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Trump’s Huawei threat a risk to Canadian and global tech in 2019: Don Pittis

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Reports that U.S. President Donald Trump is threatening to up the stakes in his battle with Chinese tech giant Huawei in 2019 seem at first glance the kind of Trumpian sniping the world has grown to expect.

But if it is true, as Reuters reported this past week, that Trump may sign an executive order prohibiting U.S. firms from buying Huawei technology, the issue goes far beyond Huawei and 5G wireless networks to one that could transform the global tech industry. And not for the better.

The reason is that Huawei — and Chinese chip maker ZTE, which the U.S. president also threatened to ban — are not unique. Instead, they are merely a couple of examples of Chinese technology that is not just catching up to the best in the world, but beginning to exceed it.

China, tech superstar

For Canadian technology businesses trying to see their way forward, facing a global tech leader that is in conflict with the U.S. is an unfamiliar experience.

Despite the Soviet Union’s space race victory with its 1957 launch of Sputnik 1, humanity’s first artificial satellite, the collapse of the Soviet communist empire nearly 30 years ago revealed a creaking technological relic.

Canadian technology experts say China is something entirely different and people who try to make the comparison with Eastern Europe, where the Trabant was the communist answer to the BMW, have it all wrong.

Some analysts say the poor quality of the Trabant and the time it took to order one were significant factors in the collapse of communism in Eastern Europe. But China’s rise as a tech industry powerhouse is a different story. (Arnd Wiegmann/Reuters)

Pretty well everyone now knows that China is a developing technological competitor. But there are growing indications that, barring some political or economic cataclysm in China, or a sudden technological golden age here in North America, China is on its way to becoming not just a technological powerhouse, but the technological powerhouse. It is becoming the global tech superstar.

And at some point Canada is going to have to make some crucial decisions on how it will cope with that change. And it may find its interests do not coincide with those of the United States.

“On Chinese technological prowess, they are now graduating twice as many graduates as the United States from university, but they’re graduating five times as many STEM graduates,” says Gordon Houlden, director of the University of Alberta’s China Institute. STEM stands for science, technology, engineering and math, the kind of graduates who make a real difference in the race for world-beating know-how.

Leapfrogging the world

In many ways, the explosive developments in Chinese science and technology have no equivalent since pre-war Germany leapfrogged the world in many areas of science and industrial production.

Over the past month, the arrest in Canada of Huawei executive Meng Wanzhou, at the request of U.S. prosecutors, has helped focus attention on that company.

An exhibition marking the 40th anniversary of China’s reform and opening up at the National Museum of China in Beijing shows off the country’s space technology. (Thomas Peter/Reuters)

While the charges against Meng have nothing to do with 5G — she’s accused of misleading financial institutions about her, and Huawei’s, relationship with a company that did business with Iran — the case has spotlighted Huawei’s state-of-the-art contributions to communications technology.

There has been much debate over whether Huawei’s involvement in 5G, or even the sale of its phones in the world market, represent a Trojan horse for the Chinese government, giving the country’s security forces backdoor access to our deepest secrets.

Not just telecom 

But that focus on 5G may be misleading. For one thing, 5G is not a single gizmo. It is more accurately a kind of marketing title for the fifth generation of mobile phone technology. As such, it represents a host of technological subsets, mostly software, some of which are being developed in Canada, says R&D specialist Rick Clayton, a partner with the Ottawa-based consultancy Doyletech.

Clayton says Huawei is just one company operating in an industrial cluster in the Ottawa suburb of Kanata North, where Canadian engineers, some of whom used to be at Nortel Networks before its collapse, work on new software components.

“There’s a fair bit of implicit and explicit sharing between the companies,” he says, which is part of what makes an industrial cluster strong.

And this by no means applies just to the smartphone sector.

One way of sharing is to license intellectual property that someone else has already invented, says Mark Henderson, former owner and editor of the specialist newsletter Research Money.

“They can get it immediately as opposed to working it out of their lab over a period of months or years,” he says.

That international sharing of technology between companies saves money and speeds up progress. The financial damage of cutting off access to intellectual property invented in China, especially as its technology pulls ahead, is hard to calculate.

