Frontier-technology markets are too narrow — here’s how to widen them

Abstract

When governments finance and purchase frontier technologies, their decisions help determine which firms gain credibility, accumulate experience and secure future opportunities. Drawing on the space, quantum and artificial-intelligence sectors, this article argues that early advantages can harden into bottlenecks when public programmes repeatedly favour the same suppliers or make rivals dependent on resources and routes to approval controlled by incumbents. The resulting entry and switching costs can weaken governments’ bargaining position, diminish competitive pressure and leave several programmes vulnerable to disruption at a single firm. We argue that public support should be guided by contestability: strong performance today should be rewarded without closing credible routes through which later suppliers and alternative technologies can demonstrate their value. Procurement arrangements should preserve the possibility of future entry and switching, with safeguards tailored to the source of dependence. We propose a forward-looking contestability check at major programme decisions, requiring agencies to identify emerging dependencies and justify any restrictions as narrowly and temporarily as the underlying need permits. Public funding should build technological capability without creating private chokepoints that foreclose future choice.