Taiwan getting heavy on R&D
Sometimes outsourcing is not all about looking for lower-wage countries
but looking for areas that foster the best possible environment for
productivity.
Taiwan is one among a number of countries in Asia Pacific that are making
a push to attract R&D investments from companies abroad.
The country has caught the eye of SRI International, one of the
pioneering R&D groups in the US which is reportedly looking to set up
facilities in Taiwan
Founded in 1946, SRI International is a nonprofit group that does R&D work
for government agencies, businesses and nonprofit foundations. The
organization licenses its technologies and creates new ventures, typically
spinning off two to three companies each year.
SRI was the brains behind ARPAnet, the Internet's predecessor which was
borne out of UCLA in the late 60s. It also became famous for inventing
that tiny yet indispensable gadget that sits beside almost every
PC in the world - the mouse.
SRI's initiative to set up shop in Taiwan is driven by lower costs.
Countries like Taiwan and Singapore, for example, reportedly offer to
subsidize as much as 30% of costs incurred by tech firms such as SRI for up
to five years.
The Pro-outsourcing Argument
Pro-outsourcing advocates say that the solution to the job drain that offshoring creates is to focus on higher education, and cutting edge research. This will create the kinds of jobs that are not easily shipped away.
On the bright side, the Bush administration has called for increased R&D spending for 2005. Most of this is reportedly going to weapons development and homeland security.
Government Contracting and the Future
It remains to be seen, exactly how these future government contracts will be filled. However, SRI may be signaling the start of a trend in which government contractors begin offshoring work as well.
This obviously presents a conflict. In order for America to ensure safe borders and a balanced budget, it makes sense for government contractors to take advantage of the benefits provided by offshore outsourcing.
On the other hand, these same government research dollars would hopefully be used to enhance state of the art research facilities in the United States.
