A Geopolitical Analysis of Innovation for Middle-Income Escape: Interpreting China's Technology Strategy

• Main Author: Englert-Yang, Nelson
• Format: Dissertation
• Language: English
• Published: ProQuest Dissertations & Theses 01-01-2023
• Subjects: Political science; Public policy; Sociology
• ISBN: 9798380141444

Recent accounts of Chinese development are cast within middle-income trap theory, which suggests that stagnation at the middle-income level is overcome through technological innovation. This gives a new face to old modernization theories of development, which also posited a universal logic of development and provided endogenous representations of that logic. Given its similarity to modernization theory, the middle-income trap theory is susceptible to the same sort of criticisms, including endogeneity bias and Western centrism. It is also susceptible to similar amendments, such as broadening the scope to consider exogenous factors and taking a more critical approach to the role of democracy in structuring opportunities for innovation-based growth. This analysis contributes to making such amendments, inquiring about the relative contributions of endogenous and exogenous factors to innovation-based growth, particularly in state-led formation of national innovation systems. In a qualitative comparative analysis (QCA), I find that the common narrative relating innovation to middle-income escape is overly simplistic, and that innovation, trade community, and regime type interact in forming the conditions for sustained economic growth. A historical comparative analysis of Russia, South Korea, and Estonia — three diverse escapees – finds that the conjoining of product and process innovation in matured innovation systems historically coincides with oligopoly and greater political scrutiny both foreign and domestic. Foreign political scrutiny is represented by democratic homophily within the trade of competitive high-tech goods, esp. in the ICT industry. Domestic political scrutiny is represented by government redirection from Big Tech to a broader range of innovation stakeholders, esp. SMEs, with a range of plausible underlying intentions and levels of success. China demonstrates these same qualities nationally but, puzzlingly, exhibits a return-of-the-state at the regional level. I argue that the inability to expand into foreign markets due to trade barriers has led to a greater role for the state as an innovation financier and actor. This also anticipates a greater role of the state for stimulating domestic consumption and strategic trade partnerships within China’s dual-circulation model. Overall, the primary finding is that nations rely on geopolitical trade to sustain innovation-based growth; moreover, that reliance allows geopolitical trade strategies to mediate innovation-based growth in interaction with domestic strategies.