BOOK REVIEW

As the Future Catches You
by
Juan Enriquez

FUTURECASTS online magazine
www.futurecasts.com
Vol. 4, No. 1, 1/1/02.

Homepage

An educational primer on the technological revolution:

    This primer presents the  technological prospects for the 21st century - primarily in information technology and genomics. The book emphasizes the pace and manner in which developments in information technology and bioscience are explosively accelerating.
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The primer is designed to attract the interest of the disinterested, alert the unaware and, hopefully, stimulate thought and discussion among students and other readers.

  The book provides a wealth of concepts, facts and context with an odd page format designed to attract the interest of the disinterested, alert the unaware and, hopefully, stimulate thought and discussion among students and other readers. Because of its page layout, it is much shorter than its 228 pages, and much snappier than most books on the subject. Coverage is general, but endnotes provide access to more depth for those who wish to go further.
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  Even those who have been keeping an eye on technological developments will find here a wealth of detail and context. It is a fine primer on the current status and economic importance of the information technology and genomics revolutions.
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  However, there are some problems with the book's economic presentation, which are set forth next.
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  Juan Enriquez of the Harvard Business School provides a paean to accelerating technological change - with all its economic threat and promise.

  "Meanwhile, lone individuals are birthing not just companies but entire industries that rapidly become bigger than the economies of most countries ---
 But unlike growth industries of the past  - cars and aerospace for example - the industries that will dominate our future depend on just a few smart minds ---
 Not a lot of manpower."

  Unfortunately, this version of the old automation scare is introduced right at the beginning. In fact, the technological advance ALWAYS creates more and better jobs throughout any reasonably flexible economy than the jobs it may destroy in particular industries. Information technology and genomics already provide employment for vast multitudes - and they make possible the provision of many goods and services that could not previously be economically provided.

Governance, education and technology all must work together for optimum economic results.

  The book emphasizes the economic impacts of the technological revolution, but Enriquez is clearly more interested in the technological and educational factors than the economic factors. From the start, he stresses the economic need for technology and education, but leaves until the penultimate chapter the obvious imperative of modern governance and a commercial environment that facilitates commerce and encourages entrepreneurial enterprise. Thus, there is a failure of essential context in the first 200 pages of the book.
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  Ultimately, he correctly notes that nations like India that do have some excellent technical schools still fail to take advantage of - or keep - their most talented people because of hostile commercial environments. A bit earlier he notes that - despite having some of the best scientists - East Germany collapsed for lack of "freedom to create and build."

  Several Indian biotech firms that export their products are wary of selling those products in their domestic market for fear of piracy. Of the thousands of drugs developed during a recent decade, only about a dozen were for tropical diseases. If intellectual property isn't protected, nobody will create any.
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  Taken as a whole, the book gets it right. Governance, education and technology all must work together for optimum economic results. However, at least an initial indication of the vital governance factors should have been provided in one or two places earlier in the book to provide proper context for many of the statements about the economic impacts of technology and education. This is noted in several places, below.
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  Nations - like Singapore - that excel in their commercial governance - will continue to find prosperity in commerce and will be able to purchase all the modern technology that they need. The Soviet Union excelled in its technical education and the brilliance of its scientists and engineers, but still fell apart economically and politically. Japan's current economic problems do not stem from a lack of education. Large numbers of unemployed or underemployed college graduates are a serious problem in such nations as Egypt and Iran.
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  Indeed, old fashioned infrastructure - telephones and trade (good communications and transportation and removal of restraints on domestic and foreign competition) - have been found to be a stronger determinant of prosperity than education - although all three (governance, education and technology) together work best. 

  In a typical segment, Enriquez points out that nations like the Philippines and Burma (now Myanmar) that were once the wealthiest per capita in Asia, didn't stay abreast of the digital revolution and today are among the poorest and most hopeless.

  This is not wrong, it just appears shallow. There are far more basic economic and political causes for the poverty of these and most other nations dependent on "commodity" production economies than just lack of education and technology - causes that Enriquez finally brings up towards the end of the book.

Synergy of the digital and genomic codes:

  The digital revolution has already come and matured, Enriquez points out. The next wave of progress will be built on the genetic code as added to the digital code. It is genetics that will be the technology that drives 21st century development.
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  The author outlines many of the pertinent efforts currently under way, and the commercial prospects already visible as of the year 2000. We are just starting to explore the new map of the human genome - available on the internet since Feb. 12, 2001.
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  Now, with nanotechnology added to genomics, proteomics, biocomputing, and standard information technology - and advances in other fields like lasers, combinatorial chemistry, and robotics - "each field reinforces and accelerates discoveries in each of its neighbors."
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  But much of the world remains ignorant of these developments and their prospects.