Chinese open source

Another common way of sharing is called open source software, something that’s been around for years and famously includes the operating system Linux, where employees from many different companies work to build and improve chunks of programming components that are widely used in the systems of those and other companies.

An increasing number of those open source projects are being invented and co-ordinated by Chinese software developers, and that trend is only likely to grow as China increases its number of STEM graduates.

Another potential mistake compounded by the focus on Huawei is thinking that China’s growing technological skills are isolated in just a few areas, such as telecom.

While the experts interviewed for this piece say the U.S. still has an overall technological lead in many sectors, China is not just catching up, it is pulling ahead.

According to the MIT Technology Review, China has become the one to beat in space technology, while its southern city of Shenzhen is racing to outdo California’s Silicon Valley as “a global hub of innovation, entrepreneurship and manufacturing.”

Currently, most global products include the best innovations from around the world. U.S. firms use Chinese-invented technology and vice versa. 

A Huawei executive has said the company will do absolutely anything, including opening its code to detailed inspection, to prove that it is not a threat. Whether a ban is worthwhile can only be determined by the best and most independent security experts. And banning Huawei to eliminate a purported backdoor does not guarantee U.S. systems will be secure from international hackers who have used other methods of entry.

If instead the security concerns are actually part of a political attempt by Trump to weaken China’s technological advantages, the world may be on the verge of a watershed that could hurt everyone. The risk is there could be a new technological cold war that divides the world, forcing countries to choose between two increasingly incompatible technical — and political — systems.

As Gordon ​Houlden of the China Institute says, besides the business cost and difficulty of untangling two sets of competing technology, economic interdependence helps prevent wars. He says as an outward-looking trading nation, Canada should do everything it can to try to prevent such a technological fissure and the resulting political divide that will inevitably hurt both the U.S. and China.

Ultimately, says Houlden, if push comes to shove, Canada must stand shoulder to shoulder with the U.S., its longtime ally and security guarantor. 

But avoiding a technological split into “we” and “they” is not just in the interests of Canada, but those of the global technology industry both inside and outside the American sphere. 

And if that doesn’t matter to you, consider this. If we gang up with the U.S. against China’s increasingly sophisticated knowledge industry, maybe sometime soon we will no longer be able to get our hands on the coolest tech.

Follow Don on Twitter @don_pittis

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The ‘Maple Majestic’ wants to be Canada’s homegrown Tesla

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Look out Tesla, Canada has a homegrown electric sedan on the way. Well, that’s if AK International Motor Corporation can drum up enough investment to make its EV a reality. Dubbed the “Maple Majestic,” the vehicle is a battery-electric designed to “excel in extreme climate performance without adversely affecting the climate, as befits a vehicle from Canada,” according to its website.

What’s in a name? — The company says the maple leaf is a “symbol of Canada’s warmth and friendliness towards all cultures,” while “majestic” refers to the country’s “status as a Constitutional Monarchy.”

That patriotism carries over into Maple Majestic’s parent company’s lofty goals. AK Motor founder Arkadiusz Kaminski says he wants the company, which he founded in 2012, to become “Canada’s first multi-brand automotive OEM,” and that the “Maple Majestic is intended to be Canada’s flagship brand of automobiles on the world stage.”

Partnerships are key — “We acknowledge that the best chance for the Maple Majestic brand to succeed, lies in continuing to build the relationship with Canada’s parts suppliers and technological innovators, whether they be academic institutions, corporations, or individual inventors,” the company explains. “We are currently seeking partners in automotive engineering, parts manufacturing, automotive assembly, electric propulsion technology, battery technology, autonomous technology, and hybrid power generation technology.”

In other words, don’t expect to be able to buy a Maple Majestic any time soon… and don’t expect to pour over 0-60 mph times, power output, range, or other key stats, because those don’t currently exist. For now, all we have are pictures and a short video clip. But at least those are arresting.

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PE-backed Quorum Software to merge with Canadian energy tech firm

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Houston-based energy technology company Quorum Software will merge with a Canadian tech firm to bolster its presence in oil and gas services.

