What's behind the tech brain drain?

Date: Thursday, February 13, 2003 1:58 PM

H-1B and JOB DESTRUCTION NEWSLETTER

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COMMENTARY--There's a reason companies like ZDNET are outsourcing their
U.S. writing to www.ZDNETIndia.com - they are smarter than the
imbeciles that pretend to be journalists at ZDNET and they even know
English better. Let's hope the managers of ZDET wise up and move their
entire company to India so that we no longer have to read anti-American
diatribes like the one below. Until U.S. schools teach kids how to
spell, write and think, we should no longer allow writers to have jobs
here - they can all be BPOed.

http://zdnet.com.com/2100-1107-984454.html

What's behind the tech brain drain?

By Michael Kanellos

Special to ZDNet
February 13, 2003, 5:34 AM PT
URL: http://zdnet.com.com/2100-1107-984454.html
COMMENTARY--There's a reason U.S. high-tech companies are hiring an
increasing number of engineers and other employees from overseas: In
many cases, they are smarter than us.

Often lost in the debate over H-1B visas and the announcements marking
another ground breaking ceremony by a western company in Asia is the
slow, and arguably inevitable, globalization of the tech industry. In
the '80s and '90s, other nations saw how the United States benefited
from the computer revolution and began to change their tax structures
and invest in university capabilities.

France and Spain have invested heavily to transform a few selected
university departments into centers for analog and microprocessor chip
design. China, while attractive for its low labor rates, has also
become a research and development center. Microsoft's second largest
lab sits in Beijing.

Russia, meanwhile, is using its long history of mathematics to enter
the industry. Many of the algorithms behind Intel's communications
products and the software emerging from the company's labs come from
its research center in Nizhny Novograd. Cellular companies are also
increasingly working with Russian scientists, both there and at U.S.
schools such as the University of California, San Diego.

"There is an awakening of the issue of manufacturing versus R&D" among
countries increasing tech capabilities, said Alex Pepe, Motorola vice
president and director of strategy for technology and manufacturing in
semiconductor products. "Countries that have focused exclusively on
manufacturing are discovering that as soon as it's cheaper to do it
somewhere else, they (corporations) will move."

Concurrently, the United States is not minting graduates in the hard
sciences like it used to. The National Science Foundation announced
last week that the number of Ph.D.s in engineering and science dropped
to 25,509 in 2001, an eight-year low. Further, the percentage of these
doctorates going to foreign residents rose: In engineering, 41.1
percent of the doctorates went to U.S. citizens in 2001, compared with
43.3 percent in 1998, according to the study.

Lower labor costs aren't the sole reason for the shift.
Cost cutting, of course, remains a driving force behind many elements
of the global push. Call centers are being erected in India and in the
more remote regions of Canada because labor is cheaper than in the
United States or Europe. Similarly, many software projects, such as bug
testing, are being ferried to developing nations because these
functions can be learned rapidly.

In a sense, the software industry is going through what the hardware
manufacturing industry experienced 15 years ago when PC and chip
manufacturing migrated to Taiwan. First, Taiwan specialized in
manufacturing basic products like circuit boards. Now it makes around
half the world's notebooks and designs many of them as well. Classic
tech employees aren't the only ones affected: Some media companies now
use cheaper copy editors in India to produce the news.

Still, lower labor costs aren't the sole reason for the shift. It may
account for the bulk of the jobs, but not the highest paying ones. With
its anti-layoff laws, getting employees in France isn't like hiring day
laborers in a parking lot. Some U.S. companies are also expected to
increase operations soon in Cambridge, England.

So what's the United States to do? First, the educational system needs
to be strengthened so that more high-school graduates will eventually
be directed toward the most challenging fields. Better explaining the
field to high school students will also help. One engineer consultant I
spoke to said he couldn't interest his girlfriend's son in the
profession until he told him about his salary and five weeks of
vacation a year.

Give anyone who gets a Ph.D. in a select field a green card.
Second, politicians and high-tech companies should reinvigorate the
concept of the melting pot: Rather than discourage foreign students or
workers coming here, the United States should court them. Give anyone
who gets a Ph.D. in a select field a green card. Bilingual employees
that can straddle both companies are some of the most heavily recruited
today. Issuing green cards to new graduates, moreover, would reduce the
ability of companies to hire H-1B visa holders cheaply.

Third, the United States should take stock of its inherent skills.
Although universities overseas have been catching up with the United
States in terms of minting graduates, the United States still has an
edge when it comes to project management and marketing. Engineers in
China don't get this sort of training, according to several executives.
In other words, backslapping, the kind of thing learned at keg parties
at college, is a valued ability.

Smart people are going to be born overseas. The best thing the United
States can do is woo them.

Department Editor Michael Kanellos will chronicle the fortunes of
promising start-ups in this regular column. If you've heard of a young
company with a hot technology, he wants to know about it. Kanellos also
runs the Enterprise Computing and Personal Technology sections at CNET
News.com.

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