www.cnn.com/2003/TECH/biztech/07/14/moves.offshore.ap/index.html
Peter Kerrigan looks at an oscilloscope while working in his home. Story Tools start quote We intend to invest in the fastest-growing markets, and those are India, Russia and China -- that's the long-term plan. It predicts that number will mushroom to 472,000 by 2015 if companies continue to farm out computer work at today's frenzied pace. Help Hurt Not sure 26 VIEW RESULTS VOTE SAN JOSE, California (AP) -- Peter Kerrigan encouraged friends to move to Silicon Valley throughout the 1980s and '90s, wooing them with tales of lucrative jobs in a burgeoning industry. But he lost his network engineering job at a major telecommunications company in August 2001 and remains unemployed. Now 43, the veteran programmer is urging his 18-year-old nephew to stay in suburban Chicago and is discouraging him from pursuing degrees in computer science or engineering. Like many unemployed programmers, Kerrigan blames the sour labor market on offshore outsourcing -- the migration of tech jobs to relatively low-paid contractors or locally hired employees in India, China, Russia and other developing countries. Strengthening foreign tech Some who oppose the trend, which such industry stalwarts as Hewlett-Packard, IBM, Dell and Microsoft are embracing, believe it could even usher in the end of American domination in technology. Every week, 400,000 people file for new unemployment claims," said Friedman, a 54-year-old Ukrainian native who immigrated in 1976. But now they are exporting highly paid, highly skilled positions in software development -- jobs that have been considered intrinsic to Silicon Valley and tech hubs such as Seattle; Russia project grows start quote People in India are very ambitious and very well-educated, but they're also ready to invest in a company, and they have less of a tendency to move out of the company. Bill Gates said late last year that the expansion was part of an estimated $400 million in corporate investments in the subcontinent. On its corporate Web site, Microsoft lists dozens of Hyderabad openings, many requiring five years of experience, fluency in multiple computer languages, and college degrees in computer science -- far from the hourly telemarketer jobs that financial services and insurance companies exported to the Philippines and elsewhere in the early '90s. Critics say it's the equivalent of exporting not just the automobile industry's assembly line jobs -- but the core engineering and car design jobs, too. According to Forrester Research, companies in the United States and Europe will spend 28 percent of their information technology budgets on overseas work in the next two years. Boeing, Dell and Motorola have opened software development centers in Russia. Intel employs 400 full-time Russian software research engineers and nearly 200 others in marketing and sales, wireless Internet access and modem projects. Santa Clara-based Intel entered the Russian market with a small contract project three years ago. But within months, the world's largest chip maker hired all the programmers who write compiler software to optimize the microprocessors' performance, and opened the Russia Software Development Center in Nizhny Novgorod. Some say sending jobs abroad may cause American tech workers' wages to stagnate. Cuts payroll and training costs The average computer programmer in India costs $20 per hour in wages and benefits, compared to $65 per hour for an American with a comparable degree and experience, according to consulting firm Cap Gemini Ernst & Young. But executives say outsourcing offers advantages beyond wage differences. Jean-Marc Hauducoeur, a senior vice president at Cincinnati-based human resources consulting firm Convergys, said his 47,000-employee company will employ 6,000 customer service representatives and network engineers in India by year's end. Others say the genius of American enterprise is its leaders' knack for envisioning the next big thing -- and workers' ability to redefine job roles and retrain. Americans pioneering developments in nanotechnology and biotech will have far more job security than simple programmers, they argue. Bob Pryor, who heads the outsourcing practice of Cap Gemini Ernst & Young, said it's "naive" to think outsourcing software jobs could ruin America's tech dominance. We need to look at where we have strategic advantage -- whether it's resources or skills," Pryor said. They even enjoy living on the cutting edge -- taking courses in advanced computer languages, getting experience in a variety of business disciplines, and endorsing a philosophy of continuous improvement, he said. But many find it tough to reconcile their macro-economic outlook with their own unemployment. This material may not be published, broadcast, rewritten, or redistributed. Story Tools 28 Click Here to try 4 Free Trial Issues of Time!
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