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The Outcomes of Deglobalization: Technology Fragmentation

Deglobalization stops the global innovation race and divides it into national branches. Emerging economies and the speed of progress will take a hit, while investment in technology will become a new strategic weapon.
The Outcomes of Deglobalization: Technology Fragmentation
The Outcomes of Deglobalization: Technology Fragmentation
Economic growth now depends on technologies
Economic growth now depends on technologies
Deglobalization is accelerating and brings new risks
Deglobalization is accelerating and brings new risks
Leaders must maneuver in science and technology
Leaders must maneuver in science and technology
In the contemporary environment, economic growth is strongly associated with the innovations. 2020 has forced governments to discharge their reserves, and now the only potential for growth is the introduction of new technologies.

The policy of deglobalization and the escalation of trade conflicts have inhibited the widespread adoption of technology and delayed economic growth. According to the report of the European Chamber and MERICS, technological wars do not force innovative companies to stay in their markets but cause significant economic damage.
The world divided into parts
For two “golden decades”, developing countries have enjoyed the fruits of hyperglobalization and convergence. But now, deglobalization is gaining strength, which does not meet much any resistance. For the emerging economies, all this foreshadows a long-term loss of dynamics.

The trend towards the separation of economies is not new but growing, combined with the disruption of supply chains and commercial flows due to the pandemic. It signifies a rupture of technological development paths, and this is already shown by the relationship between the two advanced economies and technology leaders, the United States and China.

Both China and the United States continue to work on trade restrictions and measures to limit international investment. Deglobalization is accelerating against the background of the reassessment of the benefits of foreign trade by countries and companies, taking into account the risks of dependence on imports.
Economic growth now depends on technologies
Economic growth now depends on technologies
Deglobalization is accelerating and brings new risks
Deglobalization is accelerating and brings new risks
Leaders must maneuver in science and technology
Leaders must maneuver in science and technology
Unfriendly competitions
Analysis by the European Chamber and MERICS revealed three major macro issues of the division of international economic interactions: the disconnection of financial and trade relationships, technological research and standards, and the separation of digital networks. Technology and the development of communication networks will now become a crucial strategic resource.

The race of innovation ceases to be friendly competition and turns into a new Cold War. The introduction of a "clean network" by the United States and China's measures on "autonomy and control" of technology put technology companies and startups in opposite corners of the ring. It means that countries either have to choose their side or develop a flexible or even dual economic architecture. Such solutions are not cost-saving when any movement towards disintegration is a loss to the progress of innovation, efficiency - and as a result to profits.
Supporting startups means supporting the nation
The growing trends of separation prescribe national affiliation to scientific developments, research, and technology startups. Investment in technology is now becoming as important a national budget expenditure as a military. The disintegration has launched a race to invest in innovation.

The emergence of new ideas depends not only on geography or the state of the market or conditions for the realization of the natural advantages of the region, but also on the availability of means and resources, such as modern technological parks, quality education, and measures of state incentives for innovation.

Venture investors and sponsors play a key role here, providing financial support to startups by investing in their development. The world is becoming a unique palette of new technologies that radically change our way of life. The ability to successfully maneuver in the wilds of progress, science, and technology, anticipating the development of events, is still the main task for world leaders.
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