**6. Creating new technological system in twenty-first century**

The challenges, encountering the global society, have been steadily multiplying in scale and variety: escalation of trade wars, financial flexibility, disintegration processes in Europe, migration crisis, militarization of economies, global warming – these and many other problems have been undermining sustainable life of human beings. To cope that challenges the governments, pursuing the monetary paradigm in regulation, are spending more from their budget (at least mentioning 50 billion pounds, which the UK will pay for their leave the EU), rather aggravating than improving the state of affairs. The entire global system has been badly working provoking manifold disruptions as it is listed above. What would be more useless than the efforts focused on improvement the obsolete, ill working politico-economic system? Let us recall here the Simon Kuznets statement, which he made in his Nobel lecture in 1971: "… the changing course of economic history can perhaps be subdivided into economic epoch, each identified by the **epochal innovation** with the distinctive characteristics of growth that it generates" ([14])<sup>8</sup> .

Epochal innovations and epochal transformation of the global economy requires new knowledge, new mindsets and new individuals, pursuing the novelty in theory and practical decision makings. When Charles Jones explains economist "as a laboratory scientist, setting up a model…" [2] we could not agree. Economics in accordance with our perception is a kind of

**Figure 7.** China published military budget. Source: Military budget of China https://en.wikipedia.org/wiki/Military\_

**Figure 6.** World military expenditure, 1988–2016. Source: World military spending: Increases in the USA and Europe, decreases in oil-exporting countries. https://www.sipri.org/media/press-release/2017/world-military-spending-increases-

budget\_of\_China.

usa-and-europe.

16 Globalization

<sup>8</sup> S. Kuznetc explains the epochal innovations as the following: "The major breakthroughs in the advance of human knowledge, those that constituted dominant sources of sustained growth over long periods and spread to a substantial part of the world, may be termed epochal innovations". From: Simon Kuznets. Modern Economic Growth: Findings and Reflections. http://www.nobelprize.org/nobel\_prizes/economics/laureates/1971/kuznets-lecture.html

social engineering science [15], and economists are social engineers, occupied in creation a building of new economy, rather than manipulating data, drafting economic scenarios or just only criticizing governments.

job creation, R&D facilitation and investment growth, the politicians should be clear enough

Technological Reconstruction of the Global Economy http://dx.doi.org/10.5772/intechopen.75096 19

Fourth, we would like to emphasize specifically the process of "technological localization", which is not common, but would enable understanding the new role of regions in the global reconstruction. Perhaps, regions would be a new nutshell for incubating not only specific technologies and technological innovations, but new technological systems, embracing S&M innovative companies; universities, providing the R&D and education capabilities; and local administrations. Simon Kuznets denotes a special technological advantage of small nations in the following statements: "Obviously, community of feeling, a sense of common destiny, and subordination of individual or group interest to that of the whole, are far easier to attain in small and homogenous nations than in large nations with their regional, racial and other diversities"…. "Another possible advantage of small units is the rapidity with which they can adjust to changing situations. In a sense this rapidity is related to the greater possible ease of reaching secular decisions. And since economic growth is a process of continuous adjustment to a changing technological potential and a changing constellation of national structures, the speed with which small nations may be able to make such an adjustment is a great advantage" [17]. Obviously, regions are endowed with specific resources, making them different from each other. Usually that regional specification is indicated as "regional comparative advantage". Technologies represent a means with which regions overcome their specific "comparative disadvantage" and resource scarcity, develop their specific "comparative advantage" and within their specific niche accumulates R&D capabilities to produce technologically complicated products for increasing value-added production, spurring the economic growth, making the local society more sustainable, wealthy and adjustable to the exogenous turmoil. Localities or regions would be a space, where technologies are strongly related with the real economic needs, which is quite different from the vision of technologies as some know-how, produced in R&D laboratories and transferred into innovation companies with the assistance of venture capital. Our perception of the technology-oriented networking local communities, clusters considers them as a new "drivers" for technological change and global economic growth, replacing large companies – "old champions" in that mission. From that standpoint the phenomenon of "Brexit" or "Katalonia's challenge" could be explained as the first signs of the forthcoming technological transformation of the national and local societies, based on their specific "national (regional) comparative advantage" or "national (regional) economic identity". These processes need to be carefully governed in a proper economic, rather than political, manner. No doubt technologically advanced local societies, pursuing technologybased economic growth, will make the global community more interactive, sustainable and

The growing contradictions in international and economic relations between countries lead to the destruction of the established world order, which can produce a negative impact on

about its long-term destructive consequences.

civilized.

