As nations turn to the cultivation of human capital, what will a world of virtual states be like? Production for one company or country can mow take place in many parts of the world. In the process of downsizing, corporations and nation-states will have to get used to reliance on others. Virtual corporations need other corporations' production facilities. Virtual nations need other states' production capabilities. As a result, economic relations between states will come to resemble nerves connecting heads in one place to bodies somewhere else. Naturally, producer nations will be working quickly to become the brains behind emerging industries elsewhere. But in time, few nations will have within their borders all the components of a technically advanced economic existence.