Join the Centre for Innovation Management Research on Wednesday 22 January, 1 pm – 2pm, online for an hybrid lunchtime seminar on Techno-Nationalism and Geopolitical Risk – Prospects for the US/China relationship. The debate is part of the CIMR Debates and Workshops in Public Policy series.

Chair: Birgitte Andersen, Birkbeck, University of London and Big Innovation Centre Ltd.

Please find below: Synopsis, Bios, and Presentation Briefs

Techno-nationalism is an increasingly dominant approach in governance that links a nation’s technological capabilities and self-sufficiency to its state security, economic prosperity, and social stability.  It describes the way different countries use technology to influence power in the global market. Also known as neo-mercantilism, techno-nationalism contrasts against techno-globalism. In techno-nationalism, national governments may seek to protect their own interests by developing and promoting their own technologies and restricting the use of foreign technologies. Nations do this to maintain their own political, social and economic advantages. States may also view technologies developed by citizens of their country or promoted in their country as uniquely theirs.

Currently, techno-nationalism is mainly linked to the Chinese policies to catch up with the US with respect to technological leadership and the US response in terms of trade wars and regulating Chinese access to US markets and assets. China’s efforts consist of mercantilist strategies and policies to close the technological gap in the short term and investing heavily in the development of its domestic innovation system in the long term. One indicator of the success of these efforts is a recent study by the Australian Strategic Policy Institute, which claims that China leads the way in 57 out of 64 core future technologies, at least in terms of research and development. Twenty years ago, the US held the top spot in the development of 60 of 64 technologies. Today, it’s only seven according to this study.

The Chinese techno-nationalism has resulted in a significant change in US policy towards China from efforts to integrate China in the liberal international trade system to tariffs and sectoral polices as well as specific initiatives towards individual firms such as Huawei, TikTok and Apple. Joe Biden’s administration did not break with the policies of the first Trump administration in this respect and introduced new industrial policies with the same purpose. It is likely that the second Trump administration will further strengthen the techno-nationalist character of US foreign policy, in particular in relation to discretionary tariffs.

The purpose of this event is to take stock on this development and to evaluate the future prospects following the American election.

* Marion Frenz: Dr Marion Frenz is Reader in Management; Subject Group Head: Management, Innovation and Entrepreneurship. She is a Deputy Director: Centre for Innovation Management Research. Marion’s research interested include innovation and training in micro businesses, adoption of generative AI tools, absorptive capacity concept and measurement and the role of quality and safety standards in food systems.

* Birgitte Andersen: Professor Birgitte Andersen is the Founder and CEO of Big Innovation Centre Ltd. (est. 2011), an award-winning think tank and network organisation. She also serves as the Secretariat head for the All-Party Parliamentary Group on Artificial Intelligence (APPG AI) in the UK Parliament. She is a Professor of Economics and Management of Innovation at Birkbeck, University of London, which she joined 2000. She has worked as a consultant for major international organisations, including the OECD and WIPO, and has contributed to expert panels for the European Commission as Rapporteur and for the Arab League. She has also served as an expert defence witness for the UK Crown Court on intellectual property cases. A recognised expert, Birgitte Andersen features in the media, including outlets such as BBC World, Forbes, and national newspapers.

* Bengt Åke Lundvall: Professor Emeritus, at Aalborg University Business School. Professor Lundvall's research is organized around a broad set of issues related to the innovation system (this concept was created by him in 1985[) and the learning economy. During 1992-95 he was Deputy Director at DSTI, OECD. He was involved in the preparation and follow up of the Lisbon Strategy 2000 and onwards. Lundvall has co-ordinated the IKE-group in Aalborg since 1977 and the Danish network DRUID 1996-2001. Since 2002 he coordinates the worldwide research network Globelics. In close collaboration with Christopher Freeman, in 1985 Bengt-Åke Lundvall developed the idea of innovation as an interactive process and in 1988 the concept of National System of Innovation in the second half). In the beginning of the nineties he developed the idea of "the learning economy" in collaboration with Björn Johnson.  According to the research carried by Fagerberg & Verspagen (2007) on innovation studies, Lundvall is number 4 in "The most important sources of scholarly inspiration" (only after Schumpeter, Nelson, and Lundvall's mentor Freeman).

* Xiaming Liu: Professor Xiaming Liu’s main research interests include foreign trade, foreign direct investment and multinational enterprises, and economic growth and development. Before joining Birkbeck in January 2006, Professor Xiaming had held various academic and management positions in Shanghai and Hangzhou (now Zhejiang) Universities in China, and Abertay Dundee, Aston and Surrey Universities in the UK. Prior to becoming an academic, he had years' agricultural and industrial experience in China.

* John Diamondopoulos: John Diamondopoulos is an Assistant Professor (Senior Lecturer) in Finance primarily responsible for teaching on the MSc Finance and on the MAIB/MAM programmes at Regent’s University London. John is currently enrolled in the part-time PhD programme at Birkbeck, University of London. His current research is focused on US China Dyadic Political risk and implications for valuation of technology companies.  Prior research includes the development of a financial crisis theory using a socio-political approach and a study covering central bank transparency. He holds a MPhil in Management, MRes in European Policy & Management, MA in in International Economics and Finance and BA in Economics with minors in Business and Chemistry. In addition to his university teaching experience, John has over 20 years of consulting and international business experience including leading four different entrepreneurial start-up ventures.  As a financial consultant with the Equitable Life Assurance Company, John successfully advised businesses and wealthy individuals regarding retirement planning, investments, insurance and asset protection strategies. John has been an active option trader employing macro strategies for the past 20 years.

