How Innovation Ecosystems Shape Global Power With Edoardo Giglio

In this episode, Eduardo Gileo, a cyber strategy and defense policy expert, explores how innovation ecosystems shape global power, the different strategies countries use to innovate, and the geopolitical implications of technological advancements. During the discussion we delve into topics like Silicon Valley's success factors, frugal innovation in Iran, and the future of global competition amid emerging technologies.

Key topics

• Innovation ecosystems and their impact on global power
• Strategies for successful innovation: Silicon Valley, Israel, Iran
• The role of frugal innovation in defense and technology
• Geopolitical shifts driven by technological advancements
• The importance of semiconductors and space infrastructure in national security

Sound bites

"Silicon Valley's success is no accident"
"Clarity of purpose is key to innovation success"
"Semiconductors are the backbone of modern power"

Find The Book:
Tech Tides, How Innovation Shapes Global Power by Eduardo Gileo - https://www.bloomsbury.com/uk/tech-tides-how-innovation-shapes-global-power-9781472979274/

Transcript

Francis Gorman (00:02.551)
Hi everyone, welcome to the Entropy Podcast. I'm your host, Francis Gorman. Before we dive in, if today's conversation challenges you, sparks a new idea, or sharpens how you think about the world, don't keep it to yourself. Subscribe, leave a review, and share this episode with someone who enjoys staying curious. Today I'm joined by Edoardo Giglio, a cyber strategy and defense policy expert working at the intersection of geopolitics and storytelling. He is a partner at one of the big four and advises governments, international organizations,


Francis Gorman (00:31.319)
and critical industries on hybrid threats, digital sovereignty and strategic resilience. He's a published author with Bloomsbury examining how innovation, technology and narrative power reshape global competition. If you enjoyed this conversation, you can also check out his latest book, Tech Tides, How Innovation Shapes Global Power. Edoardo, it's lovely to have you here with me today.

Edoardo Giglio (00:50.508)
Thank you for having me, Francis.

Francis Gorman (00:52.985)
I'm looking back on your bio and introduction and I think where we are in the world, we have plenty to probably talk about, which is always good. One thing that I want to kind of probe on to start out of it is this idea of innovation ecosystems and how they shape global power. What separates countries that successfully sustain innovation from those that slowly fall behind in your opinion?

Edoardo Giglio (01:16.715)
Sure, no, that goes to the part of the book in my research. So typically when we think of innovation, we think of it as lightning in a jar, almost as a black magic and

have many difficulties in trying to replicate it, but the reality is that there is plenty of research going back decades, which shows that there are some very specific variables that need to be created in the ingredients in order to spark the innovation engine, as I call it in the book. And it's no secret and no wonder that

the most successful innovation ecosystem is in Silicon Valley. Now, the thing that's interesting about the US specifically is that the US tried to replicate Silicon Valley on the East Coast as well along what's called Route 128, where you have Harvard, have the presence of the political power, Washington DC, a plethora of NGOs, conducting think tanks, also conducting research into innovation. And yet...

when they tried to replicate it, weren't able to do so. And that goes to the heart of one of the reasons why that is. then innovation has also to do with a number of variables which don't seem to be closely related, such as, for instance, presence of nice countryside where you can grow your family, the presence of tax

systems such as in California, has traditionally now not so much, but certainly back in the day used to be very pro entrepreneurship. The fact that typically, and this goes more towards a culture theory, there's the whole culture of the frontiersman. So typically moving to the West. so you would typically have individuals that are less risk averse and more risk taking.

Edoardo Giglio (03:30.141)
the presence of defense, think tanks, universities and industry all in one, which is called the quadruple helix in technical parlance. That all allowed Silicon Valley to be Silicon Valley and they haven't been able to replicate it exactly on the East Coast of the same country, is for many the the point of reference for successful innovation.

And many countries have tried to replicate it as well. In European Union, unfortunately, we've been highly unsuccessful. We can go into that in much more detail later on. countries that were innovative maybe weren't as innovative in an all-round fashion as Silicon Valley was, such as, for instance, South Africa, talking back in the 80s and early 90s that was leading the way on

many aspects of health and people tend to forget that the first successful heart transplant was conducted by South African surgeons and that was one of many innovations in the health vertical that South Africa was able to do but they weren't able to translate that in other industries which also is quite interesting. And then you have the Middle Eastern countries that for all the hundreds of billions of dollars that they have invested to

create innovation ecosystems and in the book I specify one example which is Neon. Many may have seen the inserts in the Financial Times over the past two years and the great publicity that followed in the McLaren Formula E team that was one of the first sponsors over there. That's kind of dwindled and they weren't able to attract the talent and really ignite the innovation ecosystem.

because they missed some of the key ingredients or they didn't quite understand it. And then you have other examples such as Israel and Singapore that have been highly successful in being innovative. Again, albeit in a more narrow fashion compared to Silicon Valley, but Singapore leads the way in FinTech, for instance, as well as other sectors pertaining to passports.

