SRI eyes research center in Taiwan

SRI International, a U.S. research company instrumental in the creation of the Net, is in talks that could lead to it opening a research and development facility in Taiwan.

Ed Frauenheim
Ed Frauenheim Former Staff Writer, News
Ed Frauenheim covers employment trends, specializing in outsourcing, training and pay issues.
3 min read
SRI International, a U.S. research organization instrumental in the creation of the Net, is in talks that could lead to it opening a research and development facility in Taiwan.

The storied Menlo Park, Calif., company, which was also behind the invention of the computer mouse, is in discussions with Taiwan's Industrial Technology Research Institute (ITRI) over a partnership that may involve establishing an R&D center, according to SRI officials. If SRI were to own and operate the proposed facility, it would be the organization's first R&D center outside the United States.

SRI said it and ITRI have not made a final decision to establish an R&D center. Nor, it said, have they determined who would own and operate it. If such a center were to open, though, it would focus first on pharmaceuticals, with work possibly expanding to include areas such as advanced materials and information technologies, SRI CEO Curt Carlson said in an e-mail interview this month.

Carlson said one reason to expand his 1,400-person organization overseas is cost. Conducting research and development in Taiwan will be about half as expensive as conducting it in the United States, partly because Taiwan is one of a number of countries making a strong push to attract cutting-edge R&D, he said. Carlson said both Taiwan and Singapore are offering to subsidize 30 percent to 40 percent of the costs of new technology-focused companies for up to five years.

The United States doesn't "have anything that's nearly as aggressive as what's going on there," Carlson said.

A number of high-technology firms, including industry giants IBM, Microsoft and Intel, have set up research operations in lower-wage countries such as India. Such R&D activities are part of the wider, controversial practice of "offshoring" technology jobs such as software programming and tech support.

Carlson said he's concerned that the United States is not focused enough on the international race to develop next-generation technologies. "I don't see the urgency yet in the U.S. about how fast the world is moving," he said, "and how fast the other countries are moving to catch up to us."

Duane Shelton, president of the World Technology Evaluation Center, a nonprofit research group, shares Carlson's concern. Shelton said American R&D investments are far greater than those in any other nation, in terms of total numbers, but that others can boast a greater commitment to R&D as a share of their economy. In 2000, R&D investments amounted to 2.69 percent in the United States, compared with 2.98 percent in Japan and 3.37 percent in Finland, Shelton said.

President Bush's 2005 budget calls for raising federal R&D spending 4.3 percent to $132 billion, but the increase is focused on weapons development and homeland security, according to the American Association for the Advancement of Science. The plan leaves "all other federal R&D programs collectively with declining funding," according to the association.

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, Carlson said.

SRI helped bring the Internet's predecessor, the ARPAnet, to life. The first transmission on the ARPAnet was from the University of California at Los Angeles to SRI in October 1969. SRI also invented the computer mouse, as well as technology for performing surgical procedures remotely. In addition, it owns Sarnoff, formerly RCA Laboratories, which has its own impressive legacy, including development of the first liquid crystal display.

Leonard Polizzotto, SRI's vice president of business development and marketing, said the proposed R&D center in Taiwan would not amount to shipping jobs overseas. He said R&D there would be done for new Taiwanese clients, not current U.S. clients. He also said some contract research for potential clients in Taiwan could be done in the United States.

Carlson said SRI is also growing its operations in California and in Washington, D.C. He added that the Bay Area is a difficult place in which to expand. "It makes it hard to grow here, when the housing costs are two to three times those of the rest of the country," he said.