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A US company’s global expansion surges ahead as it sets out to build its first European R&D centre in Germany: 150 researchers will make a home there.

A decision to build a new technology research centre on a university campus is rarely hailed as a diplomatic breakthrough of global significance.

That, however, was the reaction to the decision of GE Global Research of the US to site its first European R&D facility at the Technical University of Munich.

Chancellor Gerhard Schroder turned up in person at the announcement of the $52m (£33m) investment, which was seized upon in Germany as the first sign of a thaw in the frosty relations between their own government and the US.

Planned to be fully operational by 2005, the centre will house 150 researchers from all over Europe. It will specialise in renewable energy, medical imaging and materials science projects, and will work with Germany’s automotive industry on advanced lighting applications.

GE Global Research carries out advanced R&D work for its parent General Electric (GE), a corporation so vast it makes UK heavyweights such as BAE Systems look like corner shop operations.

GE employs 300,000 people and has annual sales of $125bn (£79bn). It has market-leading or number two positions in a broad range of sectors, including aero engines, turbines, medical technology and some consumer products.

Fighting rivals on so many fronts gives GE an insatiable appetite for R&D, and it expects GE Global Research to keep the larder well stocked. Previous contributions by the division include the development of man-made diamonds, the x-ray tube and the solid-state laser.

The new centre is the latest phase in a major geographical expansion of GE Global Research’s interests. Until 2000 it had no major R&D centre outside the US, but has since begun building facilities in India and Shanghai.

When these and the German centre are added to GE Global Research’s long-established R&D headquarters in New York State, the company will have formidable international resources at its disposal. By the middle of the decade it plans to be employing almost 2,500 technologists, around one third of them with doctorates.

The announcement of the new centre may have helped US-German relations, but at least one group of Schroder’s constituents are likely to have mixed feelings about the investment.

One of GE’s biggest competitors is Siemens, Germany’s own engineering and technology behemoth, which will soon find itself battling for the best research talent in its own back yard.