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2. What is backwards innovation?

  • Strategy of innovating in developing markets and then distributing in developed markets e.g. wind-up radios
  • Innovating in developed markets and distributing in developing markets e.g. computer
  • Producing products backwards
  • Innovation by walking backwards

3. Why would Protectionism be negative in the long term?

  • The revenue from tariffs may become too big for the government
  • It can be expensive for a business to upkeep
  • It weakens the protected industry because there would be no reason to innovate due to lack of competitors
  • It means that business will get less revenue

4. Advantages of being in a trading bloc:

  • Firms inside the bloc are protected from cheaper imports from outside e.g. EU shoe industry from China/Vietnam imports
  • It reduces the beneficial effects of specialisation
  • The benefits of free trade between countries in different blocs are lost
  • Products cost more for consumers because efficient producers from outside the bloc may have tariffs added to them

5. What is Protectionism?

  • A method to encourage imports to your country
  • Shielding a country's domestic industries from foreign competition by taxing imports
  • Removing restrictions or barriers on the fre e exchange of goods between countries
  • An idea formed to create competition for home industries
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