Received some interesting feedback on my last post. Several readers took me to task for mentioning the race issue, accusing me of searching out an issue that does not exist. Maybe, maybe not.
On Friday, I dropped by the offices of The Indus Entrepreneurs, which was hosting a press reception in advance of their big conference later this week. One of the folks I spoke with was Kanwal Rekhi, one of the big names in the Indian-American high-tech community. Rekhi is aware of the "Lou Dobbs" effect, but he nonetheless believes things are a lot better for Indian ex-pats than when he first immigrated in the late 1960s. Back then, Irwin Feerst tried to convince the IEEE to oppose the importation of immigrant engineers because of wage concerns. "Things are much different these days," he said.
Speaking of India, check out The New York Times piece "As a center for outsourcing, India could be losing its edge." The gist of the piece is that the good times in India have resulted--no surprise--in climbing wages and increasing staff turnover. If the trend holds, what does that mean for the future plans of U.S. companies looking to offshore work to the Indian tech lumpen proletariat?
I've received several private e-mails from Indians working in the U.S. since we began publishing the offshore outsourcing special on Tuesday. Their big concern: a possible racial backlash against foreign-born workers.
To their credit, the hired help in Washington has refrained from playing racial politics--so far, at least. But with more Americans worried about losing their jobs, all it takes is one demagogue to ignite an uproar.
Admittedly, my antennae aren't as sensitive to the nuances of this issue as someone from, say, Bangalore, working in San Mateo. But you have to ask whether there isn't some linkage between antiforeigner bias and the uproar over outsourcing, or the H-1B and L-1 visa programs. I don't recall a similar dust-up when U.S. computer companies opened up call centers and expanded their operations into Northern Europe a few years back. I'd be interested to hear your take on the topic.
Kudos to Craig Barrett of Intel for taking part in the op-ed roundtable. Unfortunately, he was the only big-time tech CEO with the guts to go on the record. (I'm sure T.J. Rodgers of Cypress Semi would have agreed, but I didn't ask.) Once the PR handlers heard about the topic, they ran for the hills. Truth be told, some of the explanations got quite creative. Without mentioning names, suffice it to say that they wanted no part of anything that even remotely smacked of controversy.
Why not?
Seems to me that sticking your head in the ground and pretending the controversy will blow past misses the point. We're too far along to ignore offshore outsourcing and to dismiss it as transitory phase of postindustrial capitalism. It's here, and it's not going away. The question now becomes, what should be done about it? Already there are voices out of Washington--some reasonable, some not. All the more reason for Silicon Valley to put its best ideas forward. The tech aristocracy may not want to dirty their hands with the muck of what may be a messy debate. But if they abdicate that responsibility, others are going to decide the issue for them.
Lots of good feedback to our special. Most of the e-mail responses have been measured and insightful. Of course, you run into the occasional bomb-thrower, but offshoring is the sort of subject that ignites passions. I was bracing for a lot worse.
Our poll turned up the tantalizing nugget that a number of U.S. businesses are willing to pay a per-head tax on jobs exported abroad. My assumption going into this was that any tax-proposal idea would be positively radioactive. Yet in private conversations, I've heard several technology execs acknowledge this is something they would support. Interesting. What with the all political grandstanding--which will only get worse as November approaches--maybe they're trying to get out ahead on the subject, before the politicians decide it for them. Now they're just waiting for somebody to go first.
Gallup weighs in
More polls. This one from Gallup on investors' sentiments about outsourcing overseas. The results: About two-thirds say it's "bad for the economy," while 23 percent indicated concern that it might cost a family member a job.
You can interpret data in any of a number of ways, but this much is clear: The politicians are going to have a field day playing this issue for all that it's worth. To be expected--but when the policy makers start posturing for political advantage, a complicated issue becomes subject to caricature and, ultimately, demagoguery.
Amid all the Sturm und Drang about offshoring, America's academic decline in the sciences is getting relatively little attention. The number of new science doctorates has been dropping since it peaked in 1998. Now there's something Lou Dobbs should be screaming about.
The bigger worry is that some of the foreign talent propping up places like Silicon Valley may decide to take their freshly minted Ph.D.s back home. If you believe the National Science Foundation, a mini-reverse brain drain is already under way. That's bad news in bells. And if the trend accelerates, don't be shocked if the next big thing gets invented by one of those same bright bulbs who studied here and then set up shop in India, Taiwan or China.
Speaking of Dobbs, what's up with his Howard Beale routine? The guy's a great financial broadcaster with a platinum resume, but the shtick is wearing thin.
The news media and the politicians running with this issue are relying on loosey-goosey numbers. Since the feds don't track the number of jobs exported abroad, whose stats should you believe? The author of the Forrester Research report that triggered so much angst now says the report's been hyped and distorted beyond recognition. Fair enough, but what does that suggest about the accuracy of all the attendant bloviation on the subject?
The Wall Street Journal's making a big deal about the creation of 20,000 new tech jobs since late last year.
Fair enough. But after a three-year drought, Silicon Valley's got a long way to go before it starts to feel good about itself. I still get the feeling we're only one massive terror attack away from another 700-point drop in the Dow and another IT customer deep freeze.
The New York Times ran a terrific piece about an Indian entrepreneur in Southborough, Mass., who tried offshoring but decided to move the jobs back because the experiment utterly failed. The lesson is that some jobs just can't get exported 10,000 miles around the globe, while others can. It all depends on what you're trying to accomplish, and anybody who thinks it's only about cost is missing the point.
Besides, don't count on Indians accepting lousy wages for brainwork too much longer. The Indian IT industry notched up double-digit salary growth in 2003. Barring the repeal of the laws of supply and demand, wage inflation is going to erode some of the motivation for sending U.S. jobs to South Asia.
The antioffshoring crowd is going to hit the roof when it reads that AMD plans to open an engineering center in Bangalore, India. That's the second big announcement by a U.S. tech company this week. 3Com's got a new VoIP operation in the planning stage, set to open in Hyderabad. Of course, AMD is only taking a page out of Intel's book. It's been setting up shop overseas for years.
