OVERVIEW: The successful operation of laboratories outside the United States is dependent on the people who staff those labs and the provision of stable financing for them. Location can affect the ease of staffing the laboratory with properly qualified people with sufficient English language facility to communicate with the home laboratory. Product development laboratories associated with plants making products for a region can be financed by adding the lab cost to the transfer price of the product. The successful operation of global RD 2) Competent and knowledgeable managers who understand the strategic intent of the laboratories and are versed in the applicable technologies the laboratories will use in carrying out their mission; 3) Staff whose qualifications fit the laboratory mission; 4) Financial support that reflects the laboratory mission and is based on sound business assumptions maintained over a period of time sufficient to allow the unit to become productive. These last two are the subject of this article. For purposes of discussion, let's assume that most companies interested in this topic have already established international operations, or will in the near future. Most international business is done through a subsidiary organized under the laws of the country in which the business is located. These subsidiaries are usually involved in some form of manufacturing, and thus are adding value to the materials they process. Those processes are usually based on technology developed in the United States. In those cases, the subsidiary should return royalties and fees to the U.S. corporation in exchange for the import of technology into the subsidiary's country. These royalties and fees are intended to pay for the R&D expense involved in developing the technology the subsidiary is now using. It is a means of repatriating past expenses without being subject to local tax. In the scenario I have established, most global companies are finding that customers outside the U.S. can be a market for their products but are also demanding that those products be adapted to their specific needs. Consequently, it becomes necessary to set up product development in that country to serve that market and those closely related to it, like the countries in the European Common Market. While product development will suffice for many product lines, it may be advantageous to add technology development to that laboratory, especially if the country has a good base in that technology. Germany and Japan are two locations in which this is frequently true. CHOOSING A COUNTRY Let's assume your company has been manufacturing in two or three countries in Europe with product engineering people attached to the plants and technical service people working with sales. Of the many choices for locating the product development facility, which country should you choose? There are a number of things to be considered in choosing the right location. If the mission of the laboratory is to communicate with customers in other countries, then language facility is a major consideration. This means locating the lab in Belgium or some other place to which technical people are likely to immigrate. Belgians usually speak English, French, Flemish, and German, and thus converse with both Southern and Northern Europeans. Most technically trained personnel can speak English, which should be a requirement for communication with the people in the U.S. labs. Then, the location may depend on whether the trained people are available to be hired in that country or if other countries' graduates immigrate to that location. Japan presents a special problem with respect to hiring technical people. Most hiring of the top graduates is done by companies with longstanding relationships with the professors. …