  "States are falling apart at an unprecedented rate ---
Because governments and citizens do not understand ---
Why technology is relevant to their daily lives ---
and how it changes the future."
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  "When a country or region is consumed by internal political battles ---
And ignores the technologies that sweep through other states ---
It becomes irrelevant."

  Enriquez points out that many nations - especially China and Japan - that were once among the world's wealthiest and most powerful - and most inventive and technologically advanced - nevertheless eventually fell behind - "Because they did not trust their own people."

  Even today, Adam Smith is still authoritative. It is the freedom of the people working in a free society under a government anxious to facilitate commerce and minimize restraints on competition that are the most important determinants of national wealth - the most important requirements for keeping abreast of the ever faster moving wave of technological change.

  The per capita gap between the richest and poorest nations rose to 390-to-1 from 5-to-1 because of the industrial revolution, Enriquez points out. Because of the information technology and genetics revolutions, the gap will soon be in excess of 1000-to-1.

  Enriquez is absolutely right. However, this does not mean that the poorest nations are getting poorer or are worse off in absolute terms. By all measures, the poorest nations are much better off today because of technological advances than they were a century ago.
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  Literacy rates in third world nations keep increasing. Average life spans, as short as they currently are, are still about twice as long today as at the beginning of the 20th century, and the spread of material comforts reaches larger segments of their populations. They move much too slowly, but progress is clear wherever the destructive forces of conflict don't outweigh the gains of production.
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  Enriquez repeats the obvious myth that "most middle aged workers were earning 9% less than their parents had 25 years earlier." This period covered the quarter century after the devaluation of the dollar in 1973 - which included the double digit miseries of the Carter administration, and the 15 years of high real interest rates required to bring inflation down to de minimis levels. These factors played more than a little role in the below par economic performance of that period.

  Nevertheless, he dramatically demonstrates the fallacy of the myth that real wages stagnated or fell in the quarter century after 1972. He reviews many of the products and services that were first introduced or that dramatically increased in quality or decreased in cost - and were far more widely distributed - even in working class households - during that period.
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  Hand held calculators, personal computers, VCRs, cell phones, the internet, all first came into general usage - spreading ever more widely.  These new products and many traditional products and services (automobiles, air travel, air conditioning, kitchen appliances, floor space in homes and apartments) rapidly improved in quality and declined in cost sufficiently to be enjoyed far more widely.

  If we are earning so much less, how come we are living so much better? Earnings figures for that period are rendered inaccurate by such factors as the inaccuracy of inflation adjustments that overstated the rate of inflation - the substantial increases in the number of second earners who earn less and drag down the averages - and the substantial increase in households headed by single mothers who similarly earn less and drag the averages down. These factors have nothing to do with technology.

Economic impact of knowledge industries:

 

 

 

 

 

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  The fast track out of poverty is education, Enriquez asserts. He emphasizes that knowledge industries now create the most new wealth and grow the fastest. He concentrates on education as the key policy factor in modern prosperity. (Here, as above pointed out, he is not wrong, but he overstates his case.)
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  Already, there is great churning as industries, businesses and individuals rise and fall on the waves of technological change. Enriquez points out that - in the U.S. - only 3 families of the richest 10 in the 1980s are still in that group today (Walton, Buffett, Kluge). In Europe and Latin America, most of the wealthiest people are the beneficiaries of inherited wealth. In the U.S., NONE of the 10 wealthiest people inherited the bulk of their wealth. Yet, 6 of the 10 wealthiest people in the world are - or were in 1999 - American. There were none in 1990.
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Africa - with its commodity based economies - is now irrelevant and is being left to its fate. This could happen to Latin America, too, if failed economic policies are not changed.

  Enriquez (like FUTURECASTS) expects inequality to vastly increase between those individuals and economies that stay abreast of technological change and those that don't. "In the age of information, hard work, by itself, is not sufficient."

  It never really was. Hard work has always been demanded and poorly compensated in nations with poorly run economic and governance systems.

  Africa - with its commodity based economies - is now irrelevant and is being left to its fate. This could happen to Latin America, too, if failed economic policies are not changed. Despite soaring populations and consumption rates, commodity prices have declined 80% in the last 150 years. Nations that depend on the production of commodities are in trouble.