Edoardo Giglio (05:57.254)
So into passports to finance and and e-payments and Israel of course leads the way in aspects pertaining to cyber and defense and the peculiarity of that is that they were born out of a In a pressure cooker and they had to fuse the civilian and military Systems and that in itself created a

situation in which even today many then leave the military, they technically don't leave because they reservists for a long time afterwards, they can get called up. But if they have any business ideas that they want to develop, the military actively takes action in supporting them with funding, with test beds, etc. And that's pretty unique to Israel.

And then you have, course, a whole host of other countries such as North Korea, the prime example of what happens when you decide not to be within the innovation ecosystem. And then Iran, again, I've mentioned a few countries that today specifically are in headlines of newspapers around the world that have been successful by necessity in one specific type of innovation, which is called frugal innovation.

And again, so really when it comes down to it, there's understanding the variables, understanding that there are certain ingredients that are not automatically or are often discounted and not even considered in the beginning, but are key and critical to ignite it. And then the last one is a clarity of purpose. So all of the countries I mentioned, Silicon Valley that started with ARPA that then became DARPA.

post-Second World War, Israel, Iran, Singapore, they had a clear vision and understanding of what innovation strategy they wanted to undertake. And then they were very deliberate about doing that, something which the EU isn't at the moment. It's one of the many issues with the European Union at the moment.

Francis Gorman (08:18.36)
That's super interesting. First, didn't know South Africa had the first heart transplant. So that's a new fact for me. So thanks very much for that. And something that you talked about there, which was the frugal nature of innovation when you spoke about Iran, I think I saw their drones are produced for like 20 to 30,000 versus the American missiles that are shooting down are in the millions or the low millions.

That kind of struck me the other day as sustainability in terms of warfare. And we did talk about Israel and Iran and the United States. And that is probably a triangle that we need to discuss with your geopolitical hat on in a minute. that's a fascinating breakdown and a really interesting view to the world. Is there different levels of innovation? You talked about kind of frugal innovation and then Silicon Valley, obviously, what I was associated with, know, startups that become unicorns, know, that kind of mega investment.

Edoardo Giglio (09:00.918)
Sure. Sure.

Francis Gorman (09:13.46)
Europe, very flat, as you said. And in Israel, like a lot of the companies in Israel, ex-Mosad, ex-military, so that does line up and you get that, I suppose, that out of the box curiosity and I don't know, it's almost like it's in their DNA that they can think of scenarios that you wouldn't necessarily have as a civilian coming through to build a defense company or build a technology company.

Edoardo Giglio (09:40.665)
Sure, no, so absolutely. So there's different types of innovation strategies and again and perhaps linking back to your first question, another

key issue is that we tend to use the wrong taxonomy or we use different taxonomies probably is the most correct way of putting in. We tend to use research and development as synonymous with innovation, which is an issue in itself. And it's an issue itself because it all depends on what framework you utilize to understand innovation and decide which innovation strategy to undertake. So the one I like to use and that's simply because

It provides a 40,000 foot view of innovation strategy buckets, is derived from the Harvard Business School Innovation Framework, which has four key innovation strategies, basic research, and then within basic research, you have different tools. So you've got your academic papers, for instance, can be basic research, you have sustaining innovation.

