Seeds of Invention; Research: These are boom times for Asian R&D. But can Chinese and Indian scientists get their ideas into the marketplace?(Cover Story)

Byline: Sudip Mazumdar and Melinda Liu (With Fred Guterl in New York and Arvind Padmanabhan in New Delhi)

The only thing a Bachelor's Degree in Computer Science did for Amit Nanavati was make him overqualified for most of the available jobs in his hometown of New Delhi. So he did what many ambitious Indians did in the late 1980s: he went to the United States for graduate school. The move worked wonders on his career. As soon as he finished his Ph.D. at Louisiana State University in Baton Rouge in 1996, a fast-rising start-up called Netscape snapped him up. Nanavati would have preferred to go back home to India, but figured he'd have an even tougher time marketing himself. He was mistaken. In the time it took him to get his degree, career prospects for engineers and scientists in India had brightened considerably. By 1998 he found himself back in New Delhi, as a researcher at IBM's new lab, where he's been ever since. "India is the right place and this is the right time," he says.

These are indeed boom times for research in Asia. U.S. and European corporations, in an effort to get closer to their overseas markets, are pouring money into the bigger Asian countries like China and India. And governments are falling over themselves to entice them, investing billions in their own universities and big corporate-research parks, like Singapore's Biopolis.

The burning question, though, is to what extent Asia will be able to turn this unprecedented investment in intellectual resources into a true engine of innovation. So far, the rise of Asian R&D is only skin-deep. Asia may boast some topflight talent, but the best Ph.D. s are still trained in the United States, say corporate-research executives. It's difficult to say who will emerge as big winners. China's rapid growth allows it to attract more investment from foreign firms, but its researchers struggle under a Soviet-style autocratic culture that doesn't lend itself to the freewheeling exchange of ideas. In this regard, India's British influence may have served it well, but scientists often face red tape.

Asians are getting a strong dose of market-driven research priorities from the influx of American firms. In the past five years more than 100 companies, including General Motors, Boeing and Mobil, have set up R&D centers in India. General Electric has put its largest non-U.S. lab in Bangalore, where the company employs 1,600 mostly Indian researchers. Johnson & Johnson, DuPont, ...