So, how do we prepare our children and future generations for such times? How do we equip our countries to compete, not only today, but in the coming decades as well? The answer lies in honing our children's creativity, and providing them with the analytical and communication skills needed to channel it toward productive ends. The second key to transforming governments into engines of innovation is to shift the balance of investment toward intangibles, as in the private sector. Whereas more than 80% of the value of the S&P 500 consisted of tangible assets 40 years ago, today that ratio is reversed: more than 80% of the largest companies' value is intangible-the knowledge and skills of their employees and the intellectual property embedded in their products. Governments, too, should think strategically about shifting their spending away from tangible infrastructure like roads and buildings, and toward intangibles like education and research and development.