The Worst Innovation Mercantilist Policies of 2014

December 8, 2014

Innovation is a central driver of growth. As a result, an increasing number of countries are seeking to become innovation leaders. Unfortunately, the methods that many choose are grounded in “innovation mercantilism”: a strategy that sees technology-based exports as the key to success while relying on distortive and protectionist tactics to achieve that goal. These practices do not just damage other economies; they damage the entire global innovation system, leading to less innovation and productivity. Moreover, they often do not even help the countries embracing the practices, instead, mercantilist policies lead them to neglect the greater opportunity to spur growth by raising the productivity of all sectors of their economies, not just a few high-tech ones.

The Eight Worst Mercantilist Policies in 2014 Are:

  • China: Abused its anti-monopoly law by instigating capricious investigations against foreign multinationals in order to protect domestic firms.
  • China: Threatened the long-term viability of the global solar industry through massive and unfair subsidies to Chinese-owned solar companies.
  • India: Issued a patent rejection for the cancer drug Abraxane.
  • India: Introduced new telecommunications equipment tariffs.
  • Indonesia: Prepared legislation that requires foreign Internet companies to store user data locally.
  • Nigeria: Proposed “Guidelines for Local ICT Content Development.”
  • Russia: Implemented localization requirements on Internet service companies.
  • Spain: Passed legislation taxing Internet news aggregators for publishing snippets of articles in search results.