Your reading of the situation is correct. There is a few reasons why this is the case:
1. De-industrialization
Imperialism allows western countries’ capitalists to exploit the cheaper resources and labor of some economically less developed nations and acquire super-profits on top through unequal exchange, since doing this is much more profitable than producing industrial goods in the west directly, western industrial capitalists have a huge incentive to move their factories to the third world. This has the effect of de-industrializing the west itself, and has gotten so bad that some European countries like the UK can barely even produce their own steel anymore, which is very bad given how important steel is to a lot of industries.
This makes the west more and more dependent on supply lines they don’t necessarily control in order to get the resources and goods they need, in this situation the smart thing to do would be to diversify your supplier countries do reduce any ones’ leverage over your country. But…
2. De-localization and American influence
The US has been hard at work making sure Europe was dependent on them above anyone else for supplies.
They have also have been offering generous advantages to businesses who would de-localize to the US, aggravating the problem for their own profits.
This is part of the reasons why the US has been doing somewhat better than the rest of the west despite de-industrialization and financialization affecting them too, they’ve been sucking on Europe like a parasite to offset the problem ever so slightly.
3. Innovation vs profits
As you’ve noted, most of the technological progress lately has been happening in the third world who has been catching up while the west seems to have lost it’s drive and is being overtaken. There are a lot of factors at play here but the main issue is the profit motive. A lot of research and a lot of things that are useful for a society aren’t profitable.
Take China’s high speed train network for example, it’s a very good thing for the peoples that there is such a good method of public transportation available, but it’s not profitable, the Chinese state is running it at a loss (offset by other income sources, but still). Because of that, such a good railway network would never be built in the west because the western companies and even governments are only interested in infrastructures if they bring in a profit.
An other example is renewable energy. For many years a lot of peoples have had and propagated this narrative that, since green tech is becoming cheaper, profit driven organizations would have an incentive to switch away from fossil energy, yet this hasn’t happened. Why? Because profit isn’t that simple.
Why can a business buy a pile of woof for 1$ and sell a chair made from the wood for 2$? Where do the added 1$ come from? It comes from work, they can take this chair made from 1$ worth of wood for 2$ because it’s not just a pile of wood anymore, something happened to it, someone used their time and energy to turn the wood into a chair. If it was possible to use some kind of spell to turn wood into chairs without effort, competition would drive the price down to the value of the dead materials that makes it: 1$, and the profit rate in the industry would be 0$ or very close to 0.
This, in a nutshell, is why cheaper green tech hasn’t pushed corporation to transition to clean energy. Sure, it’s cheaper, but it’s also vastly less profitable because green tech like solar panels and wind turbines are much more automatized than fossil fuel which mean less peoples who’s work add value to each unit of energy produced which mean proportionally less profit. This is why the green transition hasn’t happened and won’t anytime soon as long as the west is driven by the profit motive above all else.
4. What can be done?
The problem is the profit motive and private property. The capitalists shouldn’t be allowed to do whatever they want with the industries and infrastructures society needs, taking them to a different country whenever they feel like it, taking jobs away from us to exploit less developed nations, etc…
What needs to be done is to kick out the neoliberals, nationalize a bunch of important industries, restrict what capitalists are allowed to do with their private properties and moving toward abolishing private property altogether.
And the way to move toward this goal is to learn political theory and start organizing. Go to marginalized communities, poor peoples, even to the petty bourgeois not wealthy enough to move their business to the US and get left to die by the wealthier international bourgeoisie who are robbing their country, help them, listen to their problems and their complaints, help them understand where these problems come from and why the right’s analysis of the situation isn’t correct, and build a democratic popular movement able and willing to take power, by force if necessary.
Economics Explained has a massive neoliberal, pro-western bias which makes his analysis very questionable to say the least.
Their latest video about my country France for example is 18 minutes of him yapping about why akshually it’s a good thing that Macron is taking away our retirement pension, during which he says such absurdities as unironically arguing that France is kinda socialist.