11 Articles Worth Reading
11 Articles Worth Reading
Date: Wednesday, May 04, 2005 10:53 PM
JOB DESTRUCTION NEWSLETTER
by Rob Sanchez
May 04, 2005 No. 1250
Article 1:
http://www.atimes.com/atimes/South_Asia/GD27Df04.html
Illegal drug trade outsourced to India, too
High-speed communication links combined with lower costs in comparison
with the United States is what led to the outsourcing of jobs to India.
This now appears to apply to crime, too. In what has been described as
the biggest illegal bust involving Indians, a multimillion-dollar drug
racket has been unearthed by US and Indian authorities. Predictably,
the illegal drug trade flourished courtesy of the Internet, lax law
enforcement and norms in India, as well as the economies of lower
prices.
Article 2:
http://www.computerworld.com/managementtopics/outsourcing/story/0,10801,101493,00.html
Q&A: Information Builders CEO blasts Gates' H-1B stand
He can find all the engineers he wants in this country,' says Gerald
Cohen
Bill Gates told an audience in Washington a few days ago that the U.S.
needs to get rid of the cap on H-1B visas (see story). What's your
position on that? He's full of it.
Article 3:
http://news.yahoo.com/s/nm/odd_pooperscooper_dc
Man gets the poop on outsourcing By Holly McKenna
Computer programmer Steve Relles has the poop on what to do when your
job is outsourced to India.
Relles, one of a rising number of Americans seeking new opportunities
as their work shifts to countries with cheaper labor, has spent the
past year making his living scooping up dog droppings as the "Delmar
Dog Butler."
Article 4:
http://online.wsj.com/public/article/0,,SB111040555382875066-s17v47ybOQtXEvf7bi27R53oMro_20050408,00.html?mod=blogs
Outside Audit
Layoffs Seem to Conflict With Tax Break Meant to Propel Job Growth
National Semiconductor disclosed in January it may repatriate as much
as $500 million in foreign earnings under the tax break. The same day,
the company announced it would cut 550 jobs, or 6% of its work force,
to cut costs and streamline operations. Sun said in February that it
could bring home as much as $1.1 billion in foreign profits. The
company also said it had laid off 3,600 people -- about 10% of its work
force
Article 5:
http://www.detnews.com/2005/technology/0505/02/tech-166896.htm
Dell to expand India outsourcing by hiring 2,000 people
Computer-maker Dell will hire another 2,000 people by the end of the
year to make India a hub for its software development and back-office
work, its top executive said Friday. Dell will increase its staff
strength in India to 10,000 by January from nearly 8,000 at present,
Article 6:
http://www.zeenews.com/links/articles.asp?ssid=54&aid=213456&newsid=BUS
Setbacks not to hamper continuation of outsourcing to India
Alarms were raised in some quarters about outsourcing to India when it
came to light that money was siphoned from Citibank accounts, but most
analysts don't see an end to the offshore-outsourcing boom. Karamouzis
noted that the perpetrators in the case were quickly arrested and
jailed by police. "It shows that India has modern, capable law
enforcement," she said.
Article 7:
http://counterpunch.com/pardon04162005.html
The "Knowledge Job" Deficit
The High-Tech "Competitiveness" Smokescreen
"Competitiveness" is a much-abused buzz-word with which "free trade"
enthusiasts often salt their writings. No more prominent or public an
example can be found than the influencial New York Times' columnist Tom
Friedman. The hypocrisy of this man is incredible.
Article 8:
http://www.expressindia.com/fullstory.php?newsid=45988#compstory
Indiana outsources to India
Thomas L Friedman
So now I have just one simple question. Who is the exploiter and who is
the exploited in this India-Indiana story? The American arm of an
Indian consulting firm proposes to save the taxpayers of Indiana $ 8.1
million by revamping their computers - using both its Indian employees
and local hires from Indiana. If you are against globalisation because
you think it harms people in developing countries, whose side are you
on in this story: Indias or Indianas?
Article 9:
http://informationweek.com/story/showArticle.jhtml?articleID=161502292
IBM Workers In Europe May Strike Over Offshoring
Shareholders at IBM's annual meeting this week will vote on an
anti-offshoring resolution.
IBM workers in Europe may strike this week over what they say is the
company's ongoing movement of jobs to low-cost countries such as India
and China, according to union sources.
