China R&D globalization market at USD 7.65 Billion growing at a fast clip
(1888PressRelease) China has evolved as a premier destination for R&D offshoring in the last few decades and its industry is currently undergoing a paradigm shift like maturity and expansion of work portfolio, transformation and innovation in R&D, rising MNC competition with domestic Chinese firms, etc.
New Delhi: Zinnov Management Consulting, a leading globalization advisory firm, today launched a comprehensive study on the Chinese R&D Globalization landscape titled “MNC R&D Landscape: A China Perspective”. The study analyses the evolution of the Chinese R&D ecosystem along with the various opportunities and challenges it poses, while drawing parallels with the Indian market.
According to the study, the Chinese MNC R&D market is growing at a fast clip and soon likely to overtake India if the current trends continue. Citing a case in point, the study states that while India had a clear edge over China till a few years ago, China is competing head-on with India today. This is evident from the fact that China’s current MNC R&D globalization market is USD 7.65 bn, marginally lesser than India’s USD 7.75 bn.
The China market is currently undergoing a paradigm shift led by factors like expansion to secondary locations, rising MNC competition with domestic Chinese firms, transformation and innovation in R&D, maturity and expansion of work portfolio, and the continuous growth of MNC R&D centers, finds the study. Government has been the anchor behind the growth of MNC R&D centers in China as it has come up with various technology mandates while providing assistance in the form of tax benefits and financial incentives. China plans to invest 2.5 percent of its GDP in R&D by 2020 from 1.45 percent in 2006, according to the Zinnov study.
Mr. Chandramouli C.S., Director-Advisory Services, Zinnov Management Consulting, said, “A plethora of domestic market opportunities coupled with a strong and growing economy is instilling confidence in MNCs to target China for exponential growth. Of the Fortune 500 companies worldwide, over 400 already have R&D centers in China. The China market has come of age with the entire MNC R&D ecosystem maturing. The government too has been proactive in ensuring the continuity of R&D activities throughout the country with visionary policies and plans.”
Traditionally, India held sway over China also due to the rich talent pool available in the country. However, that too seems to be changing. Chinese R&D centers are rapidly expanding their headcount base due to the availability of fresh suitable R&D talent pool, which currently stands at 56,000 while compared to India’s 45,000. This situation was unimaginable till a few years ago, states the study.
Talking about the findings of the study, Mr. Praveen Bhadada, Manager-Consulting, Zinnov Management Consulting said, “While the Chinese MNC R&D subsidiary market is growing at 16% every year, greater than India’s 11%, the market has also undergone a transformed innovation process where the market growth and competition from local companies made MNCs to revisit their business models. This in turn led to products being innovated for the domestic market in China and then re-packaged for the developed economies. This reverse innovation process, coupled with constant innovation, played a significant role in the evolution of the Chinese R&D ecosystem. China today hosts 1/3rd of the global 1,000 R&D spenders with their R&D subsidiary centers. ”
Stressing further on China’s market potential, the study notes that China is increasingly becoming an R&D destination for many of the auto OEMs such as Audi, Toyota, Volvo, because it is one of the biggest market for these OEMs presently. Also, R&D in new technology areas such as Cloud, Mobile/ Telecom and Internet/ e-commerce is prevalent due to a large market, access to potential customers and increased government support. And last but not the least, China is witnessing rapid expansion of secondary locations as these are increasingly becoming viable for MNCs to set up their R&D centers. It is interesting to note that secondary locations now account for nearly 50% of the total number of MNC R&D center establishments.
Last but not the least, the study also highlights that MNCs in China are expanding their work profile with a global view. There is an ever increasing interest of top global R&D spenders in the China domestic market opportunities, abundant talent pool, quality infrastructure and government support.
Read more: http://zinnov.com/white_paper_register.php?req=wp&art_id=144
About Zinnov Management Consulting
Founded in 2002, Zinnov – meaning Zeal in Innovation – is a leading management consulting company providing advisory services in the area of Global Sourcing, Emerging Markets Expansion and Human Capital Optimization to Fortune 1000 and reputed SMB companies. Zinnov works collectively with clients to tackle prevailing organizational challenges by analyzing the changing dynamics, improving performance, and building institutional capability. The services delivered to its clients through advanced reasoning and analytical techniques, provides solutions that help in integrating organizational vision, business definition and processes.
For more information contact:
Kinjal Chhetri Panwar
Marketing Manager, Zinnov
Email: kinjal ( @ ) zinnov dot com
Phone: +91 9466132313
http://www.zinnov.com
Source:
http://www.1888pressrelease.com/zinnov-globalization/r-and-d-mnc-china/china-r-d-globalization-market-at-usd-7-65-billion-growing-a-pr-309076.html
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