Experts warn of fragmentation in global collaboration for innovation

Global collaboration around innovation and technology is still growing, but the sector is at risk of fragmentation amid heightened competition, the World Economic Forum (WEF) has warned in its second annual Global Cooperation Barometer.

“The three decades of increased cooperation that we saw after the Cold War has definitely ended. We are between world orders,” said Børge Brende, president of the WEF, as he presented the findings.

The WEF, an international organisation funded by contributions from 1,000 of the world’s largest companies, will gather world leaders for its annual meeting in Davos from 20 January.

Central to discussions at this year’s meeting will be the need to continue collaborating to solve cross-border challenges such as pandemics and climate change, Brende said. Mitigating the risks associated with artificial intelligence will also be on the agenda.

“One has to really struggle to find ways of cooperating when countries are also competing for increased influence in a new world,” he said.

Growing geopolitical tensions have already had an impact on research and innovation collaboration, with an increased focus on research security, and a reliance on tariffs and export controls, including the recent US decision to restrict exports of advanced AI chips.

At the same time, there have been efforts to step up collaboration with trusted partners, with the EU striking deals with countries including Canada, Switzerland, and South Korea to join Horizon Europe, its €95 billion research programme.

Slowdown warning

The WEF report notes that global cooperation in technology and innovation has continued to drive global adoption of new technologies. However, it also warns that “global fragmentation of frontier technologies” could slow global productivity growth.

“You see stresses emerging in [the number of] cross-border patents dropping, cross-border R&D dropping, and marked increases in national funding for AI,” said Bob Sternfels, global managing partner at McKinsey & Company, which contributed to the report. 

“All of those may harken to a future slowdown in cooperation around innovation and technology that we probably should watch for.”

The barometer measures 41 indicators across five areas of collaboration: trade and capital; innovation and technology; climate and natural capital; health and wellness; and peace and security.

Cross-border flows of pharmaceutical R&D have been steadily decreasing since their peak in 2020, but they remain above pre-pandemic levels, according to the analysis.

Despite a fall in global trade, foreign direct investment increased in 2022-23, although this was increasingly concentrated in a small number of developed countries, and in strategic sectors such as semiconductors, batteries, and renewables, Sternfels said.

Health warning

The WEF report is based on a limited set of data, comparing averages for 2022-23 to 2020-22 and the pre-pandemic period. It only provides a snapshot, and there is usually a lot of variation year on year. particularly when it comes to patents, said Kieron Flanagan, professor of science and technology policy at the University of Manchester.

“It’s very early to make big conclusions about a profound shift away from globalised research and development,” Flanagan told Science|Business.

The geopolitical context, changes in demand conditions and market opportunities, and technological opportunities are all likely to affect the strategies of companies engaging in cross-border R&D, he said.

Meanwhile, the 2022-23 period may not turn out to be representative, especially since it came just after the COVID-19 crisis, and was marked by Russia’s invasion of Ukraine, rampant inflation and the energy crisis.

While efforts are under way to reclaim production of sensitive technologies, such as semiconductors and technologies related to AI and defence, focusing on these areas could hide continuity in other sectors. “We have a tendency when thinking about technology and innovation to think of a few frontier examples and think they’re representative of the rest,” Flanagan said.

While the WEF sees collaboration as a driver of economic growth, and ultimately global progress, policymakers will also have to weigh these potential benefits against concerns about national and economic security. 

“The people pushing for more tech sovereignty in Europe would argue it’s better for resilience or for economic strength to maintain more control over technologies, even if it costs us more,” Flanagan said.