It’s difficult to get beyond the headlines about the race between the United States and China to set 5G standards, and competition over the future global market for emerging technologies.
But it’s worth considering what’s really going on in the messy, multi-layered ecosystem that develops international standards – and what it means for Australia.
The ability to continue leading the global development and commercialisation of emerging technologies is central to future US economic growth and prosperity.
Standards are part of that picture. Sometimes described as the ‘connective tissue’ between technology and the market, standards establish specifications for products, services and systems.
China’s industrial policies to secure leadership in emerging technologies include a well-resourced, state-led strategic approach to the development of relevant standards.
The international standards landscape has evolved over a number of decades, and includes entitles ranging from including international bodies, treaty-based organisations and industry consortia.
The recent development of international standards for 5G has been a focus point in China’s standards ambitions, not least because it represents something of test case for Chinese leadership in wireless technology, as outlined in Beijing’s ‘Made in China 2025’ agenda.
China’s ambition is delivering results: it is anticipated Chinese companies will secure a greater percentage of standards in 5G than they did in 4G.
The development of 5G networks has sensitised governments to the security implications of emerging technologies and sparked a degree of interest in the way in which China has become an active and effective participant in international standards development.
But this misses the operational challenges facing technology firms, industry bodies and officials involved in standards development. 5G represents only one aspect of a larger group of emerging technologies towards which both China and the United States have articulated leadership ambitions.
Looking ahead, standards development will be equally important for artificial intelligence and the Internet of Things.
Standards represent an important aspect of global technology competition, and one that has grown in significance in light of China’s decision to take a more active role.
The United States is an active member of the international standards community, but it has also – through its industry dominance – been able to rely on de facto standard setting through market size.
The comparatively slow pace of standard setting in international organisations often makes it unappealing to firms seeking quick-to-market solutions for emerging technologies that can be developed through a consortia model.
The increasing size of China’s technology sector will continue to place pressure on US industry, even as the development of new technologies creates opportunities for economic growth.
Amid these challenges, the United States may need to find a way to take a more active role in identifying and articulating where it does have a preferred approach.
The US National Institute of Standards and Technology or an affiliated entity could be asked to examine the standards community and its international interactions in a more holistic and pro-active fashion than is usually possible in the competitive US landscape.
One positive from increased attention on standards, if managed correctly, is the potential for a deeper understanding about what technical standards are, and a corresponding opportunity to place greater value on them as part of emerging technology rule-setting and their role in facilitating digital trade.
This is particularly important for countries such as Australia that participate in the development of rules governing economic behaviour – and depend on the existence of those same rules.
The next two decades will see substantial growth in digital activity across the Indo-Pacific region. Alongside international trade agreements and regulatory settings governing emerging technologies, the standards setting is an expanding area of activity in the international rules-based order.
Australian business’ ability to transact among these digital economies will be as dependent on transparent, balanced and open digital rules as they have been for traditional goods and services.
Hilary McGeachy is an Alliance 21 Fellow at the United States Studies Centre and author of its new report, US-China technology competition: Impacting a rules-based order