Collaborating with Europe to Create an Intelligent World
Good morning, ladies and gentlemen. In 2016, it was right here at the Hôtel Salomon de Rothschild during this event that we announced the establishment of our second mathematics research center. With mathematic algorithms, we have made breakthroughs in many fields of basic science to promote industry development and progress for humanity.
Huawei has been operating in Europe for nearly 20 years. The idea of "In Europe, For Europe" has always guided us as we strive to integrate into and contribute to Europe. We want to use our ability to innovate to create more value for our European customers and partners. As such, today I am here to share with you our strategies and upcoming initiatives as they relate to Europe.
1. Performance in the first three quarters of 2019
I know many have been concerned about Huawei in recent months, but have still stood by our side. This support has been invaluable to Huawei, and we can see its effects on our current financial performance. Huawei's sales revenue reached 610.8 billion yuan (about 86 billion US dollars) in the first three quarters of 2019, up 24.4% year-on-year. In the same period, our net margin was 8.7%.
I would like to thank our customers, partners, and other stakeholders for their ongoing trust and support. Moreover, I must also thank the 180,000 Huawei employees who have continued to work hard during this challenging time. Despite the huge pressure we face, we have not and will not be crushed. The challenges will only make us stronger so that we can provide more competitive products and services to our customers.
2. After 70 years of engineering innovation, the information industry is bottlenecking
We have witnessed many technological innovations in the 21st century and seen amazing high-speed growth in the information industry for the past 40 years. However, this industry is now facing many bottlenecks.
First, there are theoretical bottlenecks. Today's innovations are mainly about technological and engineering innovations to address market needs. The underlying theories behind today's innovations were created decades ago. For example, Shannon's Limit was proposed 70 years ago in 1948. Now in this 5G era, we are approaching this theoretical limit.
Second, there are engineering bottlenecks. Moore's Law has driven the rapid development of ICT over the past few decades. During that time we saw CPU performance improve by a factor of 1.5 every year. Now, the pace has slowed down, and the CPU performance improves only by a factor of 1.1 every year. This is the engineering bottleneck we are facing in the development of ICT.
We are entering an uncharted territory and facing tremendous challenges. How will we address these bottlenecks?
3. Innovation 1.0: Technological and engineering innovations driven by customer needs; the foundation of Huawei's success over the past 30 years
Customer-driven innovation in engineering and technology as well as in our products and solutions was the foundation of Huawei's success over the past 30 years. Innovation has always been an indispensable part of Huawei. As we move into the future, our strategies for innovation must change accordingly. I will further explain our innovation strategies in the past and for the future.
4. Collaborating with mainstream standards organizations
First, part of Huawei's success can be attributed to how we have followed global mainstream standards. Only by following these mainstream standards can we grow and lead the industry. Huawei uses the most advanced technologies, components, software, and platforms to keep up with global trends, so that we can grow even faster.
Huawei works with more than 400 industry organizations around the world. In Europe, Huawei has joined 44 standards and industry organizations, and contributed to more than 2,000 research papers. Huawei collaborates with other industry players to contribute to technological standards.
In terms of 5G, Huawei works with European partners to realize global harmonization of 5G standards through 5G PPP, which defines the pace and direction of 5G basic research worldwide and promotes the development of the 5G industry.
For autonomous driving and smart manufacturing, Huawei has established 5GAA with Audi, BMW, and Daimler, and worked with ABB, Siemens, and Bosch to establish 5G-ACIA. These industry alliances help foster innovations and promote cooperation between China and Europe.
Huawei also plays an important role in more than 400 organizations, serving as a board member in IEEE-SA, BBF, ETSI, TMF, Linaro, OpenStack, OPNFV, and CCSA.
5. Joint innovation centers address customer needs
Second, Huawei's success relies on innovations that are driven by customer needs. In 2005, I was appointed as the President for the European Region, responsible for expanding our business in the European market.
