Magazine

Outsourcing: BusinessWeek Readers Respond


Our Mar. 1 Cover Story, "Will outsourcing hurt America's supremacy?" -- coming amid the raging debate over outsourcing and the so-called jobless recovery in the U.S. -- generated many thoughtful letters from readers. Here is a sample:

THE IMMIGRANT PERSPECTIVE

I read "Will outsourcing hurt America's supremacy?" with great interest. I am a 60-year-old Indian immigrant, and I've been living here in the U.S. for the past 30 years. When I saw those two pictures, American Stephen Haberman and Indian Deepa Paranjpe side by side, I had this funny feeling that both were my children, and I wouldn't like to see either of them hurt. Yes, globalization is inevitable, and no one can really stop outsourcing if it helps companies become more efficient and productive. But there must be a definite plan to prevent any dislocation and misery here in the U.S.

Here is my proposal: All companies that profit and benefit from outsourcing should pay about 10% of their profits to a fund from which our American kids can be helped to learn higher levels of programming that cannot be outsourced or to train for similar high-salary good jobs.

It was an excellent and fair article in the great tradition of BusinessWeek.

Vijay Sabnis

La Crosse, Wis.

Having graduated from Indian Institute of Technology, I can confidently vouch for Deepa's technical skills and the high quality of work that she would produce. IIT's graduates, by any standard, are among the best on the globe, and Deepa's services can be obtained at a far more competitive price than in the U.S. Then what about Stephen?

Doing an M.S. in computers at Carnegie Mellon University is an aspiration of many IITians after finishing their B.S. My full respect to Stephen for his qualifications. Yet any MBA would instantly point out that software programming is not Stephen's value proposition, as it is for Deepa. Stephen will best be served if he specializes in IT management, an area where Indians have yet to prove themselves. Whatever the outcome of the debate on this subject, watching Deepa's and Stephen's lives as they evolve over time would be an excellent manifestation of the globalization of the world's economy and the shape of things to come.

Srinivas Balla

Fairfax, Va.

OUTSOURCING THE EPICENTER

What your article overlooks is the contribution foreign workers have had in developing the American software industry. In the past, the goal for qualified Indians such as Deepa was to make it to the U.S., and in the process add to the intellectual capital of this country. Now, with a booming job market at home, a significant increase in the standard of living for the upper-middle class, and higher job security, fewer Indians are keen on moving to the U.S. The real threat will be if the epicenter for software innovation shifts from the U.S. to India. If the Deepas of the world stay home, this will cost us dearly in the long term.

Gaurov Dayal

Rockville, Md.

TO THE EDUCATED GO THE SPOILS

Robert D. Hof hit the wrong target when he wrote that American tech workers [should look in] "a mirror" for the cause of outsourcing of jobs ("Now more than ever, innovation is the answer," Commentary, Mar. 1). As president of the Institute of Electrical & Electronics Engineers in 1985, I learned that 50% or more of PhDs in electrical engineering and computer science being granted by U.S. universities were going to students from other countries -- India, Taiwan, Korea, China. That's been true ever since. Fortunately, many of those graduates stayed in the U.S. (40% of electrical engineers in Silicon Valley are from abroad), "creating cutting-edge technologies" and starting businesses to use them. Unfortunately, more and more of them now are going home, as BusinessWeek noted recently. They take with them capital, as well as experience and their U.S. education, enabling them to start businesses at home.

In this Information Age, it's clear that education is the key to tech jobs. Will the U.S. win or lose by American universities' strategy of giving the highest (and most expensive) technical education to foreigners, rather than to U.S. students?

Charles A. Eldon

Sierra Vista, Ariz.

NATURE OF THE TECH BEAST?

To some extent, the problem is that computer science has never had to grow up and work for a living. Moore's Law has given it everything it wanted without having to work for it. How else do we explain the lack of major breakthroughs over the last 25 years? (Any serious practitioner in the field will tell you, usually quietly, that it is our dirty little secret.) Perhaps this is the jolt that it needs.

John Day

Foxboro, Mass.

I spent nearly 40 years in IT designing custom systems, integrating information, and controlling projects. I retired from the EDS/GM account -- probably the greatest collection of talent ever assembled: 24,000 staff in 1985. Yet I find the business to be highly dysfunctional today. Too many executives in large organizations view IT as a cost and have ceded control to the techies. Really grasping what's going on is management's responsibility. My work in General Motors Corp. (GM) allowed a glimpse at how endless activity created massive duplication and redundancy, on the order of 30 times more code and 12 times more data than required. You can never get to a positive return on investment doing everything 10 times over!

