## The Innovation Blindspot

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**Canonical URL:** [The Innovation Blindspot](https://www.imf.org/en/publications/fandd/issues/2026/09/the-innovation-blindspot-mehran-gul)

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## Bibliographic details
- Authors: MEHRAN GUL
- Published: September 1, 2026

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### Overview
- Author: MEHRAN GUL
- Publication: F&D Magazine, September 2026
- Central thesis: The global technology narrative is overly binary—framed as a US–China zero-sum rivalry—and this obscures alternative systemic models of technological development that can expand our understanding of how innovation occurs.

### Limits of the US–China binary
- Key observations:
  - The US–China framing focuses on tribal competition between two principal antagonists and misses systemic variation across geographies.
  - The role of Chinese central planning in tech is often overstated; major Chinese firms (Alibaba, Tencent, ByteDance) are not state creations and adopted Silicon Valley practices.
  - China and the US represent different intensities of a similar market-driven model rather than wholly distinct innovation systems.
  - Many revolutionary technologies (the internet, email, Bitcoin) emerged outside commercial companies, indicating that venture-capital-driven firm models are not the only path to transformational innovation.

### South Korea: cooperative competition and longevity
- Findings:
  - South Korea’s chaebol (Samsung, Hyundai, LG) defy the conventional innovator’s dilemma by maintaining longevity and entering frontier industries.
  - Samsung: early handhelds in the 1970s; rose to be the second-largest producer in 2007 when Steve Jobs announced the iPhone; within five years it topped Apple as the No. 1 smartphone maker.
  - Samsung acts as a major supplier to rivals (including Apple), earning revenue when competitors sell products—an example of competitive cooperation.
  - Hyundai, founded in 1947 as a construction company, now competes in robotics, batteries, and electric vehicles.
  - Korea’s experience shows evolution (large incumbents adapting) can preserve jobs and stability compared with disruptive creative destruction.

### Singapore: state-led capability building and GovTech
- Findings:
  - Singapore’s growth was shepherded by government planning and interventions rather than purely from start-ups.
  - The Technopreneurship Investment Fund allocated $1 billion as a limited partner in foreign venture capital funds to attract expertise and build local capabilities.
  - Singapore’s government-linked venture funds became early investors in Alibaba, Baidu, and BYD.
  - GovTech: a government agency employing more than a thousand developers, operating with a start-up culture and building systems such as Singpass, a widely adopted digital ID used to access thousands of services.
  - Singapore demonstrates that public-sector institutions, when structured differently, can be primary drivers of meaningful technological innovation.

### Conceptual implications for innovation theory
- Observations:
  - The standard political-economy contrast (market-oriented vs state-led) is insufficiently nuanced for real-world tech sectors.
  - Venture capital, staged funding rounds, rapid scaling, and winner-take-all dynamics characterize much technological change, but they are not the only viable architecture for producing transformative technology.
  - Protocols and open standards have produced foundational technologies, suggesting the dominant venture-capital-backed commercialization model is a choice, not a necessity.
  - Experiments with alternative organizational forms (DeepMind contemplating public interest company status; OpenAI’s nonprofit origins; proposals to build platforms as protocols) indicate limited but notable exploration of nonstandard models.

### Policy-relevant takeaways and recommendations
- Reframe analysis:
  - Reframe technology competition as a contest among different systems of innovation rather than solely between countries.
- Study and learn from diverse models:
  - Examine Korea’s cooperative competition and chaebol adaptability as strategies for incumbent renewal and social stability.
  - Study Singapore’s purposeful public-sector capability building (e.g., GovTech, Singpass) and targeted venture-fund investments (Technopreneurship Investment Fund).
- Encourage institutional diversity:
  - Support alternatives to venture-capital-first commercialization—protocols, public-interest corporate forms, and public-sector technology agencies—to diversify how powerful technologies are developed and governed.
- Balance disruption and stability:
  - Recognize the social costs of creative destruction and consider policies that foster evolution and adaptation within incumbents alongside support for new entrants.

### Key statistics and timepoints (as stated)
- Publication date: September 2026
- References to prior works and dates: Sebastian Mallaby, 2022; Kai-Fu Lee, 2018; Financial Times selected The New Geography of Innovation as one of the best books of 2025.
- Samsung: first handheld devices in the 1970s; second-largest producer in 2007; within five years topped Apple as No. 1 smartphone maker.
- Hyundai founded in 1947.
- Technopreneurship Investment Fund allocated $1 billion as a limited partner.
- GovTech employs more than a thousand developers.
- Singpass used to access thousands of services.

*Source: The Innovation Blindspot, F&D Magazine (MEHRAN GUL), September 2026.*

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_Source: https://www.imf.org/en/publications/fandd/issues/2026/09/the-innovation-blindspot-mehran-gul_