Huawei has systematically studied the rise and fall of global telecommunications giants—Nortel, Lucent, Alcatel, Nokia Networks, Siemens Communications, and Ericsson—extracting deep lessons in organization, strategy, technology, and governance. These cases reflect not isolated failures but a broader pattern of systemic dysfunction in Western telecoms during the structural transformation of the industry from the late 20th to early 21st century. Huawei’s ability to learn from these crises underpins its own “crisis-driven growth” model and offers a strategic lens that is particularly relevant to understanding the dynamics of the current China-US technological competition.
From Standard Leadership to Ecosystem Stalling: Navigating Technological Path Dependence and Innovation Gaps
Historically, leading technology firms have demonstrated that dominance in standards and patents does not automatically guarantee long-term innovation success. Lucent and Bell Labs exemplify this phenomenon: once revered as a powerhouse of communication theory and foundational research, their innovation engine gradually decoupled from market realities. Their closed loop of invention, patenting, and publication failed to translate into scalable commercial systems, leaving them slow to respond to the transition from TDM to IP-based packet switching. Similarly, Nortel overcommitted to CDMA2000 and IMS during the 3G era, neglecting multi-standard compatibility and flexible evolution. By the onset of 4G, financial constraints hindered LTE R&D, resulting in missed market opportunities. Ericsson and Nokia Networks faced a comparable challenge, relying too heavily on 2G/3G markets while underestimating the rise of IP-based, cloud-centric, and software-defined networking. Short-term profit pressures further constrained their R&D investments, compounding their innovation lag.
Huawei’s approach demonstrates a strategic countermeasure to such path dependence. By implementing a dual-engine strategy—combining the “2012 Lab” for long-term, foundational research with the “Product Line Iron Triangle” for rapid commercialization—the company bridges the gap between scientific discovery and marketable solutions. Huawei’s technology roadmap emphasizes multi-standard parallel development and smooth evolution, avoiding the pitfalls of betting exclusively on a single technology. In addition, a three-tiered funnel system—from pre-research to incubation to commercialization—ensures that a significant portion of early-stage projects are rigorously evaluated for product integration within three years, reducing the risk of fundamental innovations stagnating.
The lessons extend beyond individual companies to national technological strategies. The U.S. enjoys “single-item champion” advantages in AI chips, EDA tools, and advanced processes, yet without robust system integration capabilities and efficient industrial transformation, it risks a Bell Labs-style stagnation: technological leadership without strategic resilience. Conversely, China’s rapid application growth risks obscuring foundational weaknesses, particularly in EDA, high-end analog, and RF chips, as highlighted by constraints exposed during Huawei’s sanctions. The broader implication is clear: sustaining technological leadership requires not only standard-setting innovation but also holistic ecosystem development and the seamless translation of research into commercially viable systems.
When Capital Logic Overrides Industry Logic: How Financialization Weakens Manufacturing Foundations
In the early 2000s, the stories of Nortel and Lucent exemplified the corrosive effects of financialization on manufacturing. Nortel, with a market capitalization exceeding $280 billion in 2000, prioritized stock buybacks and executive stock options over critical 5G research and development. Its aggressive acquisitions, such as Bay Networks, resulted in integration failures that burdened the company. Similarly, Lucent, after its spin-off from AT&T, redirected resources from long-term R&D toward short-term, profitable non-core businesses to meet Wall Street’s quarterly expectations. Both cases illustrate how financial incentives can overshadow industrial strategy, leaving companies vulnerable despite impressive market valuations.
The Alcatel-Lucent merger further demonstrates the dangers of capital-driven decisions masquerading as strategic logic. Both firms pursued integration to achieve an “illusion of scale,” ignoring cultural differences and technological redundancies. The resulting operational inefficiencies and conflicts led to Nokia acquiring the combined entity at a low price—a textbook example of a financialized “zombie merger.” Shareholder primacy, reinforced by law, markets, ideology, and executive incentives in Anglo countries, created an environment where short-term financial gains were systematically prioritized over industrial strength and innovation.
