Microsoft looking to China to create new products

Microsoft is part of a wave of companies that are expanding research and development in China to serve its fast-growing market and take advantage of a huge Chinese talent pool of scientists and engineers.

Microsoft says its Beijing center, one of six, already has exceeded expectations, producing 260 innovations that have been added to products sold worldwide. The center is Microsoft's biggest outside the United States, with 350 researchers.

"They are increasingly poised to produce technical breakthroughs that may in fact be the basis of a whole new business for the company," said Craig Mundie, the company's chief research officer.

Mundie said the lab is expected to take the lead in developing business-oriented products for developing countries and possibly health care-related software.

Microsoft's Beijing team is best known for its role in developing an electronic tablet that recognizes handwriting. It also has worked on speech recognition and advanced graphics used in video games. The company says its researchers have been awarded 1,000 patents in China and abroad.

Dozens of other companies also operate research and development centers in China, including Intel Corp., Hewlett-Packard Co., General Electric Co., German's Siemens AG and Nokia Corp.

In Beijing, Microsoft has relied on Western-trained Chinese researchers but the country's own universities are starting to produce "highly capable" specialists, Mundie said.

"It is a very good source of talent. Particularly at the K-12 (kindergarten through 12th grade) level, China is probably doing a better job than either Europe or the United States in preparing young kids for jobs in engineering and science," Mundie said. "There is more vitality in science, technology, engineering (and) math-type of subject matter in the younger grades than there is in other parts of the world."

Microsoft also has research labs at its Redmond, Washington, headquarters and in Silicon Valley; Cambridge, Massachusetts; Bangalore, India; and Cambridge, England.