Armin Sorg - UNCTAD.ORG >> Home
Armin Sorg - UNCTAD.ORG >> Home
Armin Sorg - UNCTAD.ORG >> Home
- TAGS
- armin
- sorg
- home
- archive.unctad.org
Create successful ePaper yourself
Turn your PDF publications into a flip-book with our unique Google optimized e-Paper software.
Siemens AG<br />
Chief Economist /<br />
Corporate Relations<br />
<strong>Armin</strong> <strong>Sorg</strong><br />
GLOBALIZATION of R&D<br />
TNC STRATEGIES<br />
Siemens<br />
GENEVA 24 January, 2005<br />
<strong>UNCTAD</strong> EXPERT MEETING<br />
1|18
Siemens AG<br />
Chief Economist /<br />
Corporate Relations<br />
<strong>Armin</strong> <strong>Sorg</strong><br />
Content<br />
� This is SIEMENS<br />
� R&D at SIEMENS<br />
� R&D in Developing Countries<br />
� Conclusions<br />
2|18
Siemens AG<br />
Chief Economist /<br />
Corporate Relations<br />
<strong>Armin</strong> <strong>Sorg</strong><br />
Source: Siemens<br />
Siemens: Global Network of Innovation<br />
in Electrical Engineering and Electronics<br />
The top ten companies in our business<br />
(in fiscal 2003)<br />
120.5<br />
26.5<br />
GE<br />
(USA)<br />
79.6<br />
75.6<br />
IBM<br />
(USA)<br />
74.2<br />
63.1<br />
Siemens<br />
(Germany)<br />
66.9<br />
64.9<br />
Hewlett-<br />
Packard<br />
(USA)<br />
Total sales (in billions of euros)<br />
Sales in electrical capital goods<br />
(in billions of euros)<br />
64.2<br />
38.5<br />
Hitachi<br />
(Japan)<br />
57.3<br />
28.6<br />
56.8<br />
17.1<br />
46.7<br />
21.0<br />
Matsushita Sony Samsung<br />
(Japan) (Japan) Electronics<br />
(Korea)<br />
1 US$ = 0.91551 EUR<br />
1 Yen = 0.00772 EUR<br />
1 Won = 0.00077 EUR Siemens‘ Business Segments:<br />
43.5<br />
30.4<br />
Toshiba<br />
(Japan)<br />
Information Information and<br />
and<br />
Communications<br />
Communications<br />
37.1<br />
36.3<br />
NEC<br />
(Japan)<br />
Medical<br />
20.8<br />
7.0<br />
13.3<br />
Transportation<br />
17.1<br />
4.1<br />
Sales in 2004 (in billions of euros)<br />
Automation<br />
and Control<br />
3|18<br />
Lighting<br />
10.8<br />
Power
Siemens AG<br />
Chief Economist /<br />
Corporate Relations<br />
<strong>Armin</strong> <strong>Sorg</strong><br />
World E/E-Market - Structure<br />
2004 by region<br />
The world electrical/electronic market is a „Triad Market“:<br />
90% of the global E/E-Market is concentrated in the major trading areas.<br />
Developing Countries´ global E/E-Market share is 21.5%.<br />
Share of the E/E-Market 2004 (global volume: EUR 2,490 billion)<br />
Americas 37.6% Europe 25.9% Asia-Pacific 31.7%<br />
Areas proportional to market volume<br />
In real terms: 2004 prices and exchange rates<br />
Developing Countries = Non OECD Countries<br />
CIS/NME/Africa 4.8%<br />
of which:<br />
Developing Countries 2.6% 0.7% 13.4% 4.8%<br />
Source: Siemens<br />
4|18
Siemens AG<br />
Chief Economist /<br />
Corporate Relations<br />
<strong>Armin</strong> <strong>Sorg</strong><br />
R&D at Siemens (2004)<br />
R&D employees: 45,000<br />
(employees worldwide:<br />
430,000)<br />
Germany<br />
51 %<br />
Source: Siemens<br />
International<br />
49 %<br />
Total R&D budget: € 5.06 billion<br />
(6.7 % of sales)<br />
Automation<br />
& Control<br />
Power<br />
Information and<br />
Communications<br />
Transportation<br />
Medical<br />
Lighting<br />
CT<br />
About 95 % at Groups, Regional Units,<br />
Subsidiaries and Associated Companies<br />
for development of products, systems<br />
and manufacturing processes<br />
About 5 % at Corporate Technology<br />
for research, technology development<br />
and consulting<br />
5|18
Siemens AG<br />
Chief Economist /<br />
Corporate Relations<br />
