In-House Counsel

Sovereignty and National Security

Sovereignty and national security have always been key concerns for national governments. The need for self reliance and the avoidance of reliance on external parties are natural instincts for countries. In the early days, many developing economies adopted a policy of import substitution to avoid a dependence on foreign goods by creating domestic companies that can meet internal demands. Such initiatives also created jobs within the country to keep unemployment low. While these concerns and fears are legitimate and genuine, in today's global economy, it does not make sense for every country to produce everything it needs, nor to have domestic companies run every industry.

For example, while steel is important for nation building, steel production is not something that very country can do or need to do. Instead, they buy what they need from whomever offers them the best value for money. Air travel is essential to international commerce, but not every country can produce their own aircrafts. Today's main producers are Boeing and Airbus, and most airlines buy aircrafts from them. Extensive reliance on purchasing aircrafts from Boeing and Airbus has not limited the competitiveness and distinctive service level offered by globally successful airlines such as Singapore Airlines and Cathay Pacific. In the same breath, although many countries started with national carriers, not many have survived today, e.g. Swissair collapsed and the successor national airline Swiss was bought over by the German Lufthansa. Domestic production does not appear to be not a criteria for success.

What about the ICT sector?

Full post as published by Cisco High Tech Policy Blog on November 22, 2009 (boomark / email).