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DECEMBER 29, 2003
The Challenge From India "The rise of India" (Cover Story, Dec. 8) triggered an outpouring of vehement reader responses on both sides of the story's central argument. Here is a sample: How America Could Lose Perhaps India "will drive down costs in services," as you report, but that is small consolation for the laid-off manufacturing worker [in the U.S.] who retrained in information technology, only to see his second job go to India. Perhaps his third career should be in plumbing, painting, or gardening, as those jobs should not be outsourced anytime soon. I am all for helping the Indians and Chinese improve their economies, but not at my expense, or at the risk of my children's future, or the creation of a wasteland that was once a thriving heartland. Paul Herbig Angola, Ind. Andrew S. Grove points out that, to maintain America's edge, our software productivity must double. But what rational student would study computer science when there are no jobs to be had? When college tuition is rising much faster than inflation and the choice of a major has to be practical? When places like Silicon Valley are littered with unemployed engineers? When wages have dropped substantially and job security and benefits even more? When we outsource high-wage jobs, we are exporting prosperity. There are no replacement industries, or jobs, anywhere on the horizon. Megan Adams San Francisco Your authors subscribe to the fallacy that training and "updating skills" is the best way to survive the offshoring trend. This fallacy rests upon the assumption that an outdated skill set is behind the drive to offshore. It's not the skill set: It's the pay for the skill set. The edge that India has over America is an abundance of professionals willing to work for wages that are below the American poverty line. America lacks experienced engineers and software developers willing to work for $10,000 a year. No amount of training will change this economic fact. Scott Kirwin Wilmington, Del. I've got a master's in engineering and a good grasp of the business world. Would I tell my daughter to go into engineering? Hell, no. What skill set would you acquire if the same skill set can be acquired in a Third-World country for one-eighth (your figures) the price? Who will pay for the new "hot careers" in medicine if we are making only minimum wage? If you export every job but medicine, then who can pay for the visit to the doctor? John Thisler Broken Arrow, Okla. Your sophistic proposals regarding "Rising to India's challenge" (Editorials, Dec. 8), left me baffled. I haven't heard anyone make the argument that American IT workers aren't smart enough to compete. You say, however, that India represents a new competitive environment and that the U.S. "needs a public policy that recognizes this reality and improves science and engineering education." Exactly what educational deficiency are you proposing that we remedy? There are thousands and thousands of unemployed and underemployed IT workers in America right now. Is it your contention that their plight is in any way related to their lack of adequate education? Offshoring results from greed, self-interest, and self-preservation in the corner office. Your attempt to portray it otherwise by blaming either the victims or Washington -- rather than risk offending the corporations (read advertisers) who sing its praises -- is as transparent as it is disingenuous. Richard Surwilo Tulsa Your article failed to address an important question: Are Americans allowed to work in India? The answer is, only if they are directly or indirectly paid from a source abroad. There would be riots if foreigners were allowed to take jobs away from Indians. Anil Philip Overland Park, Kan. How America Could Gain The future of America depends upon innovation. Yet American immigration policy is designed to force many of our most innovative and well-trained science and engineering graduates to leave the country. And while forcing the best out, we are not letting the best in. Because of our concern about homeland security, many of the brightest foreign students are not entering American universities. We can build high walls and keep foreign students out, but in time, because of this, America will lose the global talent race. John Paul Douglas Richardson, Tex. As founder of a small software company, I believe offshore development is even more efficient than the raw numbers tell. Indians programmers have internalized a principle that American workers seem to have forgotten. If I ask them to add a small but unforeseen feature to our software at the last minute, they do not protest: "That's not in the spec!" They stay up all night to make it happen. They work 10 to 18-hour days; they work every other weekend, too. And they enjoy their jobs instead of grousing about deadlines or gouging the customer with extra charges. Terry Dunkle Danbury, Conn. As an Indian-American who would like to see improvements in both U.S. and Indian economies, I would like to know how corporate benefits from overseas information-technology-related ventures are passed on to U.S. consumers. This is particularly important in light of the upcoming Presidential primaries leading up to the 2004 elections. Unless the positive message gets out, the real advantages could get lost in campaign rhetoric that focuses on job losses rather than on consumer gains. Sushil Bhavnani Auburn, Ala. The highly educated entrepreneurs and innovators in India have fully embraced American-style capitalism. As an added bonus, they are bringing millions of dollars of revenue and cost savings to American shareholders each year. Fundamentally, if we want the jobs to remain in the U.S., we need to educate our children and give them the tools to succeed in the technology-driven marketplace. At least the anti-immigration