“A place that doesn’t have great philosophers will not have great technologists either.” — Mehran Gul on Europe’s inexplicable underperformance

The digital revolution, we were promised, would mean the end of geography. From Beijing to Birmingham to Berlin to Barcelona, anyone could invent anything anywhere, and so the geography of innovation would no longer matter. But that’s not the way it has worked out. At least according to the Geneva-based innovation geographer Mehran Gul.

Gul’s acclaimed The New Geography of Innovation is a travelogue of innovation. But what he finds on his journey around the world in search of innovation is the end of the end of geography. Yes, Gul reports, there’s innovation in Beijing and in Birmingham (USA) — but not in Birmingham (England), Berlin or Barcelona. All the important invention is in China and the US. There simply isn’t much radical stuff going on anywhere else.

Gul began his journey expecting to find ten or twelve countries able to innovate competitively with the United States and China. But what he discovered is either niche players or, in the case of South Korea, Israel, and India, just an extension of the US-centric system. Europe — as renters rather than owners of American technology — comes off worst. When PayPal went public, it minted 160 millionaires who went on to help build SpaceX, Tesla, LinkedIn and Palantir; when Skype exited at about the same value, it minted 11. And if you put London aside, the rest of the UK is now poorer per capita than Mississippi.

And the AI boom has only compounded all this, with half of last year’s key research papers coming from China, 40% from America, and just 4% from Europe. So really the new geography of innovation is the old geography. Only with China replacing Europe as the only serious competitor to American innovation. Oh lord, oh lord. As a Mississippi bluesman might summarize Europe’s predicament.

Five Takeaways

• Golden Shares: The Systems Are Converging. OpenAI’s 5% offer to Washington is a Chinese move. But China’s tech rose despite the state: Jack Ma exiled, sectors decapitated overnight in 2021. The only domestic rival to the party is the tech sector — and the party knows it.

• Two Countries — and Everyone Else. Gul expected ten or twelve countries at America’s level; he found two. South Korea, Israel, and India are extensions of the American system. Only China competes.

• Europe: Renters, Not Owners. DeepMind, Arm, Hugging Face all left. PayPal minted 160 millionaires; Skype, 11. Gul’s fixes: a European Nasdaq for 41 fragmented capital markets, pension funds into VC.

• The Question Nobody Is Asking. Not who wins, America or China — but why Europe fell behind both. Top ten US tech firms: $27 trillion, more than any economy on earth except America’s. Minus London, the UK is poorer per capita than Mississippi.

• Anti Case Studies. Japan: free, rich, and stuck in the keiretsu. Taiwan: one company. Singapore: inspiration, not model. India underperforms while Indians excel. Half of last year’s NeurIPS papers came from China; 4% from Europe.

About Keen On America

Nobody asks more awkward questions than the Anglo-American writer and filmmaker Andrew Keen.

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Buy The New Geography of Innovation: simonandschuster.com/books/The-New-Geography-of-Innovation/Mehran-Gul/9781982110536

Chapters:

00:00:31 Introduction: OpenAI's 5% and universal basic capitalism
00:02:13 Golden shares: America copying China
00:02:46 From Pakistan to Yale to Geneva
00:05:07 Not ten countries — just two
00:06:46 China's tech rose despite the state, not because of it
00:08:47 Common prosperity and the 2021 decapitation
00:10:24 Beyond the American and Chinese lens
00:11:51 Europe: renters, not owners, of American technology
00:13:33 Hugging Face, Arm, DeepMind: the exodus
00:15:33 PayPal made 160 millionaires; Skype made 11
00:18:25 How did Novartis and BMW manage? A Nasdaq for Europe
00:20:26 Why would Europe even want innovation?
00:21:40 The question nobody is asking
00:22:51 America steady, China tenfold, Europe shrinking
00:24:01 $27 trillion: bigger than every economy but America's
00:26:46 Why does China trust AI and America doesn't?
00:27:58 Producing technology vs absorbing it
00:28:45 Boarding a plane with your face
00:29:45 Musk and the trillionaire question
00:30:46 Switzerland: innovation without Google
00:32:46 Sweden, South Korea, Canada
00:34:07 India vs Indians
00:36:16 Singapore: invoicing NVIDIA, banking ASEAN
00:39:17 Singapore: model or inspiration?
00:40:59 Japan as anti case study
00:42:51 Taiwan: one company
00:43:52 Europe's intellectual innovation
00:45:04 No great philosophers, no great technologists
00:47:02 The end of the end of geography
00:47:53 Thanks and goodbye