Lei Li and Niklas Kirsamer

September 2026

In a recent article in Wirtschaftsdienst, Lei Li and Niklas Kirsamer examine how geoeconomic restrictions can influence innovation and technological development.

Focusing on the US-China conflict, the article shows that restrictions on access to technologies and critical inputs can also create incentives to develop domestic alternatives and strengthen research and development.

The authors describe this response as “defensive innovation”. Whether restrictions slow down or encourage technological progress depends largely on the existing capabilities of the affected economy.

Skills and technological development

The article also looks at the role of universities and labour markets. In China, growing demand for technological independence has increased the importance of engineering, science, and research-related skills.

Evidence suggests that fields more exposed to the US-China conflict saw changes in university admissions as well as stronger demand for research and development occupations.

These developments show that geoeconomic restrictions can affect not only trade and production, but also the longer-term development of skills, research capacity, and technological capabilities.

Prof. Lei Li is Professor of Economics and Politics of China at the University of Göttingen. Niklas Kirsamer is a research associate at her chair.

Read the full article on the
Wirtschaftsdienst website.

Published in Wirtschaftsdienst, Vol. 106, Issue 9, 2026, pp. 656–662.