Innovation and Threats

All major research programs that study technological change find common ground in emphasizing the explanatory significance of domestic institutions in determining national innovation rates. And yet, after decades of research, this domestic-centered approach has yet to identify any particular set of institutions or policies that explain variation in innovative performance over time and across cases. Recently, a new research program has emerged which argues that this bottleneck to theory development is due to a critical omitted variable bias: international security. This article probes one facet of this argument by examining the relationship between international threat environments and national innovation rates. The regression results show a positive effect of threats on national innovation, a finding that is robust across different specifications and periods of analysis. Additionally, unlike previous studies that find no significant relationship between security alliances and military innovation, the opposite is true of threat: states faced with high external threat environments tend to innovate at the defense technology frontier.