The European market is the home of many mainstream international communications companies. Strategies like price gouging will only disturb the market, so instead we have used our leading technologies and innovations to attract European carriers. These technologies and innovations were specifically designed with the customer's perspective in mind to help them achieve business success. In 2005, Huawei developed the industry's first distributed base station, which was a breakthrough from the traditional model of base stations. This new model has helped European customers address challenges related to site acquisition, installation, power consumption, and O&M costs, allowing them to quickly build mobile networks at a lower cost.
In 2007, Huawei launched the industry's first SingleRAN base station, which integrated 2G and 3G into one piece of equipment. Now, 4G and 5G have been added as well. The SingleRAN solution was first deployed for commercial use in Munich. These innovations have not only helped reduce customer TCO by 30%, but also significantly lowered the barriers to network rollout and improved network construction speeds. These products and solutions feature great technological and business advantages. They have become standards of the industry and represent trends in the wireless industry.
In 2006, Huawei worked with Vodafone to establish its first joint innovation center. Through these joint innovation centers, we collaborate closely with our customers to develop innovative strategies, products, solutions, and business models while tackling some of the industry's biggest development issues. Ultimately, the centers aim to address customer needs, collaboratively solve the challenges and difficulties facing the industry, and achieve widespread business success. To date, we have worked with customers and partners from across the world to build 36 joint innovation centers, and nearly half of these centers are located in Europe. This has helped make our advanced products widely recognized by European customers, and allowed us to become an industry-leading company.
6. Open innovation: Working and sharing with global partners
Third, Huawei's strategy towards innovation has always focused on openness. We have built over 16 R&D centers and 60 labs for basic research in multiple areas, including materials, heat dissipation, mathematics, chips, and optical technology. We build these research centers in regions that are rich in talent and resources.
Industry competition is reflected in competition between industry alliances, and industry alliances should be open and advanced. In April 2016, Huawei founded the Green Computing Consortium with multiple customers and partners, focusing on the ARM-based green computing industry. Currently this alliance has more than 50 members.
In February 2018, we established the Global Industry Organization. This cross-sector, cross-industry organization aims to facilitate the digital transformation of all industries, promote relevant frameworks, regulations, and standards, and align their development. We want to grow the market instead of just capturing market share. This organization held its fourth meeting in Barcelona just a week ago and released a white paper on industrial digital transformation. We have seen significant progress through this organization.
7. Intensive investment for technological breakthroughs
Fourth, we invest heavily in making technological breakthroughs. Our technical and solution innovations rely on this ongoing investment. We significantly invest in not only existing technologies but also in future-proof technologies.
Back in 1996, I was the President of Pre-Research at Huawei, a department responsible for technical research and new product planning and incubation. At that time, Huawei made it clear that funding for pre-research must exceed 10% of our total R&D funding. Now funding for pre-research has increased to over 20%. This means our annual investment in cutting-edge technologies and basic technology is around 2 to 3 billion US dollars.
In 2018, Huawei's total R&D investment was 15 billion US dollars (over 100 billion yuan). Huawei was ranked among top 5 in research spending globally. Now we have over 80,000 employees working in R&D, accounting for about 45% of our global staff.
8. Technology behind the scenes
What we actually see are products, but the basic technologies behind the scenes are what keep our competitive edge sharp. These technologies include mathematics, chip design, materials, and cooling technology.
Back in 1991, Huawei designed its first ASIC chip and established its chipset design office, the predecessor of our HiSilicon subsidiary. HiSilicon's Kirin 990 is now the world's most advanced chip for 5G smartphones. When I served as the President of HiSilicon in 2005, we had decided to develop chips for 3G phones. All of the technological advances we see today are the results of our long-term and sizable investment in R&D aimed at creating breakthroughs.
Huawei has more than 60 labs focusing on basic technologies, more than 700 PhDs in mathematics, and more than 200 PhDs in physics and chemistry. This ensures that we remain an industry leader in technology.
9. The future of Huawei's innovation
So far, I've been talking about engineering, technological, and solution innovations that we have done to meet customer needs. We call all of this Innovation 1.0. However, businesses today are stagnating because theoretical innovation is not catching up. Without new theoretical breakthroughs, it will be very difficult for us to break technological bottlenecks. Moving forward, what should Huawei do to innovate?
