By Charles Yang, President, Huawei Middle East

Information and communications technology (ICT) is rapidly working its way into every industry, just like electricity did over 100 years ago. This has triggered a digital, intelligent transformation – the driving force behind today’s digital economy.

In a world where all things are connected, every person and home will have the opportunity to enjoy a highly-personalized experience based on data and pervasive intelligence. Every organization will be able to use digital platforms to increase efficiency and develop more forward-looking business models.

For us at Huawei, we’re now in a race against time to make our vision a reality: to bring digital to every person, home and organization for a fully connected, intelligent world.

One way we are able to do this is that our products have stayed ahead of the competition over the past three decades. This can be attributed to the engineering and technological innovations we have made in response to customer needs. Moving forward, we will pursue innovation based on not only customer needs, but also our shared vision for the future. We will also invest more in the research of basic technologies and theories. We will adopt a new innovation strategy that enables us to achieve technological leadership.

As we continue to explore the future, we seek to not only light the way forward for Huawei, but also the world at large.

The times call for new theoretical breakthroughs

The ICT industry today is running into many bottlenecks after 50 years of high-speed development.

First, there are theoretical bottlenecks. Today's innovations are mainly built on theories from decades ago, and are mainly about technological and engineering innovations. A good example is CDMA, which was invented by the famous actress Hedy Lamarr in 1941. We need new theoretical breakthroughs and inventions.

Second, there are engineering bottlenecks. Moore's Law has driven the development of ICT for decades. In the past, CPU performance improved by a factor of 1.5 every year. Now, it's only 1.1. So what's next for Moore's Law? This is the bottleneck we are facing in the development of ICT.

Our founder, Mr. Ren Zhengfei, said in 2017 that Huawei's innovation is now mainly about engineering science, such as engineering mathematics and physical algorithms. He said that the way forward is unclear and that we don't always know where we are heading. We are in uncharted territory.

How will Huawei - and the wider ICT sector - address these bottlenecks?

Going from innovation to invention

To address the industry's bottlenecks and challenges, we are adopting a new innovation strategy at Huawei. We are going from Innovation 1.0 to Innovation 2.0. In Innovation 1.0, we have focused on technological and engineering innovations to meet customer needs. In Innovation 2.0, we will focus on theoretical breakthroughs and inventions driven by our shared vision for the future.

Up until this stage, we have focused on innovation in technology, engineering, products and solutions to address customer challenges. 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 a lot of engineering and technological innovations in wireless, optical networks and smartphones, and these efforts have generated a great amount of business and social value.

There are no secrets to Huawei's success. It is the result of our investing over US$100 billion in R&D over the past 30 years. It is a reward for the value that we have created for our customers in Innovation 1.0.

Based on our vision for the intelligent future we are entering, we will now aim to break the bottlenecks in theories and basic technologies that have hindered the development of ICT. In this stage, we will focus on theoretical breakthroughs and inventions, which means going from Innovation 1.0 to Innovation 2.0.

Today is an era of all IP, all cloud and all intelligence. This sets the direction for the ICT industry’s evolution. We have developed the right network development strategies based on our insights into the general direction of the industry. This has ensured that our product R&D has stayed on the right track. It has also enabled our products to stay ahead of the industry and guided industry development.

For example, in 2016, we assumed that AI would be a general-purpose technology that would be seen everywhere. As such, we proposed the "all intelligence" concept, embedding AI into telecom networks based on the SoftCOM strategy. We aimed to build autonomous driving networks that fundamentally change how telecom networks are run and maintained, and gradually make unattended networks a reality. This has solved operators' structural issues related to high OPEX and slow service provisioning. Our goal is to automate 80-90 percent of network operations and maintenance.

Clear and effective strategies for network architecture development have driven the company in the right direction and enabled the company to stay at the forefront of the industry.

The wireless domain is a good example. Huawei developed the first distributed base station in the industry in 2005. In 2007, Huawei launched the world's first SingleRAN base station, which integrated 2G and 3G into one piece of equipment. These innovations have not only helped reduce customers' TCO by 30 percent, but also significantly lowered the barriers to network rollout. The entire network construction process has become simpler.

