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SOURCE: CNET NEWS.com
Offshoring: A view from both shores
June 29, 2004, 5:51 AM PT
By Ed Frauenheim
Staff Writer, CNET News.com
Vivek Paul occupies a unique vantage point in the controversy roiling the technology industry over offshore outsourcing.
An American citizen, Paul also is a native of India and chief executive officer of Wipro Technologies, one of that country's largest IT service companies. Many American techies are increasingly bitter about the pickup in the stream of IT jobs from the United States to India, arguing that the trend threatens to erode job prospects in the nation's high-tech sector. At the same time, however, members of the Bush administration and a number of economists argue that the natural flows of capital can't be artificially stopped at the borders and that outsourcing is essential to improving corporate productivity.
Paul, who became a U.S. citizen in 1991, recently spoke with CNET News.com about the growing fear in many quarters that offshore outsourcing will undermine U.S. tech leadership.
Q: What is your response to people who fear the U.S. is losing its technology leadership because of offshore outsourcing?
A: That is really befuddling, because the U.S. is only securing its technological competitive advantage. (Look at) patents that have been written by Indian software engineers in Wipro. The individual engineers get the credit; the ownership is the customer's. So in some sense, U.S. technology companies are racing out ahead of their global peers to tap into the intellectual base that is in India. If the U.S. were to repel it in some way, it would create its future competitor. By embracing and directing it, the U.S. has pre-empted competition.
But if some of the programming jobs that are lower-level jobs go to an Infosys or Wipro--in application development, application and maintenance type work--how are you are going to get the expertise that will later lead to higher-level jobs?
That has a built-in assumption (that) there will not be enough jobs left in the U.S. to fulfill the indigenous graduating engineering base. That is not true. If anything, the number of engineers graduating in the United States is dropping. As (General Electric CEO) Jeff Immelt said, the U.S. graduates more sports therapists than engineers. In some sense, the U.S. is filling that gap with imports of people. In other words, people are flowing to where the work is--immigration.
I think that it is perhaps too jaundiced a view to think that the U.S. economy would not generate as many jobs for engineers as there are engineers. We have got a dropping number of engineers, a growing economy and already the gap is being filled more by immigration than by local demand.
Is the decline in the number of U.S. engineering degrees a problem?
Absolutely. A lot of my friends ask me, "What should I tell my kids? If all the manufacturing jobs are going to go to China, all the engineering jobs are going to India, what should I tell my kids to do?" My answer is--and I may be biased because I am an engineer: "Hey, listen, the cutting edge of technology will always be here, and the shortage of engineers only means there is more demand for them."
Should the U.S. do more to attract foreign students, such as Indians or Chinese?
The U.S. never wants to lose its ability to be the place where the best talent in the world wants to gravitate. And it should never be fearful of change. To somebody from the outside looking at this debate, it is staggering to think of a U.S. that has anything less than complete self-confidence in its ability to reinvent itself.
What should be done to make the country more attractive to Indian students? Should we be easing up some of the visa checkpoints? That has been slowing things down for students.
Post-September 11, there was an impact. There was a feeling that if you looked Middle Eastern, then somehow you would get stopped more. I had friends who were like, "I do not want to go to the U.S. now." The U.S. response was perhaps verging on the exclusionary.
That concern has gone away. What remains now is the ability to be able to give people who are graduating from Chinese and Indian universities a greater conceptual challenge, a greater intellectual challenge, as well as a greater reward system. Both of them are available in plenty...
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