HP Labs Opens Singapore Research Hub

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There have also been missteps. "Not everything has gone according to plan," Banerjee says. For instance, researchers were able to decipher Banerjee's performance evaluation formula, which considered technology licensed outside the company, papers published in journals, and the amount of technology transferred to product groups. Once they did that, some employees ratcheted up the number of papers they wrote, and focused on the least complicated technology, he says. "As with all smart scientists, people figured out how to game the system." HP changed its research evaluation process last month.

Overseas R&D Spending

HP Labs is also focusing more of its overseas research on commercially applicable technology. The Singapore lab, located in a state-of-the-art government-owned research facility called Fusionopolis, will focus on creating new software for cloud computing, and designing large data centers that pool computing power in "clouds" users can access over the Internet. The work aims in part to meet the needs of telecom companies such as Verizon Communications (VZ), Vodafone Group (VOD), and Singapore Telecommunications, according to HP.

Singapore, China, and South Korea are the fastest-growing countries for overseas R&D spending by U.S. companies, according to a Jan. 18 report from the National Science Foundation. Singapore is a transportation, financial, and technology hub for many HP customers in Asia, where sales grew 26% during the company's fiscal first quarter, which ended Jan. 31, outpacing increases elsewhere. "If you look at HP and ask where this company is going to grow, it's not in the U.S., it's not in Western Europe, and it's not in Japan," says Henry Chesbrough, a professor at the University of California at Berkeley and executive director of the Haas School of Business's Center for Open Innovation, which studies changing corporate research practices. "Their growth is going to come in these … overseas markets" like China, Southeast Asia, and India. Singapore can be a window onto Asia, Australia, and even the Middle East for technology companies, Chesbrough says. "Its vantage point suits HP very nicely."

HP will need to take care to hold on to its most talented scientists in Asia, Chesbrough says. The Chinese research labs of IBM, Microsoft, and Google (GOOG) have experienced high annual turnover rates as local companies lure away their stars, according to Chesbrough.

Since Banerjee's January meeting, Singapore lab director Whitney has been in touch with Beijing director Wang about informally sharing more of their findings. "We're not going to sit down and write a process for how to institutionalize" knowledge-sharing across labs, he says. But "when that enthusiasm comes from your boss, it percolates through the organization."

Ricadela is a writer for Bloomberg BusinessWeek in San Francisco.

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