In June, the U.S. Commerce Department announced changes to restrictions imposed last year on Chinese telecom giant Huawei to ensure that American companies and organizations are not left out of international standards development activities for 5G and other technical challenges.
Had the U.S. not reversed its isolationist course, Americans would have been hamstrung internationally at a time when U.S. leadership is critically needed. But it begs the question: Why did the administration implement restrictions in the first place?
A little over a year ago, the Department of Commerces Bureau of Industry and Business (BIS) hastily added Huawei to the Entities List, which restricted American companies from doing business with Huawei. This created another problem: It compelled American engineers to disengage from international standards development activities for fear of running afoul of the BIS restrictions. In their absence, Huawei and non-U.S. companies, not subject to the same limits, filled the influence vacuum.
The BIS decision only exacerbated an atrophying of U.S. leadership in standards activity. A 2018 report prepared for the U.S.-China Economic and Security Review Commission on the internet of things noted that, in the global standards race, U.S. interests are missing or under-represented in key international standardization organizations. At the International Standardization Organization, the U.S. ranks 16th in technical committee participation, while China ranks 4th. These examples are more the norm than the exception in international standards bodies.
Historically, the U.S. government has never been the most committed to international standards development. U.S. companies have often led to technological development. This allowed American companies, backed by modest governmental support, to advance American standards interests even without full-throated participation in international standards activities. But the dominance of the American industry is weakening amid the rise of international competition hungry to take advantage of a distracted America, flat-footed and mired in partisan political infighting.
While America withdraws, CNBC reports China is doubling down on their engagement, aiming to influence the standards for the next wave of technologies from telecommunications to artificial intelligence through an ambitious 15-year blueprint that will lay out its plans that could have wide-ranging implications for the power Beijing wields on the global stage. Through a Standards 2035 initiative to complement its highly effective China 2025 initiative, China is designing a playbook to assert leadership in technology R&D and production.
China is actively encouraging standards development activities through legal and policy changes and aggressive standard-setting activities. Chinas steps will advance its economic transformation with a shift from low value-add production to sophisticated technological products and services coming from its supply chain lines.
Chinas attention is a foil for Americas lack of focus. The U.S. for many years now has had no meaningful manufacturing strategy nor a strategy to preserve U.S. technological leadership. American leadership cannot be demonstrated behind high-walls, by scapegoating others, or with congratulatory nods to past success.
The welcomed BIS regulatory reversal comes at a time when standard-setting can be more beneficial than ever. A 2014 report by the National Institute on Standards and Technology observed that [s]tandards are more important today than ever before Nations that actively participate in developing international standards may be able to influence the provisions to favor their products or those that they prefer. Countries should use every lever at their disposal to exert more engagement withand therefore influence overglobal standards development. Failing to do so impoverishes not only their international objectives but their domestic companies who are best positioned to take advantage of them.
The BIS restrictions are indicative of a fear that seems to grip U.S. economic goals of late. The United States has been retreating from the global marketplace. Under the guise of America First, the U.S. is withdrawing from the kinds of international engagement that made the United States the worlds largest economy while also increasing economic prosperity globally.
The U.S. is now facing a familiar crossroads: will it reach into the future or cling to the past? While reaching into the future will require a greater commitment to international engagement than we are now espousing, it brings with it an incredible opportunity to shape positive change and advance American business interests. Rather than cede the field to China or any other country, America should seize the mantle of leadership, and help shape the future of global technology standards.
John Mitchell is president and chief executive officer of IPC, a global trade association representing the electronics manufacturing industry.
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