Summary:

The capital of China is Beijing and as the host of the 2008 Olympics, the city is also playing host to an outbreak of competition between global corporations for new employees.

Leading the pack is Microsoft Corp.’s research arm Microsoft Research Asia (MSRA). Established 9 years ago, this lab already boasts many development outcomes, of which a number are actually in use in Microsoft products. It is an essential element in Microsoft’s efforts to counter rivals Google, Nokia and Sony

The capital of China is Beijing and as the host of the 2008 Olympics, the city is also playing host to an outbreak of competition between global corporations for new employees.

Leading the pack is Microsoft Corp.’s research arm Microsoft Research Asia (MSRA). Established 9 years ago, this lab already boasts many development outcomes, of which a number are actually in use in Microsoft products. It is an essential element in Microsoft’s efforts to counter rivals Google, Nokia and Sony (see fig. 7).

There are currently about 350 engineers attached to the MSRA. Additionally, there are 300 people located in the Advanced Technology Center, which incorporates developed technologies into products, and about 130 people in the Search Technology Center, which specializes in search technologies. As far as search technology R&D teams go, this is apparently Microsoft’s largest. NOTE 8.

Meanwhile, Microsoft has recently started facing competition for these employees from the quickly rising Google. When establishing its own R&D lab in China in 2005, Google headhunted Kai-Fu Lee, an engineer who had been a central figure in the start-up of Microsoft’s own lab 9 years ago. Lee is currently busy trying to attract China’s elite students to the Google lab to create something that rivals MSRA.

Note 8. Microsoft has positioned China at the hub of its R&D operations in the East Asian region. Specifically, the company recruits people from Japan, Korea and Southeast Asia to work at MSRA, while at the same time appealing for joint research projects with universities in each of the countries. MSRA’s Hon said, “We have high hopes for our joint research with Japanese universities in the areas of robotics and sensors.”

Another competitor in the development of core technologies for mobile devices, Nokia is also trying to improve its development capabilities at its Beijing lab. Nokia’s Beijing people have already developed a number of technologies, including user interfaces for mobile devices using pen and other input. Seppo Pienimaa, Director of Nokia Research Center Beijing Laboratory, said, “It takes 5 years to create a good research team. We are bringing our top people from Finland and other countries to motivate our Chinese engineers.”

In May 2007, Nokia announced the establishment of a joint research facility with Tsinghua University. With 20 Nokia engineers, 30 professors from Tsinghua University and 50 students helping out, the facility is working to develop wireless and Internet technologies.

In 2006, Sony also joined in the fight to attract people in Beijing. With a software development site already set up in Shanghai, Sony decided to focus on collaborations with Peking University, Tsinghua University and other universities at its newly established Beijing lab. Keiji Kimura, EVP and Officer in Charge of Technology Strategies, Intellectual Property and Electronics Business Strategies at Sony, said, “We set up an office in Zhongguancun, Beijing about 2 years ago, where we have researched a number of different topics.” Another purpose in establishing the office was apparently to employ students from the joint research projects.

High salaries not wanted

It appears that the competition for talented graduates of China’s prestigious universities is heating up.

Global enterprises with a presence in Beijing are making the pilgrimage en masse to Tsinghua University, located on the outskirts of Beijing. The absolute top students from all over China come to study at this university. Daizaburo Hashizume, Professor of the Department of Value and Decision Science of the Graduate School of Decision Science and Technology, Tokyo Institute of Technology, said, “The best 3,000 students from China’s 15 million each year enter Tsinghua University. Basic academic skills are extremely high.”

It is not only high salaries that are needed to attract these top students. What many of Tsinghua University’s students want is an environment where they can do their research under first-string engineers, an unlimited career path that includes promotions to HQ positions, and a high corporate image that will satisfy their student egos. It takes a long time and steady efforts to develop the conditions that will attract the top students in China (see fig. 8).

Same number of interns as employees

Of the four companies mentioned above, Microsoft is ahead of the rest in its ability to pull students. NOTE 9. Science and technology students from Tsinghua University and China’s other top universities put Microsoft firmly in the lead as their choice of potential employer.

