Transforming Global Information and Communication Markets: The Political Economy of Innovation

Citation

Tuthill, L. (2010), "Transforming Global Information and Communication Markets: The Political Economy of Innovation", info, Vol. 12 No. 2, pp. 80-81. https://doi.org/10.1108/14636691011027193

Peter Cowhey and Jonathan Aronson manage to inject fresh, new energy into the old cry of “Convergence is coming!”. The flow and coherence of their arguments entice the reader, who, by the end, can imagine there to be considerable potential for the authors' prescriptions. The timing of the book could not have been better; published in close proximity to the release of the iPhone. The iPhone, and how we have discovered people use it, is a demonstration of the modularity and inflection point that Cowhey and Aronson call to our attention.

The central question the authors pose is “How can national and global policies best fulfil the promise of this inflection point in the global ICT infrastructure?”. Put simply, the authors define an inflection point as the moment at which commercial models are inexorably altered. Modularity, to summarise their view, is the absolute substitutability of terminals and technologies for applications that were once segregated. They claim that it is this modularity that brings convergence to the fore as a commercial and technological reality. Its importance is that it is as much responsible for the inflection point as the technologies themselves.

The authors provide, as context, a brief but rich historical lead up on the technological and regulatory reforms and the US political setting surrounding these. The section also, by the way, offers one of the best descriptions I have seen to date of the political and regulatory antecedents of the “net neutrality” debate in the USA and hints at why the concept has not been deemed as relevant in other major markets like the EU and Japan. They then examine why the theories of political economy used to assess the trends may need to be adapted. None of the prevailing concepts – power politics, technology as a driver, the force of new ideas or domestic polititical spillover – they argue, provide, in themselves, a sufficient foundation for analysis.

Were I to fault the authors for anything at all, it would be their self‐acknowledged US‐centric bias of analysis. Admittedly, they know the US trends best, but I have misgivings about their claim that the perspective will, nonetheless, translate to the global scale. Their arguments to support a predominant US role rely mostly on patterns of market dominance and head start, be it in internet, IPR, or R&D, for example. The authors admit, but perhaps too easily dismiss as anomalies, the decisive lead of European and Asian economies in technologies such as mobile in broadband. Moreover, in developing countries, new frameworks have sometimes been easier to introduce, given their lighter burden of legacy politics and regulation than in markets like the USA, where laws in force extend as far back as 1936. Also, in some cases, shorter and shallower legacy regimes may prove more friendly to the regulatory entrepreneurship that the authors say will be needed to grapple with the changes governments must face. It may be valid to question whether the USA will continue to take the lead in ICT regulation and governance agendas, if for no other reason than that other governments now consider the stakes to be too high. At the very least, however, if the USA were to manage a major, ICT‐oriented policy overhaul in the near future, other governments may, in some instances, be furnished not only with useful illustrations of what is possible, but perhaps also with examples of what not to do. Cowhey and Aronson do acknowledge, somewhat implicitly, that the pure export of solutions based on US domestic politics and circumstances might not work, and may not necessarily be appropriate, to the conditions in other markets, and hence not readily transferable to forums where new forms of global governance will be at issue.

Perhaps it's more of a call to arms of the part of the authors – to remind America of the leadership role it ought to take on ICT. The work could be seen as a plea to US policymakers to get their house in order as ICT approaches this new world beyond the “inflection point”. To employ notions cited by the authors – over the past decade the USA has retreated from exercising agenda setting powers – it has placed hardly any items at all, ICT or otherwise, on the agenda of the World Trade Organization's (WTO's) Doha round. Nor has the USA succeeded in agenda blocking at the ITU, when worrisome proposals rooted in monopoly legacy have arisen. In both bodies, it has not seemed willing or able to craft the coalitions needed to prevail, in spite of the all but ubiquitously held view of ICT as a driver of growth and development. Even the new telecom‐related provisions the USA has negotiated in FTAs appear more to reflect a laundry list of specific industry gripes than a forward‐looking expansion of principles contained in WTO instruments.

In addition, I am not as optimistic as the authors that the inflection point itself will change the subtext of cultural arguments in the AV community of policy makers, any sooner than the advent of the internet has. I still believe that AV content issues remain a minefield that will significantly slow the potential for a smooth transtion at the inflection point. Rightly or wrongly, strong emotions will continue to mark these issues. Moreover, music/video content industries seem no nearer to embracing new business models than they did a few years ago when they felt that the solution was to take children to court.

Most importantly, however, the authors propose solutions in the form of principles and norms that are, at once, fairly practical and generic. The fact that they employ principles, and ones that stress flexibility, goes a long way toward working around the criticism noted above. As we discovered with the WTO's telecom Reference Paper, principles can more easily be adapted to different legislative regimes and institutional structures and can also allow for innovative solutions to meet the variety of policy slants governments may have within their own domestic ICT context. Nevertheless, in one of their four “guiding principles”, the authors call on market leaders to reform their domestic government, specifically “to set the stage for reorganization of global governance”. This reviewer was understandably heartened to see the authors emphasise a role for trade agreements and institutions such as the WTO in a new, post‐inflection point global regime. Certainly, Cowhey and Donald Abelson, who co‐authored the book's conclusions, should know what trade negotiations can accomplish when there is manifest political will to do so. They were leading negotiators of the WTO package often referred to as the Basic Telecom Agreement. I sincerely hope that time will prove their confidence not to have been misplaced.

In conclusion, the book is highly readable and immensely simulating. It contains valuable insights for policymakers in an uncertain era of transition that is finally upon us and begs for a new order. It would certainly be welcome if US policy makers were ready to reflect deeply on the mix of global policy and regulatory principles that will foster continued innovation. This book should be high on their reading list.