* Klaus Nielsen: Professor Emeritus, at Birkbeck, University of London. He was Professor of Institutional Economics at Birkbeck 2007-2023. Previously, he was Professor of Social Sciences at Roskilde University, Denmark. He was instrumental in the founding and governance of the European Association for Evolutionary Political Economy as well as the World Interdisciplinary Network for Institutional Research. He is the Chair of Millennium Economics Ltd which owns the Journal of Institutional Economics. His research includes institutional economics, varieties of capitalism, social capital, innovation and sport management and economics. He has also a sustained interest in China since a first visit to China in 1973. His recent research on China focuses on the impact of Confucianism on economic behaviour and relationships.

1. Techno-nationalism is as old as civilization – especially in the form of weapons race and protection of key domestic technologies. England ‘stole’ the technology to produce iron cannons from the continent through attracting Huguenot fugitive blacksmith. Chinese tried to protect silk production with death penalty. In the post war era same punishment in the US to share knowledge on the atomic bomb.

2. Technology globalism was never complete but it was an implicit norm in neoclassical economic theory assuming that all countries had equal access to technology and it was supported by Washington consensus institutions such as IMF, the World Bank and OECD during an era of US-hegemony globalization

3. One historical turning point around 2005 when Chinese leaders adopted national

innovation system perspective and turned to 'independent' innovation. At this juncture China had invited multinationals to joint ventures and invested heavily in research and education and science without reaching strength in technology. Critical analysis pointed to lack of focus on technology management and weak absorptive capacity in Chinese State-owned enterprises.

4. The US response to China’s economic rise started already under Obama and accelerated under the first Trump-period. To b1. Techno-nationalism is as old as civilization – especially in the form of weapons race and protection of key domestic technologies. England ‘stole’ the technology to produce iron cannons from the continent through attracting Huguenot fugitive blacksmith. Chinese tried to protect silk production with death penalty. In the post war era same punishment in the US to share knowledge on the atomic bomb.

5. Techno-nationalism may serve as emerging economy strategy to catch-up with a lead country. Protecting the domestic market is a way to attract knowledge (through FDI and joint venture) and to protect ‘infant industries’. To succeed it requires massive investment in knowledge. The theoretical basis for such a strategy is a negation of Adam Smith, Ricardo, Heckscher-Ohlin and Samuelson and inspiration from Friedrich List.

6. The aim of techno-nationalism in the lead country is to slow down the rise of an emerging economy through a combination trade barriers, embargos and boycotts. US technology war against China combines trade barriers in green technologies with embargos on most advanced chips key to develop and use AI. There are different prognoses among experts

regarding the outcome. To be successful the US needs to isolate China from countries delivering key components to AI systems. If China remains successful in critical technologies the US might be tempted to use its dominance in military capacity (cf. Thucydides Trap).

Xiaming Liu: Techno-nationalism and the China/US relationship and prospects for the US/China relationship

4. Western Criticism: U. S. sees MIC2025 as a threat due to concerns over IP theft, forced tech transfers, and state subsidies.

5. Zero-Sum View: Neglects the benefits of global technological interconnectivity and cooperative competition ("co-opetition").

7. Hegemonic Stability: Global stability depends on a dominant power (U. S.) to enforce rules.

8. China’s Economic Rise: Seen as a challenge to U. S. hegemony but limited by weaker military and economic structure.

10. Future Relations: Likely characterized by competition and cooperation ("co-opetition").

Research Purpose and Question: To develop a process model of how great power dyad-specific political risk impacts the markets perception of valuation of strategic technology and non-technology firms. Thus, the main Research Question: How does great power competition increase dyadic political risk and what are the implications for market perceptions of firm valuation? Conceptual Research Goal: To build a conceptual framework to show how macro-level (dyadic political risk) affects micro-level (perceptions of firm valuation). Similar in scope to: Luo, Y. 2021. ‘Illusions of techno-nationalism.’ Journal of International Business Studies, 53, pp. 550-567. Time Frame: Overall time frame is from 2010 to present with particular focus on the Trump and Biden presidential periods when US China dyadic political risk escalated. Critical Realist Philosophy with Single Case Study Design.

Geopolitical Context: the strategy to prevent a Soviet/China Bloc during the Cold War Succeeded in the 1970s. Based on the hope that China would someday become a democratic state culminated in US strategy under Clinton to help China entering the WTO in 2001.  Fearing the end of Communist Party, Xi pursued counter policies, including the Belt & Road Project among others. US-China tensions rose under Obama and worsened under Trump and Biden, forming two blocs: the US-led western bloc and the China-led bloc with Russia, Iran, and North Korea. Despite this, China maintains strong global economic ties, especially with the EU and US.

China’ s techno-nationalist strategy (following ‘Made in China 2025’) has been highly successful in almost all areas despite US led embargos, industrial policies and tariffs. In many areas it appears as if the US efforts to counter the Chinese efforts have rather had the opposite effect. A notable exception is semiconductors, at least until now.