By Steve Toloken, UT Akron Bureau
Shanghai, China-China is projected to be the preferred spot in the world for new research and development spending by multinational corporations, according to one recent survey, and the world's plastic resin makers aren't losing any ground there.
DuPont Co., GE Plastics, Bayer AG and Dow Chemical Co., among others, all recently announced expansions of their plastics-related R&D work in China or elsewhere in Asia. The firms said they are making the investments with an eye toward boosting product development and design work in the region.
They're not alone. China tops the list of future R&D expansion locations in a 2005 survey of multinational corporations by the United Nations Conference on Trade and Development, with the US and India coming in second and third, respectively. The number of foreign R&D units in China rose from zero to more than 700 in the past decade, as the report said companies are looking for lower-cost ways to innovate.
The trend should be put in perspective, though. The UN report said that while developing economies in Asia tripled their share of global R&D spending to 6 percent between 1991 and 2002, it noted that developed economies like the US still account for more than 90 percent of the world's R&D spending.
Significant hurdles remain for China, like its weak protection of intellectual property, observers say.
There is still a hesitation to bring top-in-class into the Chinese market because of the recognition that it could show up elsewhere pretty quickly," said David Witte, managing director of the Singapore office for consulting firm Chemical Market Associates Pte. Ltd.
Foreign firms often bring lower levels of technology into the country, and then use distribution channels they establish to bring in higher-value goods made elsewhere, he said.
Still, companies are making significant investments in research in China. Several made announcements at the recent Chinaplas trade show in Shanghai.
Bayer MaterialScience AG is expanding its polymer R&D centre in Shanghai. The expansion will make the facility the company's first in the Asia-Pacific region to do R&D work for all of its four regional business units: polyurethanes, polycarbonates, coatings and thermoplastic polyurethanes.
Dow Chemical Co. is also opening an R&D center in Shanghai in early 2008.
We will have over 600 people working in technical service, application development and global research by 2010," global business director Greg Jozwiak said in a recent interview in Shanghai, which is becoming the centre of Dow's Asia business.
The R&D center will include a customer innovation" area and labs for application, product and formulation development; high-throughput research and core science.
It is not only a commitment to China, but it's committing to China as the birthplace of future development," Jozwiak said.Staff reporter Nina Ying Sun contributed to this report."