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US vs. China: Whose century is it, anyway?

In Hong Kong earlier this fall, I was asked to participate in a debate titled “Whose Century Is It Anyway?” The discussion keyed off of Fortune founder Henry Luce’s declaration of “the American Century” in 1941, and predicted an Asian Century by 2041.

At Fortune we certainly understand the economic forces fueling such predictions. Our Global 500, which ranks companies by revenue, has seen the number of Chinese companies on the list swell to 98 from just 10 at the turn of the century, while U.S. companies have fallen to 128 from 179. Even a modest continuation of that trend would catapult Asia to dominance in the next decade.

But size is not the only metric that matters. Tiny England ruled the 19th century because its ingenuity created the steam engine, the power loom, and the first Industrial Revolution. The U.S. took the lead in the 20th, building giant companies—the original Fortune 500—that mastered mass production and managerial capitalism.

We are now in the early stages of a third Industrial Revolution, with an entirely different economic logic that is causing fundamental changes in the structure of business. The marketplace friction that Nobel economist Ronald Coase cited as justification for giant companies in the last century is melting away. In its place a new model is emerging in which everyone and everything are connected, everywhere and all the time, in a vast web of interactive data that is creating an economic dynamic characterized by zero marginal costs, massive returns to scale, and platform economics. New corporate behemoths like Google, Facebook, and Uber are reaching Fortune 500 size at unprecedented speed. The century will belong to those who master this new model. Economic dynamism will matter more than sheer scale.

This new Industrial Revolution will be the focus of the 13th Fortune Global Forum, being held in San Francisco in November. The invitation-only CEO gathering will include leaders of many of the largest companies in the world and focus on the challenge of “Winning in the Disruptive Century.”

Alan Murray Alan Murray, editor of Fortune Magazine.Photograph by Wesley Mann for Fortune

Innovation, of course, is critical to this economic transition. And when it comes to innovation, the San Francisco area provides fertile ground. But innovation ultimately knows no boundaries. Many Asian-born engineers and entrepreneurs play a large role in the success of Silicon Valley. And Asian companies like Samsung, Xiaomi, and Huawei are making innovative strides every day.

Beyond innovation, the question for the 21st century is, Who will allow the social and economic disruption that innovation brings? We are at a Schumpeterian moment, when creative destruction threatens to clear away the business world we are familiar with to make way for one we aren’t. The 21st century will belong to those who embrace that disruption rather than fight it.

In the U.S., business leaders have learned the language of change. When IBM’s Ginni Rometty tells her managers to “always disrupt yourself” or Dow Chemical’s Andrew Liveris talks of four reinventions in 10 years, they are signaling that they recognize the need for rapid and profound change. America’s business leaders hear the footsteps of history rushing behind them. They know they must disrupt themselves, or be disrupted.

The U.S. political system seems less ready for the revolution. While celebrating the personal freedom that allows innovation and disruption to flourish, the political tide has turned against policies like free trade and more expansive immigration that could help fuel the transition. And rising concern about inequality has caused an antibusiness backlash that could give birth to new policies that become significant obstacles to change.

But that still leaves the U.S. ahead of China, where disruption has long been the declared enemy of the state. The top 12 companies on the Fortune Global 500 list are state-owned enterprises, with leadership chosen by the government and favored access to capital. There is no sign they hear footsteps at their heels. Even if innovation flourishes in China, creative destruction seems unlikely under the current regime. There may be private companies that take their home-grown strengths and use them to succeed elsewhere in the world. But as long as the home market is protected, disruption will surely lag.

EDD_graphicClick image to enlarge.

Debating whether the 21st century belongs to Asia or America, however, ultimately misses a key point. The successful corporations of the future will be those that not only embrace the profound changes of today’s technologies but also build their businesses on a truly global scale. The first and second In-dustrial Revolutions showered riches on a relatively small group of people in the U.S., Europe, and Japan. The third Industrial Revolution will cover the globe, creating a new, connected middle class that will include the bulk of humanity.

All these themes will be explored when we meet in San Francisco the first week of November. We will look at Google’s unique approach to management in a rare one-on-one interview with Alphabet (it still feels funny to write that) CEO Larry Page. We will hear from top leaders in finance, including J.P. Morgan CEO Jamie Dimon and Wells Fargo CEO John Stumpf; in technology, including IBM CEO Ginni Rometty, Lenovo CEO Yuanqing Yang, Cisco chairman John Chambers, Salesforce CEO Marc Benioff, and BT CEO Gavin Patterson; in health care, including United Therapeutics CEO Martine Rothblatt, Aetna CEO Mark Bertolini, and Kaiser Permanente CEO Bernard Tyson; in food, including Campbell Soup CEO Denise Morrison and Monsanto CEO Hugh Grant; in media, including Comcast CEO Brian Roberts, Yahoo CEO Marissa Mayer, and Facebook COO Sheryl Sandberg; and in heavy industry, including Siemens CEO Joe Kaeser and Lockheed CEO Marillyn Hewson.

Fortune Global Forum 2013 Fortune’s Geoff Colvin (standing) puts the tough questions to (from left) CEOs Yuanqing Yang of Lenovo Group, Coca-Cola’s Muhtar Kent, and Jamie Dimon of J.P. Morgan Chase at the most recent Fortune Global Forum, in Chengdu, China.Stefen Chow—Fortune Global Forum

Convening this year’s forum in Silicon Valley is no accident. We will mix the leaders of established companies with leading entrepreneurs, thinkers, and venture capitalists, including Marc Andreessen, Warby Parker co-founder David Gilboa, Uber co-founder Garrett Camp, Airbnb founder Brian Chesky, and Facebook’s Sandberg. (Lest anyone think that Northern California has all the answers, we explore one dark side of high-tech culture.) While attendance at the Fortune Global Forum is by invitation, the insights and news shared there will be available to anyone: The proceedings will be webcast and covered heavily on Fortune.com.

The pace and geography of the changes in business will continue to be a matter for debate and speculation. But the inevitability of that change has been settled by history. The new technologies of business have their own irresistible logic. The 21st-century corporation is coming. We at Fortune are doing our best to help light the way.

A version of this article appears in the November 1, 2015 issue of Fortune with the headline “The 21st-century club.”