Its nice to know where all the jobs are going at least. Building America the new indian way!
"Published: August 3, 2004, 1:43 PM PDT
By Alorie Gilbert
Staff Writer, CNET News.com
German software maker SAP plans to hire 1,900 software programmers to work in its Bangalore, India, development center by the end of 2006, the company said on Tuesday.
The hiring blitz will bring the headcount at the center to 3,000, making it SAP's largest software research and development hub outside Germany, the company said. SAP, headquartered in Walldorf, Germany, plans to spend 20 million euros ($24 million) on the expansion of its Bangalore operations.
SAP chief executive Henning Kagermann discussed the move while visiting the Bangalore center this week.
The software maker, which employs 30,000 people worldwide, develops programs that help companies process orders, update staff records, track inventory and manage other business tasks. The company has been expanding its operations in India, which it says is one of the fastest growing markets for its software, for several years.
Competitors, including Oracle and PeopleSoft, have also opened development centers in India. The country has attracted the information technology industry with a well-educated workforce and programmers that work for a fraction of typical American and European wages.
SAP opened its Bangalore lab in 1998 and announced plans last year to pour $120 million into building up business there. The company recently opened a development lab in Shanghai, China."
High-End Technology Work Not Immune to Outsourcing
High-End Technology Work Not Immune to Outsourcing
By STEVE LOHR
Published: June 16, 2004
In the debate over high-technology work migrating abroad, there has been widespread agreement on at least one thing: the jobs requiring higher levels of skill are the least at risk.
Routine software programming and testing jobs, analysts agree, are the ones most susceptible to being grabbed by fast-growing Indian outsourcing companies. By contrast, the people who devise the early blueprints for projects - the software architects - have been regarded as far less likely to see their jobs farmed out.
But Microsoft contract documents show that as far back as 2001 the big company had agreed to pay two Indian outsourcing companies, Infosys and Satyam, to provide skilled "software architects" for Microsoft projects. The documents were obtained this month by WashTech, an organization of technology workers based in Seattle, which gave copies to The New York Times.
"The policy prescription you hear from people again and again as the response to the global competition of outsourcing is for Americans to move to high-end work," said Ronil Hira, an assistant professor for public policy at the Rochester Institute of Technology. "It's important to dispel the myth that high-end work is immune to offshore outsourcing."
"What is not clear," Mr. Hira added, "is how much of that high-end work will go abroad."
A Microsoft spokeswoman, Stacy Drake, said that as a matter of policy the company did not comment on individual contracts with suppliers. But, she said, "we often use outside companies for projects."
The outside contractors, Ms. Drake said, are used to bring in specialized expertise Microsoft may not have internally or to bring additional technical support to a project.
Still, Ms. Drake said, building the "core intellectual property" in Microsoft products is left to full-time company employees.
Though definitions vary, software architects are highly skilled workers who often earn six-figure salaries in the United States. The Microsoft contracts with Infosys and Satyam show that the work of software architects, senior software developers and software developers was being done by employees of the Indian companies working at Microsoft facilities in the United States.
Their work did not come cheap for Microsoft, which was billed $90 an hour for software architects, or at a yearly rate of more than $180,000. Senior software developers were billed at $72 an hour and software developers $60 an hour.
The on-site work, said Mr. Hira, an expert on offshore outsourcing, is usually done by Indian software engineers who come to the United States on H-1B visas, which allow foreign workers to be employed in the United States for up to six years.
The Indian workers themselves are paid a fraction of what their employers collect. The top annual salaries paid by Indian outsourcing companies to Indian software experts working in the United States range up to $40,000 or so, Mr. Hira said.
The contracts also say that for short stints of work, less than 90 days, Microsoft will pay for round-trip economy airfare for travel between India and the United States.
The contracts also include work done in India, by project managers and by software development and testing engineers. The billing rate for this work ranges from $36 an hour to $23 an hour.
A spokeswoman for Infosys said the company did not comment on its contracts, and a Satyam spokesman could not be reached.
Critics of the outsourcing trend regard such agreements with Indian contractors, with work done both in the United States and in India, as a step toward shifting more and more skilled technology jobs overseas.
"Microsoft has hired vendors whose whole reason for being is to transfer work offshore," said Marcus Courtney, president of WashTech, an affiliate of the Communications Workers of America.
The foreign competition for work at Microsoft, Mr. Courtney said, will help the company's management put more pressure on wages for its American workers and reduce employee benefits.
Last month, Microsoft announced that it planned to cut costs by an estimated $80 million a year by trimming prescription drug benefits, tightening parental leave policies and making it more expensive to buy Microsoft shares through the employee stock purchase plan.