Huawei pursues innovation in all domains – not just in wireless solutions, but also in the optical domain. From OTN to all optical networks, Huawei has been leading the development of industry standards. With Huawei's OXC optical switching system, for example, the 3,000 optical fibers traditionally required can be replaced with a single optical backplane. With photoelectric integration, each cabinet is reduced to the size of a small board. All these innovations have created immense value for customers. The results are a 50 percent reduction in power consumption, a 90 percent reduction in floor space requirements, and deployment and maintenance efficiency hundreds of times better than before.

From multi-cameras to AI chips: New smartphone benchmarks

Innovation in mobile phones is a key part of Huawei's innovation strategy.

As many may recall, Huawei was the first company to release dual-camera phones. Its latest smartphone, the P30, has four cameras, establishing another new benchmark for phone photography. Without 36 months of persistent efforts by our 300+ R&D employees, it would have been impossible to realize a micrometer folded optical path, 10x hybrid zoom, and optical image stabilization that ensures movement of less than 0.00024 degrees for both main and zoom lenses.

Huawei was also the first company to launch an AI-powered phone. This phone knows what users need, wherever they are. These phones are smarter than their predecessors, even approaching genuine intelligence.

Matching the current 5G phase requirements, Huawei's most popular phone is its foldable phone Mate X, which features a rotating shaft thanks to innovations in multiple disciplines, such as mathematics, materials, machinery and design. It took three years to solve this problem. After dozens of iterations, it has achieved stable performance in 200,000 tests, ensuring that every part of the mobile phone lies flat.

Technology behind the scenes

When we talk of innovation, what many of us actually see are products. But the basic technologies behind the scenes are what truly keep Huawei’s competitive edge sharp. These technologies include mathematics, chip design, materials and cooling technology.

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. Breakthroughs in mathematical algorithms are the basis for the birth of SingleRAN, for example.

Over its 30 years of development, Huawei has conducted research into corrosion resistance in materials to make Huawei products adaptable to various environments. In addition, our research into graphene has significantly increased efficiency in battery cooling and our fan-free cooling design has made base stations 30 percent smaller.

Without revolutionary changes sparked by new theoretical breakthroughs and inventions, future growth for Huawei and the industry as a whole will be impossible. 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. As mentioned earlier, to remain a true pioneer in the ICT field, Huawei is going from Innovation 1.0 to Innovation 2.0.

Core concepts: Open innovation and inclusive development

So, what is Innovation 2.0 at Huawei?

At the core of Innovation 2.0 are theoretical breakthroughs and inventions driven by our shared vision for the future. Academia is one of the birthplaces of theoretical breakthroughs and inventions. To make it happen though, 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 also involve a great amount of uncertainty, so a closed approach to innovation will not work. The results and capabilities must be shared. 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.

We make that happen with Innovation 2.0 through initiatives like funding university research, building labs and making technological investments along multiple paths. We consider industry challenges and academic insight, as well as the confidence of venture capitalists to conduct joint innovations.

Lighting the way forward for the industry and the world

We recently established the Institute of Strategic Research to help make Innovation 2.0 a reality.

The Institute mainly engages in the research of cutting-edge technologies for the next five or more years. Each year, we invest USD$300 million to fund academic research in basic sciences and technologies.

The most important mission of the Institute is to look into the future and carve out a clear path for Huawei's technological development. It will help ensure that Huawei does not lose direction or miss opportunities as it moves forward. It will also explore technological and business models surrounding Huawei's core business to ensure lasting competitiveness.

We will invest heavily in a number of key areas. Scientific research comes first, earmarking funds for basic scientific research and talent cultivation to drive theoretical breakthroughs. Second, we are investing in technological research. Huawei already has extensive experience in enabling diversified industry applications.

Today, for instance, businesses are facing many engineering and technological challenges, and the world is plagued with problems such as the Shannon Limit, the "memory wall" and the inevitable slowdown of Moore's Law. This is where universities and Huawei can come into play. Working together, we can seek breakthroughs in basic technologies and speed up the process of translating university research into real-world applications, thereby crossing the "valley of death" of innovation.

Our third investment priority is technological innovation. We aim to overcome current engineering and technological challenges through our joint research programs.

