The U.S Must Win the 5G Race by Any Means Necessary

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WHAT IS 5G?

5G stands for fifth generation cellular wireless. 5G will introduce three new revolutionary features in our world: exponentially greater wireless Internet speed (up to 100x faster than the current 4G), lower latency (will be more responsive), and the ability to connect lots of devices at once (for sensors and smart devices). To give an example, with 4G it would take 6 minutes to download a 2-hour movie. With 5G, it will take all of 3.6 seconds.

The race to 5G is a race that will dictate the world leaders of the next decade. For example, when US won the race to 4G in 2010, US experienced tremendous economic and job growth. 4G technology allowed the US wireless industry to increase related jobs by 84% from 2011 to 2014, which added $125 billion in revenue to American companies, with $40 billion coming from app stores. The first 4G phones in the US appeared in 2010, which enabled 4G applications that changed our world, such as Snapchat, Uber, AirBnB, video calls, etc. If the US would’ve lost this race, these industries, advances in technologies and revenues would have gone to other countries.

As the world’s long-time leader, the US wireless technology industry employs almost five million professionals and contributes $475 billion per year to the American economy. Winning the 5G race could cause those numbers to explode in the near future. Studies show that 5G has is likely to create almost three million new jobs— and add $500 billion to US economic growth. It is a big deal.

5G IMPORTANCE ON ECONOMY/WORLD/COMPETITION

As our world turns digital, wireless technology becomes the most important competitive advantage between nations. The race to 5G is the most important thus far because our essential infrastructure in this country will be built using wireless technology. Our civic, commercial and military life depends on it.

100x faster wireless speed than 4G and reduced latency, will allow us to exponentially improve our connection with all devices. This will create new opportunities in manufacturing, transportation, health care, education, agriculture, and more. 5G will enable new services that will drive economic growth and job creation for years to come.

Historically, Europe won the 2G era, Japan won the 3G era, and of course, the US won the 4G era. But now, China poses a severe threat to winning the 5G era, which will have countless negative implications for the U.S. At a hearing before the Senate Committee on Commerce, Science, and Transportation in 2018, Mississippi Sen. Roger Wicker stated that “failing to win the race to 5G would not only materially delay the benefits of 5G for the American people, it would forever reduce the economic and societal gains that come from leading the world in technology.”

5G-CURRENT AFFAIRS-CHINA-TRUMP-HUAWEI:

Although US has a great reputation for its mobile technologies, Asia is dominantly leading the way regarding 5G. Four of the world’s five most 5G advanced nations are China, South Korea, Japan, and India.

However, no one can tell with certainty who will win the 5G race. A 2018 Cellular Telecommunications Industry Association (CTIA) report claimed that US was in third place in the 5G race, behind China and South Korea, while a 2019 CTIA report claimed that U.S. now shares the number one spot with China. Other reports put China as the clear winner, with functional 5G technology by 2020, while they claim that the U.S. is 5 years behind. AT&T Chief Executive Officer Randall Stephenson declared in March 2019 that China isn’t beating the United States on 5G – but then again, AT&T deceptively branded their new 5G E network pretending it uses 5G technology, when it used the regular 4G technology.

While these reports do not provide any clarity, these investments will. Starting in 2015, China has doubled down on investments in 5G technology, and has outspent the US by $24 billion to construct 350,000 new, 5G-compatible cell towers. During the same time, the US has built only 30,000 towers.

The reason China has prioritized development of 5G is because they understand that the race for 5G is a race for world-wide control. Michael Wessel, a member of the U.S.-China Economic and Security Review Commission, explained that China’s goal is to become the global innovation leader, and will do everything in its power to achieve this goal, legally or illegally.

One of the most important weapons for China to win the 5G race is the Chinese company Huawei. Currently, Huawei is spending a tremendous amount of resources on R&D (almost 40% of their workforce), most of which is dedicated to 5G. This is more than Microsoft, Intel or Apple’s R&D efforts.

In addition to superior dedicated resources, Huawei has a long negative history of operating outside the international law and order. Huawei currently faces bans in Japan, Australia, New Zealand and the U.S. over fears that China’s government could use its systems to spy on their countries. The CIA, FBI and NSA publicly warned against Huawei. The Pentagon banned Huawei and its products. Huawei has long been accused of espionage, and for doing illegal business with Iran. Most recently, Canada helped the U.S. arrest Huawei’s CFO Meng Wanzhou, and President Trump signed an executive order banning any US company from doing business with Huawei.

It is extremely important that President Trump, the U.S. and its allies stop or slow down Huawei’s influence and operational capabilities throughout the world. As stated earlier, winning the 5G race will allow the development of exponential technology and booming economic growth for those who employ this technology first.

