The Huawei UK Partner Summit 2019 took place in London a few days ago. Over 200 partners gathered for a day of learning and celebration.
They day opened with a welcome Speech from Sir Andrew Cahn who said: “We are at the door of the intelligent world, and only through working together can we seize the opportunities it brings. The greatest benefit of open markets is competition. When companies enter a market, those that exist there have no choice but to improve, innovate and increase their own productivity”
I wanted to understand why partners continue to collaborate with corporations such as Huawei, so let's look at some of the numbers on the study from Oxford Economics which was commissioned at the end of last year and it breaks down the total economic impact of Huawei in the UK.
Huawei supported an overall contribution to the UK GDP of 1.7 billion GBP in 2018 and is committed to investing a further 3 billion GBP between 2018 and 2022
The report shows that Huawei has also had a major impact on the UK labour market, supporting 26,200 jobs across the UK in 2018. Of these, 1,600 highly productive jobs were located at Huawei's 20 UK offices. Each Huawei employee delivers over 3.5-times more GDP than the average UK worker.
The research shows that Huawei employment and activity generated tax revenue of GBP 470 million for the UK government in 2018, up over 270 percent in real terms since 2012.
In real terms, Huawei’s gross value-added contribution to GDP was 507 percent greater in 2018 than 2012.
In addition, there was a 414 percent rise in the number of jobs supported over this period, and a 273 percent increase in the UK tax revenues stimulated by Huawei’s expenditure
Huawei also invested GBP 112 million in UK-based R&D in 2018 with 35 UK universities and research institutes. It employed over 300 UK research staff in 2018, with this number set to reach 400 in 2019.
They spent GBP 13 million on training its UK staff in 2018, enhancing the UK's overall productive potential. The report says that Huawei's contribution to the UK goes beyond the economic impact outlined in the study, with the company's presence helping to support enhanced telecoms market competition.
With these big numbers, I wanted to ask the opinion of two global thought leaders who understand this topic very well.
The first is from economist Prof Dr Emre Alkin who said:
"This report shows me how the English economy Bounced back from the side effects of 2008-2009 global crisis. It is obviously seen that United Kingdom decided to give away to a new model of growth based on technology and digital transformation. By the report, Huawei seems taking an important, rather substantial role in the model of growth.
As the calculation of the real GDP is with Value added, I cannot calculate the contribution of Huawei’s investment in UK. But it is clear that these investments made a tremendous contribution to nominal GDP, also to employment and business activity. While the European economy was at stake between 2012-2018, UK’s shift on the paradigm of growth clearly leveled up its position.
The main problem of the industrial age his productivity. The declining returns of production is a common happening everywhere. That’s why the digital transformation is needed everywhere. Because production operation is only a tiny part of the price today. Huawei’s Investments in UK seem to give way to a new era of economic activity where design, branding, education, re-de, technological improvement, logistics, advertising, communication, marketing and finance became an ecosystem under the umbrella of Industry 4.0.
Another interesting happening is that Huawei's labor productivity is increasing regarding other companies. This is also given hope to many analysts who claim that with the digital transformation, we will no longer be in the need of employees as the productivity of manpower is decelerating. Therefore I can easily say that we have still got time to improve human skills with digital transformation until robots and artificial intelligence take over all businesses. This is a good news for labor-intensive sectors but still we have to be prepared for the new era of production and services."
And the second opinion is from Entrepreneur and Angel Investor Mike Flache, who said:
"The Oxford Economics Report shows that Huawei in the UK seems to be playing an important role in the transition from the industrial to the information age. From an investor's point of view, the commitment to the UK economy – investing £ 4.3 billion over the period from 2013 to 2022 – underline this impression. On the basis of the figures available, Huawei's investments make a major contribution to UK GDP.
The extent to which internationally active tech companies invest in the UK, but also in other countries around the globe, is currently hotly debated in many places. Depending on their size, these investments have a significant impact on the most diverse areas of an economy or a country. Of course, there are numerous perspectives on this. Personally, I would like to share my concrete point of view:
Collaboration is the key to solving the challenges of a complex world and creating value for people, businesses and the environment. This requires new perspectives, fresh impulses and sustainable innovation. These can not always be provided from our own companies or countries. That's why we also need investments "from the outside". To cultivate and celebrate this diversity at all levels of business and society is an important attitude. However, this can only work if partners trust each other and share common interests, values and goals."
Great insights from both Prof Dr Emre Alkin and Mike Flache.
Looking toward the future after 18 years of partnerships success, Liang Hua, Chairman of the Huawei Board said:
"There is a lot Huawei can contribute to help the UK become a world leader in 5G, provide reliable, high-speed connectivity to towns, and achieve national coverage of full-fibre networks over the next decade"
My final take, there is an understanding from partners as Sir Andrew Cahn said that the UK has to be a champion of free trade, the markets cannot be closed, or the GDP and productivity will fall.
Partners continue to collaborate with corporations such as Huawei because they trust them, they know they are the future of new technologies and want to grow together in this fast paced innovation race.
The key is to continue to invest in the UK's potential and partner up for smarter connections.
Elise Quevedo
p.s. for those wanting to read the full Oxford Economics report, click here for download
