Cisco to invest US$50 million, triple workforce in India's Bangalore

India Daily ^ | Oct. 21, 2005 | Harish Baliga

[jb6]

Cisco is bullish on India and cannot wait to use Indian expertise for research and development.

Cisco Systems Inc. will hire more engineers in India than in the United States for its research and development work over the next three years, the company's chief executive said Friday.

President and CEO John Chambers said the company would invest US$50 million (A41.83 million) to set up a second research and development center in Bangalore, India's technology hub, and triple its workforce here to more than 4,000 by 2008.

He said this would mean more engineers are hired in India than in the U.S. over the next three years.

Cisco currently employs 1,400 engineers at its existing center in Bangalore.

"This (new) R&D center will be the second major site for Cisco after the U.S.," the Dow Jones Newswires quoted Chambers as saying. "In terms of R&D efforts, India will grow faster in absolute numbers compared to the U.S," he said during a visit to Bangalore.

On Wednesday, Chambers met senior Indian government officials in New Delhi and announced that Cisco will spend US$1.1 billion (A0.92 billion) in India over the next three years in the company's largest investment outside the United States. The money will be mostly invested in development of network infrastructure and related technologies.

[jpsb]

"The design/engineering of a product"

Design/Engineering/Innovation will go where manufacturing goes.

[phil_will1]

"The fact that manufacturing goes overseas does not imply that design/engineering will follow."

I disagree. It isn't going to make sense to have R&D on one side of the world and manufacturing on the other, particularly when engineering talent can be added for a fraction of the domestic cost offshore. There is a whole "ecosystem" that has to be in place for manufacturing to thrive. That support environment is increasingly going offshore. It is becoming increasingly difficult to envision the trend reversing, because the USA is losing the whole infrastructure that has to be in place for manufacturing to flourish.

These engineering jobs that Cisco is adding in India are not an isolated incident. As A. Pole has pointed out, Cisco believes that China will be the leading area of the world for information technology sometime between 2020 and 2040 and they are making plans to be a Chinese company by that time.

[ottothedog]

Manufacturing is fundamentally different from R&D. For one thing a 20% improvement in cost in R&D is probably not going to have as much effect on the bottom line as it would in manufacturing. The cultures of a manufacturing organization and R&D are totally different. Manufacturing is all about operational efficiency, while R&D centers on innovation.

There are a number of "fabless" companies out there (for instance, Sun is unveiling their new SPARC chip today -- manufactured by TI), who obviously view them as two separate activities. The iPod was designed by a British guy working for an American company, and is manufactured in China.

[jpsb]

Engineering is going to happen where the problems to solve are, (manufacturing plants) engineering as in tool making, process development, etc, the nuts and bolts of innovation that make up 90% of R&D. If you think the US can give away manufacturing but keep R&D you are mistaken. R&D is following manufacturing as this article illustrates, soon the USA will be just like Mexico. The few very rich and the many very poor, current economic polices are killing the (GOP voting) American middle class. I find it strange that the GOP can think that people who's jobs were lost to an "out sourcing" policy encouraged by the GOP, will vote GOP. LOL, they are out of their minds in D.C. Every lost job is more then one lost vote, that worker has friends and family, people uneffected will begin to worry about thier jobs. The GOP is going to pay a big price for it's insane trade policies that deliberately but US jobs at risk.

[ottothedog]

So if your thesis was true, you would expect that Puerto Rico would be taking over all research for big pharma. It's not. We will just have to disagree about whether manufacturing capability implies product development ability.

I agree that the issue plays out badly for the GOP, but what do you expect the government to do about it? It is kinda like the hubub over oil and gas prices. You think the politicians are going to do a better job of sorting out the issues invovled? No thanks.

As I recall, in the late 80's and early 90's the Japanese were taking over, now it is the Indians or Chinese. I don't get why all the gloom and doomers think that the U.S. is so weak that it can't compete economically against third world nations.

[jpsb]

"As I recall, in the late 80's and early 90's the Japanese were taking over"

And they largely did in the industries they targeted, steel, comsumper electronics, autos, robotics, etc. Japan cost the USA millions of high paying jobs, fortunately the home computer industry started at about the same time and it generated more jobs then were lost in industries taken over by Japanese. And notice that all/most the R&D in these industries is being done in Japan. Very little comsummer electronics R&D going on in the USA.

