Community schooling is a great idea, but students must end up with a certificate and a job for it to be worthwhile, he said in a "Squawk Alley" interview from the World Economic Forum in Davos, Switzerland. Community schools typically form partnerships with other area resources to emphasize real world skills and problem solving.
"It's the detail behind it that is important the government get right, not just the money—that the local community school works with the local businesses, what they need, and those kids get jobs and they get out so that's it valuable," he said.
The U.S. Department of Education does not publish graduation figures for inner city schools, but high school dropout rates for blacks and Latinos was respectively 7.5 percent and 12.7 percent in 2012. That compares with 4.3 percent for whites.
Democrats and Republicans should also focus on thoughtful infrastructure development, from roads, bridges and tunnels to schools and hospitals. He also sees opportunity for compromise on immigration, tax, and fiscal reform.
In the big picture, he said the United States has "the best hand ever dealt of any country" today: the best businesses, low corruption, and unbelievable work ethic. Innovation runs "like dark matter through everything," he said.
However, if the country does not tackle shortfalls in education and infrastructure, as well as fiscal and tax reform, or "we're not going to be sitting here in 20 years and making the same statements" about American exceptionalism, he said.