Sustaining innovation is nothing to do with environmental, but it's to do with the type of innovation that doesn't create anything new, but improves incrementally year on year on an existing product. You have disruptive innovation. So that typically has a one to two year cycle. You have disruptive innovation, which again, takes existing products, but either...

creates new capabilities for existing products or they do a quantum leap to use another term that's high on today's agenda to take that product to the next generation. That typically has a three to five year horizon. And then you have your moonshot innovation, which is I think what you probably and most people would tend to

Edoardo Giglio (11:42.862)
see Silicon Valley as. Moonshot innovation is where you've got your unicorns. you have your, sometimes your horizon is up to 15 years before you see a positive outcome. And so these are the four main ones. And within each of these, you have tools. So for instance, on sustaining and disruptive research and development is a tool that resides within those strategy buckets and then connected to that IE

tend to like to use frugal innovation, is essentially a bolt on, but it essentially highlights all those dual use technologies or COTS, commercial off the shelf technologies. And that's what, for instance, Iran has been by necessity very good at doing. That's why they can produce cheap, sometimes not as effective assets and hardware as

Other countries can, but nonetheless, they have effectiveness. And that's also how they were able to, for instance, create those infamous centrifuges which Stuxnet took out. They were able to basically use parts that were not meant for centrifuging fissile material.

and import it in the country and they were able to essentially reverse engineering and use it for a purpose that was otherwise what it was created for in the beginning. And interestingly, Israel started as frugal because today we see Israel as highly developed from a cyber perspective, as you quite rightly mentioned, digital perspective. I think many will remember the

Pegasus spyware for instance, they're particularly apt at those types of digital assets. But we forget then the whole history to the run-up of where they are today, including the Be'sheva Technology Park, which is where a lot of these Israeli startups

Edoardo Giglio (14:04.315)
are given life and are able to flourish. It all started in a very different set of circumstances where they didn't have the powerful lobby they now have, for instance, in the United States. They didn't have the funding that they have today. And so they would go around the world, would send representatives of Mossad and other agencies to go and either

try and lobby for funds to help them defend themselves or acquire the defense material or look at hardware and assets which they could repurpose and use and in fact many people don't well forget that the drone program was actually originated by the Israelis they went over to the States didn't have any money they didn't have money to purchase

jets to conduct surveillance along the borders. They're surrounded on all sides as we all know. They couldn't even afford purchasing third-hand mirages from France. And even if they did, they'd had issues with their fuel and keeping the surveillance planes up. they sent representatives over to United States. They went into a toy shop. They saw what was one of the first radio-controlled planes and they

purchased it and thought, well, that could be a cheap way to conduct surveillance. And they evolved that program up until the mid 70s and then the CIA picked it up and with all the funding that the CIA was able to convey towards it, it became the drone program that we see today. But it's quite interesting. So they went from a frugal innovation strategy now to

It meant some many would say moonshot innovation on cyber and digital. In Europe, if we look back at the now famous Draghi report of I think over two years ago now, the 400 page report is quite interesting that the whole of the report is mainly descriptive. One of the few elements which was prescriptive was Draghi's suggestion to create a DARPA.

Edoardo Giglio (16:26.547)
in Europe. Now, I personally, just my personal opinion, I don't think creating another institution on top of institutions and institutions that we have in Europe is the way to go. However, what was interesting is the reason behind it. And one of the reasons behind it is then we are still acting in Europe as if we all had our own personal interests. And if we look at any innovation index, global innovation index, the European Union has an innovation index.

we see that Europe has each country's got a specialty in innovation. We don't pull it together. On top of that, we have complexity of bureaucracy. So we've got different programs, got the Horizon program. We've got many programs that even people that work with it day to day struggle to list all of them. On top of that, we have so-called innovation valleys, over 152 innovation valleys. And again,

difficult to clearly understand what they actually do. So high level of complexity and sorry, and the other thing is that they use different taxonomies. Each country is a different taxonomy. If you go to European Union Commission, working group or probably any of the think tanks that are in Brussels right now, you'll hear different people using different terminology. Everyone uses research and development, although quite how

that fits in with the overall structure we don't know. And we don't actually have a focus on what we want to do. Do we want to innovate on the defense side? Do you want to concentrate on health? Do we want to, we don't know that aside from creating paperwork, that's what we have seen. And European Union itself has been priding itself on being a regulatory innovation powerhouse, which

has a, I don't want to criticize it too much. It has its merits, especially the AI act has some innovative aspects, but your ecosystem is not going to innovate. You're not going to have a successful innovation ecosystem just by producing paperwork and not having a clear strategy. So those are some key aspects and themes that those innovation strategy buckets and the framework are very useful in

Edoardo Giglio (18:51.931)
assisting people to navigate. And it's just a filter. It's another filter. It's not the only filter. It's not the most important filter, but I argue that it is a very important filter with which to see the geopolitical landscape, especially in light of the rise of the technology companies. have seen the rise of tech ambassadors that have risen to

the same level and standing as your ambassadors to NATO and other countries, which is quite interesting. We've seen the United States grandfathering the Colonel rank to captains of industry and technology companies. That's incredible. We're living on a geopolitical shift.

