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MIT SMR Strategy Forum
Each month, we pose a question about business, management, technology, or public policy to our panel of academic experts. Here you can see what they think and why.
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We asked our panel of strategy experts to tell us how strongly they agree with this statement:
Introducing 5G networks 3-5 years ahead of other countries will give Chinese firms an advantage.
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Raw Responses
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Responses weighted by panelists’ level of confidence
Across the world, the race to deploy 5G — next-generation internet connectivity — is heating up, with several countries in contention for offering this powerful network technology first. 5G will offer much faster networks for businesses and consumers and enable new advances in internet of things technology. China, South Korea, the U.S., and Japan are among the countries most likely to make the first commercial 5G network debut, and for the U.S. and China in particular, the technology has become a focal point in an escalating trade war. This month, we asked our panel of strategy experts to examine the competitive scenario if China were to achieve a 5G rollout first.
Panelists
| Panelist | Vote | Confidence | Comments |
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Agree | 6 | “I think it depends on how strong the network externalities are and the degree to which 5G technology once installed can be replaced with superior technology.” |
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Agree | 5 | “First-mover advantages are often exaggerated.” |
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Strongly Agree | 5 | “Pioneers do not always benefit. But in this case, it seems likely that they will.” |
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Agree | 8 | “A 5G network that is built earlier in a region moves businesses in that region into the future sooner. They can experiment with new products and services and be further up the learning curve. The cost is that global demand for those services is still far off, which diminishes their relative advantage.” |
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Agree | 8 | “Early experience, learning by doing, control of standards, and large scale will provide an advantage to equipment manufacturers like Huawei and ZTE, and to handset suppliers, especially with barriers to foreign firms in the Chinese telephony market.” |
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Strongly Agree | 9 | “There are no compelling applications for 5G yet, but there are many promising prototypes in security, entertainment, and logistics. Give inventive and competent firms time to explore, and they will invent something and figure out how to get revenue from it. More time is a big advantage.” |
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Agree | 7 | “Faster internet connectivity gives firms an edge in market analysis of all types, including financial. It gives firms an edge in responding to opportunities. The question here is whether access to 5G networks in China will be restricted to Chinese firms. If so, and if Chinese companies are not restricted internationally from access to data, then 5G will confer an advantage on them.” |
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Neither Agree nor Disagree | 7 | “Yes and no. “Yes” because it will create significant first-mover advantage in a huge market. “No” because it ultimately depends on whether the U.S. can freeze Chinese companies out of Western markets. This will be interesting to watch.” |
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Strongly Agree | 8 | “A technological lead is usually valuable. This may be especially important in autonomous vehicle technology, which will rely on 5G networks.” |
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Agree | 5 | |
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Agree | 6 | “But how much of an advantage? How much did Minitel help the French in the long run? And given potential for spyware via Chinese hardware, being a second-mover might be a better position in the long run. One big gain to 5G seems to be competition to cable providers. Not sure how much that makes a difference to overall economy.” |
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Agree | 6 | “There are multiple versions of 5G, and many companies and countries are trying to leapfrog in this area, but some of the key strategic adoption initiatives in China are likely to allow Chinese firms such as Huawei to have some advantages over competitors such as Ericsson and Nokia. But not sure if these advantages are decisive.” |
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Strongly Agree | 10 | “Whoever gets access to 5G first will be first to develop new technologies that require superfast speed, reduced lag time, or increased network capacity. A lag of three to five years creates a head start for Chinese firms that will be difficult to close.” |
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Agree | 8 | “It is typically the case that having access to early technology adoption leads to a leg up on introducing and benefiting from complementary technologies and innovations.” |
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Strongly Agree | 8 | “The degree of advantage is heavily dependent, of course, on how good the Chinese technology proves to be.” |
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Disagree | 8 | “If China actually beats other countries by three-plus years, it probably would give Chinese firms an advantage. But it’s unclear that they will. 5G has already begun being deployed in Korea and the U.S. It’s also not clear whether the version that China adopts will become the standard. If it does not, early deployment might even become a disadvantage.” |
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Strongly Disagree | 8 | “Which Chinese firms? Not the carriers, for whom competition is local. Not device makers, for whom 5G (because it’s a standard) will not be a differentiating feature. Maybe infrastructure producers, like Huawei or ZTE, but it looks like security concerns will harm them in the U.S., and their real advantage in addressable markets is cost-based.” |
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Strongly Agree | 7 | “5G is a big deal, and the U.S. is fumbling its rollout.” |
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Agree | 10 | “Access to 5G infrastructure and customers on 5G connections will enable Chinese firms to develop a wide range of products and services that will be more advanced than those in countries without 5G. There will be second-mover advantages for the other countries, but it could still take a while to catch up.” |
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Neither Agree nor Disagree | 6 | “The advantage here isn’t obvious. Local demand may spur local innovation (and a head start on 5G tech development), but not necessarily in a way that precludes non-Chinese firms from jumping in now or later. Moreover, the international success or failure of Chinese firms may be sensitive to other countries’ tech and security policy three to five years from now.” |
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Agree | 8 | “Working infrastructure, coupled with the large protected domestic market, will stimulate massive commercialization of related and complementary products and services by Chinese firms, which in turn will accelerate technological development.” |
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Agree | 8 | “The Chinese government can be expected to privilege national firms in building out this network and technology providers whose systems will interface with this platform.” |