Global Economy's New Map

The United States is losing the Great Brain Race. The headline sells the story. By 2020, the United States will be behind both China and India for percentage of global college graduates. Alarming news. The Oxford Internet Institute tells a different story:

A team at the University of Oxford's Internet Institute has produced a set of maps showing the "geography of the world's knowledge".

This measures how populations are consuming and producing information in the online world - mapping the level of internet use, the amount of user-generated material in Google, concentrations of academic activity and the geographical focus of Wikipedia articles.

And in contrast to the rise of the Asian economies, this tells a story of continuing Western cultural dominance.

"In raw numbers of undergraduates and PhDs, the Asian economies are racing ahead," says Prof Viktor Mayer-Schonberger, from the Oxford Internet Institute.

"But what's interesting is how the West persists in its positions of strength - because the West controls the institutions.

The Knowledge or Innovation Economy is diffusing. Developing countries are rapidly gaining ground. Yet the West maintains its advantage. From the same BBC report, the geography of US knowledge:

In the US, says Prof Mayer-Schonberger, there is hugely disproportionate investment around Silicon Valley and the Boston area, with large tracts of "wasteland" between.

"Each era has its own distinct geography. In the information age, it's not dependent on roads or waterways, but on bases of knowledge.

"This is a new kind of industrial map. Instead of coal and steel it will be about universities and innovation."

Emphasis added. It has been about universities and innovation for decades. The Great Divergence got going as early as the 1970s. You can find a new new kind of industrial map in "The Great Brain Race" by Ben Wildavsky:

Q: As the global higher education market grows, what do you see as areas of enduring strength for the United States and areas in which the U.S. will lose its position?

A: Market are unpredictable – and I think that’s true of the global academic marketplace as much as any other kind of market. So I’m hesitant to make any grand pronouncements. Here’s a cautionary tale: In the late 19th century Americans flocked to the first modern research universities in Germany and brought the model back to the United States, where it was perfected to the point that we became the world’s research powerhouse. A little more than 100 years later, the quality of Germany’s universities had plummeted – and it is now copying the U.S. model as it attempts to create a group of world-class institutions. So things can change quite a bit over a century. One possibility worth considering is that universities may take entirely new forms. We’re already seeing a large number of cross-national partnerships between universities, including many U.S. institutions. As travel and communication gets even easier and cheaper, one could imagine wholesale mergers to create global institutions – the university equivalent of multinational corporations. Nigel Thrift, vice chancellor of the University of Warwick, talks about universities following the model of “firm theory,” in which business begin in one country, trade with others, establish international branches and alliances, and eventually merge with competitors and become multinationals. I have no idea whether this will really happen – there’s also a good argument that the best universities are strongly rooted in place. But I think this thought experiment illustrates how conventional notions of competition between the United States and other nations may fade.

In the near term, we shouldn’t lose site of the fact that we remain hugely dominant – we have a disproportionate share of top researchers, 70 percent of the world’s Nobel winners, hold most of the top slots in global college rankings, and so on. We also pass an important market test, continuing to attract the lion’s share of top international students. That said, patterns of mobility could well change, and with so many new and improved universities in other nations focusing on science and engineering, that seems likely to be an area where we might lose ground. But as I indicated before, this isn’t necessarily worrisome if we look at the sum total of knowledge production around the world. From a U.S. point of view, where we are likely to remain very strong is in our creative spark, in academia and beyond. This is something other nations urgently wish to emulate – our ability to innovate, and to use research discoveries in entrepreneurial ways. For undergraduates, we also have a tradition of liberal arts. It isn't as widespread here as I would like, but I think it’s been a crucial element of our ability to graduate creative thinkers. Universities in many other nations don't have a liberal arts tradition at all. A few are trying to change that, but for now our ability to ask questions, to challenge the conventional wisdom, to be nonconformist at times, is likely to continue to be an area where we stand out.

Emphasis (in italics) added. Many of the graduates found in India and China (usually the best ones) studied abroad. The United States is very good, the best in the world, at producing talent. What this new new map already looks like:

Yale has some collaborations in China, for instance, in which it takes advantage of cheap lab space and well-trained technicians -- China’s comparative advantage, for now -- and supplies senior faculty to lead research projects -- what Yale president Richard Levin, an economist, calls “the scarce factor of production … the sophisticated knowledge worker who is the leader of the enterprise, whose research design is driving the system.”

Bases of knowledge (e.g. Silicon Valley and Boston) give way to the sophisticated knowledge worker. The places that are best at producing such workers will be the Silicon Valley or Boston of the Talent Economy.