How to look at basic research in a rapidly growing company

1. Huawei and the technology strategy

When Huawei started its business as a small company in 1987, the position of technology was not as important as it is today. Initially, the products had to be competitive, in the sense that the technological properties had to be on a par with other competing products. To achieve this, the best technological strategy is according to the so-called “fast follower” strategy. This is a strategy geared towards the number one and number two of the market, as well as evaluating the properties of the related products.

The clue in this fast follower strategy is that you are able to find a solution competitive immediately after the market entry of the number one or two. If you are too slow, you lose the market opportunity. On the other hand, however, it is possible to focus from the R&D point of view on applied research and product development. In that case there is no need to invest in basic or even fundamental research. Focus on more fundamental research, as needed for horizon 3 (see Fig. 1) and its investment is made primarily by the number one and two in the market.

Fig.1 The alchemy of growth, McKinsey 1999

2. Research directions

Drawing on our main activities, consumers, communications networks and IT, we have to ask ourselves which technologies will play a fundamental role in the next 5-15 years . Short-term research should be done ourselves, medium-term research should be done in collaboration with partners, and longer-term research should be outsourced to our partners.