Article by Anwar Aridi, Henning Kroll: “Today, emerging economies must contend with a shifting landscape of global technology governance. As fields such as artificial intelligence, quantum computing, and synthetic biology become subject to new national security concerns, access to knowledge and participation in the shaping of international trade, finance, and standards regulations are increasingly contested. Moreover, established conventions of international economic and technological collaboration are being challenged, and old partnerships may no longer be relied upon. Yet certain areas—notably health and climate—remain less fraught within the context of geopolitics, offering entry points for emerging economies even during times of heightened global tension. A recent example can be found in the successes of global effort to produce vaccines during the COVID-19 pandemic, even in a politically contested environment.
In this new geopolitical landscape, technology dependence still signals vulnerability. Emerging economies under political pressure to reduce dependence may encourage domestic production of goods to replace more advanced, imported ones: a policy dubbed import substitution. But, if pursued prematurely, before domestic producers are ready to compete, import substitution can backfire, allowing a small number of established firms to capture state resources and hurting domestic consumers.
These risks are intimately related to political forces that shape how industrial policy priorities are chosen and the state’s capacity for implementing them. For these reasons, industrial policy must be embedded in transparent, accountable, and performance-based governance mechanisms. Emerging economies, much like developed ones, must avoid the pitfalls of politically driven resource allocation when the government becomes involved in steering the country’s economic future.
Even as today’s geopolitical complexities put added stress on emerging economies, a targeted strategy for industrial policy—as well as international collaboration—continues to be essential in enabling national economies’ transition toward more advanced stages of technological development. Countries cannot attempt to “go it alone” before attaining sufficient capacity. Yet, when collaboration becomes fraught with uncertainty, policies should carefully address how to invest resources to catch up with leading economies. Only by tailoring strategies to each stage of development, investing in knowledge institutions, and navigating the geopolitics of technological governance with agility can emerging economies secure a path toward technological sovereignty…(More)”.
