Intersecting Tech Innovation, Dual-Use & Global Resilience

Understanding the Evolving Global Landscape Amid Rising Geopolitical Tensions

With the rapid development of civilian technology and an increasing blur between dual-use boundaries, our world is undergoing significant change against a backdrop of escalating geopolitical tensions. National industrial policies are evolving, and the emergence of export controls and interdependent supply chains are generating substantial risks. It is imperative that nations build resilience by balancing their security needs with a progressive societal approach, in order to navigate the challenges of the future effectively.

Changes in Dual-Use Regulation and Trade Disputes

The concept of “dual-use” regulation has long been employed as a means to govern exports and provide security for a nation’s military advantages. However, the rapid progression of high-tech sectors and increasing geopolitical tensions have reshaped this landscape. Now, many civilian innovations and commercial ventures are being considered as part of national security priorities.

One example of the changing dual-use landscape is the 17-year dispute between Airbus and Boeing. Their conflict over large civil aircraft led to the EU and the US pursuing trade retaliation at the World Trade Organisation (WTO). This situation escalated to the point where the WTO had to authorise nearly US$7.5 billion in US countermeasures in 2019. The EU retorted by imposing approximately US$4 billion in tariffs on US aircraft and selected food and beverage products in October 2020.

Shifts in Industrial Policies and Technological Innovation

The line between military and civilian usage is increasingly blurred, especially with the advent of frontier technologies such as AI and semiconductors. Public and private Research & Development (R&D) partnerships and the scale of funding now mirror government investment in these areas. Consequently, governments are responding with new industrial policies to restart or bolster strategic industries.

In the US, the CHIPS and Science Act and the Inflation Reduction Act (IRA) have allocated hundreds of billions of dollars to reshoring sectors such as semiconductors, clean energy, drones, and related sectors. Meanwhile, China and the EU have launched their own industrial policies to stimulate innovation and remove structural barriers to economic growth.

However, the effectiveness of industrial policies worldwide has been mixed. Success depends on strong execution, financing, regulatory frameworks, and a dynamic ecosystem that can facilitate and accelerate the development of strategic and emerging industries. Despite the challenges, industrial policies have been integral to building globally competitive companies tied to national development strategies.

Industrial Policy and National Security Implications

With the rapid advance of civilian technologies and blurring military and civilian boundaries, industrial policy is becoming increasingly relevant. The stakes are high, and significant risks exist for all nations, especially the leading ones, in navigating the fast-moving innovation landscape.

However, the implications of these developments are manifold and complex. Attempting to decouple supply-chain relationships in critical technological areas can lead to increased friction and mistrust. Further, attempts to deny perceived adversaries’ access to these technologies have led to counter-measures, exacerbating geopolitical tensions.

As a result, trade disputes are spilling over into everyday life and commerce, affecting a wide array of goods, from soybeans and beef to computer chips and electric vehicles. These geopolitical barriers are causing advancements in AI, space, and related critical areas to be divided between the US and China, affecting other countries’ participation and future development.

Resilience in a Changing World

In this fracturing global environment, nations need to strike a balance between great-power rivalry and development opportunities. A more inclusive, pragmatic framework is needed so that all nations can grow in ways suited to their circumstances.

There is an urgent need to build resilience, strengthen critical thinking, enhance science and technology competence, and invest in R&D. This includes ensuring the involvement of universities, industries, and not-for-profit organisations in a diverse, innovative ecosystem. If countries wish to secure a front-row seat in the global arena of frontier innovation, they must act now before the opportunity passes.

The author, Professor Wei Shyy of the Hong Kong University of Science and Technology, is an internationally recognised expert in aerospace engineering and higher education. He is a Fellow of the AIAA and ASME, an Academician of Academia Sinica, and a recipient of numerous international honours.