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Pfizer looks inland for less costly talent pool

By Zhou Yan (China Daily)
Updated: 2009-11-30 08:02

Besieged by the ballooning cost of talent in China's coastal regions, some multinational companies are traveling to untapped inland cities for equally skilled, but less expensive brainpower.

As the world's largest pharmaceutical firm, Pfizer Inc has blazed a trail in moving westward with plans to set up a new research and development (R&D) center in Wuhan, Hubei province, in central China to support Pfizer's global R&D projects.

The US-based drug maker signed a Memorandum of Understanding on Nov 25 with the local government to build the new operation at Wuhan National Bioindustry Base.

This makes Pfizer the first global pharmaceutical company to establish a presence in the area. The company did not disclose the amount of its investment in the project.

"Pfizer is setting up this R&D center in Wuhan primarily because of the city's solid research foundation and rich pool of talent," said Tan Lingshi, general manager of Pfizer (China) Research & Development Co, based in Shanghai.

R&D recruitment

Pfizer plans to recruit about 200 people for the new inland R&D center in the next three years, depending on operating conditions.

The pharmaceutical giant has more than 360 employees at its Shanghai R&D center that was set up in 2005.

"I was very impressed by the caliber of talent in the city, which is home to more than 1 million college students," Tan said, adding that the city's research foundation, including hospitals and research institutes, are very strong.

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"The cost of skilled people is significantly lower than that in Shanghai. However, the quality of talent is almost the same in terms of English language and research skills," Tan said. "It's the major driver behind our presence in Wuhan."

After Premier Wen Jiabao adopted the "Rise of Central Region" strategy in 2004 to promote development throughout central China, the inland region's education systems and infrastructure for investment dramatically improved.

"The Wuhan center will be an integral part of Pfizer's global R&D operations while being closely aligned with the Chinese government's strategy on biopharmaceutical industry development in the region," said Allan Gabor, regional president of Pfizer North Asia.

Since China's reform and opening-up began, foreign attention has been focused on a small number of universities in the coastal region, said Calla Wiemer, a visiting scholar at the University of California's Center for Chinese Studies in the United States.

"With so many Chinese young people now attending college, China can support excellence to a much greater degree within its university system," Wiemer said.

Intel's inland move

In addition to Pfizer, Intel Corp, the world's largest semiconductor chip manufacturer, started moving some of its assembly and test facilities from Shanghai to the inland province of Sichuan beginning in February to trim costs in the midst of the global financial crisis.

Intel's inland move will be completed in 12 months, the company said.

"The arrival of foreign firms will bring financial support to university research programs and generate job opportunities for well-trained graduates," Wiemer said.

"This should also help to retain talent locally that would otherwise be drawn to coastal areas," she added.

Pfizer is in discussions with Wuhan University about becoming partners in training initiatives.

Liu Chuantie, secretary-general of the Administrative Committee of the Wuhan East Lake Hi-Tech Development Zone, said that Pfizer's presence in the region also will serve as a catalyst for the industry's development in Wuhan and the surrounding midwestern regions of China.

According to Pfizer, the local government will offer the company tax and housing benefits, but the details of the subsidies still were being negotiated.

"Backed up by local authorities, the planned area of our new center probably will surpass our Shanghai center that covers 5,000 sq m," Tan said.

Wiemer said there are challenges to moving operations inland in China.

"The major concern for companies like Pfizer moving to the inland regions is that intellectual property protection has to be guaranteed to make sure that its big investment in the area is financially successful," Wiemer said.