One reason Microsoft is able to attract the top students is that it actively employs student interns and uses them on internal company projects (see fig. 7(c)). With about 350 interns currently in place, this number matches the number of engineers working at MSRA. The internships are long as well, running on average 1–2 years. Since its establishment 9 years ago, MSRA has accepted a total of 2,600 students into its internship program. The program has succeeded in showing the corporate culture, conditions and other aspects of Microsoft to many other students and has improved the image of the company.

With other measures such as transferring to Beijing the top engineers who have made a name for themselves at Microsoft Research in the US, and expending research funds on university research labs, Microsoft has gained the trust of students over these 9 years.

Participating in student education from long-term perspective

“MSRA has accepted 2,600 exceptional students as interns over the past 9 years, and the Chinese government is very grateful to Microsoft for its contribution to the education of these students.

“Of these 2,600 interns, MSRA has employed 80 people. It is inevitable that some of these interns would move to join the ranks of rival companies. We have also established a mutual student exchange program between prestigious Chinese and US universities. Participating in student education from a long-term perspective will pay dividends for Microsoft in the long run.

“There are three things that MSRA demands of its people. The first is exceptional mathematical skills because this is an indicator of a high capacity for logical thinking. The second is implementation skills because we want people with the ability to quickly code and test new ideas. This is an absolute must for R&D at Microsoft. The third is a strong urge to contribute to computer science.”

Lab with a mere 4 employees

Omron is a Japanese company that is undertaking a unique trial using top Chinese student interns as its main R&D people.

In September 2007, Omron completed its research and development campus Omron R&D Collaborative Innovation Center (Shanghai) on land adjoining Shanghai Jiao Tong University, an elite science and technology university. The center houses the Omron Institute of Sensing & Control Technology (Shanghai).

Note 9. Popularity ranking of potential employers announced by Chinese job search Website ChinaHR.com: (1) Lenovo, (2) China Mobile, (3) Haier, (4) Huawei, (5) P&G, (6) IBM, (7) Microsoft, (8) China Guangdong Nuclear Power Company, (9) Alibaba.com.cn, (10) Baidu. Outside the top 10 come Google at No. 12 and Nokia at No. 30, while only two Japanese electronics manufacturers made the top 50 – Matsushita Electric Industrial at No. 29 and Sony at No. 46.

There are only 4 Omron employees actually working at this lab. The ones actually carrying out the research are about 100 student interns studying for their master’s degree mainly at the Shanghai Jiao Tong University (see fig. 9). Students in the research lab taking on the commission attend the center from the university 2 or 3 times a week and work on various research commissions under the guidance of their professors. Each commission pays US $10,000–20,000 and takes six months to complete. Patents and other IP rights are shared between Omron and the lab taking the commission. Research topics are varied as well, including verification of image recognition algorithms, technological assessments of devices and 3D visual sensors for Factory Automation. Omron plans to double the number of registered student interns within 2 or 3 years.

Omron Institute of Sensing & Control Technology (Shanghai) president Satoshi Yano exclaimed, “The potential of Shanghai Jiao Tong University students is awfully high!” He commented, “They are able to catch up with the leading technologies by reading and understanding huge numbers of papers in English. They can even debate advanced technology with Omron’s top engineers. They are much better than Japanese students in this respect.”

Joint research with Chinese universities is not unusual in itself, but establishing a research facility for the purpose of that joint research is a rare occurrence. Yano gave two reasons for setting up the facility. The first was to stimulate the creation of new ideas by collecting students and teachers from differing fields in the one place. The second was that security measures will be required to prevent the leakage of trade secrets if this facility handles the development of Omron’s core technologies. He said, “In 3 to 5 years’ time, we want to be working on research topics proposed independently by our Shanghai facility.”

Veteran engineers transferred to China

If the focus of the R&D wars in Beijing is on search, image recognition and other technologies, then R&D under the spotlight in Shanghai is related to automotive electronics technologies. On top of joint ventures by America’s General Motors Corp., Germany’s Volkswagen and Sweden’s Volvo, local Chinese manufactures have also set up production facilities in Shanghai. With prestigious science and technology universities like Shanghai Jiao Tong University and Tongji University, Shanghai is supplying the future engineers for these enterprises.

