Executive Briefings

Carefully Consider 'Five Cs' Before Establishing R&D or Engineering Site

To avoid the missteps many companies make when choosing a new engineering or R&D site, particularly in low-cost countries, multinationals must weigh the five Cs: cost, capacity, capability, communications and culture.

Companies should identify which one or two of the five Cs are the most important for their decision to locate a facility, and then determine which cities meet these criteria. It's essential to assess the characteristics of prospective locations today and to anticipate what they will be like in three to five years. Will the infrastructure be better or worse, will investment increase, will costs rise, will the number of skilled workers decline, will crime escalate, will the political situation worsen? Those and other similar questions, keyed to the specific traits that the company is looking for in an engineering site, must be addressed in order for the company to avoid making a decision that it will regret in a matter of months.

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To avoid the missteps many companies make when choosing a new engineering or R&D site, particularly in low-cost countries, multinationals must weigh the five Cs: cost, capacity, capability, communications and culture.

Companies should identify which one or two of the five Cs are the most important for their decision to locate a facility, and then determine which cities meet these criteria. It's essential to assess the characteristics of prospective locations today and to anticipate what they will be like in three to five years. Will the infrastructure be better or worse, will investment increase, will costs rise, will the number of skilled workers decline, will crime escalate, will the political situation worsen? Those and other similar questions, keyed to the specific traits that the company is looking for in an engineering site, must be addressed in order for the company to avoid making a decision that it will regret in a matter of months.

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