Posted on 03/02/2004 3:55:47 AM PST by ZeitgeistSurfer
As corporate America becomes increasingly comfortable with offshore development, it's sending substantially more sophisticated IT work overseas. Companies such as Google Inc. are turning to foreign workers not for their willingness to work for lower wages but for their technological prowess.
Google is advertising for highly skilled IT help at its recently opened research and development facility in Bangalore, India. These employees will be involved in all aspects of Google's computer engineering work: conception, research, implementation and deployment.
"Bangalore is the so-called Silicon Valley of India, and there is a large pool of talented software engineers there," said Krishna Bharat, Google's principal scientist.
R&D is core to most companies. They guard it carefully, and their brightest people work on it. But as offshoring becomes increasingly commonplace, companies are moving up the value chain, using foreign workers in ways that make them a more integral part of the corporate identity.
Silicon Valley venture capital firms are encouraging start-ups to send their product development work overseas, said Marc Hebert, a vice president at Sierra Atlantic Inc., a Fremont, Calif.-based outsourcing firm that specializes in R&D. While Google was explicit about talent rather than cost being the driver of its offshore move, most companies are equally keen to tap the lower wages, which enable them to hire more people to bring products to market faster.
Hebert said that although idea generation and funding are still coming from the U.S., more and more of the R&D work needed to actually bring a product to market is being done offshore. "That's the really interesting trend," he said.
What that means for the future of Silicon Valley and IT development in the U.S. is unclear. But while overseas firms are hiring, the IEEE-USA said last week that the 2003 U.S. jobless rate for computer scientists and systems analysts has reached an all-time high of 5.2%.
The Asia Connection
Although the number of R&D jobs that have moved to Asia doesn't yet approach the number of low-end IT jobs that have moved, such as those in programming, the gap is bound to narrow, said Bob Hayward, an Australia-based senior vice president at Gartner Inc.
"There's a certain amount of inevitability about it," Hayward said, noting that the highly skilled Asian workforce and the leading role taken by those countries in developing cutting-edge services and technologies, such as broadband Internet access and flat-panel technology, have attracted the attention of U.S. IT vendors.
Just in the past three to four years, U.S.-backed investments in Asian R&D operations have increased dramatically, Hayward said. He noted that those investments have soared while IT vendors, faced with a global slowdown in demand for their products, have held back investments in other areas.
Several of the largest U.S. IT vendors started building R&D centers in China in 1998. Intel Corp. and Microsoft Corp. have opened facilities in Beijing. Intel has 40 researchers; Microsoft has 200 Ph.D. candidate interns and 170 researchers.
Some governments provide economic incentives to attract U.S. companies to invest in R&D operations in their countries. In Taiwan, for example, foreign firms can deduct 35% of their R&D investments from the income tax owed by their profit-making operations.
Still, some IT development work can be done only in the U.S., said Richard Brown, associate vice president of marketing at Via Technologies Inc. in Taipei, Taiwan. For example, the design and development of Via's PC chip-set products is done in Taiwan, but the company's CPU and graphics-chips products are designed by teams in the U.S., reflecting the dominance of the U.S. in those product areas, he said.
'Big Picture' Question
But the trend is clear. About half of the IT R&D done by Stratex Networks Inc. takes place overseas, some at its New Zealand subsidiary, and some in India. That has included development of a network configuration tool, said B. Lee Jones, vice president of IT and CIO at the San Jose-based company.
Jones has eight data centers to run on five continents and offices across 22 time zones. Like many U.S. IT executives, he wonders about the big picture: the long-term impact on the U.S. as more work is shifted offshore. But Jones said he believes the U.S. will remain dominant in IT.
Though he has some hesitancy about moving high-level work offshore, along with a desire to keep core development in the U.S., Jones said that "as the comfort level goes up and we are able to take advantage of having comparable quality for smaller prices, people will naturally migrate there."
Lemon is the IDG News Service correspondent in Taipei.
Then your accusation implies that you think that any potential abuse of Congress’s power to wage war makes the founding fathers aggressors, and abuse of the “general welfare” and the “interstate commerce” clauses makes the founding father’s socialist. Brilliant…
"But don't come around here lecturing the rest of us about freedom to choose"
Say the same to the minority if we turn into another social democracy after we elects to tax us to the verge of economic stagnation. Judges found it constitutional, so it must be proper by your reasoning.
" our independence and security, which is rooted in our manufacturing base. "
Nonsense, our independence and security is rooted in our freedom and courage to defend it from shortterm gain. If you believe that the “highest paid jobs are going overseas” you’re falling for the deception of our political opposition.
" What,pray tell, are we giving them? "
Opportunity to compete. A few contracts. Lets see if they can complete them.
" Ha! Ha! You should hear what the average Chinese person has to say about America and Americans "
I wonder if they “average Chinese person” could distance himself from his emotions long enough to see that this thread is about India and Taiwan, not China which is a different issue. If so, you could learn something from him.
I admire your ability to differentiate economic crisis from election year exploitation of xenophobic emotions.
That’s very Nixonian. Why bother gathering the courage and stamina to explain it to the (historically low 5%) unemployed when you can simply get into a tariff bidding war with the anti-capitalist opposition and hope that the people fall for your feigned sincerity?
Or zero percent depending on the field. I never met a foreign IT consultant in Healthcare, and next to no vendors. It’s too coupled with too dynamic of a business. (Though I once paid a ex-pat in Thailand $70 an hour for 10 hours work, not wanting to pay an American $200 per hour for the same.)
