Opinion | US tech blind spot risks harming the country’s competitiveness

At home, Trump promises a sweeping deregulatory agenda coupled with industrial policy aimed at boosting domestic tech businesses. Abroad, his administration appears poised to double down on aggressive restrictions aimed at keeping American technology out of China’s hands.

Yet Trump’s grand vision to “make America great again” overlooks a crucial detail: the cycle of innovation matters hugely for technological progress. The path the US is charting risks fostering a tech ecosystem dominated by mediocre products like attention-grabbing social media apps, while failing to nurture the kind of transformative inventions that drive productivity and long-term economic growth.

Joseph Schumpeter, the renowned Austrian economist who popularised the term “creative destruction”, identified three key stages of the process. First, there’s innovation – a breakthrough idea or method. In the realm of artificial intelligence (AI), this stage includes the development of neural networks, which laid the foundation for deep learning and, more recently, the transformer architecture that has powered the rise of generative AI.

Then comes commercialisation, when disruptive ideas evolve into market-ready products. This is where tools like ChatGPT – applications built on large language models (LLMs) – emerge and become accessible to everyday consumers. Finally, there’s diffusion, the phase when the novel technology becomes pervasive, reshaping industries and daily life.

So far, discussions of tech regulation have tended to focus on the later stages of this process which bring immediate economic benefits, often overlooking the early stage of invention. It is true that regulations to ensure safety, guarantee data privacy and protect intellectual property can raise adoption costs and slow down product roll-outs. But these guardrails are less likely to stifle innovation at the invention stage, where creative ideas take shape.