The Shortcut from Technology Follower to Market Leader: Huawei's Open Innovation Approach

Open innovation has been increasingly popular. Among various potential innovation partners, academic scholars from leading research institutes are perhaps the most valuable ones to work with. However, due to differences... [ view full abstract ]

Open innovation has been increasingly popular. Among various potential innovation partners, academic scholars from leading research institutes are perhaps the most valuable ones to work with. However, due to differences between businesses and the academia, building effective partnership has been a challenge. The case of Huawei Technologies Co., Ltd. (Huawei) illustrates a good example of facilitating effective collaboration between the two in pursuit of open innovation.

Founded in 1987, Huawei has grown from a sales agent for telephone switches into the world’s leading information and communications technology (ICT) solutions provider. Huawei has more than 76,000 research and development (R&D) staff serving one-third of the world’s population across 170 countries. The company owns the largest number of patents in China and ranks among the top worldwide. In 2012, Huawei overtook Ericsson to become the largest telecommunications equipment manufacturer in the world.

One of the key successful factors that have enabled Huawei to leapfrog its competitors is open innovation. As Huawei’s industry position has evolved from a technology follower to a market leader, one of the challenges facing Huawei has been to develop new in-house competences and achieve ground-breaking innovation. To enhance its research capabilities, Huawei has emphasized open innovation and win-win research collaborations as the most efficient and cost-effective way to achieve technology and industry breakthroughs. Starting as early as 1999, Huawei Science and Technology Fund was established to sponsor industry-related projects in universities. It is Huawei’s firm belief that academic research has historically been, and still is, an essential source of high-impact innovation.

To further strengthen collaborative research efforts with academia on the development of cutting-edge technological innovations in a more systematic way, the Huawei Science and Technology Fund was reshaped into Huawei Innovation Research Program (HIRP) in 2010. HIRP has developed a sustainable system that allows Huawei engineers to successfully collaborate with academic partners at top universities to solve complex technical problems in a timely and cost effective way.

This paper describes how Huawei has successfully tackled well-known challenges faced by a company pursuing open innovation through academic partnerships, including:

1) What project topics to pursue through open innovation?
2) Whom to work with? How to identify right experts?
3) Once experts are identified, how to get them on board? How to deal with mismatched expectations and motivations?
4) How to monitor project progress? What should be the right collaboration model? To what extent should the focal company control the process?
5) How to evaluate project outcomes?
6) How to integrate project outcomes with existing processes and knowledge?

This paper provides a comprehensive review of Huawei’s open innovation approach, HIRP in particular. It will identify challenges that Huawei has met in implementing HIRP, and then introduce and analyze the systematic scheme that Huawei has developed in response. This will be followed by a discussion on how to facilitate the collaboration between industry and academia within the context of open innovation.