Software only: R&D centers in emerging markets shouldn’t be viewed solely as places to develop low-cost software. Forward-looking companies use Asian R&D for a broad range of product development.
Low-end, peripheral work only: The reality is that Asian engineering centers are now central to the success of many American companies. One measure is head count. Cadence, Infinera, Microchip, Microsemi, Synopsys, Teradata, Texas Instruments, and VM Ware are among the companies to state their second largest R&D teams are located in India or China. Some companies have more engineers in India than in the United States. Without the Asian teams these companies would be unable to design new products anymore.
Local markets only: The most pervasive myth is that offshore engineers cannot design products for American markets. This may have been true a few decades ago. But modular product design, object-oriented programming, and sophisticated global supply chains have largely rendered these objections obsolete.
These three myths no longer reflect reality. Companies increasingly rely on engineering talent in China and India to drive product development across a wider range of new products and for a wider range of markets. Perhaps the Taiwanese-American CEO of graphics chipmaker NVIDIA Corporation, Jen Hsun-Huang, put it best when he visited Bangalore to inaugurate their R&D center there: “We know from experience that India is home to some of the world’s brightest engineers, as many of our top employees today are originally from there.” The company also runs a similar center in Shanghai.