Arguably the nation-state is not the only kid in the block now. You have technology companies with the data centers, with AI now, with other technologies that are as powerful as nation-states, arguably. So the famous Treaty of Westphalia 1648, where the nation-state had the overarching power to conduct geopolitical leverage and geopolitical maneuvers, arguably has changed.

Francis Gorman (20:22.456)
When you break it down into all different facets that are involved, it takes a little bit of time to unpack it. But as you unpack it, it forms this view of the world that makes a lot of sense when you get that lineage to all of the different components that you've touched on. One thing, as you were speaking, you talked about Iran and their need to innovate frugally and then how Israel came from frugality straight through to being prosperous.

We seem to be living in a world where the geopolitical state is shifting on a dice. We saw Trump and Stammer fall out and maybe make it back up again within the last three days. We've seen Ukraine, who have kind of been pushed to the back of the picture now because of the conflict with Israel and the United States and Iran and the Middle East getting dragged into the piece. What impact is that going have on innovation? feel like China is sitting back almost looking at this going, this is brilliant. Everyone is so distracted now we can really

take, as you said, a quantum leap forward, because in my view, China are slowly becoming one of the key superpowers at a geopolitical level in terms of their ability to innovate, which is making them, from military perspective, extremely strong. They don't seem to be getting involved in direct conflicts, but they're slowly moving items left and right of the side to support Russia or maybe Iran in the background or whatever.

Edoardo Giglio (21:31.248)
I'm to ahead and

Francis Gorman (21:53.579)
And there's a lot of kind of war of words between the United States and China in terms of their AI race and their innovation and whether it's all regulatory constraints or if we should just have a wild west. And then the final thing you said, which really struck me is some of these technology companies are almost now as powerful, if not more powerful than the nation state actors. And I think we're seeing that in a handful of the AI companies at the moment, which is really shifting the balance of power. And what's that going to mean for the world?

Like, I know I said you make storytelling of geopolitics simple and I break it down, but not to put you on the spot, Edoardo, but what's going on? Simple terms.

Edoardo Giglio (22:36.126)
Yeah, well, so if we touch, we touch on China first. China absolutely is unbridled with regards to AI. So if you look at AI in Europe, and that's one of the

tensions between US and Europe is the AI Act and your GDPR that still sits in the backbone. Many have forgotten it, but it still sits as the backbone on all these other bits of legislation. We're essentially in many ways, and despite the AI Act, has different levels of risk assessment for the use of data. So if you use it for defense purposes, you have a different tier.

of requirements which may be less stringent, but it's quite amorphous. China doesn't have any of that and again, don't want to get political, but that's probably one of the few things I would say that the Trump administration has got right from the perspective of China is not pulling any punches and is not playing by rules. And on the AI front, means that they can, because of how they're structured,

as a country, they can freely train their AI systems on any data they see fit, whether they've stolen it or whether they have taken it from their billions of citizens. That provides an incredible amount of leverage and strategic advantage. And the reality is we don't actually know what their capability is.

truly is on that front either. One thing is certain, all of these technologies can only survive with the continued growth of data centers. And to have data centers, you need your semiconductors. And semiconductors is where it starts getting crunchy, for the lack of a better word, from a geopolitical perspective, because the one country which is the

Edoardo Giglio (24:48.703)
grandfather and really the bottleneck for all semiconductors and we saw it even during COVID when the supply chains were disrupted is Taiwan. And I mentioned Taiwan specifically in the book as well as an innovator by chance. I say by chance because it's the founder, which is quite ironic that so the founder was an ex-employee from Texas Instruments in the US, left the US and founded

a semiconductor producing company in Taiwan. The government in Taiwan were

Edoardo Giglio (25:29.01)
A mixture of being lucky and also a great foresight. Backed the TSCM, is the name of the company, semiconductor company, and allowed it really to become where we are today. Of course, with the proliferation of computers, desktops, iPads, mobile phones, cars, the average car has got 20 chips in it now. And now with the AI data centers and the cloud.

cloud storage and semiconductors are absolutely key. the reason I mention them is one, because they innovated and again, once they've identified a single innovation strategy, they went for it and still are going for it. And even though countries, including US have tried to replicate that

