| Kippreport.com

Calling all nerds, Part I

June 9, 2009 11:22 by Ian Munroe

Last year, 21-year-old Huawei Technologies did something unthinkable for a Chinese company. By investing a tenth of its revenues and 40 percent of its staff in research and development (R&D), the networking and telecommunications giant registered more patent applications than any company worldwide (unseating Philips Electronics in the process).

Huawei’s focus on R&D seems to be paying off. Its sales jumped nearly 50 percent to $23 billion in 2008, and are projected to keep growing this year. A small but growing portion of that income was generated in the Gulf Cooperation Council (GCC) countries where, since 2003, Huawei has been serving clients like Saudi Aramco and Etisalat. “It might be easier to count who isn’t our client,” laughs Ihab Ghattas, assistant president of Huawei’s Middle East arm. “We have been very aggressive in the market.”

Ghattas, like the rest of Huwawei’s regional management, is based out of its Middle East headquarters in Dubai Media City. The company also has marketing staff scattered across the Levant and Gulf region, as well as a few hundred technocrats that serve major local clients.

But when it comes to R&D, Huawei, like most technology firms in the Gulf, does most of its heavy lifting many time zones from the Arabian desert. The company has research centers from Silicon Valley to Beijing, but the nearest such facility to the GCC lies across the Arabian Sea in Bangalore, India.

“You have to select a place where there is a suitable amount of manpower to generate ideas,” Ghattas says. “The GCC has a reasonable amount of expats living in it – that might not be the best situation for an R&D center, because people do come and go.”

While the GCC’s diversification endgame involves huge technology investments, experts say a lack of stable scientific expertise and resources stands in the way of creating a homegrown Huawei of its own. With few outputs in sight, the question looms: will the Gulf’s embryonic “post-carbon” economy include technology production?

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Tags: Economy, expertise, Gulf states, investment, research and development, Technology