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CEO Daily: Tuesday, September 22

September 22, 2015

If China is ever going to be a business innovator, and not just a fast follower, it should let Huawei lead the way. I visited the company’s Shenzhen campus today, and was impressed with its determination to be a global leader in building out the “internet of things.” Huawei believes the world will move from 10 billion connected devices today to 100 billion a decade from now, and it wants to play a leading role transmitting, storing, processing, analyzing and displaying the data that results.

 

While relatively small compared to China’s state-owned behemoths – it is only 228 on the Fortune Global 500 – Huawei is unique among Chinese companies in its outward focus. Consider:

 

–67% of its business originates outside of China;

–78% of its debt financing comes from outside of China;

–82% of its suppliers are outside China.

 

Moreover, the company has pioneered a global open innovation platform that includes research partnerships with leading companies and universities around the world. As a result, it has become a major technology player in every major global market save one. The one? The United States, where it is hampered by fears that its technology allows unauthorized access to the Chinese government. Those fears, fueled by the fact that Huawei’s founder began his career with the People’s Liberation Army, are vigorously denied by the company, which has made cyber security a hallmark of its global offerings.

 

One more thing makes Huawei unique: it is 100% employee-owned, which allows it to focus on the long-term and devote more than 10% of its revenues to research and development and involve 45% of its employees in the R&D effort. “We believe our (ownership structure) is the best,” said Lifang Chen, the company’s director of public affairs. “We do not face external pressure. We decide what we should do.” A lot of Huawei’s competitors would like the same freedom.

 

More news below.

 

 

 

Alan Murray
@alansmurray
alan.murray@fortune.com

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