Standardization ensures technologies work together. As innovations continue, standardization continues to ensure the integration of hardware and software and, since the advent of smartphones, it has become easier and easier to take for granted the synchronous use of mobile networks, operating systems, and apps. Myeongwan Kim, a PhD candidate with the Department of Economics, has been researching how the Chinese government has been advancing specific homegrown technologies toward the international standard-setting organization (SSO) that sets these standards for compatibility in mobile communications. His findings are described in the paper Exporting State-Promoted Technologies and the Direction of Global Innovation: Evidence from 5G Standardization.
“The Chinese government provides guidance on which specific technologies to promote by publishing policy documents, essentially white papers, and ensures all Chinese firms participating in standard setting comply with this guidance,” Kim explained. “They meet all Chinese firms before each standardization meeting to share their political priorities and ensure compliance. If firms don’t comply, they face punishment, as seen with Lenovo in 2016. This shows that regardless of whether firms are private or state-owned, they must follow the government’s political objectives in the area of 5G standardization.”
To conduct his research, Kim used a new database linking technical documents from the SSO responsible for 5G standards, Chinese government policy documents on 5G, and 5G patents. The results show that the country’s policy is to promote domestic technologies in areas where China is lagging other countries. If these technologies become standards, they form the base for future 5G innovations globally. These follow-on patents make up a significant portion of 5G patents filed worldwide after standardization. “Economically, this means firms worldwide might have to build on less advanced technologies.” he explained.
As Kim writes in the introduction to his paper, standardization is a strategic concern for not only firms, but also for governments.
“In standard-setting organizations, firms propose technical specifications that require the use of their patented technologies and negotiate their adoption as 5G standards. This is a highly competitive process,” Kim said. “For example, Apple pays $7.5 per iPhone sold to Qualcomm because Qualcomm owns patents that implement certain parts of the 5G technical specifications. The Chinese government coordinates its firms to participate in this standard-setting process to advance certain domestic technologies. This competitive process is crucial because it represents significant economic incentives for incorporating proprietary technologies into the standards. For China, it presents an opportunity to enhance global reliance on its technologies while generating significant licensing revenues worldwide.”
The implications go far beyond the monetary. “Understanding China’s influence in 5G standardization is crucial to understand not only the broader economic implications but also the strategic importance of standardization, especially in sectors involving national security.” he said.
5G technologies have dual-use applications, serving both civilian and military purposes. For example, some technologies are used to control and geo-position drones. Another example is 5G security algorithm. Using those technologies from China could raise serious national security concerns for other countries both now and in future.
“Drones are now deployed on battlefields. Everyday, we rely on 5G security algorithms that protect transmitted data,” Kim explained. “The Chinese government is particularly interested in standardizing these dual-use technologies, especially their own technologies with drone applications and own security architecture for 5G security standards, which has substantial national security implications for other countries. If these technologies are adopted as 5G standards, they become the basis for new 5G patents globally. For instance, if China standardizes its technologies for drones, US firms will build upon these technologies when inventing new drone technologies, increasing the risk of compromise if used in sensitive applications.”
The paper has made important contributions to the security discussion.
“Myeong has written an extremely ambitious job market paper that I believe breaks new ground on an important issue: Can countries use product standards to influence the direction of subsequent innovation?” said Professor Peter Morrow, a member of Kim’s supervisory committee and his TA supervisor. “He is asking a critically important question: do certain countries influence these standard setting meetings to force other countries to use their technologies?”
Doing this highly detailed and security sensitive research has been difficult, but Kim has found the culture within the Department of Economics to be supportive.
“In terms of academic culture, at least in international trade at our department, it’s a very small group and it’s very collegial because people genuinely care about each other’s research,” he said. “I’ve received a lot of help, not only from my committee members, but also from my colleagues. Other students attend my talks, give comments, and we have long chats about my research. They even send emails with relevant articles.”
It’s a culture he has already started transferring to undergraduate students in the tutorials he has led as a teaching assistant.
“Myeong has been a great TA,” said Professor Morrow. “He is unusually patient and kind with students. In addition, he is always willing to put in the time to make sure his students understand a concept clearly.”
Kim has methods in place for ensuring those concepts are clear for students.
“One thing I did in the international trade theory course, is start with intuitions and real-life examples before introducing mathematical model,” Kim remembered. “Students often find it challenging to connect mathematical models to real-world applications. So, I always make sure they understand the underlying mechanisms intuitively first. Once they grasp that, the mathematical models make total sense to them.”
Kim believes that the collegial academic culture goes beyond discourse and teaching. It is ultimately good for promoting research and innovating new methodologies.
“I think continuously communicating with others, and being open about your findings is going to make research more efficient,” he said. “More efficient research for everyone because where people are respectful and communicative, they cross-pollinate and keep each other on track. That kind of accountability is important. I will take this collegiality and open communication with me in my academic career because leads to productive outcomes for everyone.”
Return to the Department of Economics website.
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