“The US-China conflict is not going away sooner than the pandemic”, alerts Vonortas, who is co-organizing a series of workshops on the issues around technology upgrading and economic catch-up

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InSySPo: Prof. Vonortas, your research is diverse and encompasses different topics, such as university-industry cooperation, innovation networks, the relation between globalization and local technological capability and so on, all having a strong empirical base. Could you tell us more about your research interests and background?

Nicholas Vonortas: I’ve been trained as an industrial organization economist, which means applied macroeconomics. In that field, we have a lot of modelling and empirical investigation. Applied macroeconomics, for economics, means the study of firms and industries at the microlevel, studying strategies and policies, that reflect different industries and companies and so forth. However, I am not a classical microeconomist. Technology and innovation were always my main interests, both being very interdisciplinary fields. It involves not just physics, chemistry, engineering, business, sociology, but all of them together. Thus, I needed to have broader perspectives to engage with that topic. So, throughout my entire career I have been sort of working in the intersection between economics and other sciences, particularly looking at policy.

For example, at my institution in the US I’m a faculty member of the Department of Economics and I teach economic classes, but I’m also director of the Institute for Science and Technology Policy, which is in a different school. So, I’m always in between things.

However, I can split my research interests into four groups. The first one relates mostly to Science and Technology Policy. My second area of research is entrepreneurship. My third research interest involves collaborative agreements and networks, specifically focusing on innovation. Finally, I’m also involved in the evaluation of research and development efforts.

So, these are the areas where you can fit my research which are also reflected in InSySPo main research trajectories.

“There are value chains out there that are now being disrupted, reconfigured, thus offering opportunities to be exploited by countries such as Brazil, Mexico, Argentina, Chile, and others in Latin America”

InSySPo: An extensive list. But do you have any specific area where you feel you are devoting more attention over the last few months?

Nicholas Vonortas: Well, to be honest I would rank them as follows: first, entrepreneurship, since it is taking a lot of attention from me; followed by evaluation, collaborative agreements and at the bottom, in terms of intensity, general macro policy. Even though I’m one of the organizers of a book on “technology upgrading” and the challenges for emerging economies, a more “general” theme, I deal there with a more micro-level analysis. That’s where I am right now.

InSySPo: I would say your work lies in the intersection between a global look towards economy, analyzing phenomena such as globalization and global value chains, for example, and the microeconomics, the level of particular industries in particular countries.

Nicholas Vonortas: Perfect! You reminded me that as we speak I’m heavily involved in two papers that deal with global value chains, one of them based on European data and part of a significant project funded by the European Community, called GLOBALINTO. So, you can expect a heavily empirical paper coming up soon on global value chains.  

What I mean with that diversion is: global value chain is an interesting phenomenon of our times. We cannot avoid dealing with it or teaching it in the classroom, especially with the pandemic and the terrible geopolitical struggle between China and the United States. These two factors have disrupted global value chains the way we knew them. Now, instead of just looking at economic efficiency, companies will set up global value chains also looking at resiliency – with that I mean the geopolitical risks around the world.

That, in itself, is major news for emerging economies, because there are value chains out there that are now being disrupted, reconfigured, thus offering opportunities to be exploited by countries such as Brazil, Mexico, Argentina, Chile, and others in Latin America. Lots of investments are being redirected to different places and Latin American can play a significant role, with the note that these countries shouldn’t sit back and wait for things to happen. They should go out and search for these opportunities, because there are a lot of countries in the globe seeking for a piece of the value chains.

“Many people forgot how powerful governments can be, they are not trivial. Just take a look at the US-China trade wars”

InSySPo: Those geopolitical asymmetries kind of downplay the old utopia of globalization in which trades and economic activities are running freely from any local constrains. Well, now we know that it doesn’t happen like that, or maybe never happened.

Nicholas Vonortas: You see, I am old enough to remember the old times, those from, let’s say, President Allende in Chile. In those times, multinational corporations were considered as villains from which we needed to defend ourselves. That sort of approach changed completely in the late 80s-early 90s with the so-called “Washington consensus”, the neoliberal kind of approach, were the idea was “openness”: “we are open, others come in, and that’s how we learn”. That has also come to an end. We realized there are limits to this. Many people forgot how powerful governments can be, they are not trivial. Just take a look at the US-China trade wars. On that, I can even say there was a miscalculation from the Chinese side. Chinese governments have always been strong, but they wrongly assumed the US government wasn’t. That’s not the case. Just see how many of the electorate in the US sense their interests are not being “protected” enough, and they’re resisting to this [Chinese presence], so you have the conflict.