  "Rich countries no longer need great deposits of gold or diamonds ---
Or an abundance of land ---
Or millions of people ---
They need to educate their people ---
NO MORE ---
They need smart and entrepreneurial people ---
NO LESS ---
They need a government that provides economic and political stability."

  He cites Winston Churchill: "The empires of the future are the empires of the mind."
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  The economic growth rates of nations that obtain less than 100 U.S. patents per year are compared with those  that obtain thousands of patents. Major Latin American nations are compared with South Korea. While Korea grew and prospered, the Latin American economies struggled. The Latin American nations had "little new knowledge to sell - and little economic growth." Twelve nations generated 95% of all U.S. patents in 1999. The rest "are going to have trouble keeping up --- as technology and knowledge turbocharge economic growth."
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  Per capita, the U.S. generates almost 33% more patents than the second best nation - Japan. It generates 60% more than Switzerland, 100% more than Taiwan, 175% more than Canada, 200% more than Germany. Other nations are not even in this ball game. From this, the author asserts: "It is not hard to predict who gets rich --- and who gets poor."

  The U.S. produces about 500% more patents per capita than France or England, and the spread with Singapore is even much greater, but these nations are unlikely to become "poor." Wealth through commerce will not become obsolete. Europe will continue to prosper, although rigidities in its commercial and labor markets will slow it down.

  The author gets around to some of the commercial aspects of the wealth creation story when he writes about the brain drain. The best researchers and entrepreneurs are moving towards those nations where they find "information - challenges - respect - people - funds." They move to nations with economic systems that facilitate commerce and entrepreneurial enterprise.
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  MIT alumni and faculty - many of whom are foreigners who have chosen to stay in the U.S. - have founded more than 4,000 companies - generating over $230 billion in yearly sales.

  "In a borderless world ---
Those who do not educate ---
And keep their citizens ---
Will lose most intellectual wars."

  If a nation depends more on commodity exports than on value added exports, it "remains vulnerable to commodity cycles." (Value added products also have their business cycles - as periodic "tech wrecks" amply demonstrate.)
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  Japanese companies generated almost 20% of all U.S. patents in 1999 - and Japan has a very favorable trade surplus with the U.S. and maintains very high living standards. (However, its economy remains in deepening trouble - now for a decade. Enriquez is apparently not familiar with the weaknesses of mercantilist policies.)
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  Enriquez correctly points out that the technological revolution adds unequally to the productivity of various economic and commercial activities - and thus can only generate more inequality even though all can benefit in absolute terms. He frets that this will cause those left behind to abandon the capitalist "economic model."

  Where can they go? Most of their problem is due to the ineffective economic policies that already burden their economic systems. Moving further away from effective capitalist practices can only make matters much worse for them.
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  At any rate, inequality is much overrated as a cause of discontent. Most people are not that envious - as long as they feel their own material conditions are  improving over time. They are certainly not as envious as egalitarian ideologues would like them to be. Indeed, no policies can more quickly destroy a favorable environment for technological advance and entrepreneurial endeavor than egalitarian policies.

Data drives empires:

 Everything is going digital. TV, pagers, radio, newspapers, telephones, photography: This is the latest evolution of the linguistic capacity to transmit information.
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Societies that do not participate in the genomics revolution will fall further behind.

  The simpler the alphabet, the more efficient it has been as a transmitter of information, Enriquez points out. Now, a two letter alphabet - consisting of just 1s and 0s - comprises the most simple alphabet ever devised. It is also by far the most accurate and efficient transmitter of information ever devised. It is already the world's main language.
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  Things change very rapidly in this digital world. Microsoft and AOL are among the youngest - and already among the most valuable - companies in the world. However, even they are not guaranteed of survival in this digital world. (Only the paranoid survive!)

  "The power of technology - - -
to build ---
and destroy ---
is such ---
that it is likely ---
few of us have ever heard ---
the name of what will be the world's largest company ---
in 2020."

  That's because, as powerful as the digital language may be, the language of genetics will be more powerful still. "Genetic engineering" is so powerful that it has stimulated passionate debate over its use and misuse. However, knowledge of genetics has already made possible the feeding - abundantly for the most part - of a human population now in excess of 6 billion. Enriquez' outlines the current developments, characteristics and prospects in modern genomics. He warns that societies that do not participate in the genomics revolution will fall further behind.

