Placement of engineering centers in emerging market countries

Abstract

GM sponsored this research to assist in its decision to establish an engineering center in India. The objective of this research is to understand the benefits and challenges faced by global companies in China and India. The study focused on a few global companies (Delphi, General Electric, and Motorola) that had engineering centers in both China and India. Two sets of data, direct data and indirect data, were collected. Direct data include responses to surveys sent to managers of these companies as well as personal interviews with executives of these companies. Indirect data include economic data and company profiles from the Internet, journals, company reports, and news releases. The data collected indicate that establishing engineering center in emerging market is beneficial to a global company. Companies that establish engineering centers in China usually benefit from their capabilities in manufacturing and customer service. Companies that establish engineering centers in India usually benefit from their knowledge-based services and the availability of English speaking engineers. Major challenges in these countries include cultural differences between the local employees and the headquarters, lack of technical management resources, and government regulations. Overall, the benefits outweigh the challenges. This research concludes that GM should establish a carefully focused technical center in India that focuses on research relevant to emerging markets or on software development that would have potential benefits to GM.