If you close off the market to US tech giants, maybe they'll have some amount of market dominance at home, but I would doubt that would mean they've "caught up" tech wise. There would be no incentive to compete. American EV manufacturing is pretty far behind Chinese EV manufacturing, protectionism didn't help make a competitive car, it just protected the home market while slowly ceding international market after international market
I agree, protectionism is bad most of the time but it has its place. It is bad when you are ahead, it is useful when you are behind(You want them to be exposed to the cutting edge market but before that you want them to be able to exist in first place even if they are not the best at this very moment).
China's EV dominance is a result of local governments investing and buying from local businesses.
It would be the same with Russia&China. They will receive money from the governments and will sell to local buyers and will aim to expand to foreign markets.
As I said, most AI talent is not American but it is concentrated there. Give them a reason to be somewhere else, some will be somewhere else.
The solution to that would be to force companies within the EU market to compete with each other (fair competition laws), just that idea is less popular than the first winner in a market ensuring they stay dominant (because it serves the interest of those who just got power). Same reason why big tech rules EU in the first place.
> There would be no incentive to compete.
Why not ? First of all there would be plenty of incentives for EU companies to compete with one another (and plenty of capital flowing to them as the European market is big enough), then there would be competition with US actors in the rest of the world. That's exactly how the Asian economic model has been built: Japan, Taiwan, South Korea all have used protectionism + export-based subsidies to create market leaders in all kind of domains (from car manufacturing to electronics and shipbuilding).
As a counterexample, China's tech industry has caught up and in some ways surpassed the US, partially due to being closed off.
I think there's a few more important reasons beyond being closed off:
- Regulatory friendliness (eg. DJI)
- Non-enforcement of foreign patents (eg. LiFePO4 batteries)
- Technology transfer through partnerships with domestic firms
- Government support for industries deemed to be in the national interest
> As a counterexample, China's tech industry has caught up and in some ways surpassed the US, partially due to being closed off.
How did you come up to that conclusion? We don't have access to an alternate universe where the Chinese tech market was open. There is a real possibility that it would have been far ahead had it been open.
We do have access to records from the before times when the internet was wide open and Facebook, Google and Microsoft were big in China. Well, Microsoft is still big because they're not an internet company and unfazed by censorship, but the exit of Google and Facebook took a lot of pressure off Baidu and the entire Chinese social media ecosystem.
Facebook and Google were never big in China, not even close.
Google had 31% market share in 2010 http://news.bbc.co.uk/2/hi/business/8455712.stm I haven't been able to find numbers for Facebook.
Don't have a source either but I was living in China back then and basically no one was using it. It was QQ and Renren.
But also due to the U.S. driving away smart people from the U.S. to China.
China is an example of protectionism working. The world is not governed by simple rules.