" Hint 2: It's not 5% in Silicon Valley. My EA lost 25% of his clients this year because they had NO earned income in 2003. "
As I wrote a few weeks ago , Silicon Valley is about as reflective of the American economy as Sutter Valley in the 1840s, and that has next to nothing to do with outsourcing.
" Hint 3: Most elections are swayed by ~5% of the vote. "
There are always about 5% or more unemployed. The Democrat party is the one that panders for their votes.
I read your profile up to the point that you said you were a “a hard core card carrying member of the Libertarian Party”. Please, if there is anything that should define a Libertarian it’s free trade. I’ve heard that Libertarian politics are intrinsically unstable and free to morph into anything fashioned by their emotions. But I’ve never seen such a profound example as this today.
Congress' exercising their specifically inumerated power to levy tariifs is not an abuse of power, and you know it. Nice try, but you look like a blathering fool now.
Nonsense, our independence and security is rooted in our freedom and courage to defend it from shortterm gain. If you believe that the “highest paid jobs are going overseas” you’re falling for the deception of our political opposition.
Ha! Ha! You're funny! What do you propose we defend uour freedom with, once our mfg. base has been wiped out? Defend it from short-term gain? You mean like the short-term gain of trading our manufacturing and technology base for some short-term cheap labor bucks? Try steering smart bombs with hamburgers. The US is now 100% dependent on Chinese suppliers of high magnetics for smart bomb servo components. The patent for the most efficient magnetic production methods was sold off to the Chinese, and the Americans who used to make our smart-bomb servos were given a pink slip for their patriotism. Angry jobless people are not a political deception, they are a reality from which you are hiding.
Opportunity to compete.
But they are not competing, they are cheating. India has a slave-based economy wherein basic services are provided by people who live in shacks and are denied an education. That, and currency manipulations makes indian labor costs 1/10 the labor costs here. Real competition would imply a productivity and intelligence contest. That ain't happening.
this thread is about India and Taiwan, not China
This thread is also about outsourcing and foreign trade, a picture in which China looms large.
Pure speculation. Where's your proof?
Well done! Probably the best body slam of the current "free" trade system I've ever read.
After decades of second rate education in public schools this has happened. But the public schools are free and let the parents, the ones who accept second rate for their children, escape the responsibility and financial obligations of educating their children properly.
Then by your own feelings, Congress' exercising their specifically inumerated power to declare war in an unwise way is not an abuse of power. You need to learn to control your emotions.
" You mean like the short-term gain of trading our manufacturing and technology base for some short-term cheap labor bucks? "
This reminds me of the end of the worlders crying here that Armageddon was coming at the turn of the millennium. Just like how in every generation there were people who feel the end of the world was in there times, every generation of Americans thought that tariffs were the answer to international trade and competition. Same panic, same song, different day.
People at a certain level of desperation are always prone to being called slaves by people unable to succeed in even in an environment of great excess.
" This thread is also about outsourcing and foreign trade, a picture in which China looms large "
No, because of China’s international aggression, all the rules change. A discussion of training dogs can’t be applied to razing a tiger. If you can’t transcend your knee jerk emotionalism to see that, start another tread on China.
BUMP
It says in part:
"Since January 2001, a three-year period during which the economy has experienced one year of recession and two years of recovery, the U.S. economy has lost 2.6 percent of its private-sector jobs. These losses are not evenly distributed. Construction employment has declined by only 0.1 percent, and employment in oil and gas extraction by 0.7 percent.
Employment declines in manufacturing and knowledge jobs, however, have been dramatic.
Tables prepared by Charles McMillion of MBG Information Services from government data show employment in
primary metals down 24 percent;
machinery 21.6 percent;
computer and peripheral equipment 28 percent;
communications equipment 38.8 percent;
semiconductors and electronic components 37 percent;
electrical equipment and appliances 22.8 percent;
textile mills 34.1 percent;
apparel 37.3 percent;
chemicals 8.3 percent;
plastics and rubber products 13.8 percent;
Internet publishing and broadcast 40 percent;
telecommunications 19.4 percent;
ISPs, search portals, data processing 22.6 percent;
securities, commodity, investments 6.8 percent;
computer systems design and related 17 percent."
Please note that many of the industries listed are not Silicon Valley industries. Not much primary metals, textiles, apparel, plastics or rubber work in this area.
I continue to be astonished by your steadfast unremitting unwillingness to observe your surrounding reality.
I read your profile up to the point that you said you were a “a hard core card carrying member of the Libertarian Party”. Please, if there is anything that should define a Libertarian it’s free trade. I’ve heard that Libertarian politics are intrinsically unstable and free to morph into anything fashioned by their emotions. But I’ve never seen such a profound example as this today.
That profile was written quite some time ago. You may be incapable of adapting to new environments, that doesn't mean I have to be.
Frankly I'm not surprised you stopped reading my profile in the first paragraph. It seems a pattern for you to only go as deep into any subject as it takes to find a single data point that supports your preconceived prejudices.
Sad.
Angry jobless people are not a political deception, they are a reality from which you are hiding.
You got one point right.
However, I wasn't clear in my point that you were answering. My bad, sorry.
The real unemployment/gross UNDERemployment rate is at least 5% higher than the usual percentage the dems have as their unemployed "base".
This is plenty enough to throw a normal election, let alone a close one.
HOWEVER, this doesn't have to be done at the short term cost of beggaring America and Americans.
That's the part I have a real problem with!
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