Ever since Siemens was founded in 1847, the power of innovation has been the key to our long-term business success. Innovation is what keeps us ahead of our competitors; in short, it is our lifeblood.

Siemens' Research and Development (R&D) activities are focused not only on customer needs and market requirements, but also on being a trendsetter to shape future markets or standards.

To accomplish this, we have to be in a strong technological position, particularly with regard to so-called key and pace-setting technologies that determine who will hold the competitive advantages today and tomorrow.

However, we must also be well positioned in disruptive technologies in other words, those that can revolutionize the market in the future.

Our goal is to be a trendsetter in as many fields of business as possible, and this goal drives our substantial investment in R&D.

Siemens now employs more than 47,000 researchers and developers worldwide, a figure that represents 10 per cent of the company's global workforce. R&D spending in fiscal year 2005 totalled 5.2 billion euros (US$6.66 billion), representing 6.8 per cent of the company's sales, or about 23 million euros (US$29.44 million) per working day.

As innovation cycles become shorter and shorter, it is critical to get new products to market quickly and, above all, at just the right time. We have acted on this, and more than 75 per cent of our sales today are generated by products and solutions that are less than five years old.

Siemens has been active in China since 1872, and is recognized as an innovation leader in the country.

Many of China's most advanced technologies are "Made by Siemens." The company aims to be a trendsetter in all its business fields, and to shape its technologies with a clear focus on delivering tangible and valuable benefits to customers and society at large.

China is a key strategic country for our business development, not only significant as a major growth market but also as an important element of our value chain and talent potential. Our vision is for China to become a cornerstone of the global Siemens business and an important driver to make this vision a reality is local R&D to develop products, systems, solutions and services in China for China, and the rest of the world.

Technology commercialization

China already is an important R&D base for Siemens, and will become even more important in the future. We established our first local R&D activities in 1998 and since then we have set up R&D activities in all our business segments, including information and communications, automation and control, power, transportation, medical solutions, lighting and household appliances.

In 2004, Siemens also established a Corporate Technology (CT) R&D Centre in Beijing, which is an integral part of Siemens Corporate Technology global network. The centre's staff has grown to over 150 scientists and developers, focusing on core technologies that have a high strategic impact for the company.

Focal areas are energy and environment, automation, public and private infrastructure and healthcare. The development focuses on SMART - simple, maintenance friendly, affordable, reliable, timely to market - innovations that are tailor-made for the needs of the Chinese market and also have substantial potential to be successful in the global market. A particular focus is technology commercialization to quickly commercialize innovations and encourage innovation entrepreneurship.

Siemens now has 16 R&D centres in China, located in Beijing, Nanjing, Hangzhou, Shanghai and Shenzhen, with over 2,500 highly qualified engineers comprising close to 8 per cent of the total workforce in China. The company ranks as one of the top patent applicants in China with over 1,000 patent applications filed in 2005.

Strong local R&D capabilities are crucial to developing products, systems and solutions that fit the needs of local Chinese customers and the local market. Such offerings also open up additional opportunities by serving customers with similar needs in other markets globally. An example is the Siemens Somatom Spirit, a dual-slice computed tomography (CT) system developed in China for the Chinese and world market. It targets the entry-level CT market with its outstanding usability, high reliability and extremely competitive price, with a fast return on investment. Launched in March 2005, it is a great market success with 300 installations in 30 countries worldwide, include about 100 in China.

University co-operation

Siemens also actively reaches out to China's leading universities and has established numerous co-operations to promote research & development, to foster knowledge sharing and to make contributions to education. For example, in November 2005, Siemens signed a co-operation agreement with Shanghai Jiaotong University to jointly develop a wireless information service testbed based on radio frequency identification (RFID) for application in the China Shanghai World Expo 2010. The testbed will provide an effective and real-time management system for Expo facilities, exhibits and visitors.

Most recently in September 2006, Siemens donated an ion beam assisted deposition (IBAD) to Beijing's Tsinghua University. This equipment, which is the only one of its kind in China to date, will help further consolidate Tsinghua's leading position in novel high-temperature superconducting technology research, which is a major focus in China's plans for science and technology development and part of the widely known national high-tech R&D programme the "863 Plan." Through this donation, Siemens hopes to advance its joint research programme with Tsinghua University in this area, which is listed as a key project by the Ministry of Science and Technology.

(China Daily 09/13/2006 page18)