The Smartest Places on Earth ─ Why Rustbelts Are the Emerging Hotspots of Global Innovation

Antoine van Agtmael coined the term emerging markets” and built a career and a multibillion-dollar investing firm centered on these surging economies that would, over time, supplant the West as engines of wealth and prosperity. The trend held for decades, but a few years ago van Agtmael and Alfred Bakker, a renowned European journalist, began seeing signs that the tide might be turning. For example, during a visit to an enormously successful chip company in Taiwan, the company's leaders told them that their American competitors were now eating their lunch. And Taiwan was not the only place giving them this message.

Thus began a remarkable two-year journey to reassess the conventional wisdom that the US and Europe are yesterday's story and to determine whether there is something profound that is happening that points the way to the creation of the next economy.

In The Smartest Places on Earth, van Agtmael and Bakker present a truly hopeful and inspiring investigation into the emerging sources of a new era of competitiveness for America and Europe that are coming from unlikely placesthose cities and areas once known as "rustbelts" that have, from an economic perspective, been written off. Take, Akron, Ohio, whose economy for decades was dependent on industries such as tire manufacturing, a product now made cheaply elsewhere. In Akron and other such communities, a combination of forcesincluding visionary thinkers, government initiatives, start-ups making real products, and even big corporationshave succeeded in creating what van Agtmael and Bakker call a "brainbelt." These "brainbelts" depend on a collaborative style of working that is unique to the societies and culture of America and Europe, since they involve levels of trust and freedom of thinking that can't be replicated elsewhere. They are producing products and technologies transforming industries such as vehicles and transportation, farming and food production, medical devices and health-care.

For several decades American and European industry focused on cost by outsourcing production to those emerging markets that can make things cheaper. The tide has now turned, as van Agtmael and Bakker report, to being smart, and the next emerging market, may, in fact, be the West.

Antoine van Agtmael is senior adviser at Garten Rothkopf, a public policy advisory firm in Washington, DC. He was a founder, CEO, and CIO of Emerging Markets Management LLC; previously he was deputy director of the capital markets department of the International Finance Corporation ("IFC"), the private sector oriented affiliate of the World Bank, and a division chief in the World Bank's borrowing operations. He was an adjunct professor at Georgetown Law Center and taught at the Harvard Institute of Politics. Mr. van Agtmael is chairman of the NPR Foundation, a member of the board of NPR, and chairman of its Investment Committee. He is also a trustee of The Brookings Institution and cochairman of its International Advisory Council. He is on the President’s Council on International Activities at Yale University, the Advisory Council of Johns Hopkins University’s Paul H. Nitze School of Advanced International Studies (SAIS), and a member of the Council on Foreign Relations

Alfred Bakker, until his recent retirement, was a journalist specializing in monetary and financial affairs withHet Financieele Dagblad, the Financial Times of Holland,” serving as deputy editor, editor-in-chief and CEO. In addition to his writing and editing duties he helped develop the company from a newspaper publisher to a multimedia company, developing several websites, a business news radio channel, and a quarterly business magazine,FD Outlook, and, responsible for the establishment of FD Intelligence