High-Techs Latest Excuse
High-Techs Latest Excuse
Date: Friday, July 11, 2003 7:04 PM
JOB DESTRUCTION NEWSLETTER
www.ZaZona.com
According to Michael Malone, we (the people that oppose H-1B and
outsourcing) are all a bunch of economic Cassandras. He poses this
question for the Cassandras of the world:
"Ask yourself: would you rather be writing code for a few bucks a day
in Bangalore, or becoming a billionaire in Palo Alto?"
Malone's message of brotherly love doesn't stop there. He explained
that Silicon Valley is a world of PhDs from Poland to Pakistan while
Cupertino, home of Apple Computer, is mostly a bunch of hard working
Chinese. He said those ambitious PhDs will create most of the new jobs
in the U.S. economy. Instead of scapegoating foreign PhDs, Malone said
that we should be embracing them for creating all those jobs and
inventing all of those high tech goodies that we use.
Malone may inspire a whole new trend in Silicon Valley. Soon we might
start seeing bumper stickers on the back of SUVs that say: "HAVE YOU
HUGGED AN H-1B TODAY?" California politicians such as Governor Gray
Davis might even declare a state holiday called "H-1B AWARENESS DAY."
Perhaps George Bush could even make it a national holiday.
I have to cut this newsletter short because I'm in a hurry to go to our
local Intel plant around quitting time. This is Friday so the H-1Bs
might be leaving work early, like about 10 p.m. I'll be standing at the
gates ready to embrace the first H-1B I see.
http://abcnews.go.com/sections/business/SiliconInsider/SiliconInsider_030710.html
Stop the Scapegoating
High-Techs Latest Excuse Is Also the Key to the Future
Commentary
By Michael S. Malone
Special to ABCNEWS.com
July 10
High-tech's newest innovation: finding a scapegoat for the turnaround.
Creativity has always been one of Silicon Valley's greatest strengths.
New technologies, new products, new companies, new types of
organizations. For 50 years, the Valley has led the world in new ideas.
But there is one area in which the Valley has remained recondite in its
innovations: casting blame. Corporate greed, the Japanese, the Feds
Silicon Valley's betes noir have always been stock villains cast out of
the old striped-pants capitalist playbook. For such a mercurial place,
both the blame-casting and the bad guys have been shockingly
predictable: every four years, as the chip cycle slumps and the Valley
recesses, we seek out something familiar on which to download our
problems.
But something has changed. The long boom of the '90s put us out of sync
on so many things apparently now even our bad guys. A year ago, at the
bottom of the crash, the Valley was refreshingly honest in its
self-appraisal. Sure, we tried to blame corporate greed (hence the
absurd class-action lawsuit against dot-coms that was settled last week
for a billion bucks) and the Gen-Xers. But in the end, most Valleyites
just sort of shook their heads, made an ironic smile and said, "Yeah,
well, we all went a little crazy, didn't we?"
It was an unexpected self-appraisal that had the added benefit of being
the truth.
But now, just as unexpectedly, as Nasdaq starts to climb, the chip
book-to-bill ratio is turning positive, and the Valley is beginning to
heat up once again, we've instead started wailing about a new source
for all of our problems.
Who is it? Of all people, the Indians.
Keeping the Slice for the USA
Apparently, the greatest threat to America's high-tech dominance is not
the shortage of early-stage capital, the onerous tax and regulatory
environment, the crappy public education system, the lack of major new
national technology initiatives, the Federal obstructions to the
widespread installation of broadband, vindictive anti-trust
investigations, a rococo patent system or the fact that the latest
killer consumer product has yet to appear on the scene. No, the biggest
threat to the U.S. technology industry is a small army of code writers
in Bangalore, India.
Suddenly, global terrorism is taking back seat to what is being billed
as a new kind of "economic terrorism," the offshore movement of U.S.
high-tech jobs to India (as well as China, Thailand, Indonesia, Poland,
Costa Rica and Vietnam). The Forrester Research group predicts that 3.3
million U.S. service industry jobs including one million IT jobs will
move to other countries over the next 15 years.
The response has been predictable. The usual cranks on the left and
right are angrily posting messages calling for economic war against
India and solemnly mourning the impending death of the United States.
And, of course, politicians are dealing with this scandal du jour in
their usual ham-fisted way: Instead of dealing with the root causes of
the problem such as over-taxation, over-regulation and endless
government intrusion, they are trying to re-jigger the result.
