Techno-nationalism’s paradox in international standard setting

Abstract Grounded in realism, geopolitical techno-nationalism advocates restricting technology outflows to targeted entities from rival countries to safeguard national security and technological superiority. We examine this logic in international standard-setting organizations (ISSOs), which exemplify decentralized innovation ecosystems that shape future-generation technologies. We identify a paradox: techno-nationalist restrictions would unintentionally undermine, rather than strengthen home-country firms’ influence over international standards relative to targeted foreign firms. This paradox emerges because techno-nationalist logic clashes with two defining features of decentralized innovation ecosystems: (1) multilateral complementarity, where complementary knowledge needed to co-create value is widely distributed among firms, and (2) emergent technological evolution, where multiple potential trajectories exist and the eventual technological path is socially constructed. Both features make interaction and coordination between firms in ISSOs essential for influencing standards, yet technology disclosure restrictions directly disrupt these processes. The backfiring effect intensifies when home firms exhibit deep technological complementarity with targeted foreign companies, engage in early-stage standardization, or pioneer frontier innovations requiring ecosystem-wide validation. Evidence from the recent U.S. sanctions on Huawei in an influential ISSO supports our hypotheses. Our findings caution policymakers that techno-nationalist controls may backfire in decentralized innovation ecosystems and alert firms to factors that can increase their vulnerability to geopolitical tensions.