Midea Making the List of Global Fortune 500 Companies Again with $900 Million R&D Investment
FOSHAN, China, Nov. 29, 2017 /PRNewswire/ --
On December 6-8, the much anticipated 2017 Fortune Global Forum will be held in China again. The fortune 500 companies that have made the list will be under scrutiny of the whole world. The Midea Group has set itself apart, not only as the partner of the Forum, but also as one of a few Chinese private enterprises that have made the list two years in a row, and the only household appliance manufacturer on the list from China.
Midea has made the list of Global Fortune 500 Companies twice now. While earning the title of "one of the world's most profitable companies", Midea is no penny pincher when it comes to spending its hard-earned cash. Recently, the renowned consulting firm Strategy &, a subsidiary of PwC has published The 2017 Global Innovation 1000 Study, which has Investigated trends at the world's 1,000 largest corporate R&D spenders. Midea ranks 165 in this study. The core competitiveness of a technology company is a function of its R&D capabilities. Midea has spent over $900 million in the past year alone, in the effort to transform the company to become more technology-oriented. Midea has stated that it aspires to become a world-leading technologies group in consumer appliances, HVAC systems, robotics and automation systems, and smart supply chain (logistics). It is apparent that Midea has put their money where their mouth is.
What exactly has Midea spent that $900 million on, and what opportunities does Midea hope to capture with the heavy spending? That is worth exploring.
Midea's global R&D network has revealed its global ambition. So far, Midea has established over 20 R&D centers in worldwide locations including China, US, Japan, Italy, Germany, Austria, etc. Last year alone has witnessed the opening of new R&D centers in Louisville, KY in the US, Emerging Technology Center in Silicon Valley, and Innovation Center Europe (RDICE), which were clear indications of Midea's commitment to the trend in its globalized R&D efforts aligned with its localized product offerings for international markets. The R&D initiatives throughout Midea's global network have indicated that Midea's ambition has gone way beyond its home turf in the household appliance market. Midea has allocated its R&D resources to cutting-edge technologies in the areas of AI, microchips, sensors, and smart robots. It is positioning itself as a pioneer and industry leader in future-oriented disruptive technologies.
Mr. Paul Fang, Chairman & CEO of Midea Group has said, "Midea may have had many strategies. However, there is but one core strategy, which is 'technology innovation, and technology driven'. In the past, we have hoped to achieve economies of scale to compete with lower cost for bigger market share. Now this model is totally dated." This manufacturing giant is trying to regain its dominance through innovations, proprietary technologies, patents and technology know-hows. Midea has invested heavily in the core areas of Human-Machine-Interaction, so that it can seize more opportunities and capitalize in the areas of intelligent manufacturing and smart home.
R&D programs eventually all come down to talents. Midea has invested extremely generously in its talent pool. Last year, Midea has offered a one-million-yuan salary package in a global search to recruit talents holding PhD degrees. The story has made headlines. Statistics has indicated that Midea has attracted top experts from Germany, US, Japan, South Korean and Singapore, as well as top research talents from renowned universities and research institutes all over the world. There are over 10,000 staff working in Midea's R&D programs, among whom about 10% of the research personnel focuses on the development of cutting-edge technologies. In addition to its own army of researchers, Midea also has help from the outside. It has high-level strategic partnerships with over 100 world-renowned universities and research institutions to recruit talents. Midea has also invested generously to precipitate the integration of cutting-edge technologies for more breakthroughs.
It is no small feat to translate cutting-edge research results from the labs to commercially viable products for different user scenarios. Midea is not alone when planning the grand future. In the past year, Midea has signed strategic agreements with many industry leaders. The following are a few examples: a full strategic partnership with Huawei in the area of smart home; a multi-layer strategic agreement with Guangzhou Phar. Holdings in the areas of robot technology, medical devices, healthcare data application, smart supply chain, healthcare investment, and intelligent manufacturing; a multi-area and multi-layer partnership with Country Garden in the areas of city-industry integration projects, smart town projects, smart home appliances, smart home system and overseas projects. Meanwhile, Midea has also worked extensively with Clivet, KUKA, and Servotronix, which are now part of Midea Group, to share technologies and leverage each other's advantages to achieve synergy.
The $900 million seems to have been very well spent in the past year. Midea would not have been able to make the World's Top 500 list, had it not been committed to and driven by technological innovations. Continued investments in technology and R&D will further strengthen Midea's core competitiveness and make its global success sustainable. We just cannot help wondering and looking forward to how Midea will use innovations and disruptive technologies to capitalize future opportunities.
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SOURCE Midea Group