Back in US soil, they spend hundreds of millions on Intel, for instance, that hasn't gone particularly well. They maintain the monopoly over 90 % of the production of semiconductors. China, whom has always had claim or always laid claim historically on Taiwan, of course now wants it even more so for, okay, they'll...

typically outlining as a historical necessity, just like Putin does with Ukraine. But the reality is that the big bonus for them is getting their hands on the central production of semiconductors and the US-Iran war with all of the US, many US assets and many ally assets now focused on Iran and the straight-up formers.

present a fantastic opportunity for China, whom has always been preparing, always conducting exercises in the straits of Taiwan to, you know, to have to have a go at it. And once they have the monopoly on that, it's it that really shifts the balance of power from West, West back to to East. So pretty, pretty tense times. And the only other

Edoardo Giglio (27:55.383)
producer of semiconductors and in fact is is ASML based in Netherlands based in Europe and it's a one-of-a-kind they produce to have this machine that produces lithography for the semiconductor chips. That's probably one of the only other critical infrastructures on semiconductors that we have but if you put it on a scale TSCM Taiwan and

asml in, in the Netherlands. it's, it's like, Mike Tyson and, and, you myself going on, on the ring. I mean, it's not even a contest really. So that that's pretty worrying. And those semiconductors, we need them for, for everything. You need them for every type of hardware. All of the military strategy nowadays is based on multi-domain operations. So that means interconnectivity between your,

submarine fleet, your surface fleet, your front lines, your support units, your air force, and that all requires semiconductors and that also requires a cloud infrastructure which again requires semiconductors to do. So it's quite a pickle.

that they were in geopolitically on that and it will be very interesting to see how it plays out in the next few weeks for sure.

Francis Gorman (29:25.228)
does all feel a little bit unstable. And now that you've kind of brought my attention, I was very aware of China circling Taiwan. I don't think I picked up the nuance of the semiconductor aspect to it. So that's definitely another thread there to pull on and see what comes out. Where is this all going to end up? We normally see kinetic warfare as a starter, and we've seen America deploy cyber attacks in Venezuela, for instance, and it looks like they used

even though I think they made a fallout with the president in terms of targeting in the Iranian attack with the Israelis. Where are we going to end up in terms of the hybrid warfare aspect as the kinetic war starts to supersede or will it just be a dual attack going forward across these countries? Because we were seeing Russia's using disinformation and undersea cables as potentially targets in the landing stations. China, potentially espionage and

North Korea's plant and individuals and organizations across the West. What does this whole thing look like when you start to dissect it at that kind of micro level?

Edoardo Giglio (30:34.468)
I think from one side we need to remember that both China and Russia have actually codified hybrid warfare in the national strategies. So that means that typically during the Cold War, the target list would be composed primarily of, or almost exclusively of military targets or critical national infrastructure.

By codifying hybrid warfare within their national strategies, means that they are now going to target, and we've already seen as they've already started doing this, they're now targeting those targets which either traditionally may have been hint as collateral or whenever part of the targeting package to begin with. And we're talking about banks, we're talking about interconnected services, so the payment systems.

all of the good stuff that we're talking about in European Union about the NIST 2, for instance, that seeks to identify the criticality of interconnectivity of services not seeing critical infrastructure as a stove piped verticals. This information, both Russia and China have already demonstrated the preponderant use of that means of

of attack and warfare and then not forgetting that one of Russia's preferred methods is hosing which is basically sending out so much dubious information that you have cognitive overload and either the population becomes disenchanted or they

Simply don't want to take a decision or simply in the miasma of information counter information They no longer understand what's real what's not real what's true and what's not true who's speaking the truth and who's not I mean that sounds actually very familiar to where we are already today so that they will for sure continue to do I I don't think then overt kinetic warfare and between the great powers

Edoardo Giglio (33:01.084)
is likely to happen simply because it's in no one's interest to do so and there's too much at stake but proxy wars for sure I mean and also the utilisation of strategies such as Russia's ghost fleet where they're able to supersede the energy embargoes and by using civilian fleets and registering and deregistering ships and

I think China's play is that they already saw the impact of the supply chain from COVID. So they already know that we have a soft spot simply because of just how the economy has developed in the last 40 or 50 years with them controlling primarily the manufacturing aspect. We've outsourced manufacturing, offshored. Now we're trying to onshore it, but

