Let's now examine the extent to which different countries in the world have power resources that have the potential of turning them into true global powers. We're going to examine both indicators of hard and soft power. Among hard power indicators, I would like you to consider the extent of a territory, the size of the population, the size - and, of course, the wealth - of the economy, some financial indicators and, of course, military force. And among the soft power indicators, I would like to share with you some numbers about knowledge, about technology and about culture. Joseph Nye, who worked in the State Department a number of years ago when I was at Harvard, developed a list of indicators of power resources for various countries around the world. And I have updated these indicators to the year 2012, which is the last year for which we have complete data for all of the relevant countries in the world. In the first column, I list the indicator either of hard power or soft power, and in the second column, I actually give you the number for the entire world, so you have a reference point to use in your comparisons. And then I give you the number for each indicator for a number of countries that have the potential of being global powers in the world. We have United States, we have China, Japan, the European Union as a bloc, although I know very well, of course, that that bloc is undergoing very rapid processes of change and it may lose some of its members countries. And I also give you the numbers for Germany, for Brazil, for Russia and for India. Let's examine some of these countries in detail along eachof the dimensions regarding territory and population. Keep in mind the following: the US and China are of approximately the same size in terms of territory. However, there is a very important difference between the two. About two-fifths of China's territory is affected - or are affected - by ethnic strife and I'm talking specifically here about Tibet and the western provinces. And the other very important fact when it comes to geopolitics is that the United States has unimpeded access to two or even three oceans if you consider Alaska's access to the Arctic Ocean. China, by contrast, has only access to one ocean and in a very limited way as we will see in a moment. Russia is twice as big as the US or China in terms of territory; in fact, it is the largest country in the world according to this metric, but it has less than half the population of the United States. India will very soon have the largest population in the world, perhaps by the year 2025 or 2030, but only about 61 percent of the - this population is literate. Now when it comes to hard power indicator in the realm of the economy or the world of finance, then we see that China and the US are about the same size in terms of gross domestic product. However, the United States, to this day, continues to be the largest financial power in the world in terms of the size and development of its capital markets and foreign investment. China's financial importance, however, is growing very quickly and it must be watched very carefully over the next few years. Now military force; that's another hard power indicator. From this point of view, the US and Russia remain the only two nuclear superpowers in the world. There are other countries that have access to nuclear weapons, but only the US and Russia can be considered as nuclear superpowers. The US is the only power in the world with the ability to project military force around the globe because it has the largest navy and it has an army that can be very quickly deployed to various locations around the world. It also has the most extensive collection of military bases, both naval and air. China's military, by contrast, is extremely large in terms of the number of soldiers, but technologically is rather weak and it cannot project force much beyond its territory. On this chart, you have an indicator as to how much countries spend on their military as a percentage of their GDP. You can see that at the present time, the US is not only the largest economy in the world, but it's also among the leading countries - the one that spends a greater percentage of its GDP on its military. In fact, the United States spends nearly as much on its military as the rest of the world combined. The precise number is 40 percent. So the United States spends about 40 percent of all of the military spending in the world. Although that number, that percentage, has been declining a little bit over the last few years, the US continues to possess the largest and the most effective military in the world. Take a look at a particular dimension that has major implications for the global economy, for instance; which is who's got the largest navy? And here, of course, I mean warships, I mean aircraft carriers, I mean submarines, I mean tonnage in general, which is a overall indicator of the size of a navy. And as you can see, the United States has, by far, the largest navy in the world. And really the only one that has the ability to have a presence pretty much in every corner of the globe. Now let's end this analysis with soft power. Some people argue that in the 21st Century, soft power will be more important than hard power. I agree in part. Among the most important dimensions of soft power, we find knowledge. And in this case, it is very clear that Europe, the United States and Japan continue to dominate. Some of the indicators that we can use - and you can find the exact numbers on the table that I showed you a few minutes ago - some of the indicators for soft power include, from the point of view of knowledge, the size and the quality of universities; the amount of resources allocated to R&D, to research and development; the number of patents obtained by residents of a given country; and the royalties, the money that the inventors and the owners of those patents earned by licensing their technology. Another kind of soft power indicator that I would like you to consider is the extent to which different countries participate in training the elites of the world. In the table that I showed you a few minutes ago, you have the numbers for how many students from other countries are attending university in each of the global powers that we're considering here. And as you can see from the table, the United States and Europe very clearly dominate in terms of being the parts of the world that attract the largest numbers of foreign students. This is important, because the future of the world will depend on those highly-trained individuals. I'm at Oxford University. This is one of the oldest universities in the world, tracing its origins back to about 1,000 years ago. It is also one of the most distinguished universities in the world in terms of the production of prime ministers, heads of state and, of course, famous researchers and professors. And another very important indicator I believe is cultural production. In particular, I'm showing you how many movies are produced by different countries in the world. And you can see that there are two countries that stand out - the United States and India. And, of course, of those two, the American movie industry centered in Hollywood, is by far the most influential; something that most experts attribute as a major source of soft power for the United States. On this table, I'm showing you some indicators as to the extentto which governments around the world and countries overall allocate resources to a very important source of soft power, which is research and development; expressed here again as a percentage of GDP to adjust for the different sizes of countries. And we can see that European countries, along with the United States and Japan, are among the ones that spend the most on research and development in the world. The average for the entire world is about 2.1 percent. And as you can see in the table, there's only a handful of countries that spend more than the average country in the world. And what this means is that power - soft power - that emanates from knowledge, from spending on research and development in the world, is concentrated in just a few countries. We can also see this by looking not at how much monies are spent on research and development, but rather by looking at an outcome indicator, which is patents; how many patents are granted, in this case by the US Patent Office, which is the one that really matters in the world to inventors or to generators of technology in different parts of the world, different countries. And as you can see, the top five countries, with the US as the indisputable leader, account for the bulk; in fact, for more than 95 percent of all the patents granted between the years 1995 and 2010. This is clear indication that from the point of view of the soft power awarded by knowledge and technology, the United States and some European countries plus Japan continue to control the most important resources in the world. One last indicator that I wanted to share with you is the balance of royalties and fees. So royalties and fees are the money that accrues to the owners of the patents when they license the technology that they have invented. And as you can see over here, there's only five or six countries, such as the US, Japan, France, the UK, Sweden and Germany - perhaps Israel could be added to the list - that have sizable positive balances, surpluses, that is - in royalties and fees in the world. These are the only countries in the world, in other words, that develop more technology that they sell to the rest of the world than the technology that they need to buy from the rest of the world. And in so doing, they have a large surplus. So in other words, the picture that I've been painting for you here is that there's a few countries in the world that have a chance of being global powers in the 21st Century. I would like you to examine the table that I showed you earlier with both hard and soft power indicators to see if you can evaluate for yourselves which countries are more likely to be influential in the 21st Century. My own short list includes the United States, China, India, Russia and perhaps the European Union, if it holds together as a bloc. And in case it doesn't, then I would add Germany to the list. I believe that those will be the countries that during the 21st Century will have the most influence in the world based on the data that I shared with you on their hard and soft power resources.
