Wong said: "Many of the people involved in the biotech fields in China are expatriates from the United States. Due to the high level of competency found in China now, many companies here in the US are looking to outsource their R&D to China. This work can now be done at a fraction of the costs without compromising the quality of work being done."
The biopharmaceutical industry, underpinned by strong government support, the machinations of some major multinationals, and a rising demand for prescription drugs, is a key driver of the biotech industry in China. Last year China's biopharmaceutical industry grew by 15%, with revenues rising sharply.
As large enterprises pressed ahead with their globalization strategies, the R&D outsourcing market, where small and medium-sized enterprises play a leading role, experienced remarkable growth. However, the scope for outsourcing business in the biotech sector to China is still huge, with global firms still only outsourcing about 5% of their total requirements to the country.
Bridge Pharmaceutical Inc, a US biotech company, opened a research center in Beijing last year employing 200 people. The company says that even though it operates along US regulatory guidelines, its drug-development costs are about 80% lower in China than in the US; salaries of research scientists in China are estimated to be one-fifth to one-tenth those in North America. Pharmaceutical giants such as Novartis and Pfizer have also established research facilities in China, and AstraZeneca is opening a new "Innovation Center" in Shanghai this year.
Although China's biotech infrastructure is a work in progress, with a mix of First World and Third World support, the growing number of industrial and science parks that are opening around the country guarantee power, water and Internet access to high-level specifications. While many cities offer support and incentives for biotech firms, the top destinations are still Beijing and Shanghai, where the intellectual workforce tends to congregate and where services are most reliable.
Animal testing is China's specialty, with virtually non-existent regulations and severe penalties for animal-rights activists. If the research process of companies looking to outsource involves a significant amount animal testing, especially with primates, then China is the No 1 choice.
China certainly has the potential to outpace India and become the world's top outsourcing destination over the course of the next decade. There is room for growth - the McKinsey Global Institute estimates $18.4 billion in global IT work and $11.4 billion in business-process services have been outsourced overseas so far - just one-tenth of the potential offshore market.
Looking to the future, Wong said, "With developments in infrastructure, technology and personnel, China is closing the gap with the Western world. The country has a huge hunger for success, and will continue to strive toward higher goals and to be competitive with other nations. I have no doubt that it will become the outsourcing country of choice in many sectors before too long."
Beijing is drafting a human-resources training plan for Chinese outsourcing service providers. The plan outlines the development of 100 qualified outsourcing service providers in 10 base cities in the next five years in an effort to attract about 100 well-known multinationals to outsource to China.
As desirable as building a highly qualified, English-speaking army of workers may be, the trend toward offshore outsourcing is a lot more complex than simply finding language skills and resources in the lowest-cost locations. Major drivers in the outsourcing market include quality, innovation and speed to market, not just cost of services. To maintain their competitive strengths as competition intensifies, Chinese outsourcing service providers need to increase their attractiveness to users by offering high standards, demonstrable creativity, and an array of value-added benefits.
The biopharmaceutical industry, underpinned by strong government support, the machinations of some major multinationals, and a rising demand for prescription drugs, is a key driver of the biotech industry in China. Last year China's biopharmaceutical industry grew by 15%, with revenues rising sharply.
As large enterprises pressed ahead with their globalization strategies, the R&D outsourcing market, where small and medium-sized enterprises play a leading role, experienced remarkable growth. However, the scope for outsourcing business in the biotech sector to China is still huge, with global firms still only outsourcing about 5% of their total requirements to the country.
Bridge Pharmaceutical Inc, a US biotech company, opened a research center in Beijing last year employing 200 people. The company says that even though it operates along US regulatory guidelines, its drug-development costs are about 80% lower in China than in the US; salaries of research scientists in China are estimated to be one-fifth to one-tenth those in North America. Pharmaceutical giants such as Novartis and Pfizer have also established research facilities in China, and AstraZeneca is opening a new "Innovation Center" in Shanghai this year.
Although China's biotech infrastructure is a work in progress, with a mix of First World and Third World support, the growing number of industrial and science parks that are opening around the country guarantee power, water and Internet access to high-level specifications. While many cities offer support and incentives for biotech firms, the top destinations are still Beijing and Shanghai, where the intellectual workforce tends to congregate and where services are most reliable.
Animal testing is China's specialty, with virtually non-existent regulations and severe penalties for animal-rights activists. If the research process of companies looking to outsource involves a significant amount animal testing, especially with primates, then China is the No 1 choice.
China certainly has the potential to outpace India and become the world's top outsourcing destination over the course of the next decade. There is room for growth - the McKinsey Global Institute estimates $18.4 billion in global IT work and $11.4 billion in business-process services have been outsourced overseas so far - just one-tenth of the potential offshore market.
Looking to the future, Wong said, "With developments in infrastructure, technology and personnel, China is closing the gap with the Western world. The country has a huge hunger for success, and will continue to strive toward higher goals and to be competitive with other nations. I have no doubt that it will become the outsourcing country of choice in many sectors before too long."
Beijing is drafting a human-resources training plan for Chinese outsourcing service providers. The plan outlines the development of 100 qualified outsourcing service providers in 10 base cities in the next five years in an effort to attract about 100 well-known multinationals to outsource to China.
As desirable as building a highly qualified, English-speaking army of workers may be, the trend toward offshore outsourcing is a lot more complex than simply finding language skills and resources in the lowest-cost locations. Major drivers in the outsourcing market include quality, innovation and speed to market, not just cost of services. To maintain their competitive strengths as competition intensifies, Chinese outsourcing service providers need to increase their attractiveness to users by offering high standards, demonstrable creativity, and an array of value-added benefits.
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