Network states
A concept I’ve been thinking a lot about lately is that countries, just like companies, offer products to their users. The product is a place where you can build your life, your family, and your career. It has a set of features: jobs, housing, taxes, weather, cost of living, safety, and so on.
For most of modern history, this market was a monopoly. If you didn’t like the product your country was offering, there wasn’t much you could do. Moving was hard. Your job, your community, your identity were all tied to geography.
That has changed with the rise of the Internet and the knowledge economy. Remote work untethered millions of people from a fixed location. Families can pack up their things and move if they don’t like how their government is operating. One only needs to look at the recent exodus of people from the UK after the current government introduced the sharpest tax hike in decades.
Countries now operate in a global market for talent and capital. The UAE and Singapore evolved out of a desert and swampy jungle respectively to global metropolises in just a few decades by understanding this. They’ve identified their target customers (high-skill talent, entrepreneurs, capital allocators) and built a product for them: low taxes, streamlined regulation, modern infrastructure, safety.
Of course what needs to be said is that these places are governed by single leaders or parties that don’t face political turnover, which allows them to act on far longer time horizons.
Western democracies can’t replicate those political systems, but they can learn from them. Singapore, for instance, pays government officials very well in order attract top-tier talent. If you want to hire the best, you need to be prepared to pay for them, just as any company would.
The purest embodiment of this idea - countries as companies - are network states. Coined by Balaji Srinivasan, the term describes new kinds of communities and jurisdictions founded not around geography, but around shared values and legal frameworks. They are companies whose product is, quite literally, a new state.
Projects like The Network School, Prospera, Zuzalu, and Praxis are all early versions of this. Xyz.city is a good place to track their progress. Most are still experimental: pop-ups where like-minded people live and work together temporarily. Prospera, however, is already operating as a functioning special economic zone in Honduras. It has physical and legal infrastructure, residents, and a growing business ecosystem.
I expect the momentum around network states to accelerate over the coming years. Just as startups build new products to challenge incumbents, network states aim to compete with established cities and nations, places like London, Singapore, and the UAE, for residents and capital. Competition ultimately makes products better. Just as consumers benefit when new brands push innovation in cars or phones, citizens benefit when new models of governance emerge.
We’re entering an era where countries are no longer just places we inherit. They’re products we choose.