The rise of shareholder primacy was not an inevitable economic choice but a product of historical, ideological, and cultural alignment. In response to inflation, stagnation, and global competition in the 1970s and 1980s, Anglo economies embraced neoliberal policies, including deregulation and privatization, while business schools, consulting firms, and corporate boards propagated the moral doctrine that the primary responsibility of business was profit maximization. High trust in market signals, emphasis on measurable outcomes, and acceptance of inequality framed financial optimization as “objective” and “neutral,” further entrenching the ideology. This created a self-reinforcing loop: short-term market rewards drove executive incentives, which strengthened financial markets’ dominance, weakening workers, communities, and long-term industrial capabilities.
In contrast, Huawei offers a model of resisting capital logic in favor of industry logic. By remaining private and implementing employee stock ownership, Huawei avoids the pressures of short-term shareholder expectations, investing consistently in R&D—over €16 billion in 2024 alone. Strategic investment in supply chain companies and the creation of technology reserve pools enable Huawei to safeguard industrial continuity, turning backup systems into operational mainstays. China’s broader approach—combining state coordination with market mechanisms—prioritizes industrial resilience over short-term financial returns, mitigating systemic vulnerabilities inherent in globalized, financialized manufacturing models such as the US semiconductor industry’s reliance on outsourced fabs.
The contrast is stark: financialized, shareholder-driven companies often sacrifice long-term industrial health for immediate returns, leaving them vulnerable to systemic shocks. By embedding strategic reserves, investing in technological capabilities, and prioritizing industrial resilience, firms like Huawei demonstrate that resisting capital logic is not only possible but essential for sustaining manufacturing strength in a volatile global landscape.
Organizational Rigidity and Delayed Decision-Making: Why Large Enterprises Struggle to Adapt
Large, established enterprises often suffer from structural rigidity that slows decision-making and erodes competitiveness. Siemens Communications, for example, was constrained by German-style hierarchical processes and strong union influences, resulting in product launch cycles of 18–24 months—vastly slower than Huawei’s 6–9 months. Similarly, Nokia Networks’ Finnish headquarters, focused on European markets, was disconnected from emerging markets like India and Africa, delaying responses to customized customer demands. Ericsson’s “One Ericsson” integration in the 2010s led to bloated middle management and sidelined frontline account managers, reducing them to mere order-processing roles and weakening technical decision-making at the operational level.
In contrast, companies like Huawei have institutionalized mechanisms to counteract such rigidity. Regional offices are empowered to make technical decisions within their scope, supported by the “iron triangle” system—account manager, solutions expert, and delivery manager—that enables rapid closed-loop problem solving. Huawei also institutionalizes dissent through the “Blue Team Mechanism,” independent teams that challenge core strategies and prevent dominance by a single mindset, as demonstrated when they flagged potential US sanctions in 2012. Furthermore, a rotating chairman and collective decision-making via the Executive Management Team prevent the consolidation of individual authority, allowing strategic flexibility and iteration.
The broader lesson extends beyond China. US technology giants such as Intel and Qualcomm have exhibited signs of organizational entropy, where bureaucracy, political considerations, and competing DEI priorities have diluted engineering efficiency. The competitive advantage of agile Chinese firms lies not merely in fast execution but in fast strategic prediction, enabled by institutionalized dissent and decentralized decision-making. Large enterprises that fail to adapt these structures risk slowed responses, missed market opportunities, and eventual structural decline.
Geopolitical Blindspots in Technology: The Illusion of Neutrality as Protection
In recent years, Western technology manufacturers have often assumed that “communication equipment has no borders,” treating technological neutrality as a protective shield against geopolitical risk. This perspective has repeatedly underestimated the power of state intervention in strategic sectors and the vulnerabilities inherent in global supply chains. After Nortel’s bankruptcy, for instance, its 4G patents were divided among Apple, Ericsson, and Samsung, with minimal intervention from the Canadian government. Similarly, Nokia’s sale of Here Maps to a German consortium, which was subsequently acquired by a Chinese company, highlights Europe’s limited oversight of strategic assets. Even long-standing suppliers such as Ericsson, heavily reliant on Chinese OEMs like BYD Electronics, have lacked robust contingency plans for potential supply chain disruptions.
By contrast, Huawei has systematically pursued supply chain resilience. Since 2008, the company has implemented a “multi-point backup” strategy, ensuring at least two to three non-US suppliers for key components. Following US sanctions, Huawei accelerated the restructuring of its global supply chain, combining “southbound” and “westbound” strategies: assembly operations were shifted to Southeast Asia, localized production was expanded in the Middle East, and near-shore backup capacity was developed in Latin America. These measures reflect a clear understanding that technological globalization has given way to geopolitics, where infrastructure—whether 5G private networks, low-orbit satellite constellations, or regional computing power networks—carries dual strategic significance.
The lessons from the US-China technological competition underscore a critical imperative: China must integrate technological autonomy with openness. Initiatives such as OpenHarmony and MindSpore, which embrace community-driven development, demonstrate a path toward building resilient yet collaborative ecosystems. Avoiding a closed, self-preserving approach will help prevent the kind of internal standardization conflicts that historically plagued technologies, such as Japan’s VHS versus Betamax struggle. Ultimately, the era of assuming neutrality in technology is over; strategic foresight and diversified resilience are now essential for navigating the intersection of innovation and geopolitics.
From Equipment Supplier to Platform Player: Lessons in Ecosystem-Building Failures
Many traditional telecommunications and network equipment vendors have struggled to transition from being mere suppliers of hardware to becoming true platform players. Lucent’s attempt to enter the enterprise communications market through its acquisition of Octel faltered due to its inability to integrate the CRM and unified communications ecosystem. Similarly, Alcatel-Lucent’s “Nuage Networks” SDN solution failed to gain traction because it lacked meaningful collaboration with cloud service providers, remaining an isolated solution. Ericsson, despite promoting “Network as a Service” (NaaS), could not control upper-layer application entry points—such as over-the-top services and industrial applications—resulting in a gradual erosion of its bargaining power. Across these cases, the common theme is clear: without a self-sustaining ecosystem, hardware vendors struggle to leverage their technological capabilities into broader platform influence.
In contrast, Huawei has pursued a more comprehensive ecosystem strategy, combining product innovation with deep vertical integration. Its “1+8+N” intelligent strategy, later evolving into the HarmonyOS ecosystem, uses smartphones as an anchor and extends across vehicles, homes, and offices, building a self-controllable IoT operating system foundation. Huawei has also focused on industry digitalization through specialized “legion” models—such as coal mining, customs, and more than twenty other verticals—embedding ICT capabilities directly into industry workflows. By shifting from selling devices to enhancing productivity, and by linking HMS (Huawei Mobile Services), HUAWEI CLOUD, and the Ascend AI cluster, Huawei has created a “cloud-pipe-device-edge-intelligence” closed loop that strengthens its platform position.
The broader lesson of the US-China technology competition underscores the importance of ecosystem thinking. The United States excels in point technologies—such as the CUDA ecosystem or the iOS closed loop—but often falls short in fostering broad, system-level industrial collaboration. China, in contrast, leverages its vast domestic market, unified infrastructure, and rich real-world scenarios to support integrated innovation at scale. Initiatives such as the 5G + AI + power + transportation testbed demonstrate a civilization-level experimental condition that enables system-level breakthroughs unattainable for smaller or fragmented markets. Ultimately, the key to moving from an equipment vendor to a platform player lies not only in technology but in constructing a self-sustaining, multi-layered ecosystem that binds products, services, and industry scenarios together.
When Success Turns Inward: How Cultures Lose the Will to Strive
At the height of corporate success, organizational cultures can begin to decay from within. What initially grows out of discipline, ambition, and shared sacrifice may gradually harden into entitlement and complacency. The trajectory from a “striver culture” to a welfare-oriented mindset is not sudden; it is the cumulative result of success dulling urgency, weakening accountability, and replacing collective mission with individual comfort.
The decline of several once-dominant technology firms illustrates this pattern clearly. At Nortel’s peak, extraordinary material benefits—spacious offices, free meals, and executive jets—became normalized, signaling that success had already been secured rather than still needing to be earned. After Lucent’s split from AT&T, an inherited aristocratic culture persisted: engineers prioritized academic prestige and paper publication while neglecting manufacturability and large-scale execution. Similarly, Nokia’s Finnish headquarters institutionalized extreme work-life balance, but in doing so reduced tolerance for risk, iteration, and failure, ultimately constraining innovation rather than enabling it. In each case, prosperity eroded the internal pressure to strive.
Huawei represents a deliberate counterexample. Its internal systems are designed to resist cultural self-satisfaction by tightly linking contribution to reward through mechanisms such as the “Striver Agreement” and shared ownership structures. Importantly, this is not a simplistic glorification of overwork, but a model of focused, high-intensity investment in strategic opportunities. Huawei further institutionalizes self-correction through mandatory self-criticism, failure-case reviews at the executive level, and promotion criteria that emphasize “gray-scale” leadership rather than rigid rule-following. Its cadre development model—requiring rotations across R&D, marketing, delivery, and management, often in challenging overseas contexts—prevents narrow specialization and cultural stagnation.
These contrasting models offer broader lessons in the context of US–China competition. The rise of “quiet quitting” and anti-performance sentiment in parts of the US tech sector reflects a weakening of collective purpose under the dominance of individual-rights discourse. China, meanwhile, faces its own risk of swinging between two extremes: ascetic-style mobilization that exhausts human capital, and welfare-oriented permissiveness that undermines ambition. Huawei’s ongoing attempt to balance employee striving, fair sharing of returns, and structured rest suggests a possible middle path—one that treats cultural vitality as a system to be actively maintained, rather than a byproduct of past success.
Strategic Lessons from Huawei: Paradigms, Resilience, and System Reconstruction
Huawei’s trajectory under intense external pressure offers a set of strategic lessons that go beyond corporate management and speak to long-term technological competition. At its core, Huawei’s experience highlights the decisive importance of paradigm choice. Many Western technology giants faltered not because of inferior execution, but because they optimized relentlessly within aging frameworks. Huawei, by contrast, demonstrated the strategic foresight to pivot early—from traditional communications technology toward integrated ICT—thereby positioning itself to influence the foundational architecture of the intelligent era. In this contest, advantage is determined less by marginal performance metrics than by who defines the underlying infrastructure paradigm itself.
A second lesson concerns resilience at scale. The sanctions imposed on Huawei functioned as a real-world stress test of technological autonomy for a vast economy and society. Huawei’s survival suggests that a large-scale system can absorb extreme shocks when enterprises, the state, and research institutions are tightly coupled in a reinforcing structure. This capacity for systemic redundancy reframes technological competition as a question of civilizational endurance rather than firm-level survival, and it offers an alternative model of modernization for countries seeking development paths less dependent on dominant external ecosystems.
The third lesson lies in Huawei’s approach to competition. Rather than pursuing total replacement of existing U.S.-led systems, Huawei focused on constructing parallel, compatible platforms through open-source initiatives such as OpenHarmony, OpenEuler, and Ascend. This dual-track strategy prioritizes baseline security and autonomy while preserving interfaces for collaboration. It represents a pragmatic reconstruction of competitive logic—one that allows rivalry and cooperation to coexist within a fragmented global technology landscape.
The contrast with Nortel is instructive. Nortel did not fail due to a lack of technology, but because it lacked the imagination to anticipate and shape the future paradigm. Huawei’s experience underscores that enduring success in technological competition depends not only on innovation, but on the strategic capacity to redefine the rules of the game itself.
Final Thoughts
Huawei’s experience points to a single strategic insight about today’s technological competition: leadership now comes from reshaping the technological paradigm itself, not from optimizing inherited models. By moving beyond centralized, cloud- and AI-dominated architectures toward ubiquitous connectivity, scenario intelligence, and edge autonomy, Huawei illustrates how the contest is increasingly about who defines future infrastructure. Its survival under sweeping sanctions further shows that competition has expanded from firm-level performance to civilizational resilience, where coordinated nation–enterprise–research ecosystems can build systemic redundancy and offer a non-dependent path to modernization, particularly for the Global South. Rather than seeking total technological decoupling, Huawei’s development of parallel yet interoperable systems through open platforms embodies a dual-track logic that reconciles security with openness and rivalry with cooperation. Seen this way, the China–US rivalry is less about chips or supply chains than about shaping the future relationship between technology and civilization—and determining whether technology ultimately governs humanity or serves its long-term flourishing.