The race of innovation will be played out between the countries with the largest stock of human capital. These are naturally China, India, and the United States. I will discuss the demographics and economy of these three countries in detail. China and the United States will imminently compete head-to-head in the race to be the global leader of innovation, while India is still a generation away from becoming a major economic force. I will also discuss Japan, because it was the first country in the world to be significantly impacted by an aging society. I will also talk about the EU, given the fact that it is still a large single market for goods and labor.

The competition I refer to here is economic competition. It is quite different from competition among countries historically. In the past, competition was usually a zero-sum game. Countries used to compete fiercely for land and resources, which often led to conflict and wars. Today, major countries compete for innovation and human resources, which is not a zero-sum game, because innovation benefits not only the innovator, but also the rest of the world. Moreover, fierce competition for talent will raise the return on investment in education, and prompt more investment in human capital; consequently, there will be more talent to go around. But the stakes of the game are still very high, as there can only be a few centers of innovation in the world. When a city or a region becomes the center of innovation in an industry, it will be much more vibrant and wealthier than other cities. Land and resources are no longer important; rather, economic competition is a race of innovation and a war for talent.