CONCLUSION:

If Huawei and China win the 5G race, they will undoubtedly use this technology to win over allies and dominate the world for a long time to come. They will offer this technology to other countries in exchange for trade deals, military partnerships, and economic prosperity. They could also choose to offer this technology to all US enemies, except for the U.S., leaving our country unable to compete. Thus, it is of the utmost importance that the United States wins the race to 5G.

President Trump must continue to put pressure of China and Huawei, in an intelligent way. There is no easy answer to do so, especially with the US and China locked in a tariffs war. All trade talks between the two countries will definitely include Huawei as a bargaining chip.

The Trump administration, US industry and government leaders, and allies must work in concert to win this race, by any means necessary, and make sure that all (or most) other countries will receive the 5G technology from the US, rather than from China.

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Future of the VC Industry

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dont-follow-trends

FROM DISNEYLAND TO VC MANOR

Imagine gallivanting across Disneyland on a sunny March afternoon as the delightfully consuming scent of a fresh batch of popcorn kernels pop to perfection. The popcorn maker sits adjacent to the churros chariot that you’ve been evading all afternoon. Yet, this isn’t any ordinary trip to The Happiest Place on Earth. You’ve arrived early, the crowds are minimal and all the rides are operational. As you approach the renowned and recently renovated Indiana Jones ride, you are astonished to find a zero-minute wait and no line. Believe it or not, your timing was impeccable – Gather the troops, the 2 ½ minute Harrison Ford-themed adventure awaits.

HOW DOES THIS TRIP RESEMBLE THE CURRENT STATE OF THINGS FOR VCS?

Venture capital markets survived 2016 slumps, continuing on an onward and upward trajectory through 2017. The disruptors and catalysts with the emerging technologies come out on top. Although some disparity appears among volume and funds, the game play implications are massive. While a crowd-less Disneyland is unlikely, venture capital is thanks in large part to the current landscape.

As evident of Disney purchasing rival studio 20th Century Fox (the most significant cataclysm for the film industry in the 21st Century), VCs too aren’t short on cash. Lines are blurred and technology is changing the game for the industry – GET IT EARLY.

HOW CAN QUALIFIED COMPANIES GAIN A COMPETITIVE EDGE, AVOID DREADED WAIT TIMES AND TAKE A PIECE OF THE PIE? (theme park visit is optional)

Top 8 hand-picked Predictions for the Venture Capital Industry in the next decade:

  1. Technology/Big data/Automation etc. will continue driving M&A deals
  2. Full-stack professional services a trend evident by investor acclimate
  3. Venture funds will revive their passion for early-stage investments
  4. “Truly Great” companies will sidestep the venture funding circus altogether
  5. Investors receive larger stakes & are integral to the start-up team
  6. Increased liquidity, accountability and transparency is vital
  7. It’s a performance game folks. Personal + Professional Brand Synergy is instrumental
  8. Innovation, experimentation and crowdfunding lead to different types of VCs

For detailed predications and insights click here.

ON THE HORIZON

In the midst of the capital market’s landscape, regulatory overhauls, and record-breaking technology M&As with no sign of reprisal, 2020 will look very different than it does today.

Then, too, there is the surging stock market and, by extension, the rebound in technology IPOs. This has been fueled not only by a strengthening economy but by President-elect Donald Trump’s push to bolster the economy further by reducing taxes, streamlining regulations and sparking major infrastructure development.

Furthermore, the implications of evolving social organizations are worth noting. The New York based think-tank, Financial Policy Council (FPC) captures this trend in a June 2017 article titled, “Financial Power of Impact Investing.” It states:

“For many years the divide between instruments of philanthropy and investing has been clear cut. Investing strategies typically did not involve social organizations focused on non-governmental organization (NGO) concerns. However, the advent of millennial investing power, the rise of social enterprises, and the need for further asset diversification have blurred the line between both industries.”

Lastly, venture is still fairly segmented by geography. As localized hubs become more sophisticated and efficient, venture will truly be a global play.

What’s your power play?

CONNECT + CREATE:

Feature your brand and/or business:

  • Submit your thought-provoking, insightful, and note-worthy content or insights to contact@brandzainc.com or by simply including the hashtag – #VentureImpact in your comment below.
  • Diverse viewpoints and co-publications welcome. No industry, individual or inspiration is off limits.
  • Be featured in future publications.

Zana Nesheiwat is Founder of Brand ZA Inc., an integrated business solutions and impact-branding firm specializing in financial services, public policy, and technology. With global operations from Los Angeles to Dubai, the firm equips clients with intelligence and resources to effectively bridge business goals with turnkey brand strategy – driving growth across all touch points.

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