10. We are entering an intelligent world
We believe that in the next 20 to 30 years, we will enter an intelligent world, where all things can sense, all things are connected, and all things are intelligent.
In the intelligent world, all things can sense, and sensors will transform the physical world into digital signals; networks will connect all things and all data will be online; and applications powered by big data and AI will make all things intelligent.
These three features rely on advanced ICT. ICT infrastructure, such as 5G, IoT, and AI, will be the foundation of the intelligent world.
11. Horizon Europe: An ambitious plan for the future
In June 2018, the European Commission released a report titled Investing in the future — Digital Transformation 2021–2027. Based on this report, the EU will launch a new Digital Europe program in step with its R&D program Horizon Europe. Digital Europe will focus on five areas: Supercomputing, Artificial Intelligence, cybersecurity and trust, advanced digital skills, and ensuring the wide use of digital technologies across the economy and society. This is a very forward-looking plan.
In addition, we are very happy to see that the EU has proposed requirements for digital sovereignty in terms of strategy, policy, operations, and industry engagement. This proposal is a very wise decision and sets a benchmark for the development of the digital world. We used to emphasize physical boundaries because of geopolitical factors. Now when information travels around the world, digital sovereignty is becoming increasingly necessary to support national development. We will resolutely support this concept.
We must keep in mind though that digital sovereignty is not like building a "Berlin Wall" across the digital world. Open international collaboration will be more important than ever in this new world. ICT is the digital foundation of all other industries. Huawei will leverage our cutting-edge technologies and products to support Europe in building its own digital infrastructure and help our European partners maintain global competitiveness in industries where they have an advantage throughout the EU's digital and intelligent journey.
12. The combination of pragmatism and idealism
At Huawei, innovation combines pragmatism and idealism. We research and develop products based on customer needs and our forecast of future trends. We dive deep into the roots of technology through strategic brainstorming and by adopting a trial-and-error methodology that allows us to follow multiple paths for research and development. At the same time, we drive development with our shared visions for the future and cutting-edge technologies. So we drive innovation with two "wheels": pragmatism and idealism.
13. Innovation 2.0: Theoretical breakthroughs and technological inventions; the foundation of future growth for Huawei and the industry
Huawei is moving from Innovation 1.0 to Innovation 2.0. In Innovation 1.0, we have focused on innovation in technology, engineering, products, and solutions to meet customer needs. In Innovation 2.0, we will focus on theoretical breakthroughs and technological inventions driven by our shared visions for the future.
14. From innovation to invention
I'd first like to talk about the core concepts of Innovation 1.0. At this stage, we have focused on innovation in technology, engineering, products, and solutions to address customer needs and challenges. This is about going from 1 to N. The key is to help our customers and partners become more competitive, increase their revenue or reduce their costs, and enable them to achieve greater business success. In the past, Huawei made many engineering and technological innovations in wireless, optical networks, and smartphones, and these efforts have generated a great amount of business and social value.
So what's Innovation 2.0? Based on our forecasts about and visions for the intelligent world we are entering, we will aim to overcome the bottlenecks in theories and basic technologies that have hindered the development of ICT. In this stage, we will focus on theoretical breakthroughs and technological inventions, which means going from 0 to 1.
15. Core concepts: Open innovation and inclusive development
At the core of Innovation 2.0 are theoretical breakthroughs and technological inventions driven by our shared visions for the future. Academia is one of the birthplaces of theoretical breakthroughs and technological inventions. But to turn these into real products, academia needs to work together with businesses. Businesses are expected to articulate the challenges they face and fund university research to crack these challenges.
Theoretical breakthroughs and inventions involve a great amount of uncertainty, so a closed approach to innovation will not work. Huawei's Innovation 2.0 is about open innovation and inclusive development. We will work together with universities, research institutes, and businesses alike to drive breakthroughs. This means leveraging scientific research resources and talent worldwide to carry out joint innovation. As such, we have established an Institute of Strategic Research to help make Innovation 2.0 a reality. This will help ensure that Huawei does not lose its direction or miss opportunities as it moves forward.
