R&D Off-Road Vehicles in China: Mapping Out Talent and Knowledge Patterns

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By Ward Howell International

Construction has been a fundamental part of China’s economy, accounting for nine percent of its GDP. One of the auxiliary industries that developed alongside construction is the off-road vehicle industry. In this article, we take a look at the innovation and R&D dynamics that propel off-road vehicles in China.

In research conducted jointly with Kairos Future and Ward Howell International, we monitored nearly 6,000 profiles from R&D professionals of 30 of the largest companies in the industry (OEMs and top tier 1 suppliers) and over 3,000 patents from 157 manufacturers.

Brains at Full Speed

With the Chinese government focusing on reorienting China’s economic model towards one that is knowledge-based, investment in China’s R&D sector has progressed rapidly. R&D investment has tripled since 1995, reaching in absolute terms US$ 158 billion according to a report in the journal Science (August, 2014).

In absolute terms, China is still far behind the U.S. (US$ 435 billion) and EU (US$ 327 billion), but is already ahead of Japan (US$ 145 billion). However, in GDP proportion, it has already caught up to the EU-28 with 1.98 percent of its GDP, according to the latest OECD data corresponding to 2012.

As an illustration of how fast China is moving, our research shows that, in 2011, the number of invention patent applications by domestic Chinese companies in the off-road vehicle industry passed those of non-China based companies. One year later, the number of Chinese applications increased to 2.5 times that of non-Chinese ones – 3,176 vs. 1,278.

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It is interesting to note that they also differ in their focus of innovation. Chinese based players are more oriented towards parts such as rotary shafts, valves, pulleys, mows and punchers, whereas those that are non-Chinese based are strongly represented in power systems, i.e. diesel engines, electric engines, gears and EGR.

Shining stars in the off-road vehicle patenting landscape in China include national powerhouses such as Sany and Zoomlion, as well as Taiyuan Heavy Industry, Xuzhou Heavy Machinery, Shaanxi Longhai Construction Engineering or Guangxi Liugong Machinery. Top patenting cities such as Changsha, Xuzhou, Taiyuan, Shenyang and Shanghai are home to both large and small companies as well as academic institutions that help to keep the wheel turning.

Talent Dynamics in the Off-Road Vehicle Industry

Who are the individuals behind the R&D in the industry? The first thing that caught our attention: they are very young. They average age is a little below 33 years and only a fifth has more than 10 years’ experience. Overall, R&D professionals in the industry have about 7 years and 7 months of working experience. That seems to be consistent with the general path of annual spending in R&D in China: the infrastructure has been laid and, in the future, we might expect further development and scientific research as R&D figures move from hard to soft investment.

Although overall data shows that the industry is keen to rely on as many experienced professionals as possible – nearly 60 percent of them had six or more years of experience – differences in talent acquisition patterns can be observed between China and non-China based players. The latter are clearly more biased towards seasoned professionals (67 percent of their employees with 6 or more years of working experience) while the former are prone to rely on young professionals, with about 31 percent of their employees having a record of zero to four years in the job market (double the rate of its non-Chinese counterparts).

Based on the above, one would expect employment stability to be significantly more volatile among employees at Chinese based companies. However, it turns out that they are usally only 5 months less likely to remain sitting at their desks before moving to greener pastures than employees at non-Chinese based entities: 35 against 40 months, respectively. 

Industry wise, R&D professionals remain on average 38 months per employer, and a wowing 78 percent just stay less than 4 years. That means, for any given company, its R&D department almost entirely renews its staff in less than five-year cycles. This doesn’t sound like great news for off-road vehicle GMs or Heads of R&D.

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Universities Fostering the Industry’s Knowledge and Talent Requirement

The latest course of our analysis takes us to the role of the academic institutions. Co-patenting networks in top patenting cities show a high degree of collaboration between companies and academic institutions. Those networks are in turn reinforced by the mobility of R&D professionals between companies, as data from staff turnover shows. Networks can be used to identify not only prolific researchers, but also brokers who work in the intersection between different organizations.

In academic research the most prolific institutions are Jilin University (Changchun), Chang’an University (Xi’an), Central South University (Hunan), Zhejiang University and Tongji University (Shanghai), who accounted for 3,383 academic articles.

Top universities where R&D professionals in the off-road vehicle industry study yield similar results: Tongji University and Jiaotong University in Shanghai; Jilin University, Wuhan University of Technology (Hubei); and Harbin Institute of Technology (with three campuses in China: Harbin in Heilongjiang, Weihai in Shandong province and the Shenzhen graduate school in Guangdong). About 17.7 percent of R&D professionals have their diplomas chopped by one of these institutions.

Industrial Engineering (42 percent) and Electrical Engineering & Automation (14 percent) are the most common academic backgrounds of these professionals.


Talent is carrying knowledge through existing ecosystems that contain large and small companies as well as academic institutions. There is high mobility among R&D professionals between companies, with this talent mostly located in very specific areas: Shanghai, Jiangsu (Xuzhou, Suzhou), Hunan (Changsha) or Beijing.

Whereas this mobility benefits the industry as a whole, individual companies might not take as lightly the fact that on average they have to re-staff almost 80 percent of their R&D department in 4-year cycles. Not only because R&D professionals are supposed to carry the seeds that will support their future growth and it’s not pleasant to see them leave, but also because the development cycle of some innovation projects might as well be longer than this 4-year rotation cycle. A steady trickle of talent will then compromise the very ability to innovate in a consistent manner.

Managers have then two potential courses of action to prevent that from happening:

Firstly, looking outwards: mine open sources to continuously track the activities of competitors, academic institutions, recruitment trends and investment decisions in the market.

Secondly, present a more structured talent management strategy aimed at R&D professionals. Significant and constant innovation can only be addressed via well rounded and career development plans. So, for instance, our research shows that China-based players are currently tapping more into fresh talent, which in time will help them establish and consolidate their technological image among graduates as well as to easily spot top talent. All in all, this should bring the additional benefit – if consistently executed – of lowering recruitment costs thanks to higher employer brand awareness.


Formed in 1951 by former McKinsey Director Ward Howell in New York City, Ward Howell International regards itself as a global boutique offering its clients a global network of global Advisory Partners (former CxOs) to leverage industry, region and function specific expertise. Ward Howell International focuses solely on comprehensive senior-level executives search and talent management consulting.

For further information, visit www.ward-howell.com or contact juanjo.cardona@ward-howell.cn 

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