CEBRI - Geopolitics and the Economics of Innovation: Different Strategies


Geopolitics and the Economics of Innovation: Different Strategies



Geopolitics and the Economics of Innovation: Different Strategies

by Anna Jaguaribe, Trustee at CEBRI

The globalization of the late 1990’s changed the scenario for technology policy and the business models for innovation companies. The intensification of trade and investment and more particularly the fragmentation of the electric-electronics industry created a new ecosystem for innovation. The development of electronics value chain encouraged the creation of local supply networks and cross sector innovations helped the development of new service industries. Asia in general and China in particular took enormous advantages of the opportunities opened.

Large science and technology epistemic communities were developed linking researchers and entrepreneurs of mainland China with peers in Hong Kong, Taiwan, the Western Pacific Coast of the United States and Europe. R&D labs were created outside of the parent firm headquarters and the scientific exchanges between universities and research institutions at a global level increased enormously.

The 2008 financial crisis puts a halt to this cycle as it stalled one of the main economic drivers of the globalization of the 1990’s: China’s immense capacity to invest and export and the US enormous propensity to consume. From 2008 onwards the west engaged in facing the economic scenario of the costs and losses of hyperglobalization. Facing losses also entailed searching for new instruments of growth and striving towards a global scenario which assisted national policies in this task. Innovation and in particular the innovation economy quickly became the center of attention of policy makers. Technology entered the mainstream consideration of economists. National Plans such as Germany’s industry 4.0 and China’s 2025 are the products of this new understanding. 

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