Kicked around by governments but Chinese player proves worth on R&D
Only Google now spends more than Huawei on global research & development (R&D), with both companies’ investments helping to greatly stimulate international markets and generate jobs. Business technology journalist, Antony Savvas asks whether the continuing outright hostility shown to the Chinese company by western governments is a complete waste of time?
Huawei was ranked second in the European Union‘s recently published annual global Industrial R&D Investment Scoreboard. This is a jump of one place for Huawei, when compared to last year’s global Scoreboard.
Published by the European Commission, the data ranks the research investment levels of 2,500 top companies around the world, that comprises 90% of the world’s business-funded R&D. As for the top 10 R&D companies, Google invested €22.47 billion in 2020, against the €17.46 billion spent by Huawei, which was ahead of Microsoft on €16.88 billion and Samsung on €15.89 billion.
At number five, Apple laid out €15.28 billion, and Facebook made the top six on €15.03 billion. The rest of the top 10, some way behind on total expenditure, were Volkswagen, Roche, Intel and Johnson & Johnson, in that order.
ICT research grows
Overall, companies analysed in the latest Scoreboard invested €908.9 billion in R&D in 2020, which was a 6% increase on 2019. Investments in ICT products and services, health, and car manufacturing accounted for 77.4% of global R&D.
For the first time in 10 years, EU-based companies cut their overall investment in R&D, which fell by 2.2%, with the pandemic blamed for reductions in sectors like automotive, aerospace and defence. But firms based in the US and China increased their total R&D investment by 9.1% and 18.1%, respectively, with much of this cash going into health and ICT services and products research.
“But firms based in the US and China increased their total R&D investment by 9.1% and 18.1%, respectively.”
Huawei has continued to scale-up its ICT investments in the face of a technology embargo by US firms, largely forced on them by the US government. A number of western governments have come into line with the US government and have ordered that Huawei’s 5G and other network kit should be avoided and/or ripped out, because of alleged spying and security risks trumpeted by the US government.
Huawei, of course, has denied any current or potential threats, and has gone on its merry way in continuing to invest in both developed and under-developed countries, including in many of the nations whose governments have moved against it on the networks front.
While Huawei’s products have been frozen out of the key US market and its smartphone sales have dived outside its main Chinese market, as a result of the political moves, the company’s products are clearly still in demand internationally including in the 5G networking equipment space.
The company also continues to hold key positions in global standards bodies, helping to form the key technology advances that will drive forward the likes of optical networking, 5G/6G and the Internet of Things (IoT). So, the telco market as a whole may well think the current political situation the company finds itself in is farcical.
A large chunk of the global research that Huawei carries out takes place in Europe. It set up its first research centre in Sweden in 2000, and now employs more than 2,400 researchers in 23 research centres across Europe. And through a series of partnerships with over 150 European universities, it is embedded within the information & communications technology (ICT) research ecosystem in Europe.
“International collaboration in the areas of research and science is very important, to guarantee that the most innovative products and services are developed,” says Tony Jin, Huawei chief representative to the EU Institutions.
Like those living in the vicinity of a crocodile-infested swamp, an accommodation has to be found. No one wants to be eaten, but a way has to be found to live, without expecting the crocodiles to just disappear.
Yes, the US government and its “allies” are entitled to their suspicions, but a state-supported telecoms and networking juggernaut is not going to just disappear, so an accommodation has to be found, which does not cut-off the benefits of Huawei’s industry investments.
Making sure everyone can fairly access the information they want without prejudice is, on the face of it, a given in any civil society. In the case of accessing that information on the internet though, there is also the question of how it is fairly delivered across the web ecosystem.
In an advanced technical society, the consumer of the information shouldn’t have to care much how it is delivered, but we are now some way from that society as a whole, when we consider the rewards for who generates that information and who delivers it.
The concept of “net neutrality” is pretty straightforward when everyone is happy in the web ecosystem. Consumers and content generators are happy, but many of the communications service providers (CSPs) that deliver it are clearly being short-changed.
All you can eat
Before the days of “all you can eat” broadband, internet service providers (ISPs) and telcos were coining it in from metered internet access. The more information that consumers wanted, the more they paid to communication service providers (CSPs). Under pressure from consumers and regulators, the CSPs instead introduced single payment monthly internet packages.
CSPs then introduced broadband packages that could carry and deliver content at much faster speeds, and the best ones added impressively large numbers of new customers. What many didn’t envisage however, or perhaps some of them didn’t want to think about it at the time, was quickly becoming the donkeys for the content providers.
In the UK, for instance, about 15 years ago, BT did express concern about the amount of bandwidth that was going to be consumed by the BBC‘s new iPlayer platform, which is now firmly embedded as one of the nation’s go-to destinations for “free” TV content over the internet.
The iPlayer platform is not free for the CSPs that have to deliver its full TV programmes and films on their networks, nor are the likes of Netflix, Amazon Prime, Disney+ or AppleTV.
UK communications regulator Ofcom is now looking into the fairness of net neutrality, and whether CSPs should be fairly rewarded for their efforts in investing in the networks that make it work. Predictably, Netflix, the BBC and other major content creators, have already told Ofcom that net neutrality is working just fine, and CSPs have obviously begged to differ in their submissions to the Ofcom consultation.
Consumers should not have to be cut off from the content they love in any way, to allow CSPs to make a little more from their efforts. It should be down to the largely better-off content creators to do the right thing and look after their donkeys.
Ofcom’s position on net neutrality will be set out this spring, and one can expect other stirrings in the web ecosystem around this issue elsewhere in the world.
The author is Antony Savvas, a global freelance business technology journalist.