Technological transition and technological dependency: Latin America-China relations in a changing international order.
| Autor | de Toledo, Demetrio Gaspari Cirne |
Introduction
In recent years, China has obtained impressive achievements in catching up with world technological leaders. But the country is entering a very challenging phase in its catch-up process as it approaches the current technological frontier. Advanced technologies are the domain of the world technological leaders, and leaders fiercely defend their technological monopoly against contender countries that might compete for their technologies and markets. As the world approaches the watershed moment of a technological transition toward ubiquitous digitalization of products, services and social life in general, the dispute between incumbent and contender powers over technology tends to reach a climax. China's position as a pioneer and leader in 5G technology--the pervasive technology that will support core technologies of the next technological revolution--accentuates the dispute even further. How will this impact the international order, and how will it affect China--Latin America relations?
This paper examines the ongoing technological transition and its impacts on China--Latin America relations in light of changes in the international system's balance of power. China's leadership in those technologies has the potential to strengthen China--Latin America relations far beyond the current trade and investment trends. These relations will depend not only on the will of the countries of the region but also, and fundamentally, on China's position in the world as a technological provider vis-a-vis the USA and ultimately on the direction of changes in the international order. This scenario opens opportunities for Latin America's technology development if the region's countries can implement national strategies to overcome technological dependency. It also poses constraints for Latin American countries because the transition to a new technological paradigm can consolidate its technological dependency for several decades.
Technological transitions and international relations
There is abundant historical evidence of the connection between technological leadership and hegemony in the international system. From the first technological revolution in the 19th century to the present day, the political, economic and military hegemon also has pioneered the development of the central technologies in each successive technoeconomic paradigm; power transitions in the international system have also occurred hand-in-hand with technological transitions (Perez, 2009; Arrighi, [1994] 2010; Toledo, 2019).
The periodization of technoeconomic paradigms maps elegantly onto the periodization of hegemony cycles and power transitions in international relations. In her seminal work on technological revolutions, Carlota Perez, in dialogue with neo-Schumpeterian interpretations of the history and dynamics of technology, dates the first technological revolution circa 1770 having Great Britain as the core country, and the second technological revolution circa 1829, followed by the third technological revolution circa 1875. The period corresponds to Arrighi's definition of Great Britain's tour as hegemon, from the 1770s to the 1870s. Great Britain's fall from dominance as the international system's hegemon is contemporary to the third technological revolution. Both transitions--the power transition in the international system and the technological transition--happened during the same period.
The third technological revolution (circa 1875) and the fourth technological revolution (circa 1908) witness multiple technological races between the USA and Germany, the countries pioneering the innovations of the third technoeconomic paradigm. Great Britain, France and Japan follow closely behind. The USA eventually won the contest and became the hegemon, a position it would consolidate in the immediate aftermath of Second World War.
The USA's role as the hegemon in the international system would face a critical challenge in the 1970s, concurrently with the fifth technological revolution (the beginnings of the ICT technoeconomic paradigm). The USA faced fierce technological competition from Japan. Still, it eventually secured the fifth technoeconomic paradigm's leadership and reasserted hegemony in the international system and its position as a technological leader.
The relationship between technological leadership and hegemony in the international system is clear from the historical evidence presented above: power transitions in the international system coincide with technological transitions. From this general statement, we propose the following hypotheses: China's rise and the challenge to the USA's hegemony will ultimately be defined by the contest for leadership in the ongoing technological transition (that may or may not give rise to a new technoeconomic paradigm). If China wins the contest for technological leadership, it will likely occupy a central role in the international system, displacing the USA in its role of technological leader and hegemon in the international system in many, if not all domains.
What will the future of technology and international relations look like in the following decades? Will China be able to position itself as the technological leader? How will this impact the balance of power in the international system? Will the USA willfully accept China's leadership in technology and its more assertive and central role in international relations?
Most importantly, from our standpoint, is how this will impact Latin America's technological development. Will the region continue in its historical role as a peripheral, natural resources-exporter region, dependent on technologically advanced countries, shifting from a US-centered technological dependency to a China-centered technological dependency? Or will the technological transition cum power transition in the international system from the dominance of the USA to China (assuming China will come out as the winner of this contest) offer new possibilities for Latin America under a new type of technological partnership with China?
Overcoming technological dependency or getting stuck in it
Regarding Latin America's position in the world economy, the basic tenets of Latin American structuralism and dependency theory still hold. Latin American economies specialize in the export of natural resources, importing technology in tangible and intangible products. This fact makes the region dependent on advanced countries in the technology sector Latin American economies are far from the current technological frontier. The technological frontier is advancing rapidly in the current technological transition, making it even harder for Latin American countries to close the gap with the more advanced economies.
Latin American countries will need to implement a technological development strategy that combines access to foreign, more advanced technologies and indigenous technological development to overcome technological dependency. If successful, it will achieve technological autonomy in several (but not all) core technologies of a technological paradigm. Technological autonomy is not technological autarchy: the goal of technological development should not be thought of as achieving dominance and leadership in every relevant technology but as a means of reaching a delicate balance between the use of foreign technologies and the creation of domestic technologies.
The make or buy dilemma that applies to a firm's technological strategy--a decision over either developing technology (make) or using technology developed by other firms (buy)--also applies to countries. A national technology strategy should define which technologies a country will access as a user and which technologies it will develop indigenously.
A country's decision to access foreign technology is conditional on the country that controls the technology giving access to it. Access to foreign technologies varies in a spectrum that goes from no-access (as in the case of nuclear and space technologies, e.g. access to the technologies for the development and production of advanced strategic deterrence weapons systems) to end-user access, with licensing, joint venture, royalties, technological alliances, etc., falling somewhere in between.
Advanced, state-of-the-art technologies--i.e. the technologies close to the current technological frontier--are subject to technological monopolies: It is virtually impossible for a foreign country to access them. Access to mature or obsolete technologies--i.e. technologies distant from the technological frontier--is more straightforward but does not guarantee that the country accessing that technology will close the gap with the more technologically advanced countries.
As for the indigenous development of technology, there are also many possibilities. Success will depend, ultimately, on the existence of a fine-tuned techno-productive system in which institutions, human resources, and firms interact in ways conducive to developing national technological and innovation capabilities.
It is essential to let go of all of the illusions of a national technology strategy magically coordinating itself through price-formation market mechanisms. In history, there is not one case where a country has achieved long-term, sustained development without the strong coordination of the state. The state should provide goals, and means for achieving them, in an environment where individuals and firms have strong market and nonmarket incentives to raise productivity through technology-intensive means. State coordination and market competition are the necessary foundations of a national technology strategy.
To overcome technological dependency, it is necessary to (1) implement a national technology strategy and (2) establish technological cooperation with more technologically advanced countries. During the phase of "normal technology" (in the sense of Thomas Kuhn's concept of normal...
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