Despite its use of foreign contract workers, Microsoft expects to add 3,000 to 3,500 full-time employees to its United States payroll of 37,000 in the fiscal year that ends in July.
U.S. Is Losing Its Dominance in the Sciences
The United States has started to lose its worldwide dominance in critical areas of science and innovation, according to federal and private experts who point to strong evidence like prizes awarded to Americans and the number of papers in major professional journals.
Foreign advances in basic science now often rival or even exceed America's, apparently with little public awareness of the trend or its implications for jobs, industry, national security or the vigor of the nation's intellectual and cultural life.
"The rest of the world is catching up," said John E. Jankowski, a senior analyst at the National Science Foundation, the federal agency that tracks science trends. "Science excellence is no longer the domain of just the U.S."
Even analysts worried by the trend concede that an expansion of the world's brain trust, with new approaches, could invigorate the fight against disease, develop new sources of energy and wrestle with knotty environmental problems. But profits from the breakthroughs are likely to stay overseas, and this country will face competition for things like hiring scientific talent and getting space to showcase its work in top journals.
One area of international competition involves patents. Americans still win large numbers of them, but the percentage is falling as foreigners, especially Asians, have become more active and in some fields have seized the innovation lead. The United States' share of its own industrial patents has fallen steadily over the decades and now stands at 52 percent.
A more concrete decline can be seen in published research. Physical Review, a series of top physics journals, recently tracked a reversal in which American papers, in two decades, fell from the most to a minority. Last year the total was just 29 percent, down from 61 percent in 1983.
China, said Martin Blume, the journals' editor, has surged ahead by submitting more than 1,000 papers a year. "Other scientific publishers are seeing the same kind of thing," he added.
Another downturn centers on the Nobel Prizes, an icon of scientific excellence. Traditionally, the United States, powered by heavy federal investments in basic research, the kind that pursues fundamental questions of nature, dominated the awards.
But the American share, after peaking from the 1960's through the 1990's, has fallen in the 2000's to about half, 51 percent. The rest went to Britain, Japan, Russia, Germany, Sweden, Switzerland and New Zealand.
"We are in a new world, and it's increasingly going to be dominated by countries other than the United States," Denis Simon, dean of management and technology at the Rensselaer Polytechnic Institute, recently said at a scientific meeting in Washington.
Europe and Asia are ascendant, analysts say, even if their achievements go unnoticed in the United States. In March, for example, European scientists announced that one of their planetary probes had detected methane in the atmosphere of Mars -- a possible sign that alien microbes live beneath the planet's surface. The finding made headlines from Paris to Melbourne. But most Americans, bombarded with images from America's own rovers successfully exploring the red planet, missed the foreign news.
More aggressively, Europe is seeking to dominate particle physics by building the world's most powerful atom smasher, set for its debut in 2007. Its circular tunnel is 17 miles around.
Science analysts say Asia's push for excellence promises to be even more challenging.
"It's unbelievable," Diana Hicks, chairwoman of the school of public policy at the Georgia Institute of Technology, said of Asia's growth in science and technical innovation. "It's amazing to see these output numbers of papers and patents going up so fast."
Analysts say comparative American declines are an inevitable result of rising standards of living around the globe.
"It's all in the ebb and flow of globalization," said Jack Fritz, a senior officer at the National Academy of Engineering, an advisory body to the federal government. He called the declines "the next big thing we will have to adjust to."
The rapidly changing American status has not gone unnoticed by politicians, with Democrats on the attack and the White House on the defensive.
"We stand at a pivotal moment," Tom Daschle, the Senate Democratic leader, recently said at a policy forum in Washington at the American Association for the Advancement of Science, the nation's top general science group. "For all our past successes, there are disturbing signs that America's dominant position in the scientific world is being shaken."
Mr. Daschle accused the Bush administration of weakening the nation's science base by failing to provide enough money for cutting-edge research.
The president's science adviser, John H. Marburger III, who attended the forum, strongly denied that charge, saying in an interview that overall research budgets during the Bush administration have soared to record highs and that the science establishment is strong.
"The sky is not falling on science," Dr. Marburger said. "Maybe there are some clouds -- no, things that need attention." Any problems, he added, are within the power of the United States to deal with in a way that maintains the vitality of the research enterprise.
Analysts say Mr. Daschle and Dr. Marburger can both supply data that supports their positions.
