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The promise of global innovation lies in the unlikely combination of knowledge and information from different sources and locations. Companies that can scan the globe for fresh ideas and integrate knowledge from multiple subsidiaries around the world stand the best chance of generating innovative solutions. However, innovation is also one of the central arenas of geopolitical tensions. Governments aim to have a leg up in the innovation contest for national security and economic competitiveness. Consequently, when geopolitical tensions increase, governments strive to keep innovations at home and increase barriers to the cross-border flow of cutting-edge knowledge, technology, and information. Multiple technology standards further increase the challenges of cross-border knowledge integration. Companies withdraw or scale back foreign innovation efforts and the flow of ideas, talent, and resources slows. Proactive companies and managers strive to balance knowledge diversity with geopolitical risk, keep more sensitive projects at home, adopt operational strategies to have greater control over innovation, and differentiate between technologies.
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