and Policy Innovations Lab for Medical Solutions in Israel, helped develop the market for bonds with low credit ratings, or junk bonds, during the 1970s and 1980s. In 1989, Milken, often referred to as the "junk bond king," an epithet he denies, was indicted on 98 counts of racketeering and securities fraud. After pleading guilty to six securities and reporting violations, Milken was sentenced to 10 years in prison. Following a plea bargain, however, he was released after serving less than two years. Today, Milken heads the Milken Family Foundation, whose support of the teaching profession has led to significant innovations in education and whose medical research programs have contributed to major clinical breakthroughs. Milken is also the founder of the Prostate Cancer Foundation, now the world's largest philanthropic source of research funding for that disease. While Milken said that Israel has the human capital necessary to allow it to take a leadership role in fighting global problems such as terrorism, energy consumption, education and poverty, he said it will not happen unless the educational system is overhauled. "Israel must address the challenges within its educational infrastructure. Continuing and increased focus on the country's elementary and secondary education system for all citizens will better prepare the next generation to participate in the global knowledge industries of the future," he said. "The current unfortunate situation in secondary schools is only a symptom of the challenges that Israel faces. And you all know the statistics comparing the achievement of Israel's students with those in other nations." Pointing to Exxon, the world's second largest corporation with a market capitalization of some $487 billion, Milken noted that the company is worth roughly three times Israel's annual GDP. "However, when we look at human capital, we are talking about a value that is worth more than three Exxons - this is very valuable, but Israel is in danger of falling behind other countries if more educational opportunities are not opened up to Israeli citizens." Milken also said that while the changes in the country's economic sector, including the government's economic reform package and recent increases in corporate bond issuances are encouraging, other steps need to be taken. "Barriers need to be reduced to allow for easier entry for entrepreneurs, the capital market needs to be expanded and the concentration of ownership in the banking system needs to be cut," he said. "If the process of reforms can be accelerated, more resources will flow into Israel and the world's major companies will come to Israel for its human capital. The country has the potential to be one of the world's greatest research laboratories - Israel can create a legacy that relegates cancer and other diseases to the history books."