Again, I don't think that that type of strategy that Trump has been very vocal and wanting to establish is going to work simply because the pricing doesn't allow it. I think that that's where they're going to look at concentrating is probably Taiwan, if there's going to be a kinetic attack, perhaps, but it depends how Iran is going to go. For sure, Iran...

regardless of whether the attacks, overt attacks finish now or they prolong for another few weeks. For sure, that's gonna create instability in the form of terrorism abroad. We saw Oslo just the other day, the embassy attack. We don't know the exact details of it, that's a pretty high correlation between what's happening and the attack on the embassy. Alerts worldwide on

on different critical infrastructure that Tehran we know has been employing sleeper cells for many years. Again, precisely because in the absence of technological innovation and having to make do with frugal innovation, that's what they have to resort to. That's probably gonna create continual instability without a...

Edoardo Giglio (35:29.556)
quick resolution to it. To be honest, almost like we've had a replay of the recent global war on terrorism. That was a 20 years log then. Did we resolve? Many would say not. So that's probably what I foresee.

Francis Gorman (35:50.793)
that again, you're talking that the war could go on for weeks. I don't think the oil prices are going to be very forgiving if that happens. I think we've had a 20 % jump in the last week alone, which is going to have its own impacts on the ability to innovate if power and everything gets indirectly hit. There's one thing that's common to me, Edoardo, and it's about the innovation of signals. Is there any?

kind of barometer to see that a country is weakening the space rather than strengthening. Is there patterns that start to emerge over time as economies either strengthen or weaken? I look at the UK specifically at the moment and it feels to me like where they once were militarily and as an economy is no longer the case. Like they've slipped and you know, I've often read of the wealth has started to leave because of the tax rules have come in, et cetera, and that's created a brain drain at certain levels.

If you were to look across the world and say, here were the superpowers 20 years ago, and here is the shift in dynamics to today's world, is there certain flags or indicators that we can lean into to kind of go, well, this is what's happened here, and this is why it's happened? Or is that just an assumption I'm making?

Edoardo Giglio (37:05.37)
No, well, one one overarching indicator is brain drain. but many times brain drain is self created. And if we look at, for instance, the US, their famous H1 genius visa, many forget that one of the key reasons why the US was able to progress so quickly and become a superpower post Second World War

was Operation Paperclip. Operation Paperclip was nothing more, nothing less than a genius acquisition of technology acquisition strategy from the Germans that were technologically advanced to be able to ignite the engine. And interestingly, there was a letter written by a individual called Vannevar Bush.

no relation to the Bush family, but he was a chief science officer between him and Roosevelt in which he stated that he was particularly worried about the state of German technology. This is obviously before the end of the war. So the series of letters backwards and forwards were arguing on how Germany was...

had been able to become so innovative etc and obviously they had in turn sought out geniuses from from all over to to be able to do that and then at the end of the war they were concerned about Russia or the Soviet Union rather being able to take the prevalence on the innovation

ecosystem because they too had enacted a similar operation paperclip. And the suggestion of Vannevar Bush to the president was for Europe to become highly regulated and for the US to maintain reins on the regulation, especially regards to technology and the scientific progress in order to avoid Soviets

Edoardo Giglio (39:27.16)
encroaching and stealing them or if they conducted a push into one of the European Eastern Bloc countries to hold that scientific innovation, which is quite ironic because nowadays they're fractious at the EU trying to regulate technology. So it's a long-winded way to say.

Brain drain is a reason and we've seen that in many places. mean, Europe is another one, brain drain. Again, many countries in Europe were highly innovative. UK was highly innovative. There's been, as you mentioned, a millionaire or billionaire drain. Now, would we class as a brain drain? That's debatable, but one thing is for sure.

they do take with them these billionaires and millionaires. One of the ingredients of the ecosystem, which is the companies that are able to scale up the whole monetary environment that they create, the personnel they take with them when they decide to move the workforce elsewhere. It's not...

the most important, it's one of them. And when a country starts to go downhill from an innovation perspective, talent, brain drain, measures to curtail the freedom of movement, like we're seeing today and quite warringly across Europe, is one of the key aspects. and from a personal perspective,

was born in Italy, but I was an immigrant in the UK. It's quite worrying. mean, the kind of culture and the kind of energy that you felt in the UK and in London back when I first got there 27 years or 28 years ago now, it's different. It's different. And that also has a massive impact. That's definitely a key indicator.

