"Critical Analysis of The Rise of the Virtual State-.
The central idea in of Richard Rosecrance's book entitled, The Rise of the Virtual State, is that power is shifting once again, this time to nations whose people are most adept at summoning global financial capital and turning it into conceptual insights for sale around the world. Rosecrance calls these new centers of power virtual states, because their wealth and influence depend on intangible flows of money and ideas. The new virtual state does not need a lot of exports to finance their imports and their foreign investments. However a trained workforce is imperative for these virtual state to generate research, software designs, entertainment, engineering concepts, advertising, marketing, styling, legal and financial innovations. .
In the second half of The Rise of the Virtual State, Rosecrance examines several nations and comments on how they relate to the virtual state concept. He also generalizes about the relationships and characteristics of what he calls a new system of international politics and economics. .
Rosecrance, in latter part of his book the Rise of the Virtual State considers three Asian nations to be examples of virtual states: Hong Kong, Singapore, and Taiwan. In varying ways, these have each focused their home economies on services and moved excess production capacity abroad. These three "Asian Tigers- encouraged direct foreign investment and diversified their production plants in places like China and Russia where labor costs less. Quoting Robert Rowthorne and Ramana Ramaswamy, he says that in doing so, they only represent a growing worldwide trend " the natural consequence of the industrial dynamism in an already developed economy- (120) .
The relationship between Russia and Europe is complex. Russia has tended to dominate the continent militarily while Europe has tended to dominate economically. Closer association with Europe could motivate Russia to modernize its economy.