Research labs power China's next boom
(New York Times)
Updated: 2004-09-13 09:15
Harry Shum's office may be
among the best places in China to witness the next stage of the nation's rise as
an economic powerhouse.
Working in the heart of the Haidian District in
Beijing, with its canyons of universities, labs and high-tech ventures, Shum
occupies a corner of Microsoft Research Asia, the U.S. software company's effort
to tap scientific brainpower in China.
Shum oversees 170 scientists, who
huddle around computers in gray cubicles to brainstorm and tinker with ideas
that may one day drive Microsoft's technological empire to greater
"Microsoft began to realize we can't find all the talented
people in the U.S.," he said. Pointing outside, he added, "Nowhere in this
universe has a higher concentration of I.Q. power."
Microsoft is not the
only multinational company to use China as a base for research and
Chinese officials in charge of the sector say no one knows
exactly how many international companies have R&D labs in China, but a
Commerce Ministry official recently said that there were 600 labs now and that
foreign companies were arriving at the rate of 200 a year.
Zedtwitz, a professor of management at Qinghua University in Beijing, was more
conservative. He estimated that China had as many as 300 foreign R&D
centers, most founded over the past three years.
But von Zedtwitz also
said that within five years, China could overtake Britain, Germany and Japan as
a base for corporate R&D, leaving it second only to the United
These labs vary in size and ambition, but as they multiply and
expand they may help transform China. While it is now primarily a user and
copier of advanced technologies developed elsewhere, executives and experts said
it could become a powerful incubator in its own right.
Such a shift may
eventually reshape applied research, jobs and policies in the United States and
other developed countries.
"The Chinese are going to become sources of
innovation," said Denis Fred Simon, an expert on Chinese science and technology
who is provost of the Levin Institute of the State University of New York. "They
will find themselves enmeshed in global R&D more and more."
is far from certain that China will reap the full rewards of this flowering.
Planting and nurturing corporate labs is a delicate business, and in China they
are buffeted by concerns about protecting patents, retaining and training
researchers and managing the distances - physical and cultural - between China
and head offices elsewhere.
When Microsoft opened its Beijing lab in
late 1998, it was among the first multinational companies to establish a large
research center in China. It hoped that investing in research here would help
pry open the door to two dazzling prizes: China's large reservoir of skilled but
inexpensive scientists and its consumers, who are still relatively poor but who
are growing richer and more eager for new technology.
several sites in Asia, Microsoft settled on the Haidian District, home to some
40 universities, 138 scientific institutes and many of China's 810,000 research
scientists and engineers.
"China was really the No.1 target from the
beginning," Richard Rashid, senior vice president of Microsoft Research, said in
a telephone interview from corporate headquarters in Redmond, Washington. "We
felt there was a tremendously deep pool of talent there."
like other companies setting up research facilities here, was able to lure
scientists from state-run labs, which do not pay as well and often do not work
on cutting-edge developments.
"There are a lot of really good scientists
and engineers coming from Chinese universities," said von Zedtwitz, the
management professor at Qinghua University. "Their first choice is to go abroad,
but their second choice is to work in China for foreign companies."
the Microsoft lab first announced openings for 50 positions, it was deluged with
tens of thousands of applications, said Zhang Ya-Qin, the former managing
director of the lab and now a corporate vice president in charge of Microsoft's
It is no surprise that Microsoft Research Asia has
such popular appeal. It is one of the few labs here spared the pressure of
developing products for direct application; its researchers, like those in
Microsoft's labs in Redmond, San Francisco and Cambridge in Britain, are given
leeway to explore ideas with no immediate commercial payoff.
Microsoft researchers in Beijing also said they were conscious of their untested
"outsider" status, which made them especially eager to find product applications
for their theoretical findings. Among other things, researchers are working on
computer graphics, speech recognition and text translation.
young lab and an experiment of having a lab in a developing country in Asia, so
there was a need to prove ourselves," said Zhang Hongjiang, who runs a new
division devoted to shepherding research findings into applications.
and many other researchers said the lab felt more like an adrenaline-fueled
start-up than an academic institute.
If Microsoft ever overtakes Google
as an online search engine, for example, some of the credit may belong to
Wei-Ying Ma. His group, which has grown to 10 researchers, is working on ways to
drill deep into the Internet and select and organize information found
"We've progressed fast because we have a lot of really smart
people and we discuss and brainstorm a lot," Ma said. "In the U.S., the research
is much more individual, and each researcher is more like a professor. Here it's
more a team."
The expansion of foreign labs in China is bound to provoke
further debate, similar to the controversy over the outsourcing of technology
services, about the implications of the globalization of corporate
Executives at Microsoft and other companies asserted that
their Chinese labs were not taking jobs away from the United States or
"There's an internationalization of research going on," said
Rashid, the senior vice president of Microsoft Research. "That's a good thing.
The more smart people, the more innovation and the more benefits for companies
The starting point for this research boom was China's
growing sophistication as a market for technology, especially telecommunications
and the Internet, industry executives said.
Recently, Oracle opened a
lab in Beijing to tailor its Linux operating software to suit its Asian
customers. Companies like Motorola, Siemens, IBM and Intel are going even
further, running full-scale labs that work on their companies' most advanced
Although experts think China's growth as a research base will
continue, many said expansion could be slowed or ultimately endangered by
growing pains and legal uncertainties. The most immediate threat was China's
laxity in safeguarding intellectual property rights, which had led some foreign
companies to threaten to leave China for India, said von Zedtwitz, the
The recent rise of China as a base
for multinationals to conduct research has not yet seriously affected their
advanced operations elsewhere. Indeed, it may be helping them. But Martin Hirt,
a consultant at McKinsey, cited examples suggesting that at the lower end of
applied research, some jobs were indeed shifting to China from the United
States, Japan and other developed countries.
(Courtesy of the New York Times)