The Year of Living Dangerously
Was 2014 a Watershed?
Business in a Changing World
Stewarding the Future
The Return of Geopolitics
The Revenge of the Revisionist Powers
The Illusion of Geopolitics
The Enduring Power of the Liberal Order
How to Respond to a Disordered World
What the Kremlin Is Thinking
Putin’s Vision for Eurasia
Why the Ukraine Crisis Is the West’s Fault
The Liberal Delusions That Provoked Putin
Who Started the Ukraine Crisis?
A Broken Promise?
What the West Really Told Moscow About NATO Expansion
Why the Kremlin Is Betting on Escalation and Isolation
China's Imperial President
Xi Jinping Tightens His Grip
Keep Hope Alive
How to Prevent U.S.-Chinese Relations From Blowing Up
Asia for the Asians
Why Chinese-Russian Friendship Is Here To Stay
A Meeting of the Minds
Did Japan and China Just Press Reset?
The End of Realist Politics in the Middle East
The Middle East's Durable Map
Rumors of Sykes-Picot's Death are Greatly Exaggerated
Staying Out of Syria
Why the United States Shouldn't Enter the Civil War—But Why It Might Anyway
The Hollow Coalition
Washington's Timid European Allies
This is What Détente Looks Like
The United States and Iran Join Forces Against ISIS
Measuring the Threat from Returning Jihadists
Welcome to the Revolution
Why Shale Is the Next Shale
New World Order
Labor, Capital, and Ideas in the Power Law Economy
The Strategic Logic of Trade
New Rules of the Road for the Global Market
Recent advances in technology have created an increasingly unified global marketplace for labor and capital. The ability of both to flow to their highest-value uses, regardless of their location, is equalizing their prices across the globe. In recent years, this broad factor-price equalization has benefited nations with abundant low-cost labor and those with access to cheap capital. Some have argued that the current era of rapid technological progress serves labor, and some have argued that it serves capital. What both camps have slighted is the fact that technology is not only integrating existing sources of labor and capital but also creating new ones.
Machines are substituting for more types of human labor than ever before. As they replicate themselves, they are also creating more capital. This means that the real winners of the future will not be the providers of cheap labor or the owners of ordinary capital, both of whom will be increasingly squeezed by automation. Fortune will instead favor a third group: those who can innovate and create new products, services, and business models.
The distribution of income for this creative class typically takes the form of a power law, with a small number of winners capturing most of the rewards and a long tail consisting of the rest of the participants. So in the future, ideas will be the real scarce inputs in the world -- scarcer than both labor and capital -- and the few who provide good ideas will reap huge rewards. Assuring an acceptable standard of living for the rest and building inclusive economies and societies will become increasingly important challenges in the years to come.
Turn over your iPhone and you can read an eight-word business plan that has served Apple well: “Designed by Apple in California. Assembled in China.” With a market capitalization of over $500 billion, Apple has become the most valuable company in the world. Variants of this strategy have worked not only for Apple and other large global enterprises
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