Geopolitical Rivalry Reshapes Global Innovation Networks

Heli Koski

No 182, ETLA Brief from The Research Institute of the Finnish Economy

Abstract: Abstract Geopolitical tensions have increasingly extended to the development of strategic technologies. In particular, technological rivalry between the United States and China has reshaped firms’ international innovation networks and the organization of research and development activities. Patent data from leading 5G firms indicate that the effects of geopolitical fragmentation are strongest among firms whose innovation networks were previously highly integrated across geopolitical blocs. In these firms, the increase in geopolitical fragmentation is associated with a reduction of approximately 2.1 percentage points in the likelihood of collaboration between cross-block inventors, equivalent to roughly one quarter of the average level of collaboration. Geopolitical fragmentation also reduces inventor team diversity and the participation of inventors from rival geopolitical blocs. The effects were the broadest among Chinese firms. The findings suggest that geopolitical rivalry affects not only trade, investment, and technology transfer but also innovation networks through which new technologies are developed. In strategic industries such as 5G, geopolitical fragmentation may narrow the channels of international knowledge exchange and reshape the structure of global innovation networks.

Keywords: 5G; Geopolitical fragmentation; Innovation networks; Crossborder collaboration; Patents (search for similar items in EconPapers)
JEL-codes: F51 L96 O31 O33 (search for similar items in EconPapers)
Pages: 6 pages
Date: 2026-06-09
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