Read the 2021 Home Building Survey: State of the American FamilySupporting Families

A Note on High-Tech Infrastructure

| Jun 15, 2020

As an afterthought to Willy Shih’s and Terrence Keeley’s excellent essays on R&D and infrastructure, it may be helpful to consider the overlap of these two subjects.

One critical area of infrastructure where the U.S. lags dramatically is 5G mobile broadband. Adjusted for land mass and population, China is outspending us three to one. Part of the reason for our neglect of this game-changing technology lies in the fact that we view mobile broadband as mainly a consumer technology, whereas China views it as industrial infrastructure. 5G is superfluous for streaming video and other consumer applications, but it makes possible a range of other technologies, including autonomous robotic networks, autonomous vehicles, telemedicine (including remote surgery), and robotic mining. In that respect, 5G is comparable to 19th-century railroads which, in the main, were unprofitable as standalone businesses, but transformed every facet of economic life. Until the advent of the railroad, large-scale mechanized farming was not viable because animal-based transport limited the range of distribution to about 50 miles. Once the railroads arrived, farm machines invented a generation before went into mass production and transformed American agriculture.

5G is a leading (although surely not the only) example of a technology that should be viewed as public infrastructure and subsidized accordingly. We can only envision a few of the transformational new technologies that 5G will make possible. In that respect, it falls under both Shih’s and Keeley’s topics. Dr. Henry Kressel has proposed the creation of a national telecommunications authority to promote R&D and provide infrastructure subsidies in mobile broadband. A central authority of some sort is required to sort out numerous problems, such as the assignment of radio spectrum, the creation of standards (including the delicate problem of negotiating such standards with China, the market leader), and the promotion of funding for R&D and construction.

There are many ancillary issues in which government support will be required to employ such infrastructure optimally. The application of artificial intelligence to health care, now one of China’s top priorities, has been delayed in the United States due to privacy protections for medical records. Google, IBM, Microsoft, and other American companies are eager to develop this field but face regulatory obstacles.

I agree strongly with Shih’s view that the Department of Defense has a central role to play in funding basic R&D. I would add that the fact that weapons innovation often challenges the frontier of physics is particularly conducive to fruitful basic research. Still, it is important that a national strategy for infrastructure should include high-tech infrastructure (of which 5G is the most important example) and that the funding of high-tech infrastructure should support R&D in the new technologies made possible by that infrastructure.

David P. Goldman

David P. Goldman is a principal of Asia Times LLC, and the president of Macrostrategy LLC. Formerly he was global head of fixed income research at Bank of America.