Biosciences and Bioengineering:

  The genome is by far "the world's most powerful and compact coding and information-processing system." Vast sums are now being dedicated to harnessing this type of power. Computers are being designed to act as clusters of individual cells - working in parallel to solve problems - and working around or "fixing" their own problems.
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"Bioinformatics" and "Biocomputing" are fields experiencing explosive growth.

 

Biochips using relevant bits of DNA may soon be able to test for over 100,000 genetic conditions. Computer chips the size of quarters are becoming specialized chemistry labs.

  The combination of genomics and digital technology is unleashing "an avalanche of knowledge." Gene maps of basic life forms allow us to more quickly learn about them. We are now learning the genomes of some of the most debilitating and deadly diseases. We are going to be able to control the evolution of species - including our own.
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  Millions of genetic patents have already been issued, as have patents on over 100 genetically modified animals. It requires super computers just to contain and make available the flood of data. Fortunately, computer capacity and capabilities continue to increase geometrically. This formidable capacity is now being harnessed for biological research. "Bioinformatics" and "Biocomputing" are fields experiencing explosive growth.
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  At Harvard, a brilliant, passionate corps of engineers, physicists, molecular biologists, physicians and graduate students is "trying to make sense of the 100 terabytes of data that come out of gene labs yearly." They attempt to predict in advance what the results of laboratory experiments will find. They provide information about biology - they do not provide the biology itself.
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  Celera - a private company - started ten years later than the government effort - spent less than 10% as much as the government effort - and beat the government in sequencing the human genome. Celera is also much faster and more efficient in performing the vital follow-on work. The government effort was "trampled by the speed of change." The knowledge economy is different. "It is a scary time for the establishment."
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  Celera, too, sells information about biology. It doesn't produce the products of biological research. It is riding the wave of digital-genomics convergence.
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  Another gold rush involves the development of new biochips using relevant bits of DNA that may soon be able to test for over 100,000 genetic conditions. Computer chips the size of quarters are becoming specialized chemistry labs.
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  Personalized medicine will be able to distinguish in advance the people who can be helped from the people who may be hurt by particular drugs - permitting the use of many drugs with beneficial characteristics that were previously too dangerous to approve. For example, Thalidomide may be helpful in treating such diseases as leprosy, cancer, AIDS, rheumatoid arthritis, inflammatory bone disease, and tuberculosis. Preventive medicine will become a much greater part of medical practice as people learn about their disease vulnerabilities.

  "Medicine is going to change --- fast."
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  "Most medicine still treats mostly symptoms."
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  "Today's medicine ---
Will seem like voodoo ---
To our grandkids."

  Today, modern medicine still labors under a lot of myths that are going to be exploded. (There is probably no field that is free of the scourge of authoritative myths.)

Proteomics:

  Now, examination is moving on to the proteins coded by the genes. The task is to learn "how tens of thousands of genes code the million-plus proteins that regulate our lives daily."
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  Celera is now attempting to code all proteins and their interactions. They are using newer, vastly more powerful computers to define about a million proteins and tens of millions of distinct expressions of these proteins. A process that used to take several man-years for each protein now speeds along on Beta machines from PE Biosystems which each unravel as many as 30,000 protein structures per day. Celera is procuring 100 of these computers.
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  However, most major pharmaceutical companies and a host of new bioscience startups - eleven of which are listed in the book - have have also entered this race.
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Education's failing grades:

  The failure of American education is highlighted - with special attention to the failures in science education. That failure is especially damaging to certain minorities - African Americans and Hispanics - while Asian American minorities do well in science education and continue to thrive.
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The economic future rests with the educated - and especially those educated in science and technology. Without technology, Africa and Latin America fall further and further behind, and all other economic reforms are fatally flawed.

  In Latin America, Hispanic intellectuals remain interested in such subjects as agriculture, economics, politics, Latin American relations, race, gender, migration, law - - - everything but science. Asia gets more and more people trained --- Latin America, Africa, the Middle East fewer.
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  Yet, the economic future rests with the educated - and especially those educated in science and technology. Without technology, Africa and Latin America fall further and further behind, and all other economic reforms are fatally flawed.