One company utilizing the abundant human resources offered by Shanghai to rapidly expand its Shanghai R&D facility over the past 2 to 3 years is America’s Delphi, the world's largest automotive components supplier. Delphi set up its technical center in Shanghai in 2004 and has employed 600 engineers to date. The company plans to continue its rapid expansion at 200 new people per year until it reaches 1,400 engineers by 2010. Delphi is working to develop automotive components for the Asian region, including Korea, Japan and other countries on top of China. Actual products developed include power trains, car navigation systems and in-vehicle audio-visual equipment. NOTE 10. Delphi has also developed ECU software for use in internationally available vehicle models.

Working jointly with neighboring universities, they have taken up the development of core technologies for things like fuel cell and hybrid cars. John Absmeier, Technical Manager, Electronics & Safety at Delphi China Technical Center, said, “China is full of companies making lithium ion secondary batteries. We have divided our research into characteristics of batteries at our China facilities and motor controls at our US facilities.”

Delphi transferred 30–40 veteran engineers from its operations around the world to help start up its Chinese technical center (see fig. 10). It utilized the expertise built up through its international locations to attract and foster new people. For example, they summoned Indian engineers from their already established center in India to give guidance to their Chinese engineers. They also implemented a program placing the top Chinese engineers in overseas locations for periods of 6–12 months.

Going forward, it looks like Shanghai will have an even greater concentration of automotive R&D facilities. In November 2007, General Motors established a development site there for high environmental performance vehicles. Among Japanese companies, NEC Electronics formed an alliance with Shanghai Jiao Tong University to establish the Automotive Electronics Collaborative Lab. NEC is providing microprocessor training boards to foster engineers capable of mastering the company’s own microprocessors. NEC Electronics (China) Co., Ltd. president Hirohiko Takeyama said, “Business orientation is very strong in Chinese universities, as they attempt to produce development outcomes in a shorter timeframe that matches corporate timelines. Compared to universities in Japan, the US and Europe, this lends itself more readily to research and development collaborations.” He explained that going forward the company will continue R&D collaborations on automotive components with Shanghai Jiao Tong University, Tongji University, Beijing Institute of Technology and others.

Note 10. Apart from the engine itself, Delphi handles development of the entire power train from ECU through to exhaust for local automakers with low technological capabilities. Delphi’s Absmeier said, “China is planning to lift environmental regulations for automobiles up to the Euro 4 level. This will boost our role even further.”

Fostering engineers to act as bridges between Japan and China

The greatest concern for Japanese companies wanting to establish R&D presences in China is that there are not enough people serving as intermediaries between the two countries. Apart from being able to speak both Japanese and Chinese, what is needed is educated people able to fill the gaps in cultural understanding between the countries, and above all that those people be first grade engineers.

The Tokyo Institute of Technology and Tsinghua University are operating a joint program to foster these future individuals (see fig. C-1). Master’s students at each university are carrying out research in three fields – nanotechnology, biotechnology and social sciences – with participants earning their master’s degree from both the Chinese and the Japanese university.

Students of Tsinghua University researching solar cell technologies are planning to research dye sensitized solar cell technology in China, and Cu(In,Ga)Se (CIGS) solar cell technology in Japan. The group will write their master’s thesis on the former topic in Chinese and on the latter topic in Japanese. Studying two related themes at different labs will broaden the capabilities of the researchers. One Tsinghua University student said, “The Tokyo Institute of Technology is really well equipped because having separate SEMs (scanning electron microscopes) in each lab means they can be used any time. I want to utilize this environment to speed up my research.”

Before traveling overseas to study, the Tsinghua University students study hard to learn Japanese and the Tokyo Institute of Technology students study hard to learn Chinese. Daizaburo Hashizume of the Tokyo Institute of Technology, in charge of the program, said, “English is often used between Chinese and Japanese people when conversing. But there is a problem here. Chinese people working through English probably think about forming relationships with countries in the West rather than with Japan. And Korea has an even greater fear of this happening than Japan does. In the future, there will be many more Koreans studying in China as they attempt to build bridges between their two countries.”

This program is being implemented with the help of four sponsor companies. Sponsors receive periodic newsletters introducing each of the students’ activities, and while it does not necessarily mean it will lead to employment, it becomes useful information for business. The companies can sponsor their employees to study at the Tokyo Institute of Technology, while the program also allows for studying abroad at the Tsinghua University.