News Article
European companies relocating R&D overseas
The fad for European manufacturing companies relocating their operations to low-cost labour markets has taken a worrying new turn, if a recent survey of the German market is anything to go by.
The fad for European manufacturing companies relocating their operations to low-cost labour markets has taken a worrying new turn, if a recent survey of the German market is anything to go by.
Manufacturers have for many years been setting up production facilities in the developing world to take advantage of the low cost of employment available there.
But it was thought that most of the high skilled, better paid jobs would remain within Europe, the reasoning being that there simply werent the necessary skills in the developing world.
But, according to a survey by the German chambers of commerce, companies are increasingly relocating their research and development as well as their production away from Europe.
More than half of German firms that are already investing in research and development abroad are planning to shift further research capacity out of Germany and overseas.
Moreover, one in five of the 1,554 companies surveyed were intending to move research and development jobs overseas. Interestingly, companies that were most likely to "offshore" R&D jobs were those that had operations abroad.
This is of particular relevance to the semiconductor industry because all of the major European chipmakers – Infineon, Philips Semiconductors and STMicroelectronics – already have foreign manufacturing operations.
The survey also found that the most popular locations for German companies to base their overseas research and development operations were Asia and North America.
Manufacturers have for many years been setting up production facilities in the developing world to take advantage of the low cost of employment available there.
But it was thought that most of the high skilled, better paid jobs would remain within Europe, the reasoning being that there simply werent the necessary skills in the developing world.
But, according to a survey by the German chambers of commerce, companies are increasingly relocating their research and development as well as their production away from Europe.
More than half of German firms that are already investing in research and development abroad are planning to shift further research capacity out of Germany and overseas.
Moreover, one in five of the 1,554 companies surveyed were intending to move research and development jobs overseas. Interestingly, companies that were most likely to "offshore" R&D jobs were those that had operations abroad.
This is of particular relevance to the semiconductor industry because all of the major European chipmakers – Infineon, Philips Semiconductors and STMicroelectronics – already have foreign manufacturing operations.
The survey also found that the most popular locations for German companies to base their overseas research and development operations were Asia and North America.
