The Impact of Techno-nationalism on International Innovation Investment

Abstract

Against the backdrop of profound shifts in the global geopolitical landscape, techno-nationalism has emerged as a pivotal variable reshaping the international economic order. This paper explores how the rise of techno-nationalism has fundamentally altered the underlying paradigm of international innovation investment. The research identifies a paradigmatic shift in investment rationales, moving from “efficiency-driven” globalization to a “security-centric” logic, where geopolitical compatibility has superseded cost and market access as the primary determinant of capital flows. By analyzing the policy toolkits of major economies—including the U.S., the E.U., and Japan—this study demonstrates that techno-nationalism, through defensive investment screenings and offensive industrial subsidies, is driving a fragmentation and “Balkanization” of global innovation landscapes. Notably, in strategic sectors such as semiconductors and artificial intelligence, cross-border capital flows have experienced a “deep freeze,” while “friend-shoring” and “onshoring” are becoming the dominant investment modalities. While this trend may stimulate domestic R&D in the short term, the long-term consequences include diminished global innovation efficiency and the bifurcation of technical standards. Finally, the paper proposes a “multi-local” strategy for multinational corporations and suggests that sovereign states must seek a dynamic equilibrium between security imperatives and innovation vitality.