U.S. Innovation Inequality and Trumpism: The Political Economy of Technology Deserts in a Knowledge Economy

Abstract

President Trump embraced economic populism centered on trade protectionism, restrictions on international capital and technology flows, and subsidies for American raw material providers and domestic manufacturers. More innovative U.S. counties roundly rejected this economic paradigm: voters in innovation clusters of all sizes and across the country repudiated Trumpism in both 2016 and 2020. Trump’s tariffs and attacks on global supply chains, restrictions on visas for skilled foreign workers, and his overall hostility towards high-tech sectors threatened the innovative firms that motor these places’ economies. Trump was different in degree but not kind from previous American populists such as Jennings Bryan and Perot: they too exploited innovation inequality, but were less successful because, before the digital revolution, the industrial organization of American technological progress was not rooted in vertically disintegrated global supply chains. Therefore, populism may be more than resentment towards elites and experts and go beyond nationalism and trade protectionism: it may threaten innovation in ways that elicit a strong reaction from places economically invested in technological progress.

Keywords: trade protectionism, neo-mercantilism, tariffs, economic development, inequality