From geography to talent: What will make nations great in the new world order?

Watching the recent diplomatic spectacle surrounding President Xi Jinping in the United States prompted a simple question: what really makes a nation powerful and prosperous in the new world order? When we were young, we were taught that geography determined destiny. Later, politics and political systems were said to be decisive. Then came the argument that institutions, natural resources and economic policy mattered most. History, however, has shown that no single factor determines the destiny of a nation. Japan has few natural resources yet became one of Asia’s economic powerhouses. Australia and New Zealand prosper despite being in the southern hemisphere, challenging the old notion that prosperity was essentially a northern phenomenon. Singapore, with little land and virtually no natural resources, built one of the world’s most prosperous economies. Meanwhile, countries blessed with extraordinary natural wealth have not always converted that wealth into broad-based prosperity.

What makes nations rich, resilient and powerful?

Increasingly, the answer is not what a country possesses, but what it can do with what it possesses. Geography is no longer enough Geography certainly matters. Access to oceans, proximity to markets, climate, natural resources and strategic location can provide enormous advantages. But geography is not destiny. Singapore transformed a difficult geographical position into a global advantage. Japan turned resource scarcity into a culture of efficiency, engineering and innovation. Switzerland built prosperity without the natural-resource endowment of many developing countries. Conversely, favourable geography can be squandered through weak institutions, poor governance and political instability. The same applies to natural resources. Resources can create wealth. Institutions determine whether that wealth creates lasting prosperity.

Talent is universal, opportunity is not

There have also been attempts to explain differences in national prosperity through racial or cultural superiority. Such explanations are simplistic and contradicted by the experience of millions of people. Consider immigrants from developing countries who have achieved remarkable success in the United States, Canada, Australia and Europe—in business, science, technology, medicine and academia. The talent was there all along. What changed was the environment in which that talent operated. This offers an important lesson for developing countries: talent is universal, but opportunity is not. Countries like companies that can identify, educate, reward and retain talent will have a tremendous advantage.

Competition creates strength

Professor Michael Porter showed that sustainable competitive advantage rarely comes from one cheap or abundant factor. Industries become stronger when they face demanding customers, intense domestic competition, high standards and constant pressure to innovate.

Italy’s footwear industry provides a useful example. Sophisticated consumers and fierce competition forced manufacturers to continually improve design, quality and efficiency. Companies that survived the demanding domestic environment were eventually able to compete internationally. The lesson is uncomfortable but important: Protection may protect an industry. Competition makes an industry stronger. Countries that permanently shield inefficient companies from competition may preserve jobs temporarily, but they risk creating industries that cannot compete globally.

Government matters—but differently

Good government is essential, but its role should not be confused with the role of business. Governments must provide the foundations: the rule of law, property rights, infrastructure, education, financial stability, predictable regulation and effective public institutions. They must also ensure competitive markets.

But governments cannot manufacture productivity.

They cannot legislate innovation.

They cannot decree entrepreneurship.

They can create the conditions in which these things flourish.

This is why leadership matters. The strongest leaders are not necessarily those who control the most institutions, but those who build institutions that continue to work after they leave office.

Productivity will decide the future

Ultimately, the wealth of nations comes down to the age old theory - productivity. A country can enjoy a temporary boom because of high commodity prices, foreign borrowing, remittances or a natural-resource discovery. Sustained prosperity is harder: it requires producing more value from every worker, every unit of capital and every hour of work. That means investing in people, technology, research and development and education.

Increasingly, it also means learning how to use artificial intelligence. The countries that benefit most from AI will not simply be those with the most powerful computers. They will be those capable of reorganising their economies, institutions and education systems around its productive use and also respecting the environment.

China, India and the new competition

China’s extraordinary transformation demonstrates what coordinated investment, infrastructure, industrial development and global integration can achieve. Its next phase will require continued gains in productivity, innovation, human capital and financial sophistication, while addressing the social and environmental consequences of rapid development. India represents a different model. Its greatest natural resource may be its people; talent pools.

Its technology sector, entrepreneurial culture, enormous domestic market and expanding pool of skilled talent provide a powerful foundation for further growth. The challenge is ensuring that prosperity becomes sufficiently broad-based and reaches beyond the major urban centres thereby reducing poverty.

The Asian Tigers offer another lesson. Their transformation was not simply the result of authoritarian government. Exports, education, infrastructure, savings, investment, disciplined economic management and integration into the global economy were critical.

Sri Lanka

For Sri Lanka, these lessons should be impossible to ignore.

We do not have China’s scale, India’s population, Japan’s industrial depth or Singapore’s strategic positioning . But we have assets that many countries would envy: an educated and entrepreneurial population, a strategic location at the crossroads of major shipping routes, a globally connected diaspora, a capable private sector and the potential to build competitive industries in services, logistics, tourism, technology and advanced manufacturing. The problem is not that Sri Lanka lacks potential. The problem is that we have repeatedly failed to convert potential into productivity. For too long, we have confused consumption with growth, short-term relief with economic reform and political promises with national strategy. Policy uncertainty, weak institutions, bureaucratic inefficiency and stop-start reforms have undermined investor confidence and discouraged long-term investment.

The next phase must be different.

Sri Lanka needs to move from an economy that seeks advantages to an economy that builds advantages.

That means investing relentlessly in human capital, technology, digital infrastructure, research and development and globally competitive businesses. It means making the country easier to invest in, easier to do business in and easier to build a career in. It means rewarding productivity and innovation rather than connections and privilege.

Education must be treated not simply as a social expenditure, but as one of the country’s most important economic investments.

Our young people should not have to leave Sri Lanka to find opportunity. If we can create an economy where talent, entrepreneurship and innovation are rewarded at home, the country’s greatest resource—the capability of its people—can become its greatest competitive advantage.

But none of this is possible without strong institutions. Sri Lanka needs predictable economic policy, fiscal discipline, an efficient and professional public service, the rule of law, competitive markets and institutions that operate independently and transparently. Sri Lanka does not need to become another Singapore. It needs to become the most productive version of itself. Our strategic location gives us an opportunity. Our people give us talent. Our diaspora gives us global connections. Our private sector gives us entrepreneurial capacity. What we need now is the institutional discipline to turn these advantages into results .

Conclusion

The world is entering a fundamentally different era. Military power will remain important. Natural resources will remain important. Geography will remain important. But increasingly, national power will also be measured by something less visible: the ability to learn, adapt and innovate. The countries that succeed will not necessarily be those with the largest populations, the most land or the greatest natural wealth. They will be those that can turn knowledge into productivity, productivity into competitiveness, competitiveness into wealth, and wealth into a better quality of life for their citizens. Therefore, countries that learn fastest, adapt fastest and invest most wisely in their people and protect their environment will be best positioned to shape the century ahead.

References :

https://www.dailymirror.lk/print/businessopinion/Why-are-some-nations-wealthy-others-stuck-in-poverty-or-expand-and-collapse-/306-119496

https://www.ft.lk/article/590566/Sri-Lanka-s-window-of-opportunity-for-reforms-narrowing--Ruchir-Sharma

https://economie.ens.psl.eu/IMG/pdf/porter_1990_-_the_competitive_advantage_of_nations.pdf