  Yes, the technologically skilled will advance furthest - fastest. However, even though the gap between the richest and poorest employees keeps widening - technology enables all who are employed in well run economic systems to improve their material condition. Technology simply improves the productivity of some (like top athletes and other entertainers) more than others (like top brain surgeons).|
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  Skilled and trusted traditional craftsmen - plumbers, wallpaper hangers, home window washing contractors - can make six figure incomes. Big rig truck drivers routinely make over $40,000 per year. Bill Gates and many software engineers don't have college degrees. Trust and craftsmanship still pay very well - and will continue to do so.

The five fastest growing job markets are all computer related.

  Education still makes the major difference in average earnings potential - and an education that bestows expertise - or at least understanding - of technological developments is more highly valued in the job market than most of those that do not. The five fastest growing job markets are all computer related.
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  Yet, the U.S. does a lousy job in teaching math and science, and has awarded 5% fewer tech degrees per year since 1990. Religious opposition to certain aspects of science still affects education in some southern states. However, the U.S. environment for technology is so favorable that the U.S. draws the best brains from around the world to fill the growing need.

  A plethora of private institutions have arisen to supply many of the routine technological skills needed for technological  industries and processes. On the job training fills many needs, even in technology.

  The author notes the increasing debt leveraging of American business and consumers - and attributes this to the nation's trade deficit. (Typical of many who comment on the debt leverage danger, he ignores the role played by noxious tax incentives in these trends.)
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Impact:

 

The most traditional industry is agriculture - currently being transformed by new technologies

 The technological revolution affects not only electronics and genetics, but many traditional industries. The most traditional industry is agriculture - currently being transformed by new technologies - not only in the production and distribution of foods, but in creating things like medicines, plastics, and fuels.
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  Corn can become a biodegradable plastic - or can prevent pregnancy. Other plants can become a polyester that feels like silk - or vaccines against various diseases like cholera and hepatitis - or medicines not naturally produced by plants. Genes have also been successfully inserted in monkeys, pigs, and mice to achieve certain desired characteristics.
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Efforts to maintain a determinedly backwards agricultural policy will become increasingly expensive, disruptive, unsustainable and dangerous.

  Most of the world is not participating in this revolution. Europe spends many tens of billions of euros subsidizing traditional agriculture - but bans genetically modified seeds. Efforts to maintain a determinedly backwards agricultural policy will become increasingly expensive, disruptive, unsustainable and dangerous. (But "organic" farming is one of the most lucrative and fastest growing agricultural sectors in the U.S. and Europe.)
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  Technology drives much of the essential "creative destruction" process of capitalism.
Those that don't adapt bear most of the burdens of the destructive process - and benefit from few of the opportunities. In many industries, technology increasingly concentrates wealth and market share in the one or a few dominant corporations most successful in deploying new technological processes.
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  However, many of the corporations at the forefront of technology at one point have quickly been humbled by subsequent technological changes that they could not stay on top of. This terrifies huge telecoms, pharmaceuticals, genomics corporations, among others, that see myriad opportunities - and threats - flooding towards them. Periodic tech wrecks litter the economic landscape with failed high flying tech companies and traditional companies that were left behind.
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  Wang and Xerox have been humbled - IBM and Intel have been forced to reinvent themselves to remain dominant. Traditional firms have been bypassed by technological upstarts. At the time this book was published, Sears Roebuck was worth less than Ebay - the N.Y. Times was worth less than Yahoo.
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    The accelerating wave of technological change is increasingly overpowering those who seek to defend the status quo - while bestowing vast wealth on those economies that accommodate and facilitate commerce, change and enterprise.
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The brain drain:

  The U.S. attracts talent from all over the world by rewarding enterprise and facilitating commerce. Those with valuable technological skills can pick and choose the places and nations they wish to live in - and the organizations they wish to work for.
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  National governments have lost power over their most valuable citizens. If these people are not happy with conditions in their country, they can - and do - readily vote with their feet. Increasingly, regions unhappy with their condition within a larger nation are demanding greater autonomy or opting to fragment into smaller nations.
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  The fate of the U.S. and other nations depends on their flexibility, their adaptability - their ability to respond to "the ethical, political, and economic challenges of the digital-genomics era."

  "Education ---
Democracy ---
Technology ---
Competitiveness ---
Individual Economic Opportunity ---
All these overused ---
Seemingly trite words ---
Have become matters of national security."
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  Enriquez says it marvelously well --- if only this little segment had been placed somewhere around page 9 rather than in page 209.

  February 12, 2001, marked the beginning of a new era - the post-genomic era.

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Copyright 2002 Dan Blatt