16. Methodology: Visions + technological breakthroughs
Driven by our visions and forecasts, we will first research the future intelligent world, looking at how people will live, work, play, and stay healthy in the future. We will identify the main challenges people will face, then find appropriate technologies, and seize business opportunities that move us in a direction to address these challenges. This will allow us to incubate new industries.
We will also make bold forecasts about the future. For example, we estimate that over the next decade, bandwidth and computing capabilities will increase by a factor of 100, and machines' sensing capabilities will be extended so that they will be 100 times better than a human's sensory limitations. We will then plan our technologies based on these forecasts.
17. Exploring disruptive technologies throughout the entire information lifecycle
We will explore and research future-proof technologies throughout the entire information lifecycle, from information generation and storage all the way to computing, transmission, presentation, and consumption. For example, in the field of information presentation, we have light-field displays. In computing, we have brain-like computing, DNA data storage, and photonic computing. In transmission, we have visible light communications. In basic materials and process manufacturing, we have metamaterial, atomic-level manufacturing, and more. We innovate with existing technologies while simultaneously seeking innovations in disruptive technologies.
18. Strategic initiatives: University collaboration and technology investment
In our world, a lot of development needs are still unaddressed, and global issues continue to emerge one after another. Overcoming these challenges requires us to pool global wisdom and innovation capacity to make breakthroughs in basic research and explore what's next in technology.
Partnerships between businesses and universities and research institutes are essential. Businesses help scientists turn their research findings into commercial products rapidly. Businesses also share the real-world challenges, use cases, and their needs with scientists to inform their future research plans.
Huawei is committed to Innovation 2.0. We will make it possible with initiatives like funding university research, building labs, and making technological investments along multiple paths. We need to consider industry challenges and academic insight, and also confidence of venture capitalists to innovate jointly. Results from such innovation projects will be shared among all participants and across the industry to benefit Huawei and the entire world.
19. Investing in photonic computing to explore the road for heterogeneous computing
We know that the types of data we see will continue to grow, and we know we are approaching the limits of Moore's Law. These two factors have made it extremely costly to process multiple data types with a single computing architecture. Therefore, heterogeneous computing is one of the paths we can take to push past the boundaries of Moore's Law.
Huawei is investing in research on photonic computing. Our goal is to leverage the advantages of photonic technologies to perform analog computing, in order to accelerate the speed of data processing.
In AI, 80% of computing workloads are related to matrix transformation and optimization. CPUs alone cannot handle these tasks efficiently. That's where photonic computing comes into play as it can increase efficiency hundreds of times over. This is because photonic technology has natural advantages in diffraction, diffusion, and interference, eliminating the need for large-scale digital-to-analog conversion.
In the future, most computing workloads will be related to AI, so new computing architectures powered by photonic technology will be able to address the majority of computing workloads, and the efficiency will increase to hundreds of times what we see now. When that happens, the limits of Moore's Law will be long behind us.
20. Extensive collaboration with European universities and research institutes
Huawei has a lot partners in Europe, including universities, businesses, and public institutes. These partnerships focus on both the major challenges we face at present, and innovations in future-oriented basic theories. Areas of cooperation include 5G algorithms, basic AI theories, and processor architecture.
In France, Huawei is a strategic partner of leading research institutes and universities like EURECOM, Institut Mines-Télécom (IMT), and Télécom ParisTech (TPT). We work on network algorithms, AI, and sensor applications. Huawei is also collaborating with two Fields Medal winners to explore the basic theories and algorithms for advanced wireless technology.
Massive MIMO is one of the key 5G technologies, and it is the result of a partnership between Huawei and EURECOM. Massive MIMO has been verified by 3GPP and made into a global standard for 5G. Huawei and EURECOM are joint holders of the intellectual property for Massive MIMO. So far, our European partners own – wholly or partly – about 80% of the intellectual property from their joint projects with Huawei.
Huawei has provided funds to more than 300 professors, but we never seek to own their intellectual property. We have also established projects with multiple universities to nurture talented students in various ways, such as providing funding to 73 PhD students, offering over 600 internship opportunities, and delivering training and lectures to nearly 2,000 students.
21. Multiple programs for cultivating digital talent in Europe
The Digital Europe program relies on a huge number of digital professionals. Many of Huawei's programs can contribute to this strategy.
