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AFTF 2023: the innovation arms race won’t stop at tech

Editor, ANZ Insights

2023-11-02 00:00

The innovation arms race won’t be limited to emerging technologies and the semiconductors critical for their performance, according to The Asia Group president Rexon Y. Ryu.

As competition between nations like the United States and China evolves, other sectors could find themselves subject to the same ‘carrot-and-stick’ polices seen in the emerging tech sector, he said.

Speaking at the 2023 ANZ Finance & Treasury Forum in Singapore, Ryu said the sectoral focus of both the US and China was “not a static issue” and would inevitably “evolve”.

“There are many adjacent sectors to semiconductors, AI and quantum I think will ultimately be affected and implicated by this question of competition,” he said. “Whether it's biotechnology, EV, storage, [or] critical minerals.

“Those are the evolving dimensions where I think you will continue to see more and more change that builds on top of what we've seen over the last few years.”

Ryu said the US approach was to pursue a “small-yard, high-fence strategy” which helped it exert control over a small number of industries it deemed critical to its goals.

“The question in my mind is: ‘what is the size of the yard?’” he said.

Ryu spoke on a panel at the event which also featured Xenia Wickett, Geopolitical Advisor at Wickett Advisory, and Cameron Mitchell, Head of Geopolitical Risk at ANZ. You can watch highlights from the session on video below.



Throughout 2023, geopolitical tensons around the world have begun to manifest across industrial policy legislation aimed at building economic security, as nations look to onshore – or ‘friend-shore’ –  what they see as technological advantages.

In the US, the recent CHIPS and Science Act looks to invest in US technological dominance while slowing down China’s efforts to do the same. Other countries such as Japan and South Korea have also made moves in this space.

Mitchell said what was critical was how the world saw what these countries, particularly the US, were attempting to do.

“A lot of the issue here will be what the US on the one hand is trying to achieve, but then also the perceptions of what the United States is trying to achieve from the other side,” he said.

For Wickett, this modern kind of industrial policy is not entirely new, but how it is being implemented is. The shift in responsibility around know-your-customer and supply chain policies is a key example, she said.

“Historically it's [been] governments that know the customer,” Wickett said. “And if they don't like who the customer is, they take action.”

That has changed in contemporary times, she said – including 20 years of governments encouraging financial services groups to have a stronger understanding for their customers.

“Fast forward a little bit and we're now at a point where we're saying to the technology companies, ‘not only do you need to know your customer, but you actually need to know the content of what your customer is putting out there in social media,” Wickett said. “And by the way, we're going to expect you to manage them if you don't.’”

For business, it’s worth considering what that means for compliance expectations in the future, she said.

“[Soon] your compliance people will be saying to you… is not just enough to know the next person is in the chain,” Wickett said. “You have to know the whole chain right to the last person.

“And if you don't, if government doesn't slam you, society is going to slam you.”


The 2023 ANZ Finance & Treasury Forum, held in Singapore on September 28, brought together some of the Asia Pacific region’s preeminent thought leaders, with the aim of sharing innovative ideas that spark action.

The forum explored key topics of global importance across geopolitics, sustainability, and the technology that will help bring your business into the future.

ANZ will provide coverage and insights into the key themes from the forum over the coming weeks. You can click here to see our full coverage.


Slow down

Ryu said while it was clear there was policy acceleration on both the incentive and disincentive side, for the US, the disincentive – slowing down rivals like China – would be the easy part.

“The harder side in many ways is the is the affirmative side,” he said. “How do you create opportunity for [the US] to accelerate faster? And to stay ahead in competition with a country we view as our greatest strategic competitor?”

Ultimately, these initiatives will come at the cost of fragmentation in the global market, Ryu said – in contrast to historical policy in favour of fostering global trade.

“There'll be incentives and disincentives to invest or to pull out, depending on where you are and depending on which sector it is around the world,” he said. “And I think that trend will touch on a number of different sectors that that that draw from critical and emerging technologies.

“This notion of fragmentation, I think, will develop as we get deeper into this century.” 

AFTF 2023: the innovation arms race won’t stop at tech
Shane White
Editor, ANZ Insights
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