<strong>Armin</strong> <strong>Sorg</strong><br />
R&D at Siemens<br />
R&D Expenditure of the Top Ten Electrical Engineering Companies<br />
2003<br />
without external R&D orders and public funding<br />
Source: Siemens<br />
1) Without GECS (GE Capital Services)<br />
6|18
Siemens AG<br />
Chief Economist /<br />
Corporate Relations<br />
<strong>Armin</strong> <strong>Sorg</strong><br />
Source: Siemens<br />
Speed as a Measure of<br />
Innovative Strength<br />
7|18
Siemens AG<br />
Chief Economist /<br />
Corporate Relations<br />
<strong>Armin</strong> <strong>Sorg</strong><br />
Worldwide Activities in R&D<br />
London<br />
Issaquah Chatham<br />
Tilbury<br />
Peterborough<br />
Sacramento<br />
Drummondville<br />
Auburn Hills<br />
Berkeley<br />
Burlington<br />
Hoffmann<br />
Mountain View<br />
Estates<br />
Danvers<br />
Concord<br />
Piscataway<br />
Santa Clara San José Pittsburgh<br />
Johnson City Princeton<br />
San Diego<br />
Arlington<br />
Newport News<br />
Austin Norcross Knoxville<br />
Lake Mary<br />
Orlando<br />
Source: Siemens<br />
Buenos Aires<br />
Sao Paulo<br />
Curitiba<br />
Mülheim<br />
Pandrup Göteborg<br />
Bracknell<br />
Eynsham<br />
Oslo Helsinki<br />
St. Petersburg<br />
Roke Manor<br />
Berlin<br />
Karlsruhe Brussels Dresden Erlangen-Nuremberg<br />
Paris<br />
Regensburg<br />
Changchun<br />
Zurich<br />
Bratislava<br />
Toulouse<br />
Vienna Budapest<br />
Beijing<br />
Porto<br />
Istanbul<br />
Seoul<br />
Lisbon<br />
Athens<br />
Graz Netanya<br />
Tianjin<br />
Ichon<br />
Madrid<br />
Linz Tel Aviv<br />
Xi‘an<br />
Zaragoza Munich<br />
Nanjing<br />
Salzburg<br />
Shanghai<br />
New Delhi<br />
Sophia Treviso<br />
Chengdu Taipei<br />
Antipolis Milan<br />
Bombay<br />
Hong Kong<br />
Goa<br />
Bangalore<br />
Tokyo<br />
Kawasaki<br />
Yokohama<br />
Kakegawa<br />
Pretoria<br />
Penang<br />
Melbourne<br />
8|18<br />
Sydney
Siemens AG<br />
Chief Economist /<br />
Corporate Relations<br />
<strong>Armin</strong> <strong>Sorg</strong><br />
Source: Siemens<br />
R&D over Different Time Zones<br />
9 a.m. 3 p.m. 9 a.m. 4 p.m.<br />
4 p.m. 9 a.m.<br />
R&D Centers: 20 or more locations 3 to 6 locations single location<br />
9|18
Siemens AG<br />
Chief Economist /<br />
Corporate Relations<br />
<strong>Armin</strong> <strong>Sorg</strong><br />
Employees<br />
50.000<br />
40.000<br />
30.000<br />
20.000<br />
10.000<br />
0<br />
Source: Siemens<br />
Siemens R&D Personnel<br />
41.500<br />
45.000<br />
2% 6%<br />
800 2.700<br />
1994 2004<br />
Worldwide<br />
Developing Countries<br />
Brazil<br />
China<br />
India<br />
Malaysia<br />
Mexico<br />
South Africa<br />
10|18
Siemens AG<br />
Chief Economist /<br />
Corporate Relations<br />
<strong>Armin</strong> <strong>Sorg</strong><br />
Source: Siemens<br />
Production Locations 2003<br />
11|18
Siemens AG<br />
Chief Economist /<br />
Corporate Relations<br />
<strong>Armin</strong> <strong>Sorg</strong><br />
R&D<br />
Activities<br />
Source: Siemens<br />
Development of Siemens<br />
R&D Activities (schematic diagram)<br />
GER<br />
1950<br />
---------------<br />
2004<br />
EU 15<br />
(without<br />
GER)<br />
1960<br />
---------------<br />
2004<br />
USA<br />
1980<br />
---------------<br />
2004<br />
EU<br />
(10 new<br />
members)<br />
1990<br />
---------------<br />
2004<br />
Developing<br />
Countries<br />
1995<br />
---------------<br />
2004<br />
12|18<br />
t
Siemens AG<br />
Chief Economist /<br />
Corporate Relations<br />
<strong>Armin</strong> <strong>Sorg</strong><br />
The larger the Market,<br />
the higher is the R&D Intensity<br />
E/E-Market per capita 2003 in EUR<br />