Article 10:
http://www.denverpost.com/Stories/0,1413,36%257E33%257E2837994,00.html
Pair float idea to send jobs offshore
They plan to put 600 global software engineers on a cruise ship just
out of U.S. reach but close enough to bid on contracts. Don't start
with the pirate gags - eye patches, pieces of eight, Johnny Depp with a
cutlass. David Cook and Roger Green have heard them all.
Article 11:
http://www.siliconrepublic.com/news/news.nv?storyid=single4772
IBM job loss speculation in Ireland mounts
Fears that up to 120 jobs may be lost at IBMs EMEA operations in
Ireland have risen in recent days over speculation that jobs may be
transferred to India as part of an overall global restructure of the
computer giant.
1. +++++++++++++++++++++++++++++++++++++++++++++++++++
http://www.atimes.com/atimes/South_Asia/GD27Df04.html
Illegal drug trade outsourced to India, too
By Siddharth Srivastava
NEW DELHI - High-speed communication links combined with lower costs in
comparison with the United States is what led to the outsourcing of
jobs to India. This now appears to apply to crime, too. In what has
been described as the biggest illegal bust involving Indians, a
multimillion-dollar drug racket has been unearthed by US and Indian
authorities. Predictably, the illegal drug trade flourished courtesy
of the Internet, lax law enforcement and norms in India, as well as the
economies of lower prices.
A year-long investigation by Indian and US authorities has revealed
that narcotics and psychotropic tablets (pharmaceutical controlled
substances as well as medicine) in huge bulk were illegally exported
from India to the US through orders placed via Internet pharmacies,
hundreds of which dot cyberspace.
The front-end (US-based servers, e-mail queries and websites) was
managed by US citizens, while the back-end supply of drugs was handled
by a team of Indian doctors who procured the requisite permission to
buy the drugs in India, which were then shipped (or couriered) to the
US, repackaged in Philadelphia and New York, and sold to the end-users.
Authorities in Delhi have seized more than 4 million tablets valued at
US$5 million, while over $7 million in funds belonging to the Indian
cartel has been frozen in bank accounts around the world.
The drugs include generic versions of narcotic painkillers such as
Vicodin and Oxycontin, amphetamines such as Ritalin, anabolic steroids,
sex stimulant Viagra and dozens of other controlled substances, such as
diazepam, alprazolam and paracetamol with codeine. "In this first major
international enforcement action against online rogue pharmacies and
their source of supply, we have logged these traffickers off the
Internet," announced US Drug Enforcement Authority administrator Karen
P Tandy.
Explaining this illegal trade, an official of the Narcotics Control
Bureau in India said the reason for such a massive scale of exports was
the huge price difference in medicine in India compared with advanced
countries such as Canada, Australia and the United States. "It is
mostly due to the patent regime in these countries that the prices of
medicines are very high there, and exploiting this price difference,
unscrupulous elements illegally export these medicines to these
destinations from countries where prices are comparatively less."
Kudos is due to the Indian and US authorities who have for the first
time jointly cracked an illegal operation of such a scale being
conducted via the Internet. The biggest problem in dealing with
cyber-crime is that there are no uniform laws internationally. Some
countries, such as the United Kingdom, have cyber-crime laws, including
the Computer Misuse Act (1990), which are well implemented. Other
territories have laws that have yet to be fully implemented, while some
countries are yet to make provisions for cyber-crimes within their
judicial system. If there are no relevant laws in the country where the
crime originates, no one can be found guilty of breaking them.
International Internet crimes with Indian involvement have been
unearthed earlier, but more in the nature of individuals hoodwinking
others. Cases involving extortion, false identities in love affairs and
hacking are quite common. One Indian ostensibly sold property worth
hundreds of thousands of dollars on the Internet, but the bogus papers
turned out to be for the residence of the prime minister of India.
Recently, a supposed new-age guru was arrested for harassing a British
woman who had been lured to his ashram (place of worship) by convincing
her father that he possessed "great spiritual powers". The guru kept
his contact with the lady's family through the Internet and finally
made the woman come to India by threatening her father that he would
turn the young woman mad through his spiritual powers if he refused to
send her to him. In another first of its kind that has rattled the
Indian business and process-outsourcing industry, employees of Mphasis,
which handles the back-end operations of Citibank, managed to siphon
funds off accounts by accessing secret codes after colluding with bank
employees in the US.
However, the drug-transfer crime goes much deeper, highlighting the
scaling of time and spatial constraints to take advantage of a
distorted paradigm, in an increasingly connected world.
