Between Geopolitics and Technology

MIN READSep 27, 2016 | 08:01 GMT

Geopolitics Foreign Affairs Technology manufacturing computers
Advances in areas such as robotics stand to alter life on earth not only for people but also for the nations they inhabit.

(OLI SCARFF/Getty Images)

Roughly 500 years ago, Nicolaus Copernicus theorized that the Earth revolved around the sun, a fact that Galileo Galilei confirmed a century later. The breakthrough helped usher in a new era of scientific discovery, sparking numerous technological revolutions in the following centuries. The advent of the printing press and Galileo's challenges to the church represented inflection points in the advance of science and technology. From then on, technological growth was no longer incremental but exponential, as new ideas, technologies and theories emerged at an ever-increasing rate of speed.

Today, the pace of technological change continues to accelerate. Advances in areas such as nanotechnology and materials science, smart factories, additive manufacturing, autonomous cars, gene-editing techniques, and battery technology stand to alter life on Earth, not only for individuals but also for the nations they inhabit. The world's countries will experience the radical transformation that disruptive technologies bring at different times and to different extents, some more favorably than others. But technological development and diffusion do not happen at random; geopolitical factors play a determining role in the process. Recognizing which countries are best situated to take advantage of emerging technologies can help us understand what the geopolitical order will look like two decades from now.

Determining Factors

A country's geopolitical constraints and national strategy dictate what technologies it will develop or adopt. For example, as a vast territory whose major borders with Europe are largely indefensible, Russia has historically been susceptible to invasion. The country has long prioritized maintaining a large and capable military to mitigate the risk of invasion, devoting much of its efforts in science and technology development through the years to military and intelligence applications. By contrast, Japan has shifted its focus over time, gradually diverting its research and development resources from military to commercial applications to become a world leader in consumer technologies. But these factors are not immutable, nor are they the only considerations determining when and whether a country will adopt a new technology.

Geography and Infrastructure

One of the first things to consider when evaluating a country's technological trajectory is its geography and existing infrastructure. Because of its harsh geography and scarce water resources, for example, Israel has spent considerable time and resources to develop technologies that conserve, reuse and desalinate water. Today, the country is at the forefront of water technology development.

Labor Flexibility and Demographics

Labor considerations are similarly central to technological development. Over the next few decades, Japan will be one of several countries reckoning with a dwindling population, a smaller workforce and the changing demands that new technologies will make on its labor pool. But the country's inflexible labor markets are designed to protect existing workers' rights, limiting the country's ability to adapt quickly to shifting labor requirements. If Japan does not adopt new technologies — such as advanced manufacturing techniques — to compensate for its lost labor productivity, its aging population could cost the country revenue.

Capital Availability and Mobility

Capital deployment is critical in determining whether countries can adopt certain technologies, since a larger base of capital allows a country to invest in and develop a wider range of technologies. As the world's most developed market for capital, the United States can spend substantial amounts of money on research and development in several different fields. At the same time, the country's startup and venture capital culture drives innovation, particularly in the computer hardware and software sectors. Japan, on the other hand, lacks a similar venture capital environment and relies instead on corporate capital to finance startups.

Education Systems and Technological Maturity

Education systems provide the building blocks of a country's science and technology capacity. In addition, educational policies can set the course for a country's technological development, emphasizing different areas of study and cultivating the necessary knowledge and skills in future workers. The maturation of a nation's abilities in a specific technological field, meanwhile, follows sequential stages of development, such that China has progressed over time from importing semiconductors to building them in its own facilities, albeit with foreign support. Once the country has mastered indigenous production, it can then move on to competing globally to develop the world's most powerful computer chips.

Regulatory Flexibility and Proactive Policy

Emerging technologies often represent a challenge to regulatory environments. In the United States, for example, regulatory bodies have struggled to adapt existing conventions to accommodate automated vehicle technology, though the country managed quickly enough to institute a tailored policy for automated vehicles. Proactive government policies to clarify an emerging technology's regulatory environment — or to identify roadblocks to doing so — can facilitate a new advancement's development or implementation. Furthermore, a country's corporate regulatory environment plays an important role in its startup culture, determining the ease with which companies can be established.

Social Acceptance 

To achieve its potential, a technology must first be accepted and adopted by society. Emerging technologies in areas such as robotics and additive manufacturing stand to transform labor markets, potentially inviting backlash from certain populations. In Japan, however, social acceptance of humanoid robots, medical robots and related technologies is high, and the country's historical aversion to immigration remains unchanged, making it more likely than other countries to adopt the technologies for use in the service sector.

The United States: At the Forefront

Only one country in the world stands at the forefront of research and development in almost all areas of science and technology: the United States. Thanks to its geographic advantages, the United States has amassed abundant capital, which has, in turn, enabled it to spend much of its history as a leader in technological innovation, development and deployment. The country boasts strong academic institutions that support its education system and attract foreign researchers, while its flexible labor markets and regulations help it quickly react to and integrate new technologies. Its national wealth, moreover, exceeds 33 percent of global wealth — more than the next five countries combined — enabling the United States to keep outspending its competitors in research and development. And unlike much of the rest of the developed world, the population of the United States is set to keep growing.

Two decades from now, these advantages will continue to underpin the United States' status as a technology leader, putting the country at the forefront of emerging technologies, including advanced manufacturing, biotechnology, quantum-based technology and areas that have yet to be defined. The United States has played this role for a century now and will likely maintain it for the next several decades. Even so, the country will face competition in every area of technological development and rivalries in certain fields. Germany's chemical sector, for instance, will remain on par with that of the United States, and Japan's prowess in electronics and high technology will endure. But no other country can easily match the United States' broad reach in technology.