I think this conflict [US-China] is going to last much longer than the pandemic. The disease is very costly. it indicates how vulnerable the systems are, but it’s going to run its course someday and become a part of the history books just like any other pandemic. But the conflict between the US and China is not going away anytime soon. It interferes things like international production, international transfer of technology, relationship between countries, and so on, and we hope it stops here and not move to actual wars. Anyone who’s familiar with past History knows that major international conflicts are the result of economics.

We don’t want to reach these levels. But we cannot ignore the major challenges the world is facing right now. For people like us [who are studying economics and innovation], these are some really interesting times.

“The conflict between the US and China is not going away anytime soon. It interferes things like international production, international transfer of technology, the relationship between countries, and so on, and we hope it stops here and not move to actual wars”

InSySPo: Which are other ways in which those two major events of 2020: the Covid-19 pandemic and China-US trade wars have affected the field of Science, Technology, and Innovation Studies?

Nicholas Vonortas: Well, of course a lot of money is going into the vaccine race in recent times, but that is not the only thing at stake now. Most importantly, security is the main issue here. One of the things Covid-19 has shown us is how vulnerable we are in biological war. Most people do not go into the security aspect but just go to Washington and see. The most important discussion there is security, more than the actual sickness, even though they made a huge mess with their dealing of the pandemic. So, that brings that discussion closer to Innovation and Policy Studies.

More broadly, there has been a huge impact of those two events in our research field, both through the money put into the research and also the way we look at policy.

“Most people do not go into the security aspect, but just go to Washington and see. The most important discussion there is security, more than the actual sickness”

InSySPo: Changing the subject to the series of workshops you are co-organizing along some of your colleagues, with the first edition happening on November 4. We know it gathers contributions from an upcoming book to be published by Oxford University Press on “Technology Upgrading and Economic Catch-Up”. Could you tell us more about the story behind the workshop and the book?

Nicholas Vonortas: The basic idea for the book came in Moscow, Russia. At the time, 2017, we were at a conference held at the National Research University – Higher School of Economics, probably the top school in Russia for economics and business. They had this annual conference, and our co-editor prof. Jeong Dong-Lee, who is currently the advisor to the President of South Korea, gave a presentation where he addressed this idea from the World Bank that a good number of developing countries make the first step, increase their incomes, reach a state of development where they are in the middle income, but then they fail to make the second step to go higher and actually close the gap because the policies on the second step were different from those of the first.

InSySPo: Namely, the middle-income trap.

Nicholas Vonortas: Yes, but his talk was actually on what he called the middle-innovation trap. In other words, many countries are successful in imitating technologies and doing cheaper versions of existing products. The difficult is the jump towards designing your own products. So, that was his main research question: how to go from imitation to creation? That is what he meant with middle-innovation trap.

We thought about that topic, me, him and Dirk Meissner, another co-editor and host of the event, and decided that it was big enough to actually become a book. We asked Lee about his opinion on the idea, and we decided to jump on board. Considering the size of the discussion and the project, we decided to reach out to other people with help for the book. We went out and invited two other co-editors, prof. Keun Lee, from Seoul National University, and prof. Slavo Radosevic, from University College London. These two are superb researchers and they have a solid contribution on economic catch-up. Radosevic, for example, is probably the most recognized expert on transition economies, the transition of economies from socialism to capitalism and so on.

We invited them, they said yes, and the rest is history. After that, we looked around, invited some other collaborators, and finished the book. We also held an event at the University of Campinas (Brazil) last year, with InSySPo leading the way, with the presence of all the authors presenting their chapter drafts to the audience. After they received the comments and suggestions, they finished their chapters and now we have the final version of their works.

“Many countries are successful in imitating technologies and doing cheaper versions of existing products. The difficult is the jump towards designing your own products. […] How to go from imitation to creation?”

InSySPo: And now that we have those final versions, what can we expect from the workshop series?

Nicholas Vonortas: We have a collection of excellent chapters. Looking at the first edition, for starters, the initiator of the series, Lee, is presenting his chapter. His talk will be a much-advanced version of what he presented in 2017. His analysis is fantastic, and I hope a lot of people will pay attention to his presentation. Then, Keun Lee, is presenting his chapter, called “Leapfrogging economies”, i.e. how developing countries can leapfrog, jump ahead, of the developed ones. Two other contributions come from different groups from the UK. One led by Slavo Radosevic along his colleagues from University College London.

There is another chapter from Russia, coming from the Higher School of Economics. The author discussed the case of Russia as a country that faces challenges outside those areas where they perform great, economically speaking. For example, we know the Russians by their force on energy, military technology, and defense, but they have a lot of weaknesses in other areas.

We start more at the macro level, in this first edition, and then we move more to the micro level in the next workshops, ending with a discussion on environment and clean paths to development. Our next edition is certainly more micro-oriented.