Microsoft: Asian countries will lead technology R&D

"We think that Asia will be at the center of, and in many ways will lead, global innovation over the next decade," said Oliver Roll, general manager of Microsoft Asia-Pacific.

Microsoft Research (MSR), the company's basic research arm, lies at the heart of Microsoft's Asian R&D efforts. MSR has two labs in Asia, one in Bangalore, India, and another in Beijing. The work that goes on in these centers spans a wide range of topics, including next-generation user interfaces, Internet search, cryptography and technologies for emerging markets.

Apart from the basic research efforts underway at MSR, Microsoft has also invested heavily in software development centers across Asia, tapping into different areas of expertise in the region. "Countries are going to become niche players and experts in niche fields," Roll said. "It's not always going to be China and India."

Asia's growing importance as an R&D center reflects the region's fast economic growth. Asian gains in GDP (gross domestic product) have been matched by significant increases in IT spending across the region, Roll said. "India is growing at over 20 percent, China at 14 [percent] to 15 percent, and all of Southeast Asia in double digits," he said.

This rapid growth has made technology, particularly mobile phones, widely accessible in Asia. For example, between 1998 and today, the percentage of people with a mobile phone in the Philippines rose from 2 percent to nearly 50 percent, Roll said. "That's quite dramatic growth," he said.

Microsoft hopes the "pay as you go" model used to sell mobile phones can be used to expand PC access in Asia. The company is testing sales of PCs in India and China using its FlexGo technology, which allows users to pay 50 percent of the computer's cost upfront. Users then buy additional FlexGo units to use the computers on an ongoing basis. When the value of the computer has been paid off, users are able to use it without limitation.

For now, FlexGo remains in a testing stage, but the pricing model and technology should seen be more widely available. "I don't think it will be long before it goes into full availability," Roll said.