As the costs of global communication and
coordination have plummeted, we have experienced a surge in the amount and
quality of collaborative research conducted between businesses and
universities. Leading technology and engineering companies have shifted
inexorably to working with the finest scientific and engineering minds, which
tend to be housed in university laboratories. At the same time companies have
been winding down their own internalized, previously insular teams. In turn,
academic researchers have sought out the best businesses to turn their most
promising ideas into commercial realities.
Legacy national borders around new ideas
and basic research have thus evaporated as research teams have grown more specialized,
capable, and international. And we have all undoubtedly benefited from this.
Perhaps the most important role businesses
make to research and development is by helping talented university researchers navigate
the ‘valley of death’. The ‘valley of death’ is the point in the development
journey where a great invention or innovation resulting from technologically
focused research, needs to transform into something tangible that will be
successful in the marketplace and with customers. The idea will need to accrue
funds from venture capitalists and established businesses and produce returns
on investment. It will need experienced business managers to market and sell
the new idea into national and global markets. Florida State, as an example, holds one of the most
lucrative technology licences in the world. It earned the university US$66
million in royalties in 2002 alone. The licence was with the pharmaceutical
company Bristol Myers Squibb, and concerned a method for synthesising Taxol,
the anti-cancer drug. Additionally, 5G telecommunications technologies encompass
many bright ideas that may have stayed in research labs, if they hadn’t had the
support of global innovation networks and companies like Huawei to make them
commercially viable.
According to industry estimates, more than
four out of five technologies developed globally never make it to the
commercial world due to their inability to cross the ‘valley of death’. In 2015, for example, scientific
journals published 1.2 million medical research papers, but only 396 potential
drugs were submitted to U.S. regulators for permission to begin human testing.
The role of businesses here is clearly vital.
And the more knowledgeable and experienced they are in their sector the better
too. As the OECD notes, “R&D driven by the private sector tends to have
better innovation outcomes” and argues for more encouragement of participation
by “entrepreneurial enterprises and SMEs.”
The contribution that corporations make to basic and applied research has also become more relevant as governments continue to cut the amount of funding they make available to university research efforts. According to the American Association for the Advancement of Science, the 2017 budget proposal included a 17 percent reduction in funding for basic research.
The
good news is that the private sector has been making up the shortfall (and then
some). In particular, the ICT sector is providing unprecedented investment into
innovations that nurture the technologies that will ignite the fourth
industrial revolution. The major spenders of corporate R&D globally are
represented by a mix of multinational companies but the biggest contribution
comes from technology companies. Huawei is one of those companies in the top 25
according to Bloomberg.
Basic
research is a long and arduous journey, with no guarantee of success. Businesses
can also apply arguably the best risk management techniques to investment,
essentially underwriting research on the promise of a breakthrough. They are thus
well placed to absorb the costs of failure. Our collaboration with universities
also gives college and postgraduate students the chance to receive training and
hands-on experience. We provide this support with no expectation of direct
commercial return.
Our
flagship collaboration programme with universities, The Huawei Innovation
Research Program (HIRP) continues to sponsor many innovation and research
projects. This includes research in technical domains such as wireless,
networks, storage, and devices. Its immense contribution has been widely recognised,
and received a Business Model Transformation Award at the World Open Innovation
Conference (WOIC) in 2017.
There
is also overwhelming evidence that investment in basic research and bringing
inventions and innovations to market has immense social spillovers. They are
generally far in excess of any private benefits to individual firms. Reducing
R&D funding without plugging the gap will only reduce total factor productivity
growth. That will reduce the growth potential of the global economy while
simultaneously reducing the possibilities of our children for better futures.
According
to the National Science Foundation as a share of total cross-national articles
published globally, US scientists and engineers published the most articles
with Chinese partners. This is a hugely positive expansion of global innovation
networks that in a short time span has greatly increased the overall sum of
research collaborations. US firms also now spend more on R&D activities in
China than in any other foreign country – and by a wide margin.
Transnational
innovation networks or ecosystems continue to boost innovation outcomes for all
participants. As one of America’s most famous innovators and industrialists,
Henry Ford said best, “coming together is a beginning, staying together is
progress, and working together is success’.
Download
the Huawei 2018
Annual Report for more information about our commitment to R&D and building a
fully connected, intelligent world.