**7. Instead of conclusion**

What should we know about technological adjustment to the ongoing processes of global disruption? Let us make some preliminary insights, which, probably will be reflected in the further investigations.

First, the general evolution leads to a gradual replacement of labor-intensive and capitalintensive by respectively labor-saving and capital saving mode of production. In this regards, any labor-intensive or investment-intensive decisions in economy should be treated as inconsistent to the general trend and prospective. Once when we have made our investigation for the prospects of economic development of the Russian Far East, we were brought to the conclusion that for that specific region, peculiar in terms of shortage in population, substantial dependence on external energy resources and scarcity of capital resources, the laborintensive and capital-intensive (energy intensive as well) model of economic development is inapplicable. It led us searching the new technologies, substituting the scarce regional resources and they were found. Only one case among many others: three scientists and five engineers had started to produce extracts from Holothuroidea, which brought them substantial benefit and contributed into improvement of the regional economic performance in general. Production of that kind brings substantial export revenues, accumulate financial resources to pay salaries, taxes and making further own investments into extension of production facilities. Besides, it is energy, capital and labor saving technologies and what is also very important – environmentally friendly [16]. This important finding encouraged us to learn the technology-intensive capabilities, existing in some other Russian regions. In fact, the reserves for technology-driven economic growth even in the lagged behind regions are enormous. Who knows, probably, the other countries also endowed with that kind of "hidden" localized capabilities.

Second, the other decisive characteristic of the prospective key technologies for restarting the economic growth stems from the technology life-cycle shortening. It increases the rapidity with which the new technologies has been replacing the already applied, requiring the close cooperation (face-to-face interaction) between scientists from various fields of knowledge (cross-discipline interaction), small and medium innovation companies, local administration, financial institutions, universities and the other "innovation stakeholders". The higher flexibility of small and medium companies appropriate to the increasing rapidity of technological change makes that companies a new technological drivers, replacing the large companies in that mission. The "economy of scope" when production of technologically unique products dominates over the exploitation of the given technologies within the "economy of scale" paradigm, signifies about the appearance of the new stage in technological development.

Third, there are no justifications anymore for the development of military technologies neither in terms of their spin-off effect on the civil production and employment nor R&D advancement and multiplication of investments. Militarization represents a resource consuming process, harmful for the environment and risky for the financial stability of the national states. Explaining the necessity of elevation the armaments production, accompanied by anticipating job creation, R&D facilitation and investment growth, the politicians should be clear enough about its long-term destructive consequences.

Fourth, we would like to emphasize specifically the process of "technological localization", which is not common, but would enable understanding the new role of regions in the global reconstruction. Perhaps, regions would be a new nutshell for incubating not only specific technologies and technological innovations, but new technological systems, embracing S&M innovative companies; universities, providing the R&D and education capabilities; and local administrations. Simon Kuznets denotes a special technological advantage of small nations in the following statements: "Obviously, community of feeling, a sense of common destiny, and subordination of individual or group interest to that of the whole, are far easier to attain in small and homogenous nations than in large nations with their regional, racial and other diversities"…. "Another possible advantage of small units is the rapidity with which they can adjust to changing situations. In a sense this rapidity is related to the greater possible ease of reaching secular decisions. And since economic growth is a process of continuous adjustment to a changing technological potential and a changing constellation of national structures, the speed with which small nations may be able to make such an adjustment is a great advantage" [17].

Obviously, regions are endowed with specific resources, making them different from each other. Usually that regional specification is indicated as "regional comparative advantage". Technologies represent a means with which regions overcome their specific "comparative disadvantage" and resource scarcity, develop their specific "comparative advantage" and within their specific niche accumulates R&D capabilities to produce technologically complicated products for increasing value-added production, spurring the economic growth, making the local society more sustainable, wealthy and adjustable to the exogenous turmoil.

Localities or regions would be a space, where technologies are strongly related with the real economic needs, which is quite different from the vision of technologies as some know-how, produced in R&D laboratories and transferred into innovation companies with the assistance of venture capital. Our perception of the technology-oriented networking local communities, clusters considers them as a new "drivers" for technological change and global economic growth, replacing large companies – "old champions" in that mission. From that standpoint the phenomenon of "Brexit" or "Katalonia's challenge" could be explained as the first signs of the forthcoming technological transformation of the national and local societies, based on their specific "national (regional) comparative advantage" or "national (regional) economic identity". These processes need to be carefully governed in a proper economic, rather than political, manner. No doubt technologically advanced local societies, pursuing technologybased economic growth, will make the global community more interactive, sustainable and civilized.
