Innovate or Perish: Managing the Enduring Technology Company in the Global Market

Global R&D Insourcing

Global insourcing of R&D and technology encompasses partnering with global suppliers of R&D and also partnering between geographies within a single multinational company. The key global suppliers of R&D that we have experience with are western Europe, Russia, and China. India is also emerging as a global supplier.

Experience in Russia

Air Products began conducting research in Russia in 1992. The rationale for going to Russia included fresh perspectives on problems, lower cost, faster speed, and favorable IP rights relative to U.S. universities. This rationale has been tested and proven over the years and is still valid today. For example, for a typical project, an annual cost of about $50,000 can engage five to six full-time technical staff (more than 50% PhD level); at this same resource level, the cost for conducting this same project is over $1 million if conducted by U.S. industry (assuming a cost of $200,000 to $250,000 per professional per year).

Our initial experience in Russia involved working with an institute in Siberia. This relationship has continued each year to the present year, and we engage 57 scientists and technicians on 16 projects at the Siberian institute. In 2000, we strategically extended our reach to the over 400 technical institutes in Russia based on our success in Siberia. To date, we have partnered with eight institutes throughout Russia. The projects have covered diverse technical fields such as fuel cells, distillation, organometallic ...