IBM will shift its investment focus from manufacturing to technology services and innovation in China, said executives from the global technology giant in Beijing yesterday.

"Our business is changing, so our investment in China will also change," said Michael Cannon-Brookes, IBM''s vice-president of business development for China and India.

He said the technology firm''s investments will go to areas such as IT service, business transformation, Linux operating systems, and people. IBM has already invested billions of US dollars in China.

Last year, the tech firm procured hardware and services worth US$1.89 billion in the world''s fastest growing economy.

Samuel J. Palmisano, chairman, president and CEO of IBM, said yesterday that technology service, the fastest growing segment in the technology industry, will be a top priority for his company in China, which is one of IBM''s most dynamic markets.

IBM achieved year-on-year growth of 27 per cent in China in the third quarter, compared with a corporate average of 5 per cent.

While service is critical for IBM, it is also important for China, which is trying to move to the upper level of the value chain from its current position as a manufacturing powerhouse.

The Ministry of Education and IBM yesterday signed a memorandum of understanding to provide masters and doctorate degrees in service science and management engineering in some 50 universities.

Henry Chow, chairman and CEO of IBM Greater China Group, said his business has been working with the ministry for over a decade. The focus of the new co-operation is to train world-class talents and provide experience in business transformation to help China become an innovative nation.

In the past 12 years, the US giant has spent around US$180 million in co-operation with education organizations, but it declined to reveal its latest spending.  -China Daily