Political and Economic International Factors of Technological Innovations

Technological innovations are conventionally considered to be a factor that boosts states' economic and societal development. However, not all states innovate: some fail to create favorable conditions for innovative activity and remain stagnant, while others become global leaders in innovations. Innovations do not happen naturally: they require the prioritization of goals and allocation of resources. The decision to support innovative change on a national scale inherently has a political dimension, as innovations create winners and losers due to their distributive nature. Scholars have attempted to explain the variance in national innovation rates, focusing mostly on domestic institutions as causal factors. This approach has been challenged, as in the modern interconnected world it is crucial to look at the broader context and understand how national technological change is influenced by external factors, such as international economic and political ones. In this paper, the following research question is raised: how do international factors influence national rates of innovation? Cross-national regression analysis is employed to test the relationship between political and economic international factors and national rates of innovations. The main findings are that external security threat (in particular, the presence of a threat to use force in an interstate dispute) and higher levels of political globalization lead to the increase in national innovation rates. The presence of external threat gives economic and political actors motivation to allocate more resources towards technological innovations in order to increase the states' overall competitiveness. Increasing inflows of Foreign Direct Investments lead to higher rates of innovations as well, but overall the influence of international economic factors is less significant and robust than the impact of international political factors, which supports the suggestions of other scholars that international political dimension should be taken into account as a more significant causal force boosting innovations than international economic factors.