Hale Report: Podcast Episode 5 with Kathryn Ibata-Arens on Technonationalism

posted by Lyric Hughes Hale on September 24, 2019 - 12:00am

EconVue interviews Kathryn Ibata-Arens, Vincent de Paul Professor of Political Science & Director of the Global Asian Studies Program at DePaul University.  Her new book has just been published by Stanford Press: Beyond Technonationalism, Biomedical Innovation and Entrepreneurship in Asia.

An expert on Japan, Ibata-Arens spent six years researching biomedical entrepreneurship in four countries: Japan, China, India and Singapore.  Among her conclusions: just the right amount of protection and openness with access to both internal and external markets and resources leads to the success in the biomedical industry. She calls this ideal state Networked Technonationalism or NTN.  A nation that can combine NTN with scientific talent, entrepreneurship, IP protection, and access to global capital will command the competition.

Technoglobalism by contrast means fully open borders. Until recently, the United States has been its greatest proponent, but now something has changed. In a stunning reversal of roles, China is now defending its use of intellectual property developed elsewhere in the world as belonging to all humanity, while the US is fighting hard to protect its proprietary technologies.

Ibata-Arens uses a non-Asian metaphor to describe NTN and the optimal mix of openness and protection:

Janus is the Roman god of beginnings, openings, and doors. Open to the outside, closed and protective to the inside, the Temple of Janus was open only during times of war.  Likewise, Asian countries seeking to improve their innovative and entrepreneurial potential have been compelled to open to the outside world, despite the risks to the domestic economy… This dilemma—open and exposed or closed and left behind—presents a challenge to national governments and is the central problématique of this book.
Japan, the second largest healthcare market in the world and once at the forefront of biomedical research, is now flyover country. Given its wealth, its educated workforce, and advanced intellectual property protection, it should have been poised for success. However Japan effectively closed its doors to inward investment and in the process lost more than money; it lost the expertise and global marketing reach that comes with international capital. A cultural aversion to risk has resulted in a near-absence of angel investing in the Japan, critical to growth in the biomedical industry. 

By contrast, China opened its doors to FDI (Foreign Direct Investment). Although a growing middle class able to afford better healthcare has made China a coveted market, hyper-localized domestic competition has wasted resources. China’s less-stringent strictures against medical experimentation and privacy have given the country an advantage in some fields, notably genomics. Lack of connectivity with the rest of the world could lead to information asymmetries that could disadvantage Chinese scientists and  entrepreneurs. The US is also pushing hard for better protection of its technology in China. Geopolitics could get in China’s way.
Ibata-Arens makes excellent use of company case studies to highlight the differences between countries. I particularly enjoyed the story of Biocon which is now India's largest pharmaceutical company, and its intrepid founder Kiran Mazumdar-Shaw. The advantages of a large, democratic market of English speakers and a highly-networked diaspora in the tens of millions make India a serious contender in the global biomedical industry. However, size does matter. Singapore has shown that a small market that is quite a distance from other large markets, can be a roadblock to success in a huge global industry. 
After finishing her book, I couldn’t help but wonder how this construct applies to other countries such as Australia and South Korea.  Ibata-Arens said that she had to stop somewhere, but she has recently been doing research in South Korea.  Even if you are not a participant in the healthcare industry, she has made a thoughtful and  invaluable contribution to our knowledge of how 21st century nations and markets interact--sometimes successfully, sometimes not. I hope you enjoy our discussion as much as I did. You can follow Kathryn on Twitter @ibataarens
And finally, a kind request. Please consider becoming a supporter of EconVue's open platform by visiting this link on Patreon.