In the '50s and '60s, very small teams or individuals created very powerful new information streams along with cost savings as they saw the whole system through, and never duplicated existing functions. We've lost that -- and sending it to India is no solution.

Vincent G. Robinson

Rochester Hills, Mich.

TAKE A LOOK AHEAD AND BEHIND

Microsoft Corp. (MSFT) CEO Steven A. Ballmer is cited as saying the shortfall of U.S. tech students worries him more than any other issue. Now, I'm not sure what a solution to this problem would look like, but I'm pretty sure it wouldn't look like Microsoft's India Development Center -- a Microsoft-created entity which, according to its Web site (microsoft.com/india/indiadev/company/), is the company's second development center outside of the U.S. and "a critical component of Microsoft's product development initiatives." It has "a strong 200 member team...currently developing 20 different products and technologies."

Unfortunately, Mr. Ballmer is like a lot of CEOs. He doesn't see the relationship between his actions and the results he decries: students will not prepare for jobs likely to leave the U.S.

Preston W. Black

Cincinnati

THE TALENT PIPELINE

Your excellent article failed to mention the role that a liberalized business immigration policy can play in helping to stem the outsourcing of high-tech jobs. Although H-1B professionals make up a tiny percentage of the U.S. workforce, as the world's best and brightest they play an important role in our economy. Many of these high-tech jobs lead to another five U.S. jobs down the line in high tech, manufacturing, or distribution. American companies that want to remain competitive will be left with no choice but to open plants abroad where these workers are located, benefiting those countries with the attendant boost to their job market -- jobs that would otherwise remain in the U.S. Halting professional work visas only harms our recovery, at a time when we need to keep those jobs here.

Tarik H. Sultan

Tucson

Reminder to George W. Bush: China and India will have zero electoral votes in the 2004 Presidential election.

Steve Barnhoorn

Hemlock, N.Y.

As you note, the most likely target for outsourcing software jobs is in the lower end, programming ("crank-turning") positions. In most companies, however, these are the beginning of the talent pipeline for higher-end jobs. How exactly does that pipeline get fed in the U.S. to ensure availability of high-end talent in future years? Unfortunately, it is our children's futures we are damaging, not our own. But wait, aren't we expecting our children's earnings to pay for our Social Security?

Nancy Giddings

Lester Prairie, Minn.

TWO VERY DIFFERENT FUTURES

You fail to mention the very important point that this country's future prosperity depends on global economic expansion, which outsourcing promotes. By outsourcing lower-level service and manufacturing jobs, we help create the new middle classes in those countries who then become potential consumers of our more sophisticated products and services.

For example, it has been estimated that as a result of the new buying power generated by the transfer of lower-level service and manufacturing jobs to India, an additional 100 million automobiles will be purchased there in the next 10 years. This could be a major opportunity for new jobs in our auto industry. Similar situations apply to other industries.

Perminder Bindra

Patterson, N.Y.

In today's globalized economy, it is very easy to label Indian software factories as sweatshops, but we Americans need to do some soul-searching and ask ourselves how, in this globally interconnected world, American labor alone can claim wages and salaries that are out of proportion with the rest of the world.

The U.S. of today is characterized, to paraphrase Galbraith, as a leisure society with conspicuous consumption of a magnitude other countries do not aspire to match coupled with extremely low savings rates. We need to understand how Indian programmers can live very comfortably on $10,000 a year. Perhaps the economic boom we enjoyed post-World War II is an aberration, and what we are witnessing these past two decades is the correction, first via China and now India.

Bala Venkatesh

Princeton, N.J. Re "The answer to outsourcing" (Editorials, Mar. 1), jobs at the narrow top of the IT pyramid rely more on intellect and personality, not retraining. And expanding Federal training to include programmers implies there is work to retrain them for. The problem with BusinessWeek's analogy with the '70s (OPEC) and '80s (Japan) overlooks that both caused fundamental shifts in the U.S. economy. OPEC-driven oil price increases set a new baseline of operating cost and Japanese auto makers forever changed Detroit. That we absorbed the changes and moved on didn't make them any less onerous.

Ed Heresniak

McGaheysville, Va.

I take great issue with your editorial, which suggests not worrying about all the little jobs moving overseas. You don't know what you're talking about. I have several neighbors and relatives with jobs that went to Mexico or the Pacific rim. They have wives, children, and no health insurance. How are they supposed to live and send their children to school? If you were to ask them if they would like to have their little jobs back, they would accept in a New York minute.

Gary Scott

Austin, Tex.


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