TECHNOLOGICAL DEPENDENCE AS A SOURCE OF ECONOMIC VULNERABILITY: EVIDENCE AND POLICY OPTIONS FOR EMERGING ECONOMIES

Emerging economies increasingly depend on foreign technology for the layers of the digital economy that matter most: semiconductors, cloud infrastructure, software platforms and, most recently, artificial intelligence (AI) compute and models. This article asks whether such dependence is a distinct source of economic vulnerability and which policy options reduce it at acceptable cost. Using a structured narrative review of institutional reports and peer-reviewed studies, supplemented by three comparative cases (semiconductors, cloud services and AI), it assesses evidence across four channels: supply interruption, lock-in and rent extraction, jurisdictional exposure, and capability stagnation. The evidence indicates that dependence is most damaging where it is concentrated in few suppliers, hard to substitute and legally controlled abroad. It also shows that export controls tend to redirect supply chains rather than halt them, and that strict localisation can backfire on domestic firms. The findings point to a portfolio approach: procurement and contract reform, multi-vendor and open-standard architectures, pooled regional compute, and sustained investment in skills. The article concludes that the objective for emerging economies should be managed interdependence rather than technological autarky.