Kyonggi Province Gov. Sohn Hak-kyu, left, shakes hands with Siemens executive vice president Hermann Requardt, after signing an agreement on the German technology giant's investment at the JW Marriott.

Siemens, the German-based engineering colossal, on Friday said that it would spend $55 million to establish a medical research and development (R&D) center in Korea.

In a news conference at the JW Marriott Hotel in Seoul Friday, the firm said the research lab, named Siemens Medical R&D Center, will be set up at Pundang, south of Seoul, from next year.

Siemens executive vice president Hermann Requardt, who works for the company's medical division, said they selected Korea due to its advanced technologies and talented human resources.

"R&D especially requires the endless efforts and passion of researchers, which are two outstanding characteristics of Korean engineers," he added.

The Siemens project will be implemented in three phases. In 2005, the firm plans to settle in seven floors of the Pundang Venture Tower and will expand the space to 14 floors by 2007.

For the final stage, Siemens looks to build a technology complex, encompassing Pundang and other areas in Kyonggi Province, by attracting institutes for medical technologies, universities and local venture firms.

Siemens estimates the R&D center will generate about 450 jobs and as many as 2,500 jobs will be created indirectly through partner manufacturers and component suppliers.