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.
I’ve seen your rants before. You copied and pasted several thousand words of rambling text to justify your paranoia after I specifically asked you for something succinct. Life’s too short to read every kook rant.
And I know people who lost their jobs to all kinds of freedom, freedom that makes America great. The difference between you and I is that I analyze it with courage and you just fear it.
You at least have to demonstrate the ability to differentiate between an unsupported opinion and a fact if you want to persuade people
ooooo WEE.
I got a live one here.
Marry me.
"Free trade" with a giant communist country that has threatened the USA with nuclear annihilation more than once is not a good idea!
"Free trade" with a slave labor country will import the slavery right here to our shores.
Marx was right about "free trade" screwing the workers so hard that it makes communist revolution more likely. Of course then America itself would be one giant slave labor camp, perhaps that is the free traitors end game, eh?
There’s a phrase that, “Generals are always fighting the last war”. Even armchair generals. India and Taiwan (the subject of this article) are not our military or ideological opposition.
Out greatest goal in this new kind of war is to unify the world in recognition of good and evil. Good is in its best position when Western civilization inspires hope everywhere. If East and South East Asia see theocracies or socialist-fascism as viable alternatives, they’re potential obstacles to our fight.
Giving them a path into the first world also benefits us. Not just by denying fascism fertile soil, but by setting ourselves up at the panicle of world trade and culture. A nation of desperate and compelled workers is no long term threat to us. If they don’t develop democratically, they can’t adjust to modern markets and eventually stagnate. That’s what happened in the USSR. We did not import slave labor from them; we enveloped them because our system is intrinsically better.
In the unlikely event that we inspire the development of a freer and better nation than us that takes our place at the top, like our end around Brittan, I say more power to them. The English people did not suffer by our progress. “All boats are lifted by a rising tide.”
Since the founders of our Republic saw the wisdom of granting congress the power to levy tariffs and excise taxes (see Article I, Section 8, US constitution), please explain how tariffs constitute "European style protectionism". Are you saying the founders were protectionist?
Our "freedom to trade with who we choose" is governed by the power granted to the US Congress to regulate trade with foreign nations, and to levy imposts and excise taxes. Since this is a democratic constitutional republic, the act of placing tariffs on imported goods and services is an act of choice by the people, through their elected representatives. If those who want to put a stop to the destruction of our manufacturing and technology bases outnumber you; tough luck, fella. We are well within our power to tax trade with slave-based economies. Conversely, if you believe so much in your "free" trade, then by all means, vote your conscience. But don't come around here lecturing the rest of us about freedom to choose.
We know what the score is. We are aware of the sorry state of schools. We recognize the burdensome nature of our regulatory state. But that's no reason to chuck our independence and security, which is rooted in our manufacturing base. One problem at a time, man. That's what the people here are trying to tell you. How do you suppose we fix the problems with doing business in the US with the highest paying jobs fleeing overseas? Can't you see the Democrats look upon your attitude and worldview with glee? Heck, man, people like you are their number one campaign issue. Boy, talk about the "Dumb Party". The destruction of America's manufacturing and technology base, millions of high-quality jobs lost, Democrats with a huge campaign issue in battle ground states during and election year. Yesiree, ain't "free" trade grand?
Giving?!? What,pray tell, are we giving them? I thought we were just free trading. Now you say we are giving them something? Huh. If what we are giving them are American jobs, I'll keep the jobs, thank you.
Out greatest goal in this new kind of war is to unify the world in recognition of good and evil.
Ha! Ha! You should hear what the average Chinese person has to say about America and Americans ("Americans", to a Chinese person, means white person from America). They recognize evil alright, but not in the way you might like. Evil to them is George Bush. To them, the "best president" was Clinton, even though he bombed their embassy. Sad to say, but it is a fact. Yep, we give them our manufacturing base, they hate Bush and the Republicans. Sounds like a fair trade to me.
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