Setting the standard for innovation in Europe
Bernardo Matos, Director IPR Policy at Ericsson, shares his thoughts on the fundamental role of standards and fair competition in driving European innovation.
It is easy to forget, but ten years ago, we weren’t able to watch high-definition videos on our smartphones; cellular networks simply couldn’t handle that kind of traffic. Today, 4G enables this and much more. As we move into the 5G era, an even greater shift will take place in terms of how people use and think about connectivity. By 2023, 20 billion IoT-enabled devices are expected; in a couple of decades, things like self-driving cars, real-time virtual reality and sophisticated e-health applications will likely feel as second nature to us as a good old-fashioned text message.
We tend to overlook the very real technology working behind the scenes to enable all of this – technology that extends far beyond the devices that consumers hold in their hands. Terms like “beamforming” and “carrier aggregation” may seem like something straight out of Star Trek, but the average person uses them multiple times a day without realizing it. They also don’t know that these technological breakthroughs resulted from the combined efforts of some of the most brilliant engineers on the planet, working together in the Third Generation Partnership Project (3GPP) – an open innovation framework that enables technological advancement through the creation of cellular standards.
Although this model of open innovation is, at least in part, a European success story (dating back to when GSM technology was progressively rolled out in other regions), most politicians in Europe will yawn when they hear the word “standardization”. Certain translations of the term, like the French, German, Portuguese and Spanish, are closer to “normalization”, and risk generating even stronger reactions. This disinterest, particularly at Member State level1, is a problem because the open innovation model is at risk of disappearing if action is not taken to safeguard it.
Some of the threats it faces stem from the fact that some major companies using standardized cellular technology don’t pay (or delay paying) licensing royalties for it, often because they have no business incentive to do so. Why pay proactively if the eventual fine will cost the same? While the licensing environment in this space is not perfect, the high-profile disputes between big players often overshadow the reality: there is a thriving ecosystem of over 5 billion unique subscribers (and growing). The fundamental role of patents in this field – enabling innovators to invest significantly in R&D and be compensated for sharing its results for the benefit of the public – is often lost.
Other concerns relate to global competition, including allegations that some companies outside of Europe benefit from state financing conditions that allow them to contribute technology to standards without a real need to recoup investments in R&D. Such concerns can be linked to economic and industrial policy agendas designed to turn countries’ national contenders into global champions. Trade implications abound, but the EU has understandably been cautious about raising these in any formal capacity.
Whatever the reason, if this open innovation model breaks down, the impact will extend far beyond companies actively contributing to cellular technology. European politicians are currently focusing on important issues like cybersecurity, data protection and artificial intelligence, but they forget that losing the race on mobile communication technology will render some of these discussions largely irrelevant. What kind of cybersecurity can we expect if the underlying communication technology, used globally, ends up in the hands of a few?
Important technological advances continue to originate in Europe. Ericsson is currently the key contributor to 5G cellular standardization work and in 2016 filed a landmark 5G patent application laying the foundation for all future networks. Other European innovators continue to play a leading role in this process, despite the growing influence of Chinese and Korean players. But concerns are mounting about Europe being left behind in the race towards future technologies. To preserve our legacy of innovation and empower all European companies to compete on the global stage, this model needs to be protected and fostered.
In today’s tense global political climate, it is important to stress that these ideas are not meant to inspire protectionism. They are instead about ensuring that, in a global economy, all innovators have a fair chance to compete and succeed on the merits of their technology – regardless of nationality. This concern deserves to be placed firmly among the top priorities of the next European Commission, to inspire Member States to understand the implications of these issues on their shared future and on that of European innovators.
1 On a positive note, the European Commission has been active in this space with a Communication on ICT Standardization Priorities in 2016 and a Communication on Standard Essential Patents in 2017.
Disclaimer: the views, thoughts and opinions expressed in this article belong solely to the author and may not necessarily represent those of Ericsson.