In some other countries, in contrast, the prominence of government-owned firms with a degree of monopoly power, together with a regulatory environment that protects large incumbent firms and makes the entry of new firms difficult, reduces the competitive pressure for innovation and the application of new ideas.
Competition is one of the key benefits of free and open trade; companies that are exposed to global competition tend to be much more efficient and to produce goods of higher quality than companies that are sheltered from international competition. Other economic factors have probably been important in translating technological change into material progress.