Cisco announced on Nov. 1 a three-to five-year investment initiative aimed at strengthening its business commitments and long-term corporate strategy in China.
"Today's announcements underscore both China's strategic importance to Cisco's global operations and the broad range of growth opportunities presented by the China market, particularly as an innovator in the next wave of the Internet's development in collaboration and Web 2.0 technologies. Cisco has made significant investments in our China business since we established operations in the country in 1994 and this program will lay the foundation for the next chapter in Cisco's development in China," said John Chambers, chairman and CEO of Cisco.
Cisco's multi-year investment program will include:
A significant increase in local procurement. In the past five years, Cisco has purchased more than $7 billion worth of China-sourced components and services, a critical part of the company's virtual manufacturing supply chain. According to Cisco estimates, these procurement commitments provide employment to 50,000 people in manufacturing management roles and through contract manufacturing and supplier partners.
The total value of Cisco's commitments in China since 2002 are estimated at more than $8.5 billion, and under the initiative announced today, could expand to approximately $16 billion during the next five years, including significant increases in materials procurement, and increases in education, Cisco Capital, research and development, direct and indirect investments and sales and service operations.
A Memorandum of Understanding with China Development Bank to explore a joint investment program that would provide capital and expertise for innovative Chinese businesses. The initiative is intended to support high-growth Chinese companies over multiple sectors, with a focus on information technology, "green" innovators, and other key segments.
A commitment to expansion of the Cisco Networking Academies program in cooperation with China's Ministry of Education to add 300 additional academies in vocational colleges during the next three years, with a specific focus on China's central and western provinces. Currently, there are more than 200 Networking Academies in 70 cities throughout China, which have trained more than 90,000 students since inception. The new initiatives will add the capacity to train an additional 100,000 students by 2010. Cisco will also donate more than $6 million worth of networking equipment to assist in establishing labs in the new academies.
The establishment of Cisco's first global "green" technology center to address the increasing need for sustainable development, energy efficiency, reduction of electronic waste, and emission reductions inside and outside of China. The center will also augment existing programs underway by Cisco China's R&D teams in the area of application specific integrated circuits (ASIC) power efficiency design and expand this into other product areas.
Cisco first established operations in China in 1994 and now employs more than 2,300 staff in sales, customer support and service, research and development, BPO/IT outsourcing, Cisco Capital and manufacturing.