It may be recalled that the drug-patent regime in India, unlike in
Western countries, is based on what is termed product patents, in
contrast to process patents. The system is designed to encourage
low-cost manufacturing of drugs, develop the pharmaceutical industry
and make medicines widely available at low prices. Despite the great
success of this system, its end was required by a World Trade
Organization agreement demanding that all countries (with some
exceptions) switch to process patents. While India changed its patent
law last December to meet the January 2005 WTO deadline, the ground
situation is very different.
Although Indian pharmaceutical companies are now heavily investing in
research in order to compete with international firms, there is not
much political backing to the new system as there are fears that the
rise in prices consequent to the new regime will make medicine
inaccessible to the poor.
The question is: While one understands the exigencies of multinational
pharmaceutical companies needing to protect their patent rights as well
as profits, why should medicines, whether in India or anywhere, be
inaccessible to those who need them? This, in effect, resulted in the
illegal trade of medicine from India, which is not to justify the
crime, but to highlight a distorted regime.
It is estimated that the international intellectual-property agreement
(known as TRIPS, for Trade-Related Aspects of Intellectual Property
Rights, which many countries were forced to ink when nobody understood
the consequences of pharmaceutical patents) will cost India's economy
more than $700 million each year, while creating only $57 million in
profits for multinationals. Surely, there is a need to revise the
paradigms (some speak of government regulation and funding), if they
need to be implemented, despite pressure from the powerful
international pharma lobbies. After all, this is not about pirated
music.
A recent Reuters report quoted an unnamed pharmaceutical executive who
said: "There could easily be 70 [million] to 80 million people [in
India] who can afford expensive medicines, just as they go out and buy
expensive cars, branded clothes and consumer goods. That is equal to
the size of a UK or a Germany. But India has a population of over a
billion - meaning that the industry will be pricing new drugs for less
than 10% of the population, with over 90% excluded."
Another recent article in Nature Medicine notes that India is the
fourth-largest producer of pharmaceuticals in the world and two-thirds
of its exports go to developing countries. The article notes that at
least 15% of drugs now on the market in India, including some AIDS
drugs, are likely to be withdrawn.
The supply of cheap medicine (made by reputed pharma companies such as
Ranbaxy, Dr Reddy's and Nicolas Piramal to take on the likes of Pfizer
and GlaxoSmithKiline) is an extension of the overall cheaper medical
regime in India that has led to the emergence of India as an
international destination of medical care. Private-sector specialty
hospitals in India offer treatment and facilities that meet
international standards at 10-20% of the cost of treatment abroad.
These hospitals have in their own way also turned into ruthless
commercial enterprises as in the West, but at least they have the cost
factor in their favor.
Siddharth Srivastava is a New Delhi-based journalist
2. +++++++++++++++++++++++++++++++++++++++++++++++++++
http://www.computerworld.com/managementtopics/outsourcing/story/0,10801,101493,00.html
Q&A: Information Builders CEO blasts Gates' H-1B stand
'He can find all the engineers he wants in this country,' says Gerald
Cohen
Q&A by Don Tennant
MAY 02, 2005 (COMPUTERWORLD) - Gerald Cohen, the outspoken founder and
CEO of New York-based business intelligence software vendor Information
Builders Inc., spoke with Computerworld on Friday about the controversy
surrounding offshore outsourcing and the H-1B visa cap. Excerpts from
that interview follow:
Bill Gates told an audience in Washington a few days ago that the U.S.
needs to get rid of the cap on H-1B visas (see story). What's your
position on that? He's full of it. He says, "I'd hire a lot more
American engineers if I could find them -- they're not available, and
that's why we're going to China and India." He's full of it. He's going
there because it's just cheaper. He can find all the engineers he wants
in this country.
A lot of CEOs of companies like yours are saying they just can't find
the people, so they're lobbying Congress to get rid of the H-1B visa
cap. That's bulls---. A couple years ago that was true, and that's when
the cap was raised. You know who wants [to get rid of the cap]? The
Indian companies. The way the Indian companies work is they have to
have a certain number of people here, and a lot more people back there
-- so they're the ones who want to get all these people in. And they
don't even pay them American wages -- they just pay them as cheaply as
they can.
I'm the chairman of the New York Software Industry Association. One of
the programs we have is a federal government program that gives the
city of New York money to run technical training courses for people in
the city to upgrade their skills, so city companies don't have to go
overseas [for workers]. The program is essentially an H-1B replacement
program.
The funny thing is, we've had our people apply for this -- it's a free
course -- and they found a lot of these guys who took the classes were
here on H-1B visas. If you had more H-1B visas, the only thing you
would see is the overseas people coming here and replacing more
American jobs.
