R&D the Latest Target of Silicon Valley Outsourcing

The next wave of outsourcing will be research and development (R&D) functions, according to the latest Santa Clara University Business Index released Thursday.

The monthly business indicator tracks business conditions and jobs by polling executives and managers in a wide range of companies. While R&D hasn’t been moving offshore at the rate of manufacturing and customer support, SCU finance professor Robert Henderschott told internetnews.com says a trend is developing.

“There are quite a few companies in our survey — over one-fifth — putting their toe in the water,” he said.

If these companies’ experience with their initial trials is positive, Henderschott said, it could lead to more R&D outsourcing in the future.

This trend is different than the practice of small startups developing new technology or services then selling out to larger companies that roll it into their own offerings, Henderschott said.

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