Stringent patent laws damaged US tech leadership

There is little doubt that the porousness of national borders, allowing knowledge to flow between countries, has been one important factor behind major technological developments. However, this relative openness has not served all countries equally well. Companies in lead countries have accumulated IPRs and their states have joined forces to impose rules for latecomer countries that limit their freedom to engage in catching up strategies. Since the mid-1990s, a stringent international IPRs regime was established through the TRIPS agreement and other bilateral trade agreements that limited access to knowledge as well as reverse engineering learning (Drahos, 1995; Dreyfuss & Frankel, 2014). Nelson and Ostry (1993) saw the US transnational companies as moving the world towards techno-globalism. Tech giants may be a case in point. With a strong focus on IPRs and tech giants harvesting knowledge and data from abroad, the US imports knowledge and data as well as intellectual rents. Hosting the enterprise vanguards of both the first and the second phase of the ICT revolution has cemented its role as the world’s technology leader. This is fundamental for its geopolitical hegemony since its control of the dollar as world currency and its worldwide military presence in part rely on its technological lead (Schwartz, 2019). Therefore, it is not surprising that the US, when confronted with a serious contender in a strategic technology, steps back from the techno-globalism implicit in the Washington Consensus and engages in radical forms of techno-nationalism. As we demonstrated in earlier chapters, tech giants are specialized in digital services and, through their privileged access to data, they established themselves as AI world leaders. While they establish innovation networks with scholars, knowledge institutions and enterprises around the world, they do so to strengthen their technological dominance. Through their harvesting of data and knowledge in host countries, they absorb financial wealth as well as technological capabilities that are in part entered to their own state.