A recession is a time when production falls and trade dwindles, and people spend less money. Like the situation with high interest rates, people are less likely to buy luxury products in times of economic recession. But recession has a much greater effect than high interest rates. During recession, the uncertainty over jobs, and lack of consumer confidence causes people to cut down their spending as much as possible and can often only afford to buy essential items. It does not necessarily mean that a new technology will fail in times of recession, if the technology is something that will save people money, the product will flourish. For example, genetically modified foods are much cheaper than non-GM foods, and inorganic foods are cheaper than organic foods. Organic foods have been very popular recently with all the major supermarkets selling organic items alongside other items. However, if there was a recession, people may not be able to afford the ``luxury'' organic foods, and that situation could cause the GM food technologies to flourish and prosper. Also if there were new advances in pesticides and fertilisers during a recession, these technologies would be a success. Unemployment has the same effect. If there is high unemployment, the population has less money to spend on luxuries and will want to try and save money. Although recession would cause some products to fail in the marketplace, recession can also cause problems in the development stage. A company would find it difficult to find investors for their new technology, because there were would be a general lack of confidence.
The introduction of sanctions by the government, either by placing limitations on levels of production or requiring a company to gain official authorisation to enter or remain in a given market (e.g. broadcasting licences or pharmaceutical products) can result in failure. Taking the case of the pharmaceutical industry, products must pass tests carried out by government scientists and be given approval before entering the market, which is not guaranteed, despite extensive research and development, at considerable cost. Also, it simple may not be feasible to enter the market, given the stringent sanctions enforced by the government. Such sanctions may be introduced to monitor business practise, protect consumers' interests or to simply maintain a controlling influence on the technology or market as a whole. This often introduces much 'red tape', thus preventing companies from operating with the optimal level of efficiency; therefore, reducing the ability of the company and hence technology to compete in a given market.
The outbreak or threat of war can cause failure for a number of reasons. The effect on the economy of the country, in addition to individual markets, particularly technological industries, can result in the failure due to financial reasons. The heightened fear of terrorist attacks following the attacks on the World Trade Centre, for example, has increased the fear that nuclear facilities could become targets; therefore, increasing the contentious nature of the nuclear power industry, thus reducing confidence amongst city analysts and ultimately leading to the failure of the nuclear industry. Also, the research and development of a product or technology may be halted or reorganised to concentrate efforts on areas relating to national security; thereby, increasing the likelihood of the failure of a new technology in a market, due to inability to maintain research and development at levels, resulting in a likely reduction in market share and a firms competitive advantage over rivals.
The imposing of taxes, whether paid by the manufacturer, for example due to tax on raw materials, or on the completed product and thus payable by the consumer, may result in the failure of a given technology. This may, for example be due to a lack of demand, as a result of increased prices and thus consumers' unwillingness to pay, or an inability to maintain or develop a competitive advantage over rival companies or technologies due to increased capital expenditure. For example, according to the former executive chairman of British Energy, the climate change levy (a single stage tax payable by business on fuel as a specific rate per nominal unit energy) resulted in increased business rates; therefore, contributing to the failure of the nuclear power industry. In addition to this, products that are categorised such that tax exemptions apply, are often adopted by manufacturers with the expectation that such tax savings will be desirable to the consumer. However, the Sinclair C5 was designed to meet new government incentives, such that owners would enjoy exemption from insurance, road tax, crash helmet and even a drivers license; therefore, placing substantial limitations on the design specification of the product.
Laws can in many situations restrict technological development and stifle innovation; therefore, limiting the viability of production which may result in failure. For example, despite being in place to protect the public, the stringent laws regarding the treatment, transportation and disposal of nuclear waste in the nuclear power industry, has created much hostility from lobby groups, in addition to anxiety amongst the general public; therefore, heightening the awareness of the sensitive, somewhat controversial issues regarding the industry, hence ultimately making nuclear power production less viable.
Regional politics may result in the failing of a particular technology, for example a feasible, successful technology in one region may fail to succeed in another, due to variations in any of the aforementioned political parameters.