Huawei warns innovation will slow if universities reject funding

A senior executive at Chinese technology giant Huawei has warned that global knowledge generation will suffer if universities reject research funding from the controversial company.

Joe Kelly, Huawei’s vice-president of international media affairs, claimed that basic research had hit a “bottleneck” worldwide and that private money was needed to keep the innovation pipeline flowing.

A not insignificant proportion of the private research funding available to universities comes from Huawei, which is set to spend $20 billion (£15.7 billion) on research annually, allocating some $300 million of it to external organisations.

However, research institutions are increasingly wary of accepting it, citing government warnings that working with the company could jeopardise national security. Earlier this year, Huawei pleaded not guilty to theft of trade secrets in the US.

Massachusetts Institute of Technology, Cornell and Princeton universities, the University of California, Berkeley and the University of Oxford are among the institutions that have said they will refuse to accept new research funding from the company.

But Mr Kelly told Times Higher Education that, if more universities followed suit, there would be a knock-on effect on the pace of innovation. Huawei has partnered with some 300 universities worldwide on more than 1,200 projects.

Mr Kelly cited a slowing of Moore’s Law – the idea that computers’ processing power doubles every couple of years while their cost halves – as an example of the bottleneck in basic research.

“We’re seeing multiple governments reducing their absolute investment,” he said. “It’s down to commercial interests to make up the difference. We’re prepared to make a contribution.”

Huawei has always invested 10 per cent of its revenue into research and development, with 10 per cent of that ring-fenced for pure research. Now it is lifting research spending to 14 per cent of revenue, and dedicating 30 per cent of that to basic research.

“The only benefit we achieve from the vast majority of that funding is that we might get to see the research paper two weeks before it’s published,” Mr Kelly said. “We don’t fund university research in the expectation of a return. We fund university research in the expectation that mankind’s collective knowledge will grow. If collective knowledge grows, the cake gets bigger for everybody.”

In response to concerns about Huawei, Mr Kelly said that there were “no dangers” in collaborating with Huawei. He argued that allegations of intellectual property theft were isolated and company structures – including a published “annual report”, arm’s length validation of product security and a recently announced $2 billion initiative to overhaul software – should provide reassurance.

Universities might be most worried by claims that Huawei could be suborned to spy for China, after the 2017 National Intelligence Law empowered intelligence agencies to enter companies’ restricted areas and demand cooperation.

Mr Kelly said that the law did not apply to Chinese companies’ overseas operations, citing Premier Li Keqiang’s insistence last month that forcing companies to spy was “not consistent with Chinese law” and “not how China behaves”.

Perhaps the biggest problem that Huawei faces is persuading universities to believe it. Clive Hamilton, professor of public ethics at Charles Sturt University, was unconvinced. “If you work with Huawei on engineering or related issues, there’s a high chance your IP will be stolen,” he said.

Mr Kelly insisted that Western institutions should not fear working with Huawei on any type of research, including telecommunications, citing the company’s “integrity”. Mr Kelly also stressed commercial imperatives against security breaches in a company where staff were the exclusive shareholders. “If we were to compromise any carrier network, our business would be finished overnight,” he said.

In January, Huawei founder Ren Zhengfei said that neither he nor the company had ever received government demands to provide improper information. “We will certainly say no to any such request,” he told reporters.

Mr Kelly said that this contrasted with revelations about US technology companies, citing leaks by whistleblower Edward Snowden showing that they had embellished their products with “back doors” – features allowing secret remote access over the internet – at the instigation of the US government.

But Professor Hamilton said that, notwithstanding its faults, the US was a democratic country where “severe denunciations” of corporate misdeeds came from internal critics including media, intellectuals, civil society organisations and the political opposition. “None of those things exist in China,” he said, adding that if Mr Ren were to refuse a government request for information he would “be in jail within a week”.

“The symbiosis between the state and corporations in China is much tighter than it ever was in the US,” Professor Hamilton said.

john.ross@timeshighereducation.com