Editor’s Note: Jeff Ferry is chief economist at the Coalition for a Prosperous America (CPA). Follow him @Menloferry
Currently, there are only two non-Chinese wireless network vendors, Nokia and Ericsson.
[Jeff Ferry | July 2, 2020 | Industry Week]
In the global competition for wireless networks, Chinese tech firm Huawei is now the world’s leader. The Trump administration is rightly concerned about this, since Huawei has been repeatedly accused of intellectual property theft, industrial espionage, and even of implanting spyware in its products. It should now be Washington’s goal to get Huawei out of foreign telecom networks, especially those of our allies.
There’s some good news on that front, however. UK Prime Minister Boris Johnson has announced that Britain is now rethinking Huawei’s role in the country’s burgeoning 5G network, citing concerns about “hostile state vendors.”
If the United Kingdom pulls out of its agreement with Huawei to supply 5G wireless networks, the U.S. should use the opportunity to leverage further technological progress and to encourage more countries to reject Chinese suppliers.
The U.S. and UK governments could form a bilateral committee, composed of a small number of public and private sector individuals from each country. Backed with a budget of $1 to 3 billion annually from each side, the committee could provide funding for promising tech startups. Doing so could help to launch the 21st Century tech firms that will compete with Huawei’s emerging 5G dominance.
The overriding need in 5G today is for more options among the vendors that sell wireless networks to telecom companies. Currently, there are only two non-Chinese wireless network vendors, Nokia and Ericsson. And both lag behind Huawei in terms of features, technology, and pricing.
The U.S. and the UK have a joint interest in supporting tech startups that could offer new choices to the world’s telecom networks. This is not an impossible task, since there are already three promising U.S.-based startups in operation. But these emerging firms are struggling to raise funds since America’s venture capital system has largely turned its back on the telecom and semiconductor sectors that develop key innovations in wireless networks.
An advanced networks committee formed between the U.S. and UK could accelerate the development of alternative suppliers of 5G systems. With both countries pooling their money, a team of experienced technology professionals, venture capitalists, and telecom executives could help government officials fund and guide the development of promising startups. Ideally, the committee would give priority to companies doing their product development and manufacturing in the U.S. and UK.
U.S. firms are currently working with a wireless technology known as OpenRAN. Many predict that OpenRAN will help western companies catch up and eventually surpass China’s 5G vendors. But no smart investor places all his bets on one technology. The U.S. and UK should back a range of new technologies. There are other areas such as radios and modulation formats where innovation could generate breakthroughs enabling the west to retake wireless leadership. The history of the Internet—where the U.S. has invented roughly 90 percent of relevant technologies—demonstrates that ambitious, independent startups, in competition with each other and industry leaders, are the source of most technological breakthroughs and new business models.
The United States and the UK lost their leadership in wireless networks 20 years ago, when their national champions disappeared. Today a moonshot effort is urgently needed in the world of 5G wireless and its supporting technologies. A U.S.-UK tech arrangement could provide a smart, strategic opportunity for two allies to collaborate—reestablishing leadership in one of the most critical industries of the 21st century while expanding their influence for customers worldwide.
Read the original article here.