Source: Siemens<br />
13|18
Siemens AG<br />
Chief Economist /<br />
Corporate Relations<br />
<strong>Armin</strong> <strong>Sorg</strong><br />
Source: Siemens<br />
Case Study China<br />
Local R&D Activities<br />
� Since July 1998, Siemens and the Chinese Academy<br />
for Telecommunications Technology (CATT) jointly<br />
develop a new solution for 3G mobile networks.<br />
� Siemens Communications has located R&D activities<br />
in Beijing.<br />
� SOMATOM Smile, the world’s most compact and costeffective<br />
CT device, is developed and produced in<br />
Shanghai for the local and export markets.<br />
� Siemens Numerical Control Ltd. stands for R&D and<br />
develops numerical control systems tailored to the<br />
requirements of the Chinese market.<br />
� Beijing joined Munich and Princeton as an “User<br />
Interface Design Lab”.<br />
14|18
Siemens AG<br />
Chief Economist /<br />
Corporate Relations<br />
<strong>Armin</strong> <strong>Sorg</strong><br />
Cooperation with<br />
16 Chinese Universities<br />
Tsinghua University<br />
Northern Jiaotong Univ.<br />
Beijing University of Posts<br />
& Telecommunication<br />
University of International<br />
Business & Economics<br />
Xi'an Jiaotong<br />
University<br />
Southwest Jiaotong University<br />
University of Electronic Science<br />
& Tech. of China<br />
Source: Siemens<br />
Chengdu<br />
Xi’an<br />
Huazhong Univ. of<br />
Science & Technology<br />
Beijing<br />
Harbin<br />
Changchun<br />
Jinan<br />
Nanjing<br />
Wuhan Shanghai<br />
Hangzhou<br />
Guangzhou<br />
Harbin Institute<br />
of Technology<br />
Jilin University<br />
Shandong University<br />
Southeast University<br />
Shanghai Jiaotong<br />
University<br />
Tongji University<br />
Zhejiang University<br />
South China University<br />
of Technology<br />
15|18
Siemens AG<br />
Chief Economist /<br />
Corporate Relations<br />
<strong>Armin</strong> <strong>Sorg</strong><br />
Conclusions (1)<br />
R&D Policy Requirements (governments)<br />
What is necessary to attract R&D:<br />
� Realization of market economy principles<br />
� R&D friendly environment<br />
� Government relations, bureaucracy<br />
� Costs, taxes, subsidies, intellectual property<br />
� Attitude of society toward risk; trust in science<br />
� Developing clusters<br />
� Role of universities; supply of excellent brains<br />
� SME<br />
� High IT-standards<br />
� Internet connectivity<br />
� Broadband<br />
� Good quality of life for R&D personnel<br />
Source: Siemens<br />
16|18
Siemens AG<br />
Chief Economist /<br />
Corporate Relations<br />
<strong>Armin</strong> <strong>Sorg</strong><br />
Conclusions (2)<br />
R&D Strategy Requirements (company specific)<br />
What is necessary to build efficient international R&D<br />
networks:<br />
� Presence in lead markets<br />
� Close to production<br />
� Close to customers<br />
� Cooperation with public research<br />
� Strong patent portfolio<br />
� Network of excellent people<br />
� Networking regional capabilities<br />
e.g. Europe: medical, automotive, automation<br />
USA: I&C, biotechnology, nanotechnology<br />
India: software<br />
China: production technologies<br />
Source: Siemens<br />
17|18
Siemens AG<br />
Chief Economist /<br />
Corporate Relations<br />
<strong>Armin</strong> <strong>Sorg</strong><br />
Source: Siemens<br />
Conclusions (3)<br />
The main determinants for R&D activities are<br />
markets, brains and costs<br />
Building up R&D facilities is a strategic, organic,<br />
long term oriented investment. It must be seen in<br />
the context of the overall business conditions of<br />
countries and regions.<br />
18|18
Change language