02/27/2012 03:50 pm ET Updated Apr 28, 2012

The Innovation Generation

After just six weeks in this fascinating job, I can hardly believe how much I am learning. South Carolina and Florida in my first 10 days to get a flavour of the Republican presidential candidates race, some time in Washington finding my feet and rediscovering old friends, then three days in New York followed by, this last weekend, almost as long in Texas.

As Texans like to remind us, they fought for their independence from Mexico and then enjoyed almost a decade as a sovereign state before joining the United States. Bigger than France, where I was ambassador until less than two months ago, and the state which last year created more new jobs than the rest of the United States combined, it is not a place to be messed with. Visiting the Alamo for the first time was as good a way as any of taking a crash course in Texan identity and culture. The frontier spirit seemed more present than ever.

In the company of George Osborne, Britain's Chancellor of the Exchequer, who was visiting the Lone Star state on his way to a G20 meeting in Mexico, I went to the LBJ Memorial Library, in the company of members of the late president's family. A treat which brought back fond memories of Sunday lunch with Lady Bird at the Johnson family ranch 15 years earlier, and was another reminder of both the humanity of this huge political figure and the immense difficulty he faced in stepping into the shoes of JFK just minutes after witnessing his assassination in Dallas.

Austin is about so much more than its history. It is of course the state capital but also, I learned, the fastest-growing city in the United States. There must be many reasons why, but I was struck by the impact of the vast University of Texas on business life and the encouragement it has given to thousands of high-tech start-ups. Why else would Facebook have chosen Austin as its second US headquarters after Silicon Valley? And be doubling its staff after just 2 years?

As in New York a week earlier when visiting the revolutionary ecosystem -- as the dynamic start-up business incubator General Assembly calls itself -- I was introduced to a new, exhilarating world by a group of brilliant, passionate young entrepreneurs -- many fresh out of University. Learning from practitioners and each other rather than from business school professors, they are busy harnessing the potential of digital technology to improve the way the world does business and to rediscover the growth and enterprise which the "old" economies of Europe and North America so badly need.

Just when governments are - admirably - looking to invest in high-speed broadband so that no-one is left behind by the digital revolution, here are these twenty-something CEOs saying it might be better to skip fibre optics altogether and go straight to mobile. At General Assembly, one young inventor told me how his $300 a month membership and rented desk, and the opportunity to bounce ideas off others with similar innovative ideas, had allowed him to create a box of tricks which will modernize and accelerate computer systems so effectively that hard-up governments and hospitals will no longer have to throw out their obsolete equipment every 4 years. I asked whether the invention would make money. He seemed surprised by the question and simply replied: 'it's going to change the world.'

As a Brit, I was of course very pleased to hear the same entrepreneurs say that they were excited by the way Tech City in London, and a variety of other government support measures, was making the UK the obvious place in Europe to set up similar businesses. As they reminded me, it's halfway to the markets of Asia. Many of the best start-ups are of course snapped up by early-stage investors. But the great thing about this new culture is that bootstrap companies are often so small, and dependent on human rather than financial capital, that they can get going without having to mortgage their birthright to the banks.

Anyone out there wondering whether to study engineering or electronics rather than law or liberal arts should hesitate no longer -- unless it is over whether to take design instead. Technology and design are rapidly becoming the most sought after courses of study amongst dynamic young people who want to do their own thing rather than sign up for a big organization where they won't be their own bosses for a very long time, if ever.

Meanwhile, there is Texas the oil and gas capital of the world making some equally key decisions about the future of the world's energy markets and technologies. With gas in the US now selling for a quarter the price it commanded just a few years ago, thanks largely to shale technology, where are we now going with nuclear, renewables, and wind? Is the latest spike in the world price of crude about growing demand (probably not), or about geo-political uncertainty in the Middle East? Coupled with tight markets? If so, what are the industry and our governments going to do about it? Our best prospect for growth in the coming years must be the unprecedentedly fast urbanisation of countries like China and India. All will need housing, light, heating, food, transport, and wiring. But will they perhaps require different forms of energy, wiring, heating and transport?