Trade barriers are not needed now.
Protectionist sentiment is brewing. The Wall Street Journal reports a groundswell of support for CNN Anchor Lou Dobbs as U.S. presidential candidate, with his “fuming voice for the disaffected,” to stem the feared inward flow of immigrants and outward flow of jobs. But the nation has benefited enormously from globalization in development and supply of technologies.
Nothing could be more harmful to technology-based companies and their U.S. customers than the erection of trade barriers. Instead, America should promote open competition, technology neutrality and sturdy intellectual property rights.
Manufacturing has gone off-shore, as has some of the engineering work, but the nation’s strong technology companies, their supply chains, distribution networks, intellectual property development and business model innovations are responsible for record U.S. profit margins and economic growth. The United States is currently at its most competitive with the dollar weak against the Euro and other major currencies.
The technology sector has flourished with widespread benefits due to a global division of labor. American brands including Apple, Cisco, Dell, Hewlett-Packard, Intel, Microsoft, Motorola and many others stand at the pinnacle. For the most part, the wireless technologies we use are developed and sold by companies based in the United States and Europe. Leading Asia Pacific vendors Huawei, LG, Samsung and Sony Ericsson are substantially dependent upon and generate significant incomes for American companies Qualcomm and Texas Instruments which are also global leaders.
Stop government meddling at home and abroad. With a competitive internal market, U.S. technology vendors and service providers will continue to be the global trailblazers and major beneficiaries in emerging technologies and business models. Keep the borders open, give companies the freedom and incentives to innovate in technologies, brand, distribution and new business models in the ways they see fit.
ECONOMIC EFFICIENCY
The United States has far more to gain than lose. America is already doing what it does best, so let it do this some more, for example, with mobile Web 2.0. Encourage developing nations to specialize – particularly in silicon fabrication, manufacturing assembly, software coding or call center support – because that mostly complements what’s done in the United States. This will spur economic efficiency at home and help boost our export revenues abroad.
Open wireless access will not support the high customer service costs that come with today’s walled gardens and tightly controlled user experiences. Customer support demands will rise with increased diversity, lower levels of supplier integration and testing.
Without the off-shore call centers, it would be impossible to provide the high level of telephone support available to configure or troubleshoot, for example, a home Wi-Fi router bought at Best Buy for $49.99. Similarly, it won’t be economic for Android and other open devices – supplied independently of carriers’ monthly service fees and competing against subsidized devices that are bundled with them – to be supported from costly U.S. call centers.
Anti-competitive practices in developing and developed nations impede trade to the detriment of the United States and other nations. The United States should be the exemplar for open and competitive markets and shame nations into breaking their bad habits including:
- Manipulating standards and licensing to exclude or discriminate among technologies, as was the case in mandating GSM and as is proposed for DVB-H in Europe. China’s 3G licensing has been stalled in favor of helping TD-SCDMA technology, and spectrum is allocated unequally, depending on technology, in India. South Korea’s requirement for implementation of its Wireless Internet Platform for Interoperability software standard amounts to a ban on RIM’s BlackBerry.
- Weak or non-existent intellectual property rights in patents, copyrights, trademarks and regulation such as caps or compulsory licenses to limit or eliminate royalty payments to IPR owners.
- Poor intellectual property enforcement with rampant software piracy and product counterfeiting in China and elsewhere. In some cases, distributors of legitimate product face market barriers that illegal traders do not.
America should ensure U.S. companies and others worldwide play in open markets. Then, perhaps one day we might even get to see an American company or two establish a meaningful position in wireless carrier services outside the United States along with global heavyweights Vodafone, Orange, Telefonica and T-Mobile – just as Google, Yahoo!, Skype, YouTube and Facebook are leading globally online. Half the world’s population doesn’t yet have a mobile phone and only a small minority uses the mobile Internet or 3G. There’s still plenty of growth potential left for a wide variety of market participants worldwide.
Mallinson is founder of WiseHarbor, solving commercial problems
in wireless and mobile communications. www.wiseharbor.com
With the current economic climate, wireless operators face shrinking marketing budgets and reduced consumer spending.
Globally, the credit crunch is very much alive, and operators will be tightening their belts into the foreseeable future by putting off capital purchases.
