American adults have been feeling the changing economic pressures in 2022. We feel the actual impacts of inflation in rising prices of consumer goods, interest rates, and groceries. Economics is often thought of as high in the sky and out of our control, but it impacts our lives. Tech companies especially must pay close attention to economics and geopolitical climates because it broadly affects markets, standards, and innovation. Qualcomm is no stranger to being a global tech player that keeps a close eye on international economics and geopolitical issues.
Tech companies need to have a dedicated in-house expert to set economic strategy within the company and charge a path forward for joint innovation. This week, in a Six Five Insider Podcast episode, we sat down with Dr. Kirti Gupta, Chief Economist and Vice President at Qualcomm, to discuss Qualcomm's global economic strategy and why economics matter for innovation. Dr. Gupta has served as the Chief Economist at Qualcomm for over ten years, and she gave us much insight into how economics affects innovation in global technology.
5G global implications
One of the first things that we discussed with Dr. Kirti Gupta was 5G. 5G is catching much buzz right now, and for a good reason. 5G is a global technology that impacts all connected IoT devices like smart cars, farms, factories, and roadways, not just smartphones. Another component of 5G that makes it very attractive: is the sustainability component. International standards require 5G networks to consume less power than 4G networks while transmitting more data. More sustainability benefits include consuming less water and reducing greenhouse gas emissions.
Besides cellular carriers, there aren't many other companies devoted to 5G as much as Qualcomm. The company produces Snapdragon SoCs for many different smartphone manufacturers globally are implementing 5G. Qualcomm wants to continue working with policymakers and industry experts to avoid the bifurcation of markets and standards. When markets and standards bifurcate, multiple companies work separately on two different problems. On the contrary, when multiple companies spend time-solving the same issues, it is exponentially more impactful. An example of an issue caused by bifurcation would be traveling to a foreign country, and your smartphone doesn't work on foreign networks because it was built differently from the United States standards.
Another example would be an application developer having to create different versions of an application for each country that it is enabled. Dr. Gupta drove home in our podcast that the real loser of bifurcation is the consumer who will experience higher prices because of less joint innovation and economy of scale. With companies like Qualcomm focused on collaborative innovation, we can see more creation and lower costs for consumers.
Global chip shortage
The global shortage of semiconductors undoubtedly contributes to inflation and pent-up demand. Dr. Gupta affirmed that these shortages aren't new to the semiconductor industry. The pandemic has exasperated the issues that may have already existed within the semiconductor supply chain. Dr. Gupta cited an excellent example by commenting that the average smartphone has over 200 chip components coming from 45 different countries. You can quickly see how a global pandemic can cause pandemonium on global supply chains. When all of the components don't come from a singular economy, it is necessary to put together a plan that builds resilience into the supply chain. A global ecosystem of semiconductor supply and reaching economy of scale could be a way to combat some of these shortages in the longer term.
Economic importance of IP protection and regulation
One of the last topics we covered with Dr. Gupta was IP protection and regulation. Gupta stressed that IP protection is critical for an innovation economy. The way we regulate IP protection significantly impacts smaller players in the market's ability to innovate. There is an incentive for innovators to create new products and services when strong IP protection is present. On the opposite front, if you don't offer IP creators protection from theft and copy infringement, expect to see innovation slow. In a similar circumstance as the chip shortage and 5G, it's essential to support policy and regulations that bring global IP protection.
LeadershIP event in Washington D.C.
In our podcast, Dr. Gupta also teased an in-person event for anyone interested in learning about policy issues that pertain to IP, innovation, and competition. This event is called LeadershIP 2022 and will take place on April 5th in Washinton, D.C. LeadershIP 2022 will host a wide range of speakers from scholars, policymakers, and global tech executives like Susie Armstrong SVP of Engineering at Qualcomm. I am always interested in hearing about how to combat some of the global issues bottlenecking innovation. I plan on attending the event in person if possible, but it will also be available live online.
With Dr. Kirti Gupta, the Chief Economist at Qualcomm, I am confident that the company is taking its economic strategy seriously. In a world of chip shortages, raging inflation, and bifurcation of markets and standards, someone must be the voice of reason, and Kirti is just that. Tech companies need an economic strategy to drive standards, partnerships, and joint innovation.
There is only so much a single company can do to affect economics and the geopolitical climate, but with a band of these large companies, we could see much joint innovation quickly. The real winner of collaborative innovation is the consumer, who will see better products and services at lower prices due to the work Qualcomm and many others are doing right now. There is much work to be done, and the global markets are a battleground, but I am confident that Qualcomm is headed in the right direction.
I look forward to learning more about the current state of innovation, IP, and competition at LeadershIP 2022 in Washington D.C. on April 5th.
Note: Moor Insights & Strategy writers and editors may have contributed to this article.