A major question, they add, is whether big spending automatically translates into big rewards, as it did in the past. During the cold war, the government pumped more than $1 trillion into research, with a wealth of benefits including lasers, longer life expectancies, men on the Moon and the prestige of many Nobel Prizes.
Today, federal research budgets are still at record highs; this year more than $126 billion has been allocated to research. Moreover, American industry makes extensive use of federal research in producing its innovations and adds its own vast sums of money, the combination dwarfing that of any other nation or bloc.
But the edifice is less formidable than it seems, in part because of the nation's costly and unique military role. This year, financing for military research hit $66 billion, higher in fixed dollars than in the cold war and far higher than in any other country.
For all the spending, the United States began to experience a number of scientific declines in the 1990's, boom years for the nation's overall economy.
For instance, scientific papers by Americans peaked in 1992 and then fell roughly 10 percent, the National Science Foundation reports. Why? Many analysts point to rising foreign competition, as does the European Commission, which also monitors global science trends. In a study last year, the commission said Europe surpassed the United States in the mid-1990's as the world's largest producer of scientific literature.
Dr. Hicks of Georgia Tech said that American scientists, when top journals reject their papers, usually have no idea that rising foreign competition may be to blame.
On another front, the numbers of new doctorates in the sciences peaked in 1998 and then fell 5 percent the next year, a loss of more than 1,300 new scientists, according to the foundation.
A minor exodus also hit one of the hidden strengths of American science: vast ranks of bright foreigners. In a significant shift of demographics, they began to leave in what experts call a reverse brain drain. After peaking in the mid-1990's, the number of doctoral students from China, India and Taiwan with plans to stay in the United States began to fall by the hundreds, according to the foundation.
These declines are important, analysts say, because new scientific knowledge is an engine of the American economy and technical innovation, its influence evident in everything from potent drugs to fast computer chips.
Patents are a main way that companies and inventors reap commercial rewards from their ideas and stay competitive in the marketplace while improving the lives of millions.
Foreigners outside the United States are playing an increasingly important role in these expressions of industrial creativity. In a recent study, CHI Research, a consulting firm in Haddon Heights, N.J., found that researchers in Japan, Taiwan and South Korea now account for more than a quarter of all United States industrial patents awarded each year, generating revenue for their own countries and limiting it in the United States.
Moreover, their growth rates are rapid. Between 1980 and 2003, South Korea went from 0 to 2 percent of the total, Taiwan from 0 to 3 percent and Japan from 12 to 21 percent.
"It's not just lots of patents," Francis Narin, CHI's president, said of the Asian rise. "It's lots of good patents that have a high impact," as measured by how often subsequent patents cite them.
Recently, Dr. Narin added, both Taiwan and Singapore surged ahead of the United States in the overall number of citations. Singapore's patents include ones in chemicals, semiconductors, electronics and industrial tools.
China represents the next wave, experts agree, its scientific rise still too fresh to show up in most statistics but already apparent. Dr. Simon of Rensselaer said that about 400 foreign companies had recently set up research centers in China, with General Electric, for instance, doing important work there on medical scanners, which means fewer skilled jobs in America.
Ross Armbrecht, president of the Industrial Research Institute, a nonprofit group in Washington that represents large American companies, said businesses were going to China not just because of low costs but to take advantage of China's growing scientific excellence.
"It's frightening," Dr. Armbrecht said. "But you've got to go where the horses are." An eventual danger, he added, is the slow loss of intellectual property as local professionals start their own businesses with what they have learned from American companies.
For the United States, future trends look challenging, many analysts say.
In a report last month, the American Association for the Advancement of Science said the Bush administration, to live up to its pledge to halve the nation's budget deficit in the next five years, would cut research financing at 21 of 24 federal agencies -- all those that do or finance science except those involved in space and national and domestic security.
More troubling to some experts is the likelihood of an accelerating loss of quality scientists. Applications from foreign graduate students to research universities are down by a quarter, experts say, partly because of the federal government's tightening of visas after the 2001 terrorist attacks.
Shirley Ann Jackson, president of the American Association for the Advancement of Science, told the recent forum audience that the drop in foreign students, the apparently declining interest of young Americans in science careers and the aging of the technical work force were, taken together, a perilous combination of developments.
"Who," she asked, "will do the science of this millennium?"
Several private groups, including the Council on Competitiveness, an organization in Washington that seeks policies to promote industrial vigor, have begun to agitate for wide debate and action.
"Many other countries have realized that science and technology are key to economic growth and prosperity," said Jennifer Bond, the council's vice president for international affairs. "They're catching up to us," she said, warning Americans not to "rest on our laurels."