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Competing with dominant global standards in a catching-up context. The case of mobile standards in China

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  • Vialle, Pierre
  • Song, Junjie
  • Zhang, Jian

Abstract

The process of diffusion of standards and competition between standards is susceptible to initial conditions and is path dependent. In this paper, the authors are interested in investigating to which extent economic actions and public policy initiatives can modify the outcome of a path-dependent process of competition between standards. They also aim to identify the factors that affect the success of such initiatives. To this end they analyse competition between mobile standards in China across two generations (2G and 3G), with the help of essential notions of economics of standards. Different policy initiatives have been taken to stimulate the domestic innovation and to relieve the burden of foreign IPRs, culminating with the introduction of a 3G domestic standard, TD-SCDMA, to compete with the established global standards. Despite the size of the Chinese market and the strong hold of the government on the telecommunications industry, it is found that the available market data indicate that these path-breaking initiatives have not been successful from a commercial point of view. From the case study, the authors analyse the reasons for the unsatisfactory market results and outline the main lessons to be drawn. They also investigate to which extent the Chinese initiatives have contributed to other objectives related to catching-up. It is suggested that they have provided opportunities of learning to innovate and develop valuable capabilities. Building on the lessons drawn from this case, the authors discuss three standard policy and strategy options for catching-up countries: simple participation in global consortiums on agreed global standards, indigenous architectural innovation, and indigenous modular innovation.

Suggested Citation

  • Vialle, Pierre & Song, Junjie & Zhang, Jian, 2012. "Competing with dominant global standards in a catching-up context. The case of mobile standards in China," Telecommunications Policy, Elsevier, vol. 36(10), pages 832-846.
  • Handle: RePEc:eee:telpol:v:36:y:2012:i:10:p:832-846
    DOI: 10.1016/j.telpol.2012.09.003
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