Fourth is our partnerships with universities. Collaboration between businesses and universities is a two-way process in which both parties benefit by driving theoretical breakthroughs and inventions. From the perspective of businesses, this means creating value for customers and serving end consumers through their offerings.

Ultimately, the Institute of Strategic Research is poised to 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.

Yet, what basic research and invention areas are Huawei engaging in right now? And, what do future-proof technologies look like?

The first area is optical computing. As you may be aware, massive data of different types are being generated every day. Due to the limits of Moore's Law, it is very costly to process all data with only one type of computing architecture. Heterogeneous computing is an effective way to address this challenge, pushing the limits of Moore's Law. Huawei researches optical computing and has taken advantage of the analog nature of optics to enable complex logical operations for data processing.

In the field of artificial intelligence, 80 percent of computing is a matter of matrix transformation and optimal solutions. If it is done using the traditional CPU approach, it can be very inefficient. With optical computing, the performance will improve by a factor of hundreds due to optical features such as diffraction, diffusion and interference. As AI computing becomes increasingly prevalent, new computing architectures will be more suitable for 80 percent of computations. This will deliver performance hundreds of times faster than before. The limits of Moore's Law will be broken to a large extent.

The second area of future-proof technologies is DNA data storage. In the information world, the volume of data is growing exponentially, much faster than the growth of Moore's Law. There is an increasing demand for storage capacity, leading to higher cost and limiting the continued growth of capacity. In fact, storage has become the costliest element in the IT industry. To address this, you either keep discarding some data, or search for new technologies that offer more capacity.

Now we all know that genes contain huge amounts of information. A human gene stores dozens of gigabytes of data. Given that DNA is so good at storing information, can we possibly use DNA to store data? A cubic millimeter of DNA can store 700 TB of data, equivalent to 70 hard disks of 10 TB each. According to this calculation, a kilo of DNA is sufficient to store all of today's data. However, this DNA data storage technology is far from commercial use. This is because the data read and write speeds are still very slow. It takes four days to write five megabytes of data. So, we need to explore new methods and technologies that can help us break these bottlenecks.

The third area is atomic-scale manufacturing. Today, the precision of manufacturing has reached the Nano level – say, 10 nanometers. However, the advancement to the micro level still happens at the level of macro manufacturing. For the more sophisticated precision manufacturing of today, the macro approach will no longer work properly, hitting the Moore's Law ceiling.

There is now a manufacturing concept called "atoms to products". In this model, atomic-scale items are directly assembled into nanostructures and then integrated into larger micro components. The size of an atom is 0.1 nanometer, which means atom-scale manufacturing will lead to a 100-fold capacity improvement over Moore's Law.

While all these advancements are very exciting, there is still a long way to go in our journey toward an intelligent world. We need new inventions and breakthroughs in theory. At Huawei, we will continue to explore the unknowns that the future holds for all of us and push the boundaries of traditional thinking. In uncharted territory, we have to make our own trail.

An open, collaborative and sustainable ecosystem enables digital transformation, innovation and invention

We advocate sharing value with other ecosystem players and evolving together with the global ICT industry. No single company or country has what it takes to make the digital world prosper. One of our primary goals is to cultivate an open, dynamic and diverse ecosystem where all players coexist and prosper together.

With over 30 years of breakthroughs, we are in a strong position to make the most of the opportunities that are emerging in cloud, 5G and smart devices. We will continue to work together with others regardless of the challenges we face.

We already collaborate extensively and have established long-term partnerships with more than 13,000 suppliers worldwide. Moving forward, we will continue to drive business success through strategic procurement. Through mutual trust, support and the simplest possible transaction models, we innovate together with our suppliers to drive industry development and ensure business continuity. Regardless of any future changes in the external environment, our procurement policy will remain unchanged and we will remain dedicated to working together for shared success.

Huawei also plays an active role in industry organizations to develop and grow the industry. We are a member of more than 400 standards organizations, industry alliances and open source communities where we serve in more than 400 key positions. In 2018 alone, we submitted more than 5,000 standards proposals for a growing total of nearly 60,000.

By working closely with international standards organizations and helping vertical industries to go digital with applied ICT solutions, Huawei is able to play a leading role in strengthening the Middle East’s ICT ecosystem by enabling omnipresent connectivity.

