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July 29, 2014

AIPC: How Connectivity and Urbanization Can Help Economic Master Planning

At the recent AIPC Conference held at the new City Cube Convention Centre in Berlin, the keynote address by TED speaker Dr. Parag Khanna emphasized the importance of connectivity and urban infrastructure as central pillars to national competitiveness and economic master planning.
Disputing concerns that globalization has stalled in the face of 9/11 and the Global Financial Crisis (total goods and services exchange has already returned to pre-2008 levels), Khanna explains how the inexorable growth of the global economy is entering the "fifth phase" of its development pathway; from the Silk Road-Colonialism-Industrial Revolution-Post WWII eras to "Total Globalization" within the next 15 years.
Power has shifted away from the old vanguard of the US-centric cabal of the OECD to a fully integrated global market fuelled by the emerging markets of Asia, Africa, the Middle East, and Latin America.
Khanna stresses the importance of the BRICS and their administrations deploying their commodity dividends (including low cost labour) into the development of communication and urban infrastructure to enable "Smart Cities" to deploy their Economic Master Plans.

Khanna also emphasizes the importance of investments in meeting facilities (such as convention centres) to support the inbound convening of investors and talent in order to support the development plan and to enhance local knowledge transfer. Such conferences and conventions being hosted by these "Smart" cities being fundamental to securing a reputation as "knowledge hubs" for attracting the capital inflows and talent into priority innovation (or "new thing") sectors.

But education, Khanna stresses, is key. In order to establish these reputations and to attract the capital and talent, an educated domestic workforce is critical. Khanna points to Germany, Singapore, and the UAE as destinations that are strategically "smart" and setting the pace in terms of economic master planning in an effort to rise the global value chain and to exploit the export potential of a "totally globalized" economy. But diversification through innovation and education is far from restricted to the developed economies: Brazil and India, for example, are already utilizing their educational investments and natural resources to break into new technology services and life science segments of the global economy.

But the BRICS, anointed as such by Goldman Sachs, appear to have varying degrees of their development  fundamentals in play. China and Korea, for example, are strong re-investors of their capital surpluses into communications and infrastructure – while Brazil lags in its public investments as a proportion of GDP reflected in its growth forecast recently being slashed from 6 percent to 1.5 percent and India's pro-business administration yet to prove whether it can break through the maze of bureaucracy and corruption that undermine its demographic potential.
Khanna continually points to the need on the part of policymakers to ensure that the fundamentals for growth are in place to capitalise on attracting top tier industries and top tier talent from within those industries that have been identified for growth. China has not only built "smart cities" in terms of communications and urban infrastructure, but further invested $1trillion in developing its capabilities in seven clearly defined industries for future growth and for decades to come.
An Economic Master Plan built on communications, urban infrastructure development, and educational foundations is key to economic transition and a seat at top table. See the full keynote from Khanna below:

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About the Author: James Latham

James Latham





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