Global Competition and Strategies in the Information and Communications Technology Industry: A Liberal-Strategic Approach

Abstract

This article examines the roles of multinational corporations and the European Union (EU) in structuring global competition around wireless standardization. It analyzes the realities of global competition in information and communications technology (ICT) markets from a more liberal-strategic viewpoint than the subsidy-based industry support promulgated by strategic trade theorists in the 1980s and 1990s. According to a liberal-strategic trade perspective, public actors try to tweak the rules of the world economy to structure global competition in ways that enhance job creation, overall competitiveness in high-technology sectors, and domestic welfare, rather than being primarily concerned about import competition. The story of the European approach to global standardization and competition--and the strategic use of international standards bodies by multinational corporations--primarily represents an aggressive outward-oriented strategy. European actors pursued a globally oriented strategy in the European Telecommunications Standards Institute (ETSI) with the objective of aligning Europe with market and policy developments in the rapidly growing markets of the Asia-Pacific region. By downplaying the importance of import competition, often stressed by strategic trade theorists a liberal-strategic approach to the ICT industry focuses on the prospect of cutting-edge innovations based on a coherent industry strategy that looks at the creation of internationally competitive technologies in the longer-term rather than at incremental change and current import competition pressure.