U.S.-Japan Technology Policy Coordination: Balancing Technonationalism With a Globalized World



James L. Schoff | The Carnegie Endowment for International Peace

The U.S.-Japan alliance sits at a crucial historical juncture as globalization recedes and China’s international stature grows. The world is shifting from a technoglobalist-oriented economic and innovation framework premised on reducing barriers to trade, investment, and supply chain development amid harmonized multilateral standards. The technonationalist framework taking its place is prompting countries to intervene more frequently in trade and technological affairs to give their own high-tech industry leaders an advantage over those of other countries.

Now the United States and China are the main protagonists in this technologically driven competition, but Japan remains an indispensable player. The resulting zero-sum landscape has produced protectionist policies that have not been pursued widely since the 1980s and 1990s, when U.S.-Japan economic competition was at its height. The high stakes behind this current shift promise to make this era of technonationalism longer lasting and more intense than earlier periods.

Japan and the United States have watched warily as China’s economic heft has grown and as the technological sophistication of its manufacturing base has increased. Beijing’s penchant for pursuing a state-driven economic and innovation model has not allayed their concerns. This reemergence of great-power competition is coinciding with the so-called Fourth Industrial Revolution, in which an early lead in technological mastery of certain strategic fields like AI and quantum computing could put a country (and its allies) in an unassailable leadership position. Fear of “losing” this competition is fueling an unprecedented scale of investment and a zero-sum mentality that could tempt countries to overreact in ways that would damage their national interests and broader global interests.


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