[jb6]

Glad to see you have so much to say. What's the matter, finding it harder to protect the giving away of our nation? Typical.

[jb6]

Take a look at the latest cell phones:

Japanese technology
Taiwanese design
Chinese manufacture

What's the American role? Branding and distribution.

[jb6]

And, with regard to all the money supposedly going offshore...much of it has actually come directly back to the USA as tourism (I would say the *real* winner here is Mickey Mouse).

Great, we've gone from the world manufacturing power house, the world's creditor and inovator to the world's dumping grounds for THEIR finished goods, debtors and entertainers. Wow, now that's evolution.

[jb6]

Actually if you check, some of the biggest pushers for a national health care disaster are the mega corps who don't want to pay for insurance. Just like the culprits who are pushing for the government to handle pensions.

[jb6]

Do you think that serious steps that a Democrat would take to stop outsourcing would improve the domestic employment situation in the tech sector or drive more of these companies out of the country? Do you think that Democrats have anything to offer disgruntled "displaced" workers? How about the unions? Do you think spending a large fraction of your life whining about free trade is going to increase your chances of landing a good job in your area of expertise?

Funny, I didn't know that the Founding Fathers were democraps...but yet their trade policies were protectionist and tariff based (one of the few ways the government has to get legal money) and pro American industry. Best dig them up and tell them they were all socialists.

[jb6]

What everyone likes to forget (amongst the Free Traitors) is that a corporation, as an entity, is an agreement between a group of people and the Federal government. As such, both that group of people and the Federal government carry certain burdons associated to the social agreement. The corporations receive the benefits of infrastructure, maintained capitalistic markets, military security, diplomatic representation and judicial defense. Unfortunetly, these same said modern corps seem to feel that this is a one way street, that they owe nothing back to the society/government that allows them to exist.

I say fine, when over 80% of your work force isn't American, go register somewhere else and let that nation pay for your interests/defenses.

[RFT1]

What is even more ironic is that around 40-45% of those who benifit from open borders and "free" trade, educated white collar professionals, are diehard Democrats anyways.

[ottothedog]

Hmmm...isn't there that company in Schaumburg, IL (symbol MOT)? Samsung is Korean. Nokia is European. RIM is Canadian. I have a Treo (at least a US company). Qualcomm (they seem to be hiring in the US): Qualcomm jobs

The market for these phones is global with Asia being the fastest growing, so a global set of companies is not to be unexpected. And let's take a look at how those Japanese have been doing...

Ok, so you guys are pessimistic. I'm not. I still don't know what you expect the government to do.

[jb6]

Actually, you should check out Carl Marx's speach PRO Free trade. He saw it as a great way to destroy national identities and central governments and to create a huge poor worker base and a small super rich elite that would be easy to destroy for the future revolution. So, Free Traitors are either socialists/marxists or useful idiots.

[jb6]

The market for these phones is global with Asia being the fastest growing, so a global set of companies is not to be unexpected. And let's take a look at how those Japanese have been doing...

And what market tech good isn't global? And what market tech good are we the innovators or leading producers of....I'll wait for the answer.

[ottothedog]

The Japanese economy has stunk over the past 15 years. It is just not starting to recover. See the chart above.

Steel has been an awful business (meaning nobody makes money) for a long time because for some unknown reason gubmints in every country subsidizes it (for the exception to this check out US minimills).

The Japanese have owned consumer electronics for a long, long time. This is because they have put out some nice stuff. There are now US companies that put out some nifty gadgets (iPod, XBOX, Treo for instance). Who is the leader in digital cameras? Kodak!

The U.S. automobile industry is similar to consumer electronics in that they have had difficulty putting out a good quality product that people wanted. Although Chrysler of all people innovated the most (minivan and SUV). The Germans and Japanese now have plants here.

[ottothedog]

MP3 Players, Digital Cameras, Software.

[jb6]

Software? Maybe you missed all those tech centers and R&D heading to China, India, Taiwan and Russia? IBM just laid off 13,000 Americans and Europeans and hired 15,000 Indians in R&D.

[ottothedog]

Maybe I misunderstood your question. I thought you asked what markets we are the leaders in, and software definitely qualifies.

I understand your concern (if for no other reason, than it affects me, too). I just don't know what you expect anyone to do about it. That and I am optimistic about our ability to compete in the global marketplace. I think that the US has lots of structural advantages over most other countries.