Edoardo Giglio (41:50.099)
And then the other key indicator is the number of tech companies or unicorn companies that the country creates and you know, if we look short Europe UK included when I mentioned Europe by I Include the UK just from a geographical perspective Yes, it's improving but if you look at it on a

scale of comparison to the US or even China, we're simply way down the rankings. Russia, for instance, is an example of a clear example of a superpower. They're still trying to maintain superpower. They've got other variables that allow them to be where they are at the moment, such as an incredible production capability. They can restock in six months what it takes Europe

years, five years, five years plus to do. But they're suffering. mean, you know, from an innovation perspective, they had their own DARPA equivalent that never really created much. And they're kind of like surviving on more of a sustaining innovation and frugal innovation as well without an upward trajectory. And I'll leave you with just this one.

bit of trivia. During the space race, and this is also why it's not... you shouldn't look at innovation strategy or the type of innovation strategy as an indicator of where a country is going necessarily because context is everything. And this is a perfect example. During the space race, there was an issue of writing implements in zero gravity. So DARPA goes off and they spend a million and they create the anti-gravity pendant.

many of us probably bought in the gadget shops over the years. The Soviets went off and looked at the problem. They got together the chief scientists in a conference and allegedly the US scientists were very happy themselves and showed us anti-gravity pen. It cost a million to conduct the research and development, but it can write in zero gravity, et cetera, et cetera. It's fantastic.

Edoardo Giglio (44:14.705)
What have you Soviets done thinking that they would never have been able to spend a million on a research development for a pen? And they simply took out a pencil. So there you go, pencil. That's free innovation. It works in zero gravity, costs nothing. And that million that you spent in R &D, we're putting in on sending Sputnik up there, et cetera.

That always gives me food for thought.

Francis Gorman (44:46.06)
I love that example. Something cheerful to end all of the war talk on. Eagard, just before we finish up, I think I need to ask you what emerging trends worry you most about the future of global competition? It seems like something after everything you've said would be a good question to end on.

Edoardo Giglio (45:07.566)
Sure. the my personal main worry is the access to space and the communications. We've seen Elon Musk as the key example of what happens when that type of critical infrastructure and power is vested in a single individual. Let's not forget that he literally switched off the satellites for Ukrainians, which led to

the Russians being able to accrue a wide variety of territory over three days. And that type of infrastructure, which was typically in the hands of nation states, now in the hands of tech moguls or tech bros in the parlance, is worrying because it becomes, well,

unelected, number one, unregulated. mean, the power to decide on something like that, I would think would need to be regulated for the benefit of all. that kind of, that worries me. In addition to a whole host of technologies from AI being the main one, I think just the other day, they were able to create a

get AI despite all the fail-safes to create a bio warfare ingredient list basically. That happened in the past. They thought they sorted it out, but that's crept up again. And if I just apply that to what China is able to do without any limitations, that is very, very worrisome. And then of course you've got the emerging technologies.

quantum. I know there's a lot of quantum hype. Everything is quantum nowadays, but there are some very interesting and viable quantum assets and products now. One of which being quantum encryption. have quantum sensing coming up. Whoever is first past the post of getting those type of technologies to a

Edoardo Giglio (47:33.984)
dimension because now they're typically pretty big considering they have to be minus 230 degrees Celsius or as close as possible to absolute zero. But once they crack that nut and they're able to deploy it, whoever is first past the post will have an exponential advantage because historically you could have certainly technological advancement and you could play catch up.

the mixture, the coming together of digital innovation, emerging technologies and AI that can accelerate all the aforementioned means then if you start on that path, you get ahead so far then to try and make up for that gap becomes almost geometrically, geometrically, I hate saying impossible, but improbable.

And that's worrying because if it's not us, it's China and Russia, and that would make the world look a very, very different place from where we are today.

Francis Gorman (48:40.81)
And on that cheery note, I think that brings us to the end of our conversation. Edoardo, it was an absolute pleasure having you on. There was an awful lot of information there. And I think you've fantastically entangled and untangled all of the nuances of the geopolitical world, the power of innovation, and all of the different structures and the different levels of innovation from through gravity straight through to...

Edoardo Giglio (48:43.038)
Ha

Francis Gorman (49:07.281)
the powerhouses of Silicon Valley. that's been really informative and I thoroughly enjoyed speaking with you today. Thank you for coming on the show.

Edoardo Giglio (49:15.711)
Thank you for having me Francis, appreciate it.

Francis Gorman (49:18.477)
Thank you.