Cities are economic drivers at the heart of globalisation. Policymakers should look more closely at their potential, too. Here is why.

I do not share your pessimistic view of space tourism (“Unhappy Holidays” in OECD Observer No. 237, May 2003). In fact, space tourism is already happening and will slowly but steadily grow into the largest off-world business.

Nanotechnology – the science of the small – is becoming a big priority in the policy agendas of many countries. Nanotechnology refers to a range of new technologies that aim to manipulate individual atoms and molecules in order to create new products and processes: computers that fit on the head of a pin or structures that are built from the bottom up, atom by atom.

The architecture of multilateral co-operation established after the Second World War is being challenged by the end of the Cold War. The world of the 20th century was shaped by two global wars and the boom-depression cycles, which foreshadowed them or were their sequel. Now the “end of history”, pronounced by Francis Fukuyama when Soviet communism collapsed, is being overtaken by the “clash of civilisations” advanced by Samuel P. Huntington as the new motor of world conflict. Turmoil and unforeseen challenges are coming to centre stage.

Space is very much a reality in our lives, even if we are not always aware of it. And it is likely to grow in importance in the future, with far-reaching national and international implications, not least because of the dual nature (military and civilian) of most space technologies.

Le Corbusier, the great (though controversial) European urban planner and architect, argued that buildings were machines, to perform a task and to be disposed of when no longer up-to-date. He once famously quipped: why should we leave our buildings to our heirs, since we do not bequeath them our bodies?

Today, information can be gathered and diffused on a global scale, bringing with it countless opportunities, but also fear and frustration, with many people worrying that they are being left behind.

The US economy may well be the world’s largest, with the country riding a wave of unprecedented growth. Yet 40% of its adult population lack the literacy skills required to participate in today’s complex knowledge economy. Likewise, other leading economies, such as Germany and the United Kingdom, show similar patterns. Should we be concerned?

Capitalism has won. The key question now is what type of capitalism will prevail? And what are the prospects for a new global model of capitalism, given the rapid globalisation of product and financial markets, and the emergence of new, more homogenous technologies?

We start with three facts of world affairs. The first is the interdependence of states – their mutual vulnerability in many domains. Second is globalisation – the many forces that transcend state borders – from epidemics to electronic banking. Third is the pyramid of power – military, economic, political, cultural. At the onset of the 21st century the world is unipolar. It combines a single superpower with successive levels of great, medium, regional, and rising powers.

The destruction of tropical forests, encroaching deserts, dry wastelands, millions more species lost, weather patterns playing havoc, cities choking, water courses trickling and vast dead oceans heaving with oil and other undigestables left behind by the human race. This is an exaggerated and harrowing view of the future and, thankfully, no such scenario for the world’s environment is in prospect, at least not between now and 2020. But is a spoiled planet really as improbable as all that?

Over several months I have participated in many discussions with experts from all over the world on the issue of the new economy. The question usually raised: is there a new economy? The consensus answer seems to be “perhaps”. There may be an element of media hype about it all, but there is also substance behind the headlines. As OECD chief economist, Ignazio Visco, points out in this special edition of the OECD Observer, trends are finally emerging in the economic data that the new economy might help to explain, especially in the area of productivity.

Not everyone would agree with Albert Einstein when he famously expressed his reluctance to think about the future because it came soon enough anyway. His words seem to suggest that we are all passengers hurtling forward on some ineluctable and fatalistic course, whereas in fact the future is something which humanity can shape.

The impact of information tech-nology (IT) on work is a question which probably worries us more than we care to admit. Will information technology be a liberating force on the individual and the herald of a new social and economic contract? Or will it cause a drastic cut in jobs and massive unemployment? Will the quality of life be improved by opportunities both inside and outside the workplace, or will the work experience deteriorate into a race, with the jobless in search of unstable, unpredictable and above all insecure contracts?

The energy market is unlikely to undergo any radical change in the next twenty years. That at least is the general consensus. The thinking behind it goes broadly like this. Turnover of the industrial capital stock is low and in power generation, residential construction and to a lesser extent transportation, existing technologies, from the combustion engine to gas turbine generators and railway electrification, will continue to hold sway.

Man's love-hate relationship with the city will continue in the 21st century. Love, because cities will remain a vital part of growth and development, and a vibrant part of creative human culture; and hate, because they will continue to deliver their litany of management problems in pollution, over-crowding, congestion and crime. Those costs will probably rise, but so will the advantages.