Yesterday, Britain made an expected, yet dramatic reversal in its decision to use Huawei technology to stand up its 5G platform. The move could cost the UK billions of pounds and delay the deployment of 5G by two years, if not more. More importantly, this is the start of a more fundamental shift in geo-politics, with technology dividing countries into two camps. Wider trade disputes will result from this, providing challenges and opportunities for domestic manufacturers.
Ian Bremmer, American political scientist, was recently interviewed on Canada’s Monk dialogues, in which he carefully outlined the shift in global power and technology being at the center of this shift. Think of it as the new cold war, no nuclear weapons this time, just rapid advancement of technology.
The camps, US and its allies in one camp (five eyes intelligence pact, plus an extension of other countries, e.g. India is likely, given the tensions on its border with China) and China and its allies in another (most likely Russia and a large number of countries that have received large capital investments from China).
For Canada, part of the five eyes intelligence pact, it is clear that the country will follow suit behind the US, Britain and Australia. The challenge is replacing Huawei technology. The alternative is Nokia and Ericsson and this will be more expensive. Most importantly, it shines a light on developed countries overreliance on other countries to provide cheaper goods and services instead of investing and manufacturing its own. There is no question that the talent exists within Canada, Britain, US etc. If there is a lesson to be learned here, smarter, more forward-thinking policy is required if these countries are to capture the trade opportunities in the future. Just look at what just happened for Ericsson and Nokia.