Microsoft looking to China to create new products, AS

November 06, 2008, 1:25 PM — BEIJING (AP) _ Microsoft Corp. expects its Beijing research center to start producing breakthroughs that could lead to global products in health care and other areas, the software giant's chief research officer said Wednesday as the center marked its 10th anniversary.

Microsoft is part of a wave of companies that are expanding research and development in China to serve its fast-growing market and take advantage of a huge Chinese talent pool of scientists and engineers.

Microsoft says its Beijing center, one of six, already has exceeded expectations, producing 260 innovations that have been added to products sold worldwide. The center is Microsoft's biggest outside the United States, with 350 researchers.

"They are increasingly poised to produce technical breakthroughs that may in fact be the basis of a whole new business for the company," said Craig Mundie, the company's chief research officer.

Mundie said the lab is expected to take the lead in developing business-oriented products for developing countries and possibly health care-related software.

Microsoft's Beijing team is best known for its role in developing an electronic tablet that recognizes handwriting. It also has worked on speech recognition and advanced graphics used in video games. The company says its researchers have been awarded 1,000 patents in China and abroad.

Dozens of other companies also operate research and development centers in China, including Intel Corp., Hewlett-Packard Co., General Electric Co., German's Siemens AG and Nokia Corp.

In Beijing, Microsoft has relied on Western-trained Chinese researchers but the country's own universities are starting to produce "highly capable" specialists, Mundie said.

"It is a very good source of talent. Particularly at the K-12 (kindergarten through 12th grade) level, China is probably doing a better job than either Europe or the United States in preparing young kids for jobs in engineering and science," Mundie said. "There is more vitality in science, technology, engineering (and) math-type of subject matter in the younger grades than there is in other parts of the world."

Microsoft also has research labs at its Redmond, Washington, headquarters and in Silicon Valley; Cambridge, Massachusetts; Bangalore, India; and Cambridge, England.

It has expanded in China despite rampant Chinese piracy of software, music and other intellectual property that has cost the company heavily in lost potential sales. The American Chamber of Commerce in China says the threat of theft has made some companies reluctant to work on their most advanced technologies here.

Mundie said Microsoft is less concerned about theft of technology during research because its software is made up of many small elements and individual employees have access to only a few of them.

"The value of being able to harness this global work force to work on global problems outweighs the risk of loss of one component," he said.

Globally, Microsoft's research agenda over the next decade includes "natural user interface" to let users control computers with speech or gestures instead of a keyboard or mouse, Mundie said.

That will depend on "multicore chips" under development that put multiple processors on a single chip, Mundie said.

Such chips will allow computers to run complex functions such as speech recognition by dividing up complex tasks among different processors, though that will require new programming techniques, he said.

Microsoft has spent a decade working on developing such strategies, according to Mundie.

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