[Vision2020] Export of core tech jobs seen as threat

Mon, 14 Jul 2003 08:42:46 -0700

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Export of core tech jobs seen as threat

By RACHEL KONRAD
Associated Press

SAN JOSE - 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.

''I told him, 'Unless you're planning to do this as a path to technical
sales, don't do it,''' said Kerrigan, who lives in Oakland. ''He won't =
be
able to have a career designing and building stuff because all those =
jobs
have moved to India.''

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.

The hemorrhaging of tens of thousands of technology jobs in recent years =
to
cheaper workers abroad is already a fact of life -- as inevitable, U.S.
executives say, as the 1980s migration of Rust Belt manufacturing jobs =
to
Southeast Asia and Latin America.

But a new wave of technology outsourcing -- involving tasks that involve
greater skills -- could be cutting to the industry's bone, threatening =
to
prolong the three-year U.S. economic downturn.

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.

''We're giving countries like China and India the support they need to =
build
up their technology industries, and the result could disadvantage us in =
the
long run,'' said Phil Friedman, an electrical engineer and chief =
executive
of New York-based Computer Generated Solutions, a 1,200-employee =
software
company that targets the apparel industry.

''We outsourced electronics manufacturing. We're closing steel mills. =
Every
week, 400,000 people file for new unemployment claims,'' said Friedman, =
a
54-year-old Ukrainian native who immigrated in 1976. ''At the same time,
we're shipping tech jobs offshore -- it's a shortsighted approach and =
cheats
the American work force.''

Cost-conscious executives have been shifting lower-level tech jobs in =
data
entry and systems support abroad to cheaper labor markets for more than =
a
decade. 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; Boston; and Austin, Texas.

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.

Roughly 27,000 technology jobs moved overseas in 2000, according to a
November study by Forrester Research. It predicts that number will =
mushroom
to 472,000 by 2015 if companies continue to farm out computer work at
today's frenzied pace.

According to Forrester, 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.

''We intend to invest in the fastest-growing markets, and those are =
India,
Russia and China -- that's the long-term plan,'' Intel spokesman Chuck
Mulloy said.

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class=3Dheadline>Export of core tech jobs seen as threat</SPAN><BR><SPAN =

class=3Ddeck> By =
RACHEL=20
KONRAD Associated =
Press 
SAN JOSE -=20
Peter Kerrigan encouraged friends to move to Silicon Valley=20
throughout the 1980s and '90s, wooing them with tales of lucrative jobs =
in a=20
burgeoning industry.
But he lost his network engineering job at a major telecommunications =
company=20
in August 2001 and remains unemployed. Now 43, the veteran programmer is =
urging=20
his 18-year-old nephew to stay in suburban Chicago and is discouraging =
him from=20
pursuing degrees in computer science or engineering.
''I told him, 'Unless you're planning to do this as a path to =
technical=20
sales, don't do it,''' said Kerrigan, who lives in Oakland. ''He won't =
be able=20
to have a career designing and building stuff because all those jobs =
have moved=20
to India.''
Like many unemployed programmers, Kerrigan blames the sour labor =
market on=20
offshore outsourcing -- the migration of tech jobs to relatively =
low-paid=20
contractors or locally hired employees in India, China, Russia and other =

developing countries.
The hemorrhaging of tens of thousands of technology jobs in recent =
years to=20
cheaper workers abroad is already a fact of life -- as inevitable, U.S.=20
executives say, as the 1980s migration of Rust Belt manufacturing jobs =
to=20
Southeast Asia and Latin America.
But a new wave of technology outsourcing -- involving tasks that =
involve=20
greater skills -- could be cutting to the industry's bone, threatening =
to=20
prolong the three-year U.S. economic downturn.
Some who oppose the trend, which such industry stalwarts as =
Hewlett-Packard,=20
IBM, Dell and Microsoft are embracing, believe it could even usher in =
the end of=20
American domination in technology.
''We're giving countries like China and India the support they need =
to build=20
up their technology industries, and the result could disadvantage us in =
the long=20
run,'' said Phil Friedman, an electrical engineer and chief executive of =
New=20
York-based Computer Generated Solutions, a 1,200-employee software =
company that=20
targets the apparel industry.
''We outsourced electronics manufacturing. We're closing steel mills. =
Every=20
week, 400,000 people file for new unemployment claims,'' said Friedman, =
a=20
54-year-old Ukrainian native who immigrated in 1976. ''At the same time, =
we're=20
shipping tech jobs offshore -- it's a shortsighted approach and cheats =
the=20
American work force.''
Cost-conscious executives have been shifting lower-level tech jobs in =
data=20
entry and systems support abroad to cheaper labor markets for more than =
a=20
decade. But now they are exporting highly paid, highly skilled positions =
in=20
software development -- jobs that have been considered intrinsic to =
Silicon=20
Valley and tech hubs such as Seattle; Boston; and Austin, Texas.
Critics say it's the equivalent of exporting not just the automobile=20
industry's assembly line jobs -- but the core engineering and car design =
jobs,=20
too.
Roughly 27,000 technology jobs moved overseas in 2000, according to a =

November study by Forrester Research. It predicts that number will =
mushroom to=20
472,000 by 2015 if companies continue to farm out computer work at =
today's=20
frenzied pace.
According to Forrester, companies in the United States and Europe =
will spend=20
28 percent of their information technology budgets on overseas work in =
the next=20
two years.
Boeing, Dell and Motorola have opened software development centers in =
Russia.=20
Intel employs 400 full-time Russian software research engineers and =
nearly 200=20
others in marketing and sales, wireless Internet access and modem =
projects.
Santa Clara-based Intel entered the Russian market with a small =
contract=20
project three years ago. But within months, the world's largest chip =
maker hired=20
all the programmers who write compiler software to optimize the =
microprocessors'=20
performance, and opened the Russia Software Development Center in Nizhny =

Novgorod.</P>
<P>''We intend to invest in the fastest-growing markets, and those are =
India,=20
Russia and China -- that's the long-term plan,'' Intel spokesman Chuck =
Mulloy=20
said.</P></SPAN><!-- end body-content --></BODY></HTML>

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