The US needs a new techno-democratic statecraft: Start with 5G

The United States is drafting the opening lines of what will likely be a chapter of tremendous consequence in its history: a new strategic competition, a contest of economic power rooted in technological capability. At stake is America’s influence on the world stage and the efficacy and resilience of liberal democracy. The leaders in adopting emerging technologies and those who shape their use will garner economic, military, and political strength for decades. The leaders of the Chinese Communist Party are scripting the rival narrative.

For too long, America’s approach to technology policy has been fractious and reactive. On its current trajectory — with a shrinking share of global R&D spending, human capital shortfalls, and the rapid rise of a near-peer competitor — the United States cannot continue to coast. America’s ability to harness the emerging technologies that will fuel the 21^st century economy to the fullest extent possible is at stake. Falling short would squander economic and societal benefits and expose the United States to avoidable risks and challenges. 

To effectively compete, the United States needs a new strategy and a comprehensive commitment to technological leadership — techno-democratic statecraft guided by a true national strategy for technology. This national strategic approach to technology policy should have three main lines of effort and be largely proactive and affirmative:

1. Promote American innovation with more investments in R&D and human capital, homegrown and international; and by securing key supply chains.
2. Protect key areas of competitive advantage with targeted multilateral export controls and bolstering counter-espionage and IP theft safeguards.
3. Partner with other democratic technology leaders — one of America’s greatest strengths is its unmatched network of allies and partners — on matters of tech policy, such as supply chain security, standards-setting, and countering the illiberal use of technology.

What would techno-democratic statecraft look like in practice? The 5G dilemma offers an illustrative example. Today’s wireless telecommunications industry is an inefficient oligopoly. Four companies — Huawei, Nokia, Ericsson, and Samsung — supply most of the world’s 5G radio access network (RAN) equipment such as radio amplifiers and base stations. Their RAN hardware is vendor-proprietary and not inter-operable. This ‘locks in’ vendors with operators and puts up big barriers to other companies wanting to enter the market, resulting in a worryingly limited supply chain.

That Chinese firm Huawei dominates this oligopoly is especially problematic because it directly threatens the integrity of global 5G networks. Beyond the cybersecurity, espionage, and data integrity concerns is the fact that, with broad deployments of Huawei equipment, Beijing could directly hold foreign critical infrastructure at risk.

Chinese industrial policy all but ensures the oligopoly will persist, and likely worsen, as Nokia, Ericsson, and Samsung face growing hurdles to compete. Beijing supplied Huawei with as much as $75 billion in subsidies, enabling the company to spend billions on R&D it could otherwise not afford and to undercut the competition on price to gain and protect market share.

This is the reason why most of the solutions floated by U.S. policymakers so far — creating a national champion, boosting the fortunes of Samsung, or taking an equity stake in Nokia or Ericsson — fall short of effectively addressing the core problem. They perpetuate an inefficient industry that Beijing tilts in its favor through trade practices that the United States wouldn’t have the stomach to negate.

Much better is promoting innovation and competition in the industry. Wireless infrastructure built on a modular architecture with open interfaces for the RAN presents that opportunity. A modular architecture allows an operator to choose multiple vendors for a range of offerings, rather than being locked in with a single large integrated vendor. Open interfaces — the ability of equipment from any vendor to work with that of another — make that possible. This is a proven and mature technology alternative, with numerous commercial deployments around the world.

A restructured industry based on open interfaces would directly address the prevailing concerns over untrusted vendors such as Huawei and the broader inefficiencies of the industry. There are distinct advantages to be gained in security and interoperability, supply chain resiliency, probable cost savings, and the opportunity to stimulate much-needed competition in the sector. Taken together, these advantages do much to blunt Beijing’s industrial policies that have enabled Huawei’s predatory anti-competitive practices.

The idea of open RAN is gaining traction in U.S. policymaking circles, most notably with the USA Telecommunications Act, pending bipartisan legislation that would provide funding for open architecture technologies. An important provision of the bill is that money would be made available to work with foreign partners to accelerate the adoption of secure and trusted equipment around the world.

Multilateral coordination will be key to promoting a healthy telecommunications sector based on open architecture. Because doing so would comprise a paradigm shift for the industry, the United States can best help bring about such sweeping change in concert with allies. This does not mean heavy-handed industrial policy but rather signaling and incentives such as conditioning industry subsidies, boosting specific R&D efforts, and crafting 5G strategies with open interfaces at its core to nudge these solid ideas on the path toward broad adoption.

5G is but one example of where like-minded countries have the opportunity to reshape foundational aspects of the 21^st century economy in ways that promote healthy competition and bolster the deployment of technology in alignment with democratic norms and values. The same should be done for a slew of key technology areas, such as semiconductors and genomics. Doing so will require fresh thinking and a new approach to technology policy: techno-democratic statecraft — a bold, proactive and affirmative strategy to create and maintain vibrant and creative tech sectors and to outcompete illiberal states, with collaboration among the world’s tech-leading democracies as a cornerstone.

Martijn Rasser is a senior fellow in the Technology and National Security Program at the Center for a New American Security (CNAS). Prior to joining CNAS, he served as a senior intelligence officer and analyst at the Central Intelligence Agency and as a senior advisor in the Office of the Secretary of Defense. Outside of CNAS, he is advising the Biden campaign on tech issues.