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Innovation Depends on Trade

What is technological innovation?

For one of the most important and controversial philosophers of technology, Martin Heidegger, technology is not only a type of rationality that shapes scientific thought, but it is also a field of perception. This was later expanded by contemporary philosopher Bernard Stiegler who argued that technology evolves in parallel to humans but that the human is co-constituted by technology.


We can think of technological innovation as the reorganization of existing technical forms into new ones. Technological innovation happens for any number of reasons, but it usually occurs when entrepreneurs arbitrage between a technological innovation and a commercial product or service that can be derived from it.


What is the link between technological innovation and international trade?

Firm-level

There is growing and robust evidence that among small technology firms there is a strong correlation between exporting and innovation - whether measured by product innovation, organizational innovation, research and development intensity, or patents. This is a bidirectional relationship - in some cases exporting leads innovation and in others it is vice-versa. Moreover, among small companies around the world, exporters outperform non-exporters in nearly every metric – sales, productivity growth, and job creation.


Industry-level

Globalization foments the “creative destruction” process outlined by classical economist Joseph Schumpeter. Technological innovation creates new industries while destroying older ones, whether that is the telegraph, the train, or the internet. International trade distributes innovative technologies and industries around the world, raising productivity on a global scale.


In sum, when small tech companies expand internationally it not only leads to their microeconomic growth but also our macroeconomic growth. If you are delaying an international business strategy then your competitors – domestic or foreign – will capture that growth to your loss. Contact me now for a proposal for your company.

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© 2020 by Bridges Technology Trade Partners.

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