The world really is getting smaller. No sooner had I filed a story on the growing popularity of Russia as a destination for complex R&D projects, then along comes Leonard Y Liu telling the same story about China. Liu dropped by Corporate Dealmaker’s offices recently to do a little evangelizing about his company, Augmentum, an outsourcing service provider with a 400-person R&D center in Shanghai.

Augmentum doesn't take on the long-term programming projects that India has become so adept at. The company develops complex software products at its Shanghai center like the user interface software it’s developed for Intel’s digital media infrastructure. The company also counts Microsoft and Cadence Design Systems as customers.

Listening to Liu wax poetic about his company’s ability to deliver high-end products to clients at offshore prices, I got a serious sense of déjà vu. A few weeks earlier I’d heard a nearly identical story about Russia from Eugene Goland, founder of the outsourcing service provider DataArt, which offers similar high-end software services through its R&D center in St. Petersburg.

Both companies target Western clients, with impressive results. Revenue at DataArt is up 300% over the past three years, and after just two years in business Augmentum is making money and hopes this summer to open a second R&D center, this one in Beijing.

You've likely heard this before. Offshore locales are gaining popularity as destinations for skilled R&D. This is more evidence that is in fact the case. — Suzanne Stevens

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