By: Trends Editorial Team
Kevin Wen graduated from Tianjin University in 2001, then worked for Huawei and Harbour Networks in telecommunication system software programming, and holds several Telecommunication patents. He then transferred to work in the marketing department, and became one of the pioneers to develop overseas telecom markets, and manage strategic cooperation with European companies.
After 2008, Wen started his own business Silk-road LinkedNet Technologies Limited, which delivers end-to-end VoIP solution, WiFi commercial operation solutions, Instant Messenger and Social Networking platforms with large-scale users for Tier1 operators overseas, service to South East Asia, the Middle East and Russia. Since 2018, Wen has also been devoted to the research and development of Blockchain and Token Economy to integrate with social networking and fintech applications.
In 2018, Wen participated and initiated “Silk-road Bridge” which introduced China’s New Four Inventions of “Mobile Payment, Sharing Economy, E-commerce and Blockchain” to overseas markets, bridged the cooperation and provided the first internet study tour in the Middle East to China for entrepreneurs.
Wen cooperated with top level consultancy companies in the Middle East, participated in the Z-Park Internet of Things Industry Alliance, providing services for Chinese companies and organizations to develop the market in the Middle East, supplied in-depth policy and marketing strategy consultancy, and investment and capital raising services.
Thank you so much for giving Trends this exclusive interview despite your busy schedule, we are very grateful. Please introduce yourself and tell us more about your new role as the Head of Iran-China Internet Of Things Innovation Center.
Thanks for the opportunity to interact with readers of Trends Magazine. I have worked in research, development and marketing for Huawei and other major telecom companies for 7 years, then proceeded to start my own international telecom and internet business and have been working in the Iranian market for 10 years. Before the sanctions, we supplied IT and telecom equipment and services here. We have witnessed the growing cooperation between the two countries and the big improvement of internet applications in Iran after 3G and 4G capabilities were deployed, but there is still huge potential for development when compared to China’s internet economy. I plan to do more to help deepen cooperation between the two counties in internet-related fields and remove the barrier of language and culture. China has some of the best internet applications these days, but because most of the contents are in Chinese, it is hard for other countries to understand them. Based on our experience in both countries for the past 10 years, we set up this platform to achieve the goal of “Copy China to Iran,” very similar to “Copy Silicon Valley to China,” which was used at the early stages of the internet industry’s development in China.
Despite the massive trade and industrial cooperation between Iran and China, there seem to be very little going on between the two countries when it comes to technology, innovation and R&D cooperation. Why is that?
Good question. That’s what made us decide to launch this service platform. As stated above, today many people know that China has good internet industries and telecom companies, high speed trains and so on, but when it comes to cooperation, the cultural and language barriers make it quite challenging to proceed further. When I came to Iran, I noticed that local companies were learning and copying US Internet companies, but almost none were copying Chinese ones. When I communicated with these companies, I noticed that they knew almost nothing about Chinese companies. Again, the main barrier is language and culture, and of course, it is also due to the fact that China’s domestic market is big enough for internet and high tech companies to grow into giants without paying attention to the international market. Ever since China’s market reached a heavy competitive situation and the leverage of the big population was almost used up, more and more companies set up strategies to enter the international market, especially after the Chinese government launched the Belt and Road Initiative. There will definitely be rapid growth in cooperation between China and other countries. Iran will be one of the main countries for such cooperation. We set up this type of service platform to speed up the cooperation between the two countries.
Except for Huawei a few years ago and before the recent sanctions, almost none of China’s tech giants have had any presence in Iran, why is that? What does it take for them to consider Iran, both as a market as well as a potential tech hub in the region? Do you foresee any such scenario?
Firstly, it is not fully like what you feel. Actually, a number of China’s tech giants are present in Iran, but they are not promoted publicly. Huawei is one of the most famous, as it has a mobile phone business which makes the brand name easy to remember. Iran is the biggest potential market in the Middle East for high tech industries. Most tech giants from China want to set up win-win businesses here and transform Iran into a regional hub, since Iran has some of the best university education in this region. However, because of the issue of sanctions, the progress rate is often subject to change. From a long-term point-of-view, Iran can be a great tech hub for the Middle East and Asia. We are doing what we can under the sanctions and preparing for when sanctions are lessened or removed.
You have visited Iran numerous times in the past decade. Please tell us about your overall experience. How do you assess the tech sector and startup ecosystem in Iran and how does it compare to China? How does it compare to other countries in the MENA region, considering that it has been under significant sanctions for the past many years?
