The 20^th century began with capitalism and globalization appearing to flourish. However, two World Wars, nationalistic policies, and the rise of communism caused capitalism to derail worldwide during the first half of the century. While the United States pursued its capitalistic agenda, it also tended to be somewhat isolationist in its foreign policy during this same period.
After World War II, the Cold War and the threat of nuclear war tended to dominate global perspectives. Accompanying the Cold War was the struggle between communism and capitalism. With the fall of the Soviet Union, capitalism once again became the dominant economic philosophy. As the 20^th century ended, many nations throughout the world appeared to be adopting a capitalistic agenda.
With capitalism becoming the dominant economic philosophy, it can be expected that the world will become much more competitive. No longer will a nation be able to dominate from an economic perspective in the manner by which the United States did in the 20^th century.  In addition to Japan and the Economic Union, China has adopted an entrepreneurial spirit endorsing private enterprise while still having one party communist rule. China will be a major player in the 21^st century.
With the changing global landscape, the drivers of regional and national competitiveness can also be expected to change. In this paper, traditional studies concerning the competitive advantage of nations will be examined. Much of this work has been dedicated to the study of specific industries and these industry studies will be examined. The drivers that dominated the 20th century will also be discussed. The impact of 9/11 and the emergence of China and India will also be explored.
New drivers of national competitiveness will be proposed and discussed. These new drivers will include (1) traditional macroeconomic factors, (2) the role of government, (3) transportation and communication technologies, (4) knowledge and talent, (5) innovation and diversity, (6) education, and (7) cultural factors. A discussion of each of these drivers will be provided.

It should also be added that while capitalism has seemingly triumphed, this does not mean that government will become less important. As will be discussed, the role of government is becoming critical in providing an infrastructure that is effective, efficient, and more transparent. Technology is an enabler of creating such an environment. In addition, government’s role in providing a legal structure, reducing corruption, and promoting sound corporate governance is very important.