"Now, here, you see, it takes all the running you can do, to keep in the same place.
If you want to get somewhere else, you must run at least twice as fast as that!"
The Red Queen, Alice in Wonderland
If you want to get somewhere else, you must run at least twice as fast as that!"
The Red Queen, Alice in Wonderland
Many countries aspire to develop knowledge economies. The experience of innovating clusters such as Silicon Valley suggests that the biggest profit margins are enjoyed not by those who work hardest nor those who most need them, but by those who can create a commanding position by inventing new products and or new ways of doing things, and who can use that position to appropriate a large share of the profits from their innovation. In a globalizing economy, there are many competitors for business, and the competition for markets based on low cost production can drive profit margins for the producers very low. The firms that own the intellectual property rights, or who otherwise command the market can have the inputs they need produced at very low cost, and can profit by selling at their own high prices.
Some nations have large markets, provide their governments with the ability to offer access to their internal market as a bargaining chip; especially fortunate are the governments with large internal emerging markets, since the offer of early entry into a growing market is especially enticing to many companies. Smaller countries too can have access to large markets, such as those that have access to the U.S. or European markets; their governments however don't control the access to those markets; a firm that doesn't get the deal it wants with country A can go to country B and get access to the same market. China and India, in theory, can demand access to technology from those firms that it allows into their markets. Small countries in large markets compete for corporate presence.
There are a number of relatively small oil exporting countries that seem to be embarked on a path of using their mineral wealth to buy technology and to create innovative capacity. How successful they will be in that effort will await the judgment of history.
Still, it sometime seems to me that leaders in small countries lacking oil income feel that they can command the transfer of technology and even of innovative capacity in the same way that China, India, Kuwait or Kazakhstan seek to do. Their governments however must seek to influence the decisions of business leaders in the global economy who have many options.
Looking at emerging fields such as software, biotechnology and nanotechnology, where many countries are making investments in science and technology to obtain a position in the emerging global markets, the Red Queen's comment comes to mind. A country has to run fast to keep pace with the competition, and very fast actually to get a competitive advantage.
Communism, if one thinks about it, failed in large part because it doesn't work to have a central government instruct the economy to "go forth, be fruitful, and multiply". The West succeeded by a process in which countries created conditions were innovation was possible and innovators had incentives to do their thing. It would seem that the leaders in small countries seeking entry into large markets should find it obvious that they can not command the multinational companies of our day. Still, some seem to have an almost magical belief in the efficacy of written mission statements.
Countries seek to build this capacity in order to improve the lives of their citizens. The question arises as to whether by allowing immigration to staff these new industries the country benefits its own citizens or those of other countries. That is a key issue in the U.S. immigration debate. It seems clear that by bringing in more competitors for the existing jobs, a country will tend to depress the pay level for those jobs. Immigrants will not only benefit from the jobs, but homeboys will receive less than they might have were labor in short supply.
I suggest, however, that there are "rainmakers", people who make their home green (the color of money) by creating jobs. These are the innovators, the technological experts, the entrepreneurs, and those who command investment capital. Immigration policies that keep out the rainmakers are counterproductive.
Does this make any sense?
Some nations have large markets, provide their governments with the ability to offer access to their internal market as a bargaining chip; especially fortunate are the governments with large internal emerging markets, since the offer of early entry into a growing market is especially enticing to many companies. Smaller countries too can have access to large markets, such as those that have access to the U.S. or European markets; their governments however don't control the access to those markets; a firm that doesn't get the deal it wants with country A can go to country B and get access to the same market. China and India, in theory, can demand access to technology from those firms that it allows into their markets. Small countries in large markets compete for corporate presence.
There are a number of relatively small oil exporting countries that seem to be embarked on a path of using their mineral wealth to buy technology and to create innovative capacity. How successful they will be in that effort will await the judgment of history.
Still, it sometime seems to me that leaders in small countries lacking oil income feel that they can command the transfer of technology and even of innovative capacity in the same way that China, India, Kuwait or Kazakhstan seek to do. Their governments however must seek to influence the decisions of business leaders in the global economy who have many options.
Looking at emerging fields such as software, biotechnology and nanotechnology, where many countries are making investments in science and technology to obtain a position in the emerging global markets, the Red Queen's comment comes to mind. A country has to run fast to keep pace with the competition, and very fast actually to get a competitive advantage.
Communism, if one thinks about it, failed in large part because it doesn't work to have a central government instruct the economy to "go forth, be fruitful, and multiply". The West succeeded by a process in which countries created conditions were innovation was possible and innovators had incentives to do their thing. It would seem that the leaders in small countries seeking entry into large markets should find it obvious that they can not command the multinational companies of our day. Still, some seem to have an almost magical belief in the efficacy of written mission statements.
Countries seek to build this capacity in order to improve the lives of their citizens. The question arises as to whether by allowing immigration to staff these new industries the country benefits its own citizens or those of other countries. That is a key issue in the U.S. immigration debate. It seems clear that by bringing in more competitors for the existing jobs, a country will tend to depress the pay level for those jobs. Immigrants will not only benefit from the jobs, but homeboys will receive less than they might have were labor in short supply.
I suggest, however, that there are "rainmakers", people who make their home green (the color of money) by creating jobs. These are the innovators, the technological experts, the entrepreneurs, and those who command investment capital. Immigration policies that keep out the rainmakers are counterproductive.
Does this make any sense?
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