Every year over the past decade, I have visited Iran several times, even under significant sanctions, and I was still able to see the fast improvement in its tech sector and also see more and more incubators being set up. The large-scale coverage of 3G and 4G are significant improvements in the Iranian tech sector; we can see the growth rate of these networks is high, which can benefit startups as more and more innovative applications are created each day. However, when compared to China – from a technical standpoint – Iran is still lacking an “ecosystem platform” or the platforms that are qualified to set up existing ecosystems are purely American based. They have no plan to set up ecosystems based on their own platforms. From an investment and marketing point of view, Iran is still short of professional Venture Capital, or VC. The government has shown support through policy and funds but because of its lack of an ecosystem platform, the effectiveness is limited. Iran is actually at a phase in which it is more important to grow ecosystem platform level companies, rather than relying on existing ecosystems. Startup opportunities are very rich in this field. Professional VC and capital markets are urgently needed; professional VC funds are the blood for high tech startups. As far as comparison to the MENA region goes, I am not very familiar with other countries in this region, I only know that Dubai is open and attracts global players to startup there. Based on the high tech projects that the UAE invests in more and more startups are growing rapidly. In Iran, because the sanctions severed the connections with the professional global capital market, the challenge is huge and requires the study and development of new and innovative solutions for new types of capital market. I think it is possible.
Iran seems to be one of the most strategic places in China’s One Belt, One Road Initiative. Beside investing in Iran’s road, rail and port infrastructure, there will also be a need to invest in Iran’s ICT infrastructure, isn’t that the case? If so, can that be achieved any time soon and given the current “Maximum Pressure” policy imposed on Iran by the US?
Sure, if there is an opportunity that does not violate the sanctions, they will definitely also invest in ICT (Information and Communications Technology) infrastructure. In regards to the time needed to achieve it, sanctions will definitely make it take longer. We are studying to do as much as possible without going against the US sanctions.
What do you see as the key success factors in China’s technology achievements? To what degree has government support played a role in the growth of the technology sector? What would take for China to become a major player beyond its borders and become a Tier 1 global player like the US?
Firstly, China has clear five year, ten year, and even longer overall time objectives and planning that acts a guide for all; secondly, based on the objectives and planning, related markets are opened for competition globally. Government projects are open for bidding, supportive policy regarding high tech parks and supportive industrial funds are setup to support high tech companies. Finally, because of China’s big market, new companies have more opportunities to grow. So, in general, China has a meticulous system to support and grow its high tech sector while opening the market to meet the increase in demand. China is a developing country and we study the high tech sectors of developed countries but also do innovative localization and upgrades to keep up with them. We have the benefit of a large population that requires every successful company to be able to overcome the most large-scale applications that even US companies seldom have the opportunity to get involved with and practice. When it comes to the current era that is about big data and AI and about higher and higher broadband networks, China has a unique advantage to become a top player. Furthermore, the Belt and Road Initiative is to expand the overall market; most of the countries of the Belt and Road region can copy China’s model to improve quickly. It is an opportunity but also a challenge, as said before, because of the language barrier, other countries cannot rapidly and easily understand the most essential advantages of the China model; now our aim is to reduce this obstacle, to enable other countries to quickly understand and reap the benefits.
China seems to be ahead of everyone else, including the US when it comes to 5G implementation. Why is 5G so strategic? How does it impact our personal and business lives? Will the US crack down on Huawei slow down the adoption of 5G outside of China?
Exactly, because China has its own huge market with the largest user base, the demand for higher broadband is much greater than other countries and causes tech giants to grow quickly. When we come to 5G, not only will broadband bandwidth increase 10 times and release more video and Augmented Reality or AR-based applications, it will also connect everything into the internet, meaning there will be 10 times more terminals connected to the internet. The US tries to slow down Huawei, and I think everyone can easily see why. Regarding whether it will slow down the adoption of 5G outside of China, I think it has an impact for sure. However for developing countries, I think it is a better opportunity; if more resources are available for supporting deployment of 5G infrastructure quickly then they will have a better opportunity to upgrade traditional industries, and benefit their overall economy and lifestyle.
When it comes to Blockchain technology, China is also a global leader, not just in mining but in using it in various industries, including Fintech. How is Blockchain impacting various industries and can we expect any cooperation between Iran and China in that area?
As I said, 5G will increase mobile broadband bandwidth by 10 times, increase connected terminals by 10 times, and that means it really is the Internet of All Things, but they are just connections. How do we evaluate the value of the huge data running over the connections? Blockchain plays the role of defining the value of data carried, so Blockchain is also called “Internet of Value”. So, in general, we call the ABCD+5G+IOT+X Industries the new digital revolution that is coming. “A” meaning “AI,” “B” meaning “Blockchain,” “C” meaning “Cloud Computing,” “D” meaning “Big Data.” As for how Blockchain is used for fintech, because Blockchain has unique distributed database architecture, non-changeable character, open-source, peer-to-peer, self-healing, and so on, it’s naturally matched for the financial industry. Before, in order to set up secure transactions, finance systems were complicated, inefficient, costly and still had many issues with hacking that brought huge losses for the financial industry. Finance + Blockchain is going to create a new generation of finance services. In general, for the internet field, we say that “The Singularity is Near,” The Big Bang is going to happen.
