This archive report was first published on 29 June 2020.
As the world becomes increasingly digital, the demand for technology is on the rise. However, the US government's recent restrictions on technology exports are set to have a significant impact on the global innovation ecosystem.
Published on June 29, 2020, the restrictions aim to limit the supply of US-made technology components to certain entities, particularly in the EU, UK, Korea, and Japan. This move is seen as a security measure, but some argue that it may be a ploy to slow down the pace of technological development by countries or companies seen as competitors.
One of the main concerns is that the restrictions will target companies like Huawei, which has proven track records of operating in over 170 countries for over 30 years. The company is poised to become a leader in emerging technologies such as cloud and AI, and the restrictions will have a significant impact on the technology supply chain.
Within the next five years, the global territory and application dominance of 5G will be determined. The question is whether the US and its allies can mount sufficient competition to Huawei to retain and capture enough market share to sustain a long-term competitive position.
The restrictions are a departure from the best practice of developing an open ecosystem based on common standards. Many African countries, such as Ethiopia, Kenya, and Rwanda, are working towards becoming technology manufacturing powerhouses and would benefit greatly from technology sharing and collaboration.
Instead of leaving it to the forces of supply and demand, the current restrictions attempt to control who can use what technology and who can work with which partners. This goes against the principles of an open ecosystem and is likely to slow down the whole innovation ecosystem.
As a result, the consumer will suffer, with their ability to switch, mix, and match products from different suppliers disappearing. The cost of being forced to choose and stick to one line of products will also increase, given the monopolistic realities that will emerge.
Furthermore, if products cannot talk to each other easily, or if they end up using different standards, or if supply chains get fractured, and there is no trust left in the ecosystem, it will also make the internet less secure.
It is essential to ensure that trade barriers do not hamper technological advancements. No country or entity has a monopoly on know-how, and continued collaboration is crucial for development, especially in these uncertain times.
