How do universities and startups not matter? They're incubators of knowledge and wealth creation. And regarding multinationals, most of the biggest multinationals are either Japanese, American or European. Places like China and Indonesia do a lot of the manufacturing for them, but most of the wealth still flows back to the countries where the knowledge for that technology is developed. Most of Apple's wealth is concentrated in the U.S because that's where Apple's knowledge creators are based. Same with Nokia or Toyota or any company. The world isn't totally flat despite what Tom Friedman thinks. Pockets of innovation will always exist. I think India is a better example of a developing power with a strong innovation base than China is.