Thursday, June 02, 2005

Talk with the GM of Ericsson China R&D

In talks with Rolf Löfdahl, the General Manager of Ericsson China's main R&D center (located in Sanlitun), he verified that more and more of Ericsson's R&D will be done in China.

Contrary to my previous belief that much of the R&D here was because of politics (getting advantages when negotiating contracts with the government and State Owned Enterprises) and therefor get access to the large market, it is mainly because it is very cost effective. There are so many skilled engineers who cost a fraction of what their colleagues in Europe and Northern America do, that they are forced to take advantage of it.

The R&D is not localize products and is not second-rate compared to other centers around the world. It targets the international market just like the other centers. It is Ericsson's next product lines that are being developed here. These engineers are directly competing with the Swedish and other engineers. He didn't think that people back home has realized this and definitely not come to terms of its implications.

It has been said many times that China is no longer only a place where much of the worlds manufacturing is conducted, and this is a very concrete example of this. Ericsson intend to hire hundreds of engineer every year for the coming years. One guess is that not too many guys will be hired back in Sweden. This development will not stop even if there will be a large financial crisis in this country and the domestic market slumps. A global financial crisis would probably also hit the centers in high-cost countries harder than here and possible even increase the speed of this relocation.

When talking about this Rolf sighed and said that he was glad that he wasn't 20 years younger and would have to make choices for his career. I then I pointed out that this is exactly the position I am in. He said that his children though would have to face this new situation, and he would not have any clear advice for them on what to do. We will have to sharpen up a lot back home and come up with a lot of new ideas and use our strengths to stay competitive... and seize this as an opportunity and adjust. Easy to say, necessary, but painful. This process needs to take some time and should possible be slowed, but not fought.


Mhashe said...

Johan, I really enjoyed browsing your blog. It was very educational in getting a glimpse of Chinese culture. I was an engineer in my prior life and now trade fulltime in the US markets. Since I can trade from anywhere in the world, I'm actually thinking of relocating to China to learn Chinese and the culture. Do you have any suggestions?

Johan said...

I think you should go there on vacation first. There is a lot of frustrating things about China when the initial novelty is gone.

I would perhaps recommend settling in either HK, Taiwan, or Singapore, and then travel to China.

I didn't particularly like Singapore when I stayed there, but China has made me miss the place.

Sorry for replying so late. Good luck! Tell me about your decision.