Collaboration is, we believe, the key to shared success throughout the ecosystem. Openness is a considerable component in promoting inclusive and sustainable partnerships. In the digital era, businesses choose their partners based on the ecosystems they operate within, more so than the products and prices they offer. Open, inclusive, sustainable ecosystems enable suppliers to be more present and accessible, and are ultimately more prosperous, bringing value to all players.

When all ICT ecosystem players can access shared value, they can evolve together. This collaborative benefits system is what will drive the ICT industry forward. A cross-industry approach brings together governments, industry alliances and organizations, developers and academia to create a larger market for all participants so that they can share benefits in the long run. Creating shared value is something Huawei has and will continue to focus on.

That shared value will be seen in areas like big data intelligence. In tomorrow’s intelligent world, we will see 180 billion TB of data generated; 85% of enterprise applications will be on the cloud; 86% of global companies will adopt AI; and, data utilization rates will skyrocket to 80%. This means that the newly-generated data for each year will become a constant source of innovative intelligence and value creation.

The expansion of 5G is another area of shared value for all. We already collaborate with carriers and industry partners to continuously develop 5G applications in vertical industries, enable a thriving industry ecosystem and make full preparation for the mature commercial use of 5G. We recently launched a series of cross-industry collaborations based on network slicing and MEC in smart grid, VR/AR, IoV, remote surgery, smart manufacturing and other fields, greatly expanding the 5G global ecosystem. As a result, Huawei has secured 50 commercial 5G contracts and has shipped more than 150,000 base stations to customers around the world

Huawei Connect 2019: An embodiment of Huawei’s ecosystem approach

When talking about open systems and partnerships, this vision really comes to life in showcases such as Huawei Connect. This is one of Huawei’s flagship open platform for working together and sharing experience with the industry. The best minds in the industry have attended the event – including thought leaders, business leaders, industry experts, ecosystem partners, application providers and developers – to chart the way forward and explore new opportunities.

Last year alone, about 100 intelligent solutions were launched by Huawei and its partners, developed for different industries. Approximately 60 percent of these were independently released by Huawei, and 40 percent by our partners and Huawei, or independently by our partners. These were seen by over 20,000 attendees participating in more than 300 discussions on business and technology leadership.

Some of our priorities in past years include the introduction of our AI full-stack portfolio and AI solutions for industries. Cloud, smart city, smart campus and intent-driven networks have featured prominently. Of course we also look at the interplay between macro themes such as big data, IoT, cloud, security and services.

At this year's 2019 event, we gave attendees an inside look at new advancements in ICT technology, showcased the results of joint innovation with our partners and shared the best practices in digital transformation. We also exchanged ideas with these stakeholders, talked with customers and partners to explore business opportunities, learned from the best technical experts and developers, and experienced amazing applications and digital platforms.

During the conference, we also announced our latest AI and cloud solutions, and shared what we're doing to help our customers and partners go digital. An intelligent world is right around the corner, and AI is seeing wide application in all industries.

Furthermore, we believe that AI defines Huawei cloud and makes it extraordinary. We are committed to simplifying algorithms and making computing power more affordable than ever before and we can't wait to share the headway we've made. More and more companies have come to realize the value of AI, and with that intelligence available through the cloud, they are no longer questioning whether they should go to cloud, but how they can transition to the cloud faster.

Building a fully connected, intelligent world

Taking into consideration all of these rapid advancements in the ICT industry, it is perhaps no surprise that the world has benefitted massively from a historical technology pivot. In the end, we believe that more intelligent connectivity will trigger innovation on a scale previously unknown in the Middle East region and worldwide. The resulting new business models will change the way entire industries are run, and how products and services are consumed.

For our part, Huawei will continue to focus on ICT infrastructure and smart devices, and work with global customers and partners to realize ubiquitous connectivity and pervasive intelligence. We will also continue to work together with others regardless of the challenges we face. We won't close ourselves off from the outside world. We want to work more closely with partners across the value chain to create greater value for our customers and a better experience for consumers.

By doing so, we are committed to bringing digital to every person, home and organization for a fully connected, intelligent world.
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