MNC R&D Ecosystem in China

China has emerged as a key location for outsourced R&D operations especially in Telecom, Software and Electronics. The offshoring wave in China started nearly a decade later than in India. However, today, the country is competing with India and already being considered as an established offshore destination. A quick look at the following facts will help to understand the position that China holds in the global offshoring landscape:-

  • In 2011, R&D investment of global firms in China was USD 7.65 billion, which was only a bit lower than India where R&D investment was USD 7.75 billion. However, taking in to consideration that China’s market is growing nearly 50 percent faster when compared to India, the MNC R&D investment in China is expected to soon overtake that in India.
  • MNC presence in China is higher with nearly 1100 MNCs present in the region (roughly twice as compared to that in India). Similarly, the total number of R&D centers present in China is also high.
  • In addition, the availability of fresh talent pool suitable for R&D i.e., 56,000, which is roughly 10,000 graduates higher when compared to India and presence of large number of engineering graduates and PhDs in the country, makes it a preferred offshoring destination. However, in terms of average annual cost/FTE, India has a slight edge over China (but this factor is increasingly losing importance as business drivers for globalization are shifting from cost to innovation).

Though language barriers and IPR issues exist, global businesses can no longer ignore China as the region presents huge business opportunities. It is essential for MNCs looking to operate in China to gain understanding of the current R&D landscape. Undertaking R&D activities in China helps in achieving this objective as it provides the advantage of remaining close to market and consumers in China. This report aims to provide a comprehensive coverage of the MNC R&D landscape in China along with the key trends that point towards paradigm shift that the R&D landscape is currently undergoing. This includes the following:-

  • Continuous growth of MNC R&D centers in China
  • Emergence of Tier-2 locations as new centers of growth
  • Rising competition for MNCs from domestic Chinese firms
  • Change in innovation philosophy of MNCs in emerging geographies
  • Expansion of work portfolio by MNCs in China
  • Diminishing cost arbitrage advantage for MNCs in China

In addition, the report also throws light on the role that Chinese government plays for increasing R&D investment in the country.

Download the free preview report from the following link.

This entry was posted in Talent Practice and tagged , , . Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *