Posted on 07/01/2004 9:31:09 PM PDT by CarrotAndStick
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 US citizen in 1991, recently spoke with CNET News.com about the growing fear in many quarters that offshore outsourcing will undermine US tech leadership.
Q: What is your response to people who fear the US is losing its technology leadership because of offshore outsourcing? A: That is really befuddling, because the US 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, US technology companies are racing out ahead of their global peers to tap into the intellectual base that is in India. If the US were to repel it in some way, it would create its future competitor. By embracing and directing it, the US 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 US to fulfil 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 US graduates more sports therapists than engineers. In some sense, the US 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 US 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 US 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 US do more to attract foreign students, such as Indians or Chinese? The US 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 US 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 US now." The US 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.
So what should those incentives be, exactly? Making it easier for immigration would certainly help, because what is happening is that the visa pipeline has been a joke. Now that there are no more visas available, people can't come even if they wanted to.
You're talking about H-1B visas? That is right. The H-1B visa is the classic visa that a graduating foreign student uses between the student visa and the green card. You've just snipped off that link in the chain. You cannot go from student visa to green card. The single biggest thing that can be done is to fix this H-1B situation.
In other words, a student might be less willing to come to the US because they see that the number of H-1B visas is small and they might not be able to stay here? That's right. [They'll say] "It is going to cost me a fortune to go to a university in the US, and my employment after that is not certain. In fact, it is quite uncertain. What if they cut the visas back even further?"
Let me ask your thoughts about recent political changes in India. Are you comfortable with the Congress Party coming back into power and the new leader that has been put forward as the next prime minister? If I go back 14 years ago, I was actually part of the wave of General Electric [employees] first entering India. In some sense, I was leading GE's efforts to invest in India and build India as a market. I was facing a resistant government on the other side. They wanted to be closed. I remember personally seeing what Dr. Manmohan Singh, who is now prime minister and who was then the finance minister, did to open up the economy. In some sense, he blasted away many of the sort of constraints that were holding us back. I look at that and say, "Boy, there is nothing wrong with having him be the guy who is running the show." The things that you worry about are: What are the compromises that need to be made with small political parties to keep the coalition alive?
The Communist Party, for example? That is right. But my own sense is that once the new government achieves liftoff speed on its own, then the side parties know that if they go, somebody else can come. The balance of power tilts back to the party that has the dominant share.
Wipro's chairman has been active in setting up a foundation. Besides offering good jobs, has Wipro done other things to try to alleviate some of the poverty issues in India? We have focused our non-commercial efforts on education...on two fronts. One is for the "haves," which means people who can afford to go to school. We have been launching a new kind of education programme that is more discovery-based, rather than rote-based, a criticism that we hear a lot about in India.
At what grade level? We basically do it from grade four to eight. It is in private schools. It's in public schools as well.
When you say you are focused on "haves", who are you targeting? People who already go to school. And then we take into account the fact that something like a whopping 60 percent of India’s kids don't go to school.
Primarily in the rural areas? Right. That part of the work typically is oriented around how to get kids to schools. It is a completely different set of challenges. If you are within an hour’s drive from a metro area, you are classified as a "have". If you live more than an hour's drive from a metro area, you are a "have not".
How do you give them the infrastructure they need? You want to give every school a computer, but you certainly cannot afford to give every school a computer. So we worked with a local entrepreneur who would set up a computer centre in the school, and from eight to five, that computer is available to students. From five to midnight, it is a for-fee service for locals who want to do email or whatever. The entrepreneur makes money, while we get the infrastructure in the school. The kids benefit and the locals benefit because they have now access to email.
We don't need engineers any more then we need manufacturing! /endsarcasm
Here's a little about India's rote-based education.
"Competitive exam mania. It’s the quality of education that suffers," by Pratap Bhanu Mehta
http://www.tribuneindia.com/2003/20031201/edit.htm#5
The tuition issue: Perception and the whole truth, by Bhim S. Dahiya
http://www.tribuneindia.com/2001/20010708/edit.htm#1
What the H*** is this guy talking about? He didn't answer the question.
You two will have good times here.
If anything, the number of engineers graduating in the United States is dropping.
True! Because Americans realize there is no future for Americans in the technical fields.
As (General Electric CEO) Jeff Immelt said, the US graduates more sports therapists than engineers.
Of course. Sports therapists aren't being offshored - yet.
In some sense, the US is filling that gap with imports of people. In other words, people are flowing to where the work is -- immigration.
Not exactly. The large US corporations are forcing domestic wages down by importing foreign workers.
I think that it is perhaps too jaundiced a view to think that the US economy would not generate as many jobs for engineers as there are engineers.
Only if one defines "jobs for engineers" as flipping burgers and stocking shelves at WalMart.
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 it a growing economy? Is it really? The GDP grew less than the rate of inflation - which means that in real terms the US economy is shrinking.
The annualized federal deficit is, as I recall, $466 Billion dollars. We have 130 million jobs. So the annual federal deficit per job is about $3,500 per job. Not the amount of federal spending - this is the amount of new federal debt for every worker in the U.S.
Is this healthy? Is it even sustainable?
Free trade is like gangrene - our economic body dies an inch at a time until our national demise.
My head is spinning. This competitive/comparative advantage is more heady than dialectic materialism.
Isn't it, though?
If all this offshoring is so good...why does India have protective trade tariffs?
Free traitin' - lies hiding lies within lies.
No question that the country can "reinvent itself". The crucial question is, what will that be? An agricultural community that makes its bones selling Pepsi and cancer sticks to the world? A land bursting at the seams with WalMarts and Sonic drivethroughs? Entertainment Nation?
Look at what's happening out there. What is being torn down and/or shutdown? Factories, power plants, steel mills, aircraft assembly lines, national laboratories. What is being built? Lawyer's offices, sports medicine complexes, McDonald's, Walmarts. What is not being built? Oil refineries, baseload power stations, heavy industry, in short anything that makes a world-class industrial, economic, and military power.
Spain did it after the decline of her superpower status. It became a major tourist destination. We should invest more into the national parks. They cannot be outsourced.
Am I to believe this? I don't care about India's economy nearly as much as I am the U.S.'s.
Despite the glowing rhetoric, the fact remains that data shipped out of the country is unsecured and, if India ever gets mad at us and decides to sanction the US, we are SOL for technology and help desk needs. Corporate America won't appreciate that fact until they can't meet a contractual delivery date. Right now, it's all about the "profits" they are supposedly hauling in by the bucket load (which I sincerely doubt).
Tell that to the environmentalists and UN
"We don't need engineers any more then we need manufacturing! /endsarcasm" - Yasotay
Well, we do have a surplus of social engineers :-)
This is yet another weak point in the globalist argument that I have never seen the globalists successfully refute on any of these threads. Referring back to the original article:
That is really befuddling, because the US 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.
The crux of this argument is incredibly weak. It presupposes that those foreign developers will always honor and abide by international patent agreements. There may very well come a time when they do not feel so inclined. Take, for example, the PRC, which has on some occasions made reference to nuking certain West Coast cities in this country. Does anyone really think that a country whose leaders would say such things would feel bound by such quaint notions as abiding by international business law?
I'm sure this is true. Word ripples around: "Don't go into engineering if you want a job."
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