Cut-Rate Research Services
I read in a recent Chemical and Engineering news issue that Cambridge Major Labs will be launching a cut-rate research service. They are evidently trying to compete head-to-head with cheaper labor sources in China and India. To do this, they will hire industrial post-docs to do the work. The typical rate for an FTE in the US is $200,000 vs $60,000 annually in India or China. Cambridge Majors will be offering their industrial post-docs to their customers for a rate of $120-150,000.
Personally, I think this is a poor decision trying to compete on price. If price is truly the reason that process development and research is going to China or India, then offering only a 25% discount isn’t going to do it. They could go to India or China and save 50% over the low end of their offer.
I also firmly believe you get what you pay for. I’d much rather spend the extra $50,000 and get experienced people who have been in the industry for a while rather than a new industrial post-doc fresh out of graduate school.
I think this whole mentality in the US of focussing almost entirely on price is very detrimental. It serves to erode the expectations for price in the future. When you start offering low prices, this becomes the new norm and further price reductions are expected in the future. I’ll keep my eye on this to see what develops in the future.
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