November 19, 2007 -- Tianjin Economic and Technological Development Area (TEDA) and Microsoft China signed a memorandum on strengthening cooperation and development of the IT and software industry within the development zone on 9 November 2007. The cooperation involves implementing improvements in a variety of areas: personnel training, e-government, IT construction, protection of IPR and cooperation in investment. The memorandum states that TEDA and Microsoft will together build the Tianjin Software (Microsoft technology) Training Base and strengthen cooperation in training software engineers.

"TEDA's outsourcing industry currently faces problems like a shortage of personnel," Yang Chonghao, a spokesperson from TEDA told Emerging China. "Training services to ensure the outsourcing industry develops talent is an important measure. This is the main objective of the Microsoft contract."

The training base will be tailored to the demands of software companies in TEDA, with software engineers and construction requirements for a software-outsourcing base. Tianjin is one of 10 cities identified by the Ministry of Commerce earlier this year as an Outsource Service Base. The other nine cities are Beijing, Dalian, Xi'an, Shenzhen, Chengdu, Wuhan, Nanjing, Shanghai, and Jinan.

In terms of training, this is the first time Microsoft has set up a cooperation with TEDA, though it has been doing IT and software talent training in many other places in China. In the next 5 years, the company will train 80,000 software engineers, including software architects, in China.

"Microsoft is committed to supporting its development in building a strong local IT industry and fostering a healthy IT ecosystem," a Microsoft spokesperson told Emerging China. "The training courses aim to help provide trainees with both advanced IT technology learning and a real work experience that will make them more adaptable to the needs of the IT enterprises in TEDA. The major feature of this training course is to enhance students' practical abilities to narrow the differences in education between the job market and the needs of corporate posts."

Turning Tianjin into a major center for outsourcing services requires a large supply of labor. Currently, the supply is lacking.

"This memorandum deals with the issue of talented people," Xia Yu, an analyst at Analysys, a global telecoms consultancy and research company, told Emerging China. "Although China has a huge number of IT talents, the number of talented people who can adapt to the requirements of enterprises is small, and the number of high-end talent proficient in technology, foreign languages and commercial complexities is even smaller."

There are high costs involved in training the kind of people required to turn Tianjin into a major outsourcing services base. The cooperation will work toward solving the problems of labor supply. Teaming up with Microsoft serves as an important measure of TEDA's ability to consolidate resources and cultivate talented personnel for service outsourcing.
TEDA was established in 1984. Of the Fortune 500 companies, 57 multinational companies have invested in 123 enterprises in TEDA. TEDA is located in Tianjin, a municipality 120km southeast of Beijing.