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This report is divided into three sections, which are published separately. The first, presented here, looks at the environment for competition by exploring how 5G creates wealth, the standards contest, and the effect of technological change in telecommunications as we move to an 'open' environment. The second will discuss the strengths and weaknesses of two key national competitors in Europe and China. A final section to be published later concludes by assessing U.S. strength and recommending elements of a comprehensive national approach to 5G strategy.

The growing recognition that technology builds national power has led to a narrative of a “race” between the United States and China. China is now what the European Union calls a “systemic rival” and technology is a central part of this rivalry. China has recognised the advantages of being a leader in technology and uses statist economic policies and espionage to obtain an advantage. Fifth-generation mobile technologies (5G) have become one of the most high-profile domains where this competition is playing out.

Key points:

  • The United States is not losing the 5G “race.” S. (and Japanese) technologies are essential for 5G infrastructure.
  • The United States is holding its own in the standards bodies and is well placed to repeat the commercial success it had with 4G.
  • 5G technologies meet the growing demand to create and move new knowledge faster and more efficiently than competitors.
  • 5G creates wealth by enabling new enterprise services for industry and by building the network that will support the internet of things.
  • The “killer app” for 5G has not been created, but this will change as entrepreneurs explore newly available 5G capabilities and develop services and products to use it.
  • Telecom is changing in ways that make Huawei hardware less important. The telecom supply chain depends on semiconductors and software—all areas where the United States has a substantial lead over China. In some cases, there are no Chinese competitors.
  • The problems attributed to a 5G “race” are overstated. The United States needs policies to speed deployment and reduce risk, but the larger issue is how to deal with an increasingly hostile China in a new kind of nonmilitary competition.
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