Five states (Connecticut, New Jersey, Maryland, Washington and
Missouri) are already looking at legislation to prohibit off-shore
outsourcing of state contracts. Meanwhile, U.S. Congressman Don
Manzillo, R-Ill., has been holding hearings on the subject on Capitol
Hill.
There's already talk of tariffs, barriers to off-shore contracts and
hiring quotas. Everything but allowing the natural market forces to
work. No, we've got to stop those damn Indians from taking our precious
manufacturing and service jobs right now. Why? Because the tech pie
will never again get bigger. As Sam Jadallah, general partner at
venture capital firm Mohr, Davidow says, "I don't think ['90s-level
tech spending] will come back in my lifetime."
It's a zero-sum job game out there folks, and we've got to keep the
biggest slices right here in the U.S. of A.
An Inevitable Change for the Better
Can we reassert some perspective here? Let's begin with Mr. Jadallah,
whom I hereby nominate for the stupidest quote emanating from Silicon
Valley in 2003. The fact is, give us one good new technology market and
tech spending will not only come back in Jadallah's lifetime, but by
next March. Another good boom will generate 10 times as many jobs as
we're predicted to lose overseas. If Jadallah doesn't understand that,
why is he a venture capitalist? What is he telling his poor
entrepreneurs at board meetings give up? The narrow-minded pessimism
of his quote goes a long ways to explaining the current crisis of
confidence in the venture capital industry.
Jadallah is hardly alone, as the America's Doomed crowd on the Web and
the Chicken Littles in the various statehouses suggest. All are making
the same, fundamental philosophical mistake: they are looking at the
situation as both closed and static-state. But technology, by
definition, is both open and dynamic.
Of course low-level customer service and programming jobs are heading
off-shore. It was inevitable, as it was for printed circuit board
stuffing and component assembly 20 years ago. Would the United States
economy have been better off if we'd thrown up tariff barriers two
decades ago against offshore PC assembly or contract semiconductor
fabrication?
On the contrary, allowing that natural market process to occur drove
down costs, which in turn opened the door to the creation of thousands
of new U.S. tech companies, and millions of new domestic jobs. The key
was that we kept the innovation and we maintained the world's best
environment for new company creation.
Something else occurred, too something little noticed by the economic
Cassandras, then or now. It was that we not only got the better part of
the business deal in the long run, but also the better half of the
talent pool. Even as we've been shipping low-end jobs around the world
the last 20 years, we've been gaining the best and brightest from those
same countries. Ask yourself: would you rather be writing code for a
few bucks a day in Bangalore, or becoming a billionaire in Palo Alto?
Stop the Scapegoating
Silicon Valley is now one of the most multi-ethnic communities on the
planet a world of PhDs from Poland to Pakistan. Cupertino, home of
Apple Computer, is now a largely Chinese community. These ambitious
people are building most of the hot new start-ups in the Valley these
days. They will be providing most of the new jobs in the U.S. economy
in the years to come. Instead of scapegoating, we should be embracing
them.
And if you think they are going to take their riches and intellectual
capital and go home someday, you should spend a day playing the Sims
with my sons and their thoroughly Americanized Indian, Pakistani,
Russian, Polish, Chinese and Korean buddies. They are as likely to
return to the homeland for anything but a family visit as I am to put
on the tweeds and go back to Donegal.
Will this transformation be painful? Of course it will; it always is.
Many hard-working Americans (including a lot of those new Americans)
will lose their jobs. But, history shows that those jobs will be
eventually be lost anyway, no matter how many artificial barriers we
put up to keep them. The hard fact is that we can only move on to new
jobs. Whether those jobs will be better or worse depends upon the
decisions we make right now.
If we try to hang on to jobs that are no longer competitive on the
world stage, we will lose. But if we can leverage those lost jobs into
future gains in new, better jobs and talented immigrants, then we win.
But that will only happen if we get back into the business of
innovation, new products, entrepreneurship and new companies. And to do
that, we need to stop fretting about lost jobs and set about creating
new ones. We need government to stop worrying about international
economic warfare and start stripping away all the bureaucratic
impediments to domestic corporate health. We need to see some optimism
and vision back in the investment industry.
And we need to stop blaming the very people who, ironically, may prove
crucial to our future success.
Michael S. Malone, once called the Boswell of Silicon Valley, most
recently was editor-at-large of Forbes ASAP magazine. His work as the
nations first daily high-tech reporter at the San Jose Mercury-News
sparked the writing of his critically acclaimed The Big Score: The
Billion Dollar Story of Silicon Valley, which went on to become a
public TV series. He has written several other highly praised business
books and a novel about Silicon Valley, where he was raised.
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