Invest in R&D. You won’t regret it….

I was in Shenzhen 3 months prior to the outbreak of the pandemic, where I had the opportunity to see Huawei’s two major campuses. I also find the chance to take a closer look at the working environment, Huawei’s approach to its personnel and its management style. I asked questions. A lot… The answers I got were more than satisfying. They genuinely broadened my horizons.

I was supposed to visit both London and Barcelona to see Huawei’s innovative technology. But, this global disease outbreak didn’t let me do it. We are all stuck at home, allowed only to go to the nearest market. There are people who don’t even have this luxury now.

It was quite interesting that while only supermarkets in Istanbul’s shopping mall were open, Huawei stores also remained open, continuing to offer services to customers by taking every protective measure possible. Accordingly, global-scale measures to protect Huawei employees and their families from the virus were the priority topic in the company’s 2019 Activity Report, which was released to the press yesterday at Huawei’s headquarters in Shenzhen. The company’s engagement in R&D was largely covered in the report as well.

As the activity report was released at 10.00 am this morning in the current local time in Turkey, I tried to watch the press conference on my mobile phone, while I was commenting live on TV. My apologies if any of the viewers had seen that. But I was too curious to find out whether Huawei allocated large sums of funds to the R&D last as well. Ready to hear this? In 2019, the company spent %15.3 of its total revenue on R & D investments, which approximately equals to a figure of 19 billion USD. Another 14 billion USD the year before that… BTW: Huawei is the only Chinese corporation that ranks among the top 10 companies investing most in R&D.

From a comparative point of view: US companies tend to spend a lot of money on R&D activities. Amazon, Alphabet, Volkswagen, Samsung, Microsoft, Huawei, Intel, Apple, Roche, Johnson & Johnson are among the companies that invest the most in R&D. But, when we consider the ratio of R&D investments to total company revenue, Huawei ranks third among the top ten R&D spenders.

When we look at the same criteria, in terms of absolute numbers, we can see that Huawei has been named among the world’s top 5 companies ranked by their total research and development investment. I think it’s not so hard to understand why this global giant that spends the most on R&D with respect to its revenue makes the Americans feel worried so much. After all, this is a company where 96.000 people (%49 of total employees) are working to develop a strong R&D structure. Such hard work enabled Huawei to have a total of 85.000 patents so far. Unbelievable, but true!

Awarded the R&D Centre of the Year 2019, in Turkey, VESTEL currently employs a total staff of 16.000, 1600 of which work in the R&D department, only 10% of total employees. By the way, Vestel spends only 2% of its revenue on R&D each year. I think you might see the difference between two approaches.

“Discoveries never fail…”

Knowing that Huawei operates in Turkey as well, I really wonder what Huawei officials think about Turkish companies’ R&D and staff policies, their approach to patent acquisition. Some believe that where you are born will shape your destiny. But Huawei is proudly proving them wrong, acting as a beacon for others who consider themselves “unjustly treated” in different corners of the world.

While I was answering questions live on air, I was trying to read the messages of Eric Xu, who released Huawei’s annual activity report. Rotating Chairman of Huawei, Eric Xu said the company had a tough year, pointing out that they continued to create value for their customers despite all external pressure. Indeed, 2019 was the toughest year for Huawei and its partners because of Trump’s efforts to make it so. But Huawei deserves great appreciation indeed since, despite all challenges, it could increase its revenue by 19,% compared to the previous year, achieving a total revenue of 120 billion USD, along with a profit of 6.5 billion USD.

Unfortunately, this year started off terribly and it gets more terrible every day for the world. Each and every sector was badly wounded by the coronavirus and it will be quite hard for them to gather their strength back. But Huawei has successfully proved that companies that keep to the straight and narrow won’t help but win in the end. Also, their “customer and employee sensitive” approach that dominates their management style and organisational structure must serve as an example for other companies in the world. As I’ve seen it with my own eyes, I’m most confident to say that companies that “never give up discovering” have more hope for the future. The fact that Huawei increased its cash flow by 22.4% (13 billion USD) in 2019 perfectly proves my point. Not to mention that only 36% of its revenue comes from the Chinese market.

So, my mind was divided between the live broadcast and Shenzhen yesterday. But it was worth the effort. I felt both happy and privileged to see Huawei achieve such groundbreaking success despite all the difficulties. I thought to myself:

“Globality is last century. Universality is what matters now. To be universal, we should apply the values of our homeland to the universe and keep discovering to do that.”

As I always say: “Discovery never fails”.