be built with the power of mind, not muscle or machinery. for the time being, we have lost a million of minds that have increased the growth potential of other a venables, shifts in economic geography and their causes, paper presented at an annual symposium of federal reserve bank of kansas city in jackson hole on 25 august 2006. capgemini survey entitled online availability of public services : how is europe progressing? web based survey on electronic public services. report of the 6th measurement, june 2006. www. in2015. sg countries. many people who left poland will achieve success, and set up prosperous companies. some of these companies may become global challengers. simultaneously, poland has gained a million ambassadors abroad. for the time being, we are only lamenting. have we yet done anything to use this huge polish intellectual potential located in other countries in order to pursue joint efforts aimed at improving the standard of living for poles, both at home and abroad. have we got a vision that would for example indicate mechanisms for creating a diaspora with millions of poles in the eu or across the globe, a diaspora that could effectively care for poles ’ and poland ’ s interest? actual examples of these include the chinese and mexican diaspora in the us, the jewish diaspora across countries, the portuguese diaspora in france or global scott network, and many other. in the global economy, greater progress is made thanks to increasing use of information and communication technologies ( ict ), also in public services. firstly, it allows to leave unilateral communication channels for interactive two - way communication, which in turn enables citizens and entrepreneurs to be more active, and allows to offer public services better tailored to the needs of individuals and businesses. secondly, ict development leads to innovation growth in public services worldwide, which means that changes in public administration ’ s activities increasingly rarer show features of reproduction, and the public administration becomes ever more often a leader in the field of innovative services. in consequence, methods of a country ’ s actions and fulfilment of its functions are irrevocably directed at using such technologies, and adopt the form of e - strategy, e - policy, eregulations and e - services. with just a few exceptions, public administration in poland has not contributed to increasing innovativeness and effectiveness of the private sector, but has been rather ball and chain. communication between citizens, entrepreneurs and an authority takes place mainly on paper, and it is necessary to come in person, bring a

country fail to change their product and service profiles to achieve greater value added, they will find themselves pushed out of the market by companies from countries with low manufacturing costs. this applies to a number of markets, products and services only recently considered as subject to the international competition, one glaring example being the off - shoring of services offered by radiologists from the us to india 6. china has already become the world ’ s leading exporter of computers and their components or telecommunications equipment 7. i believe that it is just a matter of less than twenty years for china to achieve a similar position in the automotive industry, mainly because chinese companies have mastered network - based cooperation. hence, if a given european country fails to reach an adequate ability to drive innovation despite having sound public finances, liberal labour market and low taxes, it cannot stand the competition on the part of countries with low manufacturing costs. this may lead to lost markets, falling output and growing unemployment, and in consequence public finance deterioration. it was as early as in late 1980s that a well - known economist, paul romer 8, wrote that a country ’ s success would be determined by knowledge and ability to drive innovation. when set against labour and capital, knowledge and innovation are infinite, with a number of people able to simultaneously use the same knowledge or innovation. labour and capital are in turn ascribed to a specific place. by saying that i do not only mean such great innovations as the light bulb, mobile phone or wal mart ’ s business model, which have improved the living standard of millions or billions of people. what i have in mind are also thousands or even millions of small innovations, for instance those aimed to improve the efficiency of a given business process. today, we can add yet another factor to romer ’ s model, namely the relationship capital. now, it is common knowledge that innovation is fostered by cooperation between experts in various countries, cooperation between manufacturers and customers, local market expertise, cooperation between higher education establishments and businesses. in the long term, successful countries and businesses will be those that knowingly invest in the relationship capital. here, china ’ s informed policy of supporting poor asian and african countries is definitely worth mentioning. perhaps some of you think that china and india are far countries, and for that reason pose no challenge for us. this is far from being true, as technological progress and lower transportation costs have in many instances rendered distance immaterial, with many economists speaking of ‘ the death of r freeman, the