Never before have technology and international relations been so tightly intertwined. Photo: TUCHONG

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The rapid development of information technology—particularly the accelerated progress of digital technology and artificial intelligence in recent years—is profoundly reshaping the international system and global order. Never before have technology and international relations been so tightly intertwined. Techno-economics, by opening the “black box” of technology as a factor of production, has systematically clarified the essential features of technological evolution. This provides both a theoretical foundation and practical opportunity for advancing international relations theoretical exploration along the lines of international political economy.

Increasing returns of technology and shifting international patterns

Technology is characterized by increasing returns, which in turn give rise to specific techno-economic paradigms over the course of its evolution. This offers a conceptual lens for understanding the dynamics and mechanisms underlying shifts in global power. W. Brian Arthur, an external professor at Santa Fe Institute in the United States and founder of complexity economics, has provided a systematic account of how increasing returns influence technological development. He argues that when a technology enjoys an early advantage, the law of increasing returns allows it to consolidate that position, often leading to technological lock-in while pushing out alternative solutions. This insight helps international relations scholars trace the roots of international technological rivalry.

Tian Ye, a professor from the School of International Studies at Renmin University of China, contends that increasing returns can transform an initial technological advantage into a sustained one, making technological competition central to global competition. In essence, the rational expectation that early advantages can yield long-term dominance motivates countries to engage in technological contests. This logic can provide theoretical explanation for competition not only with adversaries, but also among allies.

The dynamic of increasing returns also drives newly emerging technologies to evolve along trajectories that incorporate multiple actors and factors, eventually forming organizational structures and socioeconomic institution around them. This is what evolutionary economist Carlota Perez terms a “techno-economic paradigm.” Once embedded in social practice, legislation, or institutional frameworks, such paradigms promote innovations aligned with their logic while suppressing those that diverge—rendering technological catch-up a formidable challenge for latecomer nations. 

Yet, technological revolutions can open “windows of opportunity” for such nations to leap ahead by disrupting existing paradigms. Scholars in international relations increasingly recognize these revolutions as critical drivers of global power shifts. Marxist political economy suggests that countries can capitalize on these windows by adjusting their modes of production to align with the new, more advanced technologies that represent advanced productive forces—thereby unlocking their full economic potential and positioning themselves as future forerunners in technology. 

Distributional effects of technological innovation and domestic political polarization   

The increasing returns inherent to technology, together with the dominance of techno-economic paradigms, mean that each wave of innovation may destabilize existing industries, organizational forms, and social systems—creating “winners” and “losers.” This process of disruption aligns with Joseph Schumpeter’s notion of “creative destruction.” Specifically, technological innovation can lead to domestic polarization in five key areas. First, it can create divisions between emerging industries and more established, mature sectors. Second, it may widen the gap between modern enterprises—either newly established or significantly upgraded—and those that remain tied to outdated operational models. Third, it can result in differentiation between older industrial hubs and newer regions that benefit from the rise of emerging industries. Fourth, it can deepen the divide between workers equipped with the skills required to engage with new technologies and those whose skills are becoming increasingly obsolete. Fifth, it can exacerbate social disparities between individuals employed in dynamic enterprises or living in economically vibrant regions and those who remain in stagnant areas, facing threats of unemployment or unstable incomes. 

According to the logic of collective action, the gains from technological progress are typically dispersed and slow to materialize, while the losses tend to be immediate and concentrated. As a result, narrow, self-interested groups defending the status quo are often better organized and more effective than broad coalitions seeking structural changes. Resistance from those who stand to lose may take extreme forms—including riots, destruction of machinery, or even violence against innovators—which can severely delay or derail technological adoption. The Luddite movement in the United Kindom during the Industrial Revolution is a classic example.

While some international relations scholars such as Huang Qixuan, a professor from the School of International and Public Affairs at Shanghai Jiao Tong University, have identified international competition as a major impetus for technological innovation. The analysis above underscores that the internal distributional effects may become the main constraint to technological innovation. For countries seeking to gain a competitive edge through technological innovation, it is crucial to not only fully leverage the role of technological innovation in promoting economic growth and military strength but also properly address the distributional effects of technological innovation, and try to limit the opposition from disadvantaged groups. Fostering a supportive domestic environment for technological innovation is essential to keeping such disruptions within controllable bounds.

Temporal dimensions of technological development and national policy choice

Technological development unfolds across long time frames and in distinct phases. These temporal characteristics must be taken seriously in the politics of technology and serve as essential considerations in national policy formulation.

On one hand, technological advancement is a long-term process. Sustained innovation-driven growth—whether economic or military—requires a robust technological foundation. But this foundation cannot be built overnight; it demands a long-term strategic vision, consistent planning, and patient execution. A long-term perspective is thus indispensable for building national technological capacity. It reflects a willingness to defer short-term gratification in pursuit of long-term gains and typically translates into better outcomes in the accumulation of human and physical capital. Indeed, a forward-looking orientation is widely recognized as a key driver of national wealth. 

On the other hand, technological development is also phased. Like products, technologies pass through life cycles—from inception to maturity and eventual decline. Given this dynamic, countries must tailor their policies to match the varying characteristics and strategic needs of each stage. South Korean technology economist Keun Lee has also emphasized that the duration of a technology’s life cycle is a key factor that late-developing countries must consider when crafting catch-up strategies. 

Zhang Qianyu is an assistant research fellow from the National Institute of International Strategy at the Chinese Academy of Social Sciences.

Edited by ZHAO YUAN