The world has witnessed a surge in the amount and quality of collaborative research between businesses and universities. Leading technology and engineering companies have shifted inexorably to working with the finest scientific and engineering minds, often housed in university laboratories, while at the same time winding down their own internalised, previously insular teams. In turn, academic researchers seek out the best businesses to help turn their most promising ideas into commercial realities.
Borders around new ideas and basic research have thus evaporated as research teams have grown more specialised, capable and international. And we have all undoubtedly benefited from this.
So any moves to re-erect walls around universities and stifle knowledge transfer as the result of recent trends towards antiglobalisation should be met with dismay. What is at stake?
Perhaps the most important role that businesses make to research and development is by helping talented university researchers navigate the “valley of death”.
This is the point in the development journey where a great invention or innovation needs to transform into something tangible that will be successful in the marketplace.
The people behind the idea will need to accrue funds from venture capitalists, establish businesses and produce returns on investment. According to industry estimates, more than four out of five technologies developed globally never make it to the commercial world because of their inability to cross the “valley of death”.
The role of businesses here is clearly vital. And the more knowledgeable and experienced they are in their sector the better. As the OECD notes: “Research and development driven by the private sector tends to have better innovation outcomes”. It also argues for more encouragement of participation by “entrepreneurial enterprises and SMEs”.
The contribution that corporations make to basic and applied research has also become increasingly important as some governments continue to cut the amount of funding that they make available to university research. The good news is that the private sector has been making up the shortfall (and then some).
In particular, the information and communication technology sector is providing unprecedented investment into innovation as it helps nurture the technologies that will ignite the fourth industrial revolution.
The major spenders of corporate R&D globally are represented by a mix of multinational companies but the biggest contribution comes from technology companies. While I am proud to say that Huawei is among the top 25 contributors, according to Bloomberg, it should be noted that it is the only Chinese company on the list. The sums that we spend on research and development are dwarfed by the aggregate of Amazon, Alphabet, Microsoft, Intel, Facebook, Oracle and Cisco.
Basic research is a long and arduous journey, with no guarantee of success. Businesses can also apply arguably the best risk management techniques to investment, underwriting research on the promise of a breakthrough and making them well placed to absorb the costs of failure.
Our flagship collaboration with universities, The Huawei Innovation Research Program, continues to sponsor many innovation and research projects, including research in technical domains such as wireless, networks, storage and devices. Its immense contribution has been widely recognised, and received a Business Model Transformation Award at the World Open Innovation Conference in 2017.
There is also overwhelming evidence that investment in basic research and successfully bringing inventions and innovations to market has immense social spillovers, far in excess of any private benefits to individual firms. Reducing R&D funding without plugging the gap will only reduce total factor productivity growth, diminish potential growth of the global economy and simultaneously limit the possibilities for a better future for our children.
One of America’s most famous innovators and industrialists, Henry Ford, said it best: “Coming together is a beginning, staying together is progress, and working together is success”.
Andrew Williamson is vice-president of market insights in the Public Affairs and Communications Department at Huawei Technologies.