Dubai and Shenzhen are economic centers for their geologic regions. These cities are exceptional because they allow a free economy to exist in locations that otherwise rely on government oversight of production, or have until recently.
Dubai is in the United Arab Emirates, and has emerged the largest global economic center in the middle east in the last ten years. Most countries in the middle east have relied on state-run oil companies for most of the economic activity. This oil is traded overseas, which has allowed the middle eastern nations to participate in global trade. The nation, or in many cases, OPEC, the oil-producing nations operating as a unit, were the ones making decisions that impacted the global trade. This is in contrast to the western world, where the entrepreneur, whether the individual or the CEO, is in charge of strategic decisions.
In the Middle East, economic activity was never at the discretion of the individual, but up to the nation that supplied oil to determine which products and services it would allow into its country. The country determined the values which guided the spend and trade that occurred with other nations. For instance, the country could prioritize fruits and vegetables, and limit the citizen’s freedom to indulge in an overseas candy bar. More commonly, these nations chose to trade for arms and military weaponry. The country decided that weapons were more important for all the citizens, rather than each citizen having a say.
China was long-ruled by communist political regimes that put similar constraints on trade. Negotiations on imports and exports were led by the leader of the country, or the minister of trade. This put constraints on the freedom of individuals because they could not choose how to spend the dollars that they made.
Countries operating with free markets allow the free-flowing information and tools across country lines – whether digital or not. When countries such as China or United Arab Emirates puts constraints on individual’s ability to produce, this does two things. It discourages individuals from producing and limits their ability to be productive compared to other countries in the world. Also, those individuals that want to produce and ignore the constraints of the country are encouraged to leave to a country that is willing to accept their ideas and labor. This is bad for the country, as they are not able to receive the benefits that that individual wanted to contribute.
Individuals want to contribute to their country, and their country wants them to contribute. By participating in a free economy, an individual is able to improve the situation for himself and his local community. Through participating in a local economy, not only does an individual spend money locally and trade for local goods, but he also pays taxes, creates products or carries out services that are, necessarily, valued by the local community (he wouldn’t get paid otherwise), and innovate. An individual must be able to try new ideas. He must be able to fail, if ever the country will innovate. The ideas that work are the ideas that are voted on by people willing to spend money to see them scale.
These days, these constraints are being destroyed by technology and the competition of other countries. Just like companies compete for the sale of products and services, the countries that house those companies compete for labor and business that produce tax revenue so the country can fund its projects. As free economies prove to be more productive and more innovative, those countries that choose not to participate in the free economy are left behind.
Further, economic constraints are being destroyed by technology. Social media has allowed people to communicate globally, instantly. Global marketplaces and shipping companies allow for people to purchase and receive goods anywhere in the world. Technology companies that depend on digital skills can recruit talent globally, and those skills can be put to work in any location with internet access. There’s internet access in every country.
These skills can be learned online, in many cases for free, from any location with internet access. As more intelligent individuals are given access to the internet and the tools that are now a part of it, more individuals will have access to these markets, and more individuals will have the ability to produce and contribute to the global, and their local, economy. Central hubs for innovation – London, New York, Silicon Valley, are no longer gatekeepers for talent and resources. The same resources can be found anywhere in the world, and talent can be encouraged to stay in those economies outside of the original hubs.
As more educated individuals have access to this global economy, more people will be able to participate in the economy. Because they no longer need to fly to New York or San Jose to get the job that enables them to contribute, and because the country they live in will be incentivized to provide them access to the global economy, more economically free cities will manifest around the globe.
The growth of cities will happen internationally – such as Shenzhen in China and Dubai in the UAE, and this will happen nationally. More cities will emerge within nations as this talent pool grows and resource constraints of hub cities become less important. In the United States, more cities will become internationally competitive. Atlanta, Denver, and Austin are three examples of cities that claim to be tech centers – and rightly so.
This growth will only be sped up when access to capital becomes available to individuals outside of hub cities. In the United States, many startup companies are funded by venture capital firms. The majority of these are located and prefer funding in Silicon Valley. That is one more hurdle that will be overcome through the increase in talent outside of “The Valley” and with the decentralization of funding – through technologies such as cryptocurrency. Decentralization will allow entrepreneurs to raise funding more easily through their own marketing efforts which can be targeted towards financial institutions or individuals looking to invest.
In summary, more economically free cities will come into being in the next 50 years. This will happen because:
- Economic constraints are being destroyed by technology, where people can work from anywhere and make money from anyone.
- Central hubs (New York and London) will be less important because of the connectivity of people, and more educated individuals that will have access to their local economies.
- Governments are incentivized to reduce constraints to maximize long-term growth of local markets.