Innovation and competition in the global communications technology industry in the 21st century: North America, Europe and Asia

Innovation and competition in the global communications technology industry in the 21st century: North America, Europe and Asia. At the end of the 20th century, it was clear that the remaining national champions competing the telecommunications equipment sector would need to adapt to the convergence of telecommunications and data networks. Along with their data networking capabilities, the new entrants from Silicon Valley had a different business model combining accelerated innovation and rapid growth through acquisitions with stock-based remuneration policies to attract and retain highly-qualified employees. In response, the incumbents were forced to engage in major corporate transformation initiatives. As internet access and mobile phone adoption grew globally, the value chain of the sector was reconfigured with manufacturing moving to lower-cost locations and innovation expected to emerge primarily from Silicon Valley. When the dot.com and telecom bubbles burst at the start of the 21st century, the North American firms Lucent, Motorola, Nortel and RIM were particularly vulnerable. With the demise of these corporations, the continent has lost its capabilities in an industry that has significant importance for national security. Cisco is the new economy firm that drove much of the transformation of the sector but it has not emerged as a champion in the new landscape of converged communication networks. Instead, the leading firm in the sector is a new entrant from China. Huawei was founded in 1987 and it has successfully internationalized to sell telecommunications equipment to operators worldwide and diversified to sell high-end smartphones to consumers and cloud-related networks and services to businesses. The firm was extremely well positioned to benefit from the deployment of 5G networks when American policy makers engaged in unprecedented protectionist measures designed not only to ban Huawei from operating in the US but also to constrain all its activities by cutting off its access to chips. During the boom and bust period of the 3G era, the extent of corporate transformation undertaken by European firms was influenced by different technology and market choices, as well as different governance régimes and institutional environments. Intense competition from Huawei and the smaller Chinese competitor, ZTE, over the past twenty years has contributed to consolidation among previous national champions and only two European players, Ericsson and Nokia, are still in the industry. While traditional Japanese communication-technology companies have remained niche players, Samsung in Korea has entered the sector and engaged in a level of investment that suggests it aims to become a significant market challenger in the telecommunications segment. Case-studies of the major US, European and Asian firms compare the organizational learning practices to investigate reasons for innovative success and failure. For the three decades covering the transformation of the sector (1990-2020), each firm's strategic choices of markets and technologies and their sources and uses of funds will be examined for the purposes of comparison. The company studies examine the influence of different corporate-governance regimes on structures of organizational learning and modes of mobilizing committed finance. Both long-term institutional and government support for each firm will also be compared, as well as country-specific and regional initiatives in the area of regulation and deregulation of national telecom markets, standardization practices and protection for intellectual property.