Concern over outsourcing, but no solutions

Thursday, 23 October 2003, 07:00 Hrs
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WASHINGTON: Concern was expressed at a hearing before the U.S. House Committee on Small Business on the outsourcing of high tech jobs to countries like India and China.

All those who testified noted that U.S. companies were moving more service jobs overseas because of some crucial advantages to expand globally.

However, those who testified before the committee differed in their views on how to prevent or even reverse the trend of high-tech jobs going overseas.

They pointed out that trade barriers were falling because India, Russia and China and many other countries had technological expertise and because high-speed digital connections and new technologies made it far easier to communicate from afar.

Besides this, for instance, a Java programmer in India, fresh out of college can be hired for $5,000 a year versus $60,000 a year in the U.S.

The technology is such that why be in New York, when you can be 9,000 miles away with far less expense, they said.

Witnesses before the committee, headed by Don Manzullo, Republican-Illinois, were Harris Miller, president of Information Technology Association of America (ITAA); Ron Hira, Institute of Electrical and Electronics Engineers (IEEE-USA); Robert Dupree, vice president of American Textile Manufacturers Institute (ATMI); and Natasha Humphries, a software engineer from Santa Clara, California.

Committee chairman Manzullo said moving American jobs offshore could have "serious consequences for the long-term economic viability of this country. The U.S. is in danger of losing its competitive advantage in the technology sector".

"Even though the U.S. economy has recovered from its most recent recession, it has largely been a jobless recovery," he added.

To combat the phenomenon, Manzullo urged passage of a bill that would exclude domestic manufacturers and producers from taxation of up to 10 percent. He also advocated a more U.S.-centred purchasing plan for the Department of Defence (DoD).

"It is imperative that Congress strengthen and fight for stronger 'Buy America' legislation," he said. "These provisions include increasing from 50 percent to 65 percent the amount of U.S. content required in major DoD purchases."

But Harris Miller, the ITAA president, was sceptical that legislation would solve the problem.

"ITAA believes that the U.S. cannot legislate or regulate its way out of this perplexing situation," he said in his written testimony. "At the same time, to do nothing ... is to risk an ever-increasing number of knowledge-worker jobs disappearing overseas."

Miller advocated "detailed analysis of the situation, examination of various policy and programmatic approaches to address identified challenges, and a plan of action to implement critical policies and programmes."

Miller said "We also need an increased spending by the federal government on Information Technology and R&D."

Ron Hira, who chairs the research and development policy committee at the Institute of Electrical and Electronics Engineers (IEEE-USA), disagreed, saying investment in education would fail without "reasonably secure" career opportunities for graduates.

Himself being of Indian ethnicity, Hira mentioned how Indian students largely opt for mathematics, science, engineering, R&D, software, chip design and computer technology. So much so they have built a vast pool of highly qualified technical personnel, making India, a country of more talent than capital.

"And while overseas outsourcing cannot be blamed for all of the unemployment facing American engineers, it certainly is a major contributing factor."

Natasha Humphries, who was laid off recently as a senior software quality assurance engineer, narrated her own personal experience of facing tough competition from H1-B visa professionals and from the offshore technical team in India.

Saying how "off-shoring has created a devastating economic climate throughout the U.S.", she suggested that Congress quickly revise current legislation and enact new legislation with incentives to maintain high tech jobs in the U.S.

Source: IANS
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