Abstract
This study delves into the connections between politics, such as sanctions, tariffs, and industrial policies, and local technological innovation, using endogenous growth theory as a guide. These interventions aim to shift strategic power or correct market imbalances. However, their impact on innovation may change depending on the situation. The paper provides both historical and current examples from Iran, China, and the United States to show how political limitations can first lead to a decline in domestic innovation, and second, cause domestic innovation to rise.
For example, sanctions can limit access to foreign capital and the flow of knowledge, but they can also spur local R&D and self-reliance. Industrial policies work differently as they are implemented by state support for strategic sectors, steering enterprises toward long-term innovation. The China-U.S. trade war is referred to as a case study from which the process of how escalating restrictions reshape national innovation strategies in practice can be tracked. The paper concludes by proposing the Strategic Innovation Buffering Mechanism (SIBM), a policy framework designed to shield innovation systems from external shocks and sustain long-term endogenous growth.
Keywords: Strategic Innovation, Politics and Technological Innovation, Endogenous Growth Theory
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