Quorum announced Feb. 15 it plans to merge with Calgary, Alberta-based Aucerna, a global provider of planning, execution and reserves software for the energy sector. The combined firm will operate under the Quorum Software brand.

Gene Austin, CEO of Quorum Software, will continue in his capacity as chief executive of the combined firm. Austin, former CEO of Austin-based marketing tech firm Bazaarvoice Inc., became CEO of Quorum in December 2018.

Aucerna co-founder and CEO Wayne Sim will be appointed to the Quorum Software board of directors. Both companies are backed by San Francisco- and Chicago-based private equity firm Thoma Bravo.

“Over the last 20 years, Quorum has become the leading innovator of software deployed by North American energy companies,” said Austin. “Today, Quorum is expanding the scope of our technology and expertise to all energy-producing regions of the globe. Customers everywhere will have access to a cloud technology ecosystem that connects decision-ready data from operations to the boardroom.”

In addition to the merger announcement, Quorum Software announced it had entered into an agreement with Finnish IT firm TietoEvry to purchase TietoEvry’s entire oil and gas business. The agreement, which includes hydrocarbon management, personnel and material logistics software and related services, is valued at 155 million euros, or $188 million, according to a statement from TietoEvry.

“Our three organizations complement each other — from the software that our great people design to the energy markets where we operate,” said Sim. “Our new company will be able to deliver value to our stakeholders, while accelerating the growth of our combined business and the energy industry’s software transformation.”

The combined company will serve over 1,800 energy companies in 55 countries, according to the announcement. With its headquarters in Houston, Quorum will continue to have a significant presence in Calgary and in Norway, the headquarters for TietoEvry’s oil and gas software business. Quorum will have other offices throughout North America, Latin America, Europe, Asia and the Middle East.

As of Sept. 30, 2020, private equity firm Thoma Bravo had more than $73 billion in assets under management. In late December 2020, Thoma Bravo agreed to acquire Richardson, Texas-based tech firm RealPage in a roughly $10 billion acquisition.

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Piece of Kitchener technology lands on Mars on Perseverance rover

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KITCHENER — A piece of Kitchener technology has landed on Mars, thanks to NASA’s Perseverance rover.

The rover settled on the planet’s surface on Thursday afternoon. It’s been travelling through space since it was launched from Cape Canaveral, Fla. in July.

“The whole idea of being on a device that we’re sending to another plant with the express mission of looking for traces of past life, it’s pretty mind boggling actually,” said Rafal Pawluczyk, chief technical officer for FiberTech Optica.

The Kitchener-based company made fibre optic cables for the rover’s SuperCam that will examine samples with a camera, laser and spectrometers.

“The cables that we built take the light from that multiplexer and deliver it to each spectrograph,” Pawluczyk said.

The cables connect a device on the rover to the SuperCam, which will be used to examine rock and soil samples, to spectrometers. They’ll relay information from one device to another.

The project started four years ago with a connection to Los Alamos National Lab, where the instruments connected to the cables were developed.

“We could actually demonstrate we can design something that will meet their really hard engineering requirements,” Pawluczyk said.

The Jezero Crater is where the Perseverance rover, with FiberTech Optica’s technology onboard, landed Thursday. Scientists believe it was once flooded with water and is the best bet for finding any evidence of life. FiberTech’s cables will help that in that search.

Ioannis Haranas, an astrophysicist and professor at Wilfrid Laurier University, said the rover isn’t looking for “green men.”

“They’re looking for microbial, single-cell life, any type of fossils and stuff like that,” Haranas said. “That’s why they chose a special landing site. This could be very fertile land for that.”

“It’s very ambitious,” said Ralf Gellert, a physics professor at the University of Guelph.

Gellert helped with previous rover missions and said it’s the first time a Mars rover has landed without a piece of Guelph technology on it. While he’s not part of Perseverance’s mission, he said the possibilities are exciting.

“Every new landing site is a new piece of the puzzle that you can put together with the new results that we have from the other landing sites,” he said.

“It’s scientifically very interesting because, even though we don’t have an instrument on that rover, we can compare what the new rover Perseverance finds at this new landing site,” he said.

Now that Perseverance has landed on Mars, FiberTech is looking ahead to its next possible mission into space.

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