The Impact of the Global Technological Divide on World Economic Leadership, Using Examples From a Number of Developed and Developing Countries

Abstract

Recent technological trends and, particularly, the global technology fracture, significantly affect power distribution in the world economy. However, the problems that arise due to these tendencies and their possible consequences for the economic world order remain understudied. This article assesses the impact of the global technology fracture on economic leadership in the context of the contradictions of the West-East development models, taking into consideration both interstate conflicts in the innovative field and the rising power of big-tech companies. Complex index construction is employed to formalize the concept of leadership in the world economy and a panel data regression model is used for estimating effects of the technology fracture on it. The sample contains data on major macroeconomic and technological indicators for 30 western and 10 Asian countries from 2010 to 2019. As a result, it is concluded that the presence of a clear plan for the implementation of information and communication technologies by the state can have a positive impact on the economic leadership of a country, and the growing importance of technology giants has a negative impact on this indicator. Finally, this article contributes to a better understanding of the economic leadership concept among scholars and draws policymakersʼ attention to the necessity of new regulations in the technological sphere.