Page 73 - The Fourth Industrial Revolution

most patents, command the majority of the world’s venture capital, and

when publicly listed, enjoy high corporate valuations. This is further
reinforced by the fact that North America remains at the cutting edge of four
synergistic technology revolutions: technology-fuelled innovation in energy
production, advanced and digital manufacturing, the life sciences, and

information technology.

And while North America and the EU, which includes some of the most

innovative economies, lead the way, other parts of the world are rapidly
catching up. Estimates of China’s innovation performance, for example,
have increased to 49% of the EU level in 2015 (up from 35% in 2006) as

the country shifts its economic model to focus on innovation and services. 43
Even considering that China’s progress springs from a relatively low level,
the country is continually entering higher value-added segments of global
production and employing its significant economies of scale to compete
better globally. 44

Overall, this shows that policy choices will ultimately determine whether a
specific country or region can capitalize fully on the opportunities afforded

by the technology revolution.

Regions and cities as hubs of innovation

I am particularly concerned about the effect that automation will have on
some countries and regions, particularly those in fast-growing markets and
developing countries, where it could abruptly erode the comparative
advantage they enjoy in producing labour-intensive goods and services.

Such a scenario could devastate the economies of some countries and
regions that are currently thriving.

It is clear that neither countries nor regions can flourish if their cities
(innovation ecosystems) are not being continually nourished. Cities have
been the engines of economic growth, prosperity and social progress

throughout history, and will be essential to the future competitiveness of
nations and regions. Today, more than half of the world’s population lives in
urban areas, ranging from mid-size cities to megacities, and the number of
city dwellers worldwide keeps rising. Many factors that affect the

competitiveness of countries and regions – from innovation and education to
infrastructure and public administration – are under the purview of cities.

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