On the eve of the American Inauguration Day, the tech business world is much different than when previous president Barack Obama took office. In 2008, Uber was just an idea in its founders' heads, Apple just opened up its App Store, and Edward Snowden was just another government contractor.
It is what makes Parag Khanna's new book Technocracy in America: Rise of the Info-State such a timely read. As he's shared with Inc. in the past, startups now have as much influence, if not more influence than governments themselves, and leaders will have to create a tech-forward, global agenda to thrive. I talked with Khanna about why the business environment is different now, how new leaders should adapt and how entrepreneurs can change the world.
Inc.: What is the key difference between a democracy and a technocracy?
Parag Khanna: The two systems are not at all antithetical. In fact, my argument in Technocracy in America is that they can be very constructively fused together. The will of the people as expressed through democracy can be filtered by the expert analysis of a technocracy.
Inc.: What are three things that shifted in the world that make, to paraphrase you, physical borders less relevant?
Khanna: We have more borders than ever, but more connectivity than ever across them, which is what makes them seem less relevant. The key shifts are infrastructural connectivity such as transportation by air and rail, digital connectivity via the Internet and mobile phones that seamlessly connect us all, and demographic blending as mass migrations have made homogenous societies ever more diverse.
Inc.: Why should entrepreneurs embrace the technocracy idea?
Khanna: A good technocratic system would have sound and steady policies that support entrepreneurs with low political risk of regulations lurching around in unpredictable ways. Technocracies provide subsidies and tax breaks for entrepreneurs in order to diversify the economy and broaden the base of growth.
Inc.: As a businessperson, how should I shift my view of commerce based on your new world philosophy?
Khanna: Being global is more essential and more feasible than ever before. Slow growth in mature markets makes it necessary to expand beyond borders, and technologies like the cloud make it easier and more affordable as well.
Inc.: As you've argued, our biggest startups may have more power than small countries. Will we see this trend continue?
Khanna: Absolutely. There is a growing number of what I call "stateless superpowers" whose influence reaches worldwide and have the ability to hold capital offshore, cultivate talent globally, and distribute their management and operations to reach billions of customers. That is more than one can say about the reach of most countries, not just small ones.
Inc.: Finally, based on the technocracy idea, what should future world leaders do to support current and blooming entrepreneurs?
Khanna: First of all, entrepreneurs should become future world leaders! We need more innovative thinking in government to overcome the current stasis in our capitals. Then only will we have systems that consistently provide the small business loans, skills training and other policies that entrepreneurs need.