Arm plans to open R&D laboratory in India or China
By Richard Fletcher (Daily Telegraph 16/11/2003)
Arm, the Cambridge-based semiconductor company and standard
bearer for the UK technology sector, is to open a research-and-development
laboratory in India or China.
Its initiative will heighten concerns that highly skilled
quaternary occupations are being transferred from the UK to Asia - where
employment costs are relatively low - along with more basic jobs in services and
A former member of the FTSE100 index, Arm is one of the UK
technology sector's few global success stories. Its plan is a blow to the UK's
reputation as a centre for new technology, despite the fact that no domestic
jobs will be lost as a consequence of the investment.
Executives at multinational firms say they can no longer ignore
India's highly educated workforce when assessing where to locate their
businesses. "The quality of their graduates, especially in science and
maths, is so high, that we would be mad not to employ them," said one.
"It's not just that they are cheap. They tend to have
better skills than their British or American counterparts".
Last month, GlaxoSmithKline announced an alliance with India's
largest drugs company, which will see research and clinical trials outsourced to
Also, McKinsey, the global management consultancy firm, now
employs more research staff in India than in Britain and some investment banks
are working on plans to move analysts to India.
Reuters has recently announced plans to move hundreds of jobs
to the sub-continent.
Arm's plans are at an early stage, although the company's board
has decided that the new centre must be built in "a low-cost region".
Warren East, chief executive of Arm, is looking at India and China, although
there is a chance that some investment may be made in eastern Europe.
The company hopes to double the number of engineers it employs
within five years. The majority of these are expected to be employed in the
group's new research and development facility.
The company currently has 400 engineers in Cambridge and
Austin, Texas. They design chips for digital cameras, printers, mobile phones
and handheld computers.
Last month, Arm announced better than expected third-quarter
results and said there were signs of recovery in the semiconductor sector.