The Huawei Developer Program targets the ICT sector, providing 1.5 billion US dollars to support 5 million developers worldwide over the next 5 years.
The Shining-Star Program focuses on the consumer sector. With a budget of 1 billion US dollars, this program will benefit tens of millions of app developers over the next 3 years, helping these people create novel apps for our consumers. Through this program, Huawei and developers form a new ecosystem that puts consumers at its core and delivers intelligent experiences across all scenarios.
Cultivating university students is an important aspect of our strategy. We have opened Huawei ICT Academies in more than 50 universities around the world, to teach students practical knowledge about advanced ICT technology. Since 2011, the Huawei ICT Academy network has covered 12 European countries, including the UK, France, Germany, Spain, Romania, and Poland. The project has produced over 100 ICT lecturers thus far, and it benefits 1,500 students every year.
Developing the future generation of digital professionals is also crucial, and we deliver on this goal through our Seeds for the Future program, which encourages young people to acquire the skills needed to navigate a digital society. This program has been rolled out in more than 100 countries worldwide. It was first launched in Europe in 2011, and has since then benefited 1,347 students from 31 European countries.
Moving forward, we plan to scale up the program to reach 3,000 European students, including 1,000 students who will take part in a China tour, 1,000 students who will work as interns at Huawei to learn more about business practices, and 1,000 students who will be hired as Huawei employees.
22. TECH4ALL: Tech for all. Pass it on
Digital technology is reshaping our world. It now plays a vital role in promoting national economic growth and boosting social welfare and happiness. It also helps achieve the United Nations' Sustainable Development Goals, enabling humanity to address challenges like poverty, inequality, climate change, environmental deterioration, economic issues, and healthcare problems. The ultimate goal is to not leave anyone behind in the digital world.
Huawei has never let up in its effort in this regard, and it has launched a long-term initiative, named TECH4ALL, to promote digital inclusion. Digital inclusion means every individual and organization can equally access and use information and communications technology. By considering its own capabilities, Huawei has identified four domains in which it could comprehensively promote digital inclusion: healthcare, education, development, and environment.
In terms of healthcare, Huawei has partnered with Spanish medical research lab IIS Aragon and Spanish research center DIVE to develop Track AI, a new medical tool that can detect visual impairment in young children. With Track AI, a doctor can analyze data to detect the signs of eye diseases. With the help of digital technology, trained parents can also detect visual impairment in their children, just like skilled doctors. This approach is even faster, simpler, and more efficient, and will benefit 19 million visually impaired children around the world.
In tropical rainforests, Huawei is working with Rainforest Connection (RFCx) to convert a huge number of used Huawei mobile phones into solar-powered devices that will monitor the rainforests. This is transforming these mobile phones into the "ears" of the rainforests. Equipped with AI, these phones are now used to listen to and identify the sounds of trucks and electric saws that are illegally felling trees, helping international environmental protection organizations more efficiently protect the planet. Next year, another 6,000 square kilometers of tropical rainforests in even more countries will benefit from these efforts.
23. Our vision and mission
Technology represents a type of shared wealth for all human beings, regardless of national borders. Europe has been advocating multilateralism since the first industrial revolution. Multilateralism manifests itself in the creation of shared value and joint rule-making. These ideas are key for Huawei to create value for Europe and the world at large, both in terms of technological development and industry development.
With a full stack of leading technologies and capabilities, Huawei can play a key role in enabling digitization in European industry and driving digital adoption on this continent. We have what it takes to help European businesses stay ahead of the curve as they embrace digital and AI, and to help Europe build its own digital infrastructure.
Together with other industry players in Europe, Huawei has contributed greatly to 3GPP and GSMA, and boosted healthy development in the communications industry. Going forward, we are confident that Huawei – in tandem with partners in Europe and other parts of the world – will grow the digital sector and enable all industries to thrive in the digital and AI era.
At Huawei, our vision is to bring digital to every person, home and organization for a fully connected, intelligent world. We believe only collaboration will get us there.
That's all for my speech today. Thank you all for coming to Huawei European Innovation Day.