China: Contending With Constraints

Because of its sheer size, China comes closest to the United States in its ability to develop and integrate new technologies. But it has its limits. Beijing prioritizes internal cohesion and stability, and one of its biggest challenges is managing social unrest. Despite 40 years of economic success, the country remains relatively poor, with a nominal gross domestic product per capita of just $7,924 in 2015, according to the World Bank — a mere fraction of even South Korea's. Though China's size allows it to pool resources for national priorities, its low levels of wealth, capital and development make it hard to achieve expansive technological gains throughout society.

Besides this, China's resources are scarce relative to its population size. In predominantly private-run commercial sectors such as electronics and consumer-goods manufacturing, the country's deficiencies in capital mobility, regulatory flexibility and education are more apparent. Even in those areas where the government sets clear targets — for instance, computer hardware development — China has not advanced beyond imitating or licensing and using foreign technology.

Whether China can break its dependence on foreign technology remains to be seen. As the country develops, its fractures become all the more pronounced. China's labor surplus is beginning to dry up as wages increase domestically. To compensate, Beijing will adopt and construct (though not necessarily develop) industrial robotics, technology that could allow the country to finally overcome the geopolitical barriers that have blocked its progress in the past. But managing the population throughout these transitions will prove a difficult task. In fact, China's inflexible labor markets and education systems could leave workers more frustrated over their diminishing employment prospects if their skills do not match the demands of the job market. And though new technology will help China to correct some of its deficiencies, the country is likely to remain a step behind global leaders, impeded by its inherent limitations.

Still, for a developing nation, China is relatively advanced in technologies that support national security initiatives, including aerospace, quantum-based technologies, biotechnology and cyber security. In some of these sectors (for instance, quantum-based technologies) China is among the world's leaders, while in other areas (such as cutting-edge jet engines) the country has struggled to move beyond reverse-engineering foreign designs. Beijing will continue to prioritize military technologies in its educational systems and pour funding into research and development in those areas.

Japan: An Aging Economy

Over the next several decades, Japan will face two main challenges. China's rise as a military and economic competitor will drive Tokyo to normalize its military and force Japanese companies to adapt to new competition. Meanwhile, Japan's demographic crisis is expected to reduce the country's population by roughly 10 percent in the next 15 years, slashing its workforce.

Japan will work to develop technologies that help mitigate the economic effects of its demographic decline, an endeavor the country has the financial power and educational resources to support. This will put Japan at the forefront of the most advanced manufacturing technologies and in the vanguard of lifelike robotics, health care and medicine. Though the emphasis on steadying Japan's economy could divert funding from military and indigenous technological development, the costs of ignoring the demographic crisis are far too high for Japan. After all, falling tax revenue would reduce the country's spending capacity across the board. As long as it remains under the United States' security umbrella, Japan can afford to prioritize maintaining its economic advantage over China and South Korea.

Europe: A Rift Widens

In Europe, technological developments and the economic gains that they bring will further divide the Continent. Germany, Austria, Belgium, the Netherlands, the United Kingdom and the Scandinavian countries are not only Europe's economic engine, but they are also its technological powerhouse. Like Japan, however, these countries will experience demographic declines in the coming years, which may divert their attention to developing and adopting technologies to ease the burden of a shrinking workforce. The degree to which this happens depends to some extent on the future of the European Union itself. If the bloc and the Schengen zone endure, the countries may turn to cheaper labor sources — from within the European Union — freeing their research and development sectors to focus on other areas of technology.

The opposite may be true for Italy, Spain, Greece, Portugal and parts of France. Relative to their northern counterparts, these countries have less access to capital and particularly inflexible labor markets. The region will likely spend much of the next decade dealing with the fallout of its continuing financial crisis, and it will not have the resources to devote to research and development or emerging technologies. Consequently, the countries' most skilled workers may decide to seek work elsewhere in the bloc, dooming Southern Europe to fall even further behind the rest of the developed world in science and technology.

A New Model for Development

As critical as emerging technologies will be in determining the developed world's trajectory, they will have an even more profound effect on developing nations. Advanced manufacturing techniques using robotics, additive manufacturing and other emerging technologies could disrupt the very process by which countries develop. For the United States, Germany, Japan, South Korea and now China, manufacturing was an integral part of their economic progression. Though advanced manufacturing may not break that paradigm, it could limit the extent of development that can occur simultaneously around the world, reducing the number of countries or regions that can take advantage of the process. Furthermore, it will change the way developing countries achieve technological proficiency, altering the time-honored cycle of imitating existing technologies, modifying them and then developing them domestically.

Catching up with the developed world in science and technology is no small feat. It took Japan and South Korea several generations to complete the move from low-end to high-end manufacturing and from duplicating technologies to innovating. It is hard to imagine that any country in the developing world can cut that process short and reach even Taiwan's or China's level of technological development in the next 20 years.

The nations with the best chance of even approaching that accomplishment are those that have a wealth of human capital at their disposal — for example, India. The country will be keen to adopt technologies that help it overcome the geographic and infrastructure limitations that have hampered its manufacturing sector, though the process will be slow. At the same time, its large size and vast resources will enable India to compete with more advanced countries in areas in which its government is already focused, such as military hardware development.

Since Copernicus and Galileo helped to usher in the technological age, the world's dynamics have changed more and more with each subsequent revolution. Examining the interplay between technology and geopolitics allows us to predict how the rapid advancements on the horizon will change not only the way people live, but also the way nations interact.

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