5G and the Global Economy: How Static Competition Policy Frameworks Can Defeat Open Innovation

September 2019

Wireless telecommunications help knit together the global economy. The efforts of hundreds of thousands of engineers employed by thousands of firms have cooperated and competed to deliver solutions, not just compatible across firms but continually improving across time. This miracle of coordination is due to Open Innovation,  a paradigm by which innovating firms use external as well as internal ideas to improve their devices and enhance the consumer experience. This paradigm has helped make mobile telecommunications one of the most, if not the most, innovative engines in the world economy. 

This paper explains how the mobile wireless open innovation model has been impaired by regulatory interventions and judicial decisions – so much so that the open innovation model, which has been so important in the evolution of the mobile wireless industry to date, could well collapse and be replaced by a vertical integration “stack” model which would be less friendly and beneficial to consumers. In this new reality, open dialogue between technology developers, chipset partners, and device manufacturers would become less open, less frequent, and more proprietary.

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