Protectionism threatens the technology industry
10/3/2012 1:57 PM EDT
China to dominate the value chain?
Just examine it from each part of the value chain. In terms of
semiconductors, China is expanding production both from domestic and
international manufacturers, the number of engineers in the country is
growing exponentially, and the number of Chinese semiconductor companies
is also growing rapidly.
It is becoming difficult to keep track of all
the semiconductor start-ups focused on processors in China because they
seem to come out of nowhere quickly. The processors powering todays
advanced electronics are really all system-on-chip (SoC) solutions. As a
result, they just require the knowledge to piece together different
intellectual property (IP) blocks into a single piece of silicon.
seen Chinese companies achieve working silicon processors in as little
as six months and create products that will eventually compete with the
mainstream products from industry powerhouses like Qualcomm.
software, Chinese OEMs remain reliant upon foreign operating system in
many areas, but there is nothing to stop them from adopting an
alternative solution, especially of the powerful Chinese carriers
support a competing standard to Android, iOS, and Windows. And, the rest
of the value chain for retail, content, and services already has
options unique to China. So, what if the industry litigation, tariff
battles, or other global political issues pushed the Chinese government
and industry to become closed off to foreign technology solutions? And
the same could easily be said about any of the emerging markets,
especially the BRIC (Brazil, Russia, India, and China) countries.
moral of this article is that even in the age of the global economy, we
need to not lose sight of the value and fragility of open borders and
competition. The technology industry is a very high profile segment of
the economy and one that is subject to great scrutiny by all. Although
it is natural to focus on protecting a company’s technology and/or
market position, competition ultimately benefits the entire industry. As
a result, in may be better to compete, than to resort to measures that
eliminate competitive threats.