All of what you saw until now is what was before the Singularity, ABCD+5G+IOT+X Industries, will bring The Big Bang. As for the cooperation between Iran and China in the field of Blockchain, Blockchain is an open-source technology, and is great for letting developer communities communicate more. Then we can see how a deep cooperation can take place.
What does it take, in your opinion, for Iran to develop its tech sector, despite the US sanctions? Many believe that China managed to insulate itself against the US tech dominance by developing its own solutions, from search engines and social media to communications protocols and so on.
Firstly, China was not developing its own solutions, but rather was developing and creating global standards and actively participating in them. In technology development, China is always open and wants to be a member of the global family. What you mean, I think, is more about the feeling outside of China and how China limits US players. But actually, it is about Chinese regulations; some companies don’t want to obey the regulations, so they are not qualified to participate in the market. Actually, in regards to what you said about search engines and social media, Microsoft Bing and Yahoo search services have continuously worked in China; Microsoft and Apple social media and communication platforms have always worked in China as well. Moreover Amazon has also always worked in China. But when these giants face local companies who study technologies quickly, and have a more user-centric service philosophy, by and by, those global giants fall behind. Furthermore, many of these giants still hugely benefit from the Chinese market via capital investment. Most of these domestic giants have big investors and shareholders from other countries. In my opinion for Iran to develop its tech sector, China is definitely a great example for Iran to follow. The key is, not to be isolated: embrace open technologies, but learn fast; open for capital market; create and earn profit together; manage regulations well; maximize users centric attitude and protect national security with a balance. It’s definitely a systemic solution to develop the tech sector.
With regards to Iran-China IOT Innovation Center, please tell us about any initiatives or projects we can expect in 2020?
First of all, we saw that Iran has a good engineering culture along with a good number and quality of engineers. From a human resources point-of-view, outsourcing will be further developed. We know that there is not enough info on successful models, both technical and business, in China to enable other countries understand and copy them, such knowledge bases and training will be set up. Based on the above basis, more projects will be created in accordance with the UN sanction regulation. In the Iran-China Internet of Things Innovation Center, China is a Z-Park Internet of Things Industry Alliance member, which has covered nearly 7,000 key core companies in the IOT industry. It has served nearly 3,000 companies in the related areas of the IOT and smart cities, forming an open, cooperative mechanism for production, learning, research and development. In general, we have good potential to start with outsourcing development, knowledge database, training and so on, and to deepen cooperation in some projects. We welcome readers to contact us via Trends Interview for a partnership in ABCD+5G+IOT+X Industries.
You have almost 10 years of experience in the Iranian market, and almost 18 years in China. China has achieved great success in these 18 years. Based on that success, what would you like to share with Iran to help the country follow in the footsteps of China in the field of technology?
When I look back at almost 10 years of experience in Iran, and 18 years of experience in China, something indeed touched me deeply. During entrance training at my first job with Huawei, we were told that they had set a company law which stated that more than 10% of the annual revenue must be invested in Research and Development, or R&D. At that moment, I did not know what that meant. But today, when I look back, I realize how great it was for Huawei founder Ren Zhengfei to setup this company law when Huawei was only a trading company which resold private branch exchange from foreign countries. Today Huawei has a revenue stream of almost 200 billion USD annually, and still they insist on spending more than 10% of the revenue on R&D. When I worked for Huawei from 2001 to 2003, they had a difficult time due to the global internet industry crisis, but they still insisted on investing 10% of the revenue on R&D, which finally led to Huawei having success in 3G and 4G networks. For Iran, unfortunately, no company has had such a vision, too many companies only consider immediate profits. Iran is among the top ten countries with the highest number of engineering graduates, annually, therefore it has potential for technological development. So, this is what I want to share, why did Huawei achieve huge success? I believe that the company policy of investing 10% of the yearly revenue in R&D is one of the key factors. While Huawei started by trading foreign telecom equipment, what made them different and led to the company reaching such great heights, I believe, is the aforementioned company policy Today, Iranian trading companies that have decent profits should deeply consider reinvesting their profits in R&D. This principle is simple, but actually very hard to execute; let Huawei’s success be a testament of the long-term value. Of course how to do R&D more efficiently has to be discussed on its own in length, it cannot be summed up in a few words. Anyone that has interest can contact me through Trends to discuss how to setup a powerful R&D division.