activists in America should be happy: My relatives in India threw away their H1-B visa applications and stayed home. Sheela Chanda Rochester, N.Y. BusinessWeek has done a marvelous job moderating the discussion on outsourcing of manufacturing and IT jobs -- to China and India, respectively. Outsourcing, when done right, will help the U.S. maintain its preeminent position in the world. Business and engineering schools will have to adapt creatively to this emerging scenario. Although strictly business decisions are at the heart of these outsourcings, it is strategically good for the U.S. that two separate players are emerging in the manufacturing and high-tech sectors. As they say, it is better not to have all your eggs in one basket. A.V. Anilkumar Vanderbilt University Nashville As a first-generation Indian-American, it made me proud to read "The rise of India." However, I am alarmed by the perception that this rise is coming at the expense of the U.S. Whenever our economic model undergoes a transformation, as we witnessed with Japan's growing manufacturing prowess in the 1980s, Americans appear to go through some sort of a xenophobic phase initially. Eventually, the Japan that could say no ended up enduring a recession that lasted through most of the 1990s, while the U.S. that kept saying yes witnessed record economic growth during the same period! Jack Nargundkar Germantown, Md. China's Ample Brainpower China was depicted in the India story as a nation prospering on its "raw muscle of factory labor." But the nation's workforce is far from a mere source of factory labor. China boasts 50 million people possessing at least a college degree, and the highly educated in the population are increasing at a pace of 5 million per year. Implying that there is a lack of "brainpower" is both misleading and offensive. Jiyu Chen Melvindale, Mich. Venezuela: What Chávez Is Doing Right "Will Venezuelans sign up to dump Chávez?" (International Outlook, Dec. 1) treated the current government of Venezuela unfairly. First, the author repeated the opposition's charge that Hugo Chávez is "gutting democratic institutions." In fact, every change made by the Chávez Administration has been accomplished using democratic, constitutional, and peaceful means. Second, the article says that Hugo Chávez "ominously warned" signers of the recall petition that their names would be recorded. Yet when the media took his statement as a threat, he immediately issued a clarification, stating that his comments were intended to reassure people that they could verify that their signatures had been counted. It is also worth noting that signatures on petitions become public record in most U.S. states. Finally, you report that there is a danger that Hugo Chávez will declare a state of emergency. This is absurd. Chávez did not declare a state of emergency when the opposition staged a coup -- nor during a two-month-long opposition oil sabotage that devastated the economy. This contrasts sharply with his opponents' behavior: They suspended the constitution and imposed martial law when they took power for 48 hours in the 2002 coup. Bernardo Alvarez Herrera Ambassador of Venezuela Washington   Earnings Transparency: Through A Glass, Darkly I'm all for full disclosure and transparency ("The secret behind those profit jumps," Information Technology, Dec. 8), but it's a two-way street. Investors have to stop using earnings releases as their sole source of information and as a crutch for bad decisions. One cannot possibly derive all the information one needs to invest in a company by relying on a two-page earnings release. In the past two years, the business media, analysts, and investors have hounded the Securities & Exchange Commission and the Financial Accounting Standards Board to pass more rules and regulations -- and they did. So now we have accelerated filing deadlines, chief executive officer and chief financial officer certification for 10-Qs and 10-Ks, and more rules and regulations, resulting in 50-page 10-Qs and 100-page-plus 10-Ks. It is every investor's responsibility to actually sit down and read the 10-K and 10-Qs prepared at a great expense of time and money by the companies they are investing in. James Guilfoyle Manager External Reporting & Accounting Policy Corning Inc. Corning, N.Y. The accounting practices you described go on during every business cycle in many companies. It's just not obvious because FASB doesn't require disclosure of write-offs that were subsequently reversed. It starts with a few big companies announcing earnings shortfalls (say about early 2000). Then every company has a "come-to-jesus moment" and announces bad numbers (late 2000). Then everyone suffers in the market for a while until the recovery is well under way (say late 2002/early 2003). Now we can rebuild momentum in our earnings and make everyone happy. Bob Marinellie Millfield, Ohio Putting Aetna Under The Microscope It wouldn't take a top mind in the industry (Jack Rowe) to build Aetna's profits, as reported in "Aetna's painful recovery" (People, Dec. 8). All one has to do is eliminate 15,000 employees, reduce insured coverage, or eliminate their coverage. Frankly, a high school dropout could manage such a system. Donald P. Jackson Kalamazoo, Mich. Jack Rowe and Ron Williams should be commended for deploying strategic intent at Aetna and introducing differentiated offerings such as Aexcel. Sure, it's bound to offend some constituencies, but this is precisely why the carrot-and-stick approach is desperately needed to encourage cost efficiencies in our trillion-dollar-plus health-care industry. High-quality organizations and physicians need to be rewarded based upon proven outcomes and use of innovative approaches to care. Mark Kovarik Director, Financial Planning Mount Sinai Hospital New York
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