New World Order

Globalization, especially the rise of Asia, is causing the biggest upheaval in the balance of global power since the 19th century (Philip Steven).

Americans must live with being a bargain basement country (John Gapper) and the U.S. is rapidly becoming the fat, complacent Detroit of nations (John Kao). ... Ouch.

Wait a minute, the United States may be down, but it`s not out. Things may look bleak now, but openness remains America`s hidden advantage (Chrystia Freeland). ... Didn`t I hear that somewhere else before.

Canada`s advantage is openness and its ability to accept and assimilate immigrants, even as a backlash forms against immigration in many other countries (Michael Adams).

UPDATE: Denmark looks well-positioned to benefit from the new global order (Justin Fox).

I stand by my prediction from Flight; Small states have a keen advantage in the new globalization. Canada, Australia, and the Scandanavian nations are best positioned, economically and socially to benefit from the age of creative globalization.  Large old economy states - most notably Russa but also Germany, France, Japan and the United States - have their work cut out for them and suffer from extreme scelerois of the sort Mancur Olson long ago identified.  China and India, as big as they are, have a long, long way to go  before they become real players in terms of innovation, creativity and talent attraction.

Comments

[Maya Frost]

Richard,

The link for the John Kao bit is pointing to the piece by Chrystia Freeland.

[Richard Florida]

Maya - The Kao quote is in that piece and also in his book, Innovation Nation.

[AD]

Richard,

You note that Japan may have trouble adapting. This is bang on. The old MITI (now METI) wants to build a creative economy in response to the challenges of globalization and the geographical fact of being on the edge of booming Asia. One of their proposals is to make Japan the research centre of Asia. But this is being blocked by increasing anti-foreigner measures. For example, on November 20 the Japanese Justice Ministry instituted fingerprinting and photo checks at immigration for all foreigners (even permanent residents), a policy that exceeds the very costly (for the US) hassles imposed by US-VISIT. This policy will drive away the talent that Japan desperately needs (as the METI bureaucrats emphasize). In his The Atlantic blog, James Fallows comments on the unpleasantness of Japan's new "big brother" system:
http://jamesfallows.theatlantic.com/archives/2007/11/not_so_thankful_for_this_at_th.php

Note also that Japan is missing out on the energy-environmental revolution because the old guard is neoliberal. Like America's Bushies, they emphasize voluntary solutions because they believe environmental protecting costs growth. This is absurd, of course, especially if one looks at Japan's recent history (the auto industry being a prime example). But because of the ideology and vested interests, Japan's renewable targets (as a percentage of electricity generation) are a measly 1.63 by 2014, less than a tenth of the targets in Germany, many US states, and etc.

In short, the Japanese old guard is holding the country back. They simply do not understand the role of the public sector in dealing with positive and negative externalities. They seem perversely inclined to create more of the latter.

Best,
AD

[Rana]

AD - Rock it. Japan is a great country, with real innovative strengths. I wrote a book about their model with Martin Kenney, Beyond Mass Production. They are in many respects the final refinement of Fordism - with real quality and real technology.

But innovative center of Asia, no way. Not unless they completely change course and become massively open. Just like you say.

I think there are three possibilities. One is Hong Kong or Singapore, though I doubt it. They would have to also become more open, though not nearly as much of a stretch as Japan.

Two is Australia and New Zealand. I find this very likely actually. They are big open countries and already oriented to Asia.

Three is North America's Pacific Coast - LA, San Fran, Seatte, Vancouver and also Hawaii.

My guess is low cost, standard stuff with migrate to China. Japan and Korea and Taiwan will continue to stay strong in areas where they already are world class -cars, flat panels, robots, advanced steel, semiconductors, disk drives and the like.

The real innovation will remain along the Pacific Coast of North America, and Australia and New Zealand. If the US becomes more restrictive toward immigration (which is likely given the twin issues of "homeland security" and "illegal immigration") the winners will be Vancouver, Sydney, Melbourne, Brisbane, Perth, Wellington, Auckland and one of my favorite places on earth, Noosa.