But surely you use overseas labor to lower your own costs. I'm going to
put two hats on. With one hat -- my [Software Industry Association] hat
-- I say we want to keep jobs in New York City. The other hat says we
want the company to be prosperous, and if I can lower my costs by doing
work overseas, the company's more prosperous. But I'm not so sure
that's better for the country.
I think a certain amount of tariff protection protects native
industries. If it was product, we have a mechanism -- we put a tariff
on it, and we've used that for years. It's a well-accepted idea. In
fact, most of the guys [overseas] we're buying from have restrictive
tariffs -- we can't get into their markets so easily. For services, you
don't have a tariff, so it's a phenomenon that now services are going
outside the U.S. And I personally think that's not a healthy thing for
the country.
How much of your development work is done outside of the U.S.? We do a
little quality-assurance work outside of the U.S. We find it's
economical to do the routine kind of QA work [overseas].
What's your response to the unemployed U.S. IT worker who says you
should be keeping those jobs in the U.S.? We have to [do business]
economically. It's a real problem. The government is providing us with
no help, so we're doing [what we have to do] ourselves. If you look
further down the road, there's going to be a huge drain of IT jobs. A
lot of these jobs that go overseas are the spawning grounds for future
jobs. So the whole industry's going to move offshore.
What do you want the government to do to help? The Indians will bring
people into the U.S. cheaply [to work here]. No! When you [bring people
into] the U.S., you have to pay American wages. That would be a minimum
standard, for example. There are a lot of small things that could be
done, but I have no solution for how we're going to throttle this in
some way.
In any case, you have no problem finding the skills you need for your
company in the U.S.? No, I don't. I go offshore strictly for price. I
can get things done cheaper in Moscow than I can in New York City.
A lot of people say the education system in the U.S. is failing to
provide qualified IT workers. You disagree? That's bunk. Why do you
have declining computer science majors? Because every parent is saying,
"Why major in computer science when all the jobs are going offshore?"
It feeds itself. And I guarantee you, if it doesn't stop, in a couple
years you're not going to have much of an IT industry here.
So you feel the universities are doing a good job? Yeah, but they're
getting a declining enrollment. I'm on the board of the CUNY Institute
for Software Development and Design, and I think [universities are]
doing a terrific job of graduating competent master's and Ph.D. program
students in computer technology.
You rely on markets outside of North America for 25% of your business,
and you've said that number could rise to 50% by the time you pass the
torch to a successor. So, clearly you expect to do a lot more work
overseas. If you have a laboratory in France or England, that's not
replacing American jobs, necessarily. You're selling in England, you
should do some work in England, for example. That makes sense. What are
you selling in India? Zilch.
So you don't buy the argument about outsourcing offshore as a means of
getting a foothold in a market? No, I don't buy that. What are you
going to sell to the Indians? We're not going to sell them a whole lot
of software. And not much hardware either, if you ask me. The hardware
we do sell them is manufactured in China or Taiwan.
But it's a big world out there, and as it computerizes, it's going to
buy software. So I think there's a huge market outside the U.S. All of
us are building out our infrastructures to sell worldwide. And we're
going to hire employees in those countries. That's good for their
economy and good for our economy.
3. +++++++++++++++++++++++++++++++++++++++++++++++++++
http://news.yahoo.com/s/nm/odd_pooperscooper_dc
Man gets the poop on outsourcing By Holly McKenna
Mon May 2,12:58 PM ET
Computer programmer Steve Relles has the poop on what to do when your
job is outsourced to India.
Relles, one of a rising number of Americans seeking new opportunities
as their work shifts to countries with cheaper labor, has spent the
past year making his living scooping up dog droppings as the "Delmar
Dog Butler."
"My parents paid for me to get a (degree) in math and now I am a pooper
scooper," Relles, a 42-year-old married father of two told Reuters. "I
can clean four to five yards in a hour if they are close together."
Relles, who lost his computer programming job about three years ago,
got the idea of cleaning dog dirt from people's back yards from Mark
Booth, a friend in Buffalo, New York.
Relles has over 100 clients who pay $10 each for a once-a-week cleaning
of their yard.
Relles competes for business with another local company called "Scoopy
Do." Similar outfits have sprung up across America, including
Petbutler.net, which operates in Ohio.
In the United States, there are about 63 million dogs, each producing
about 23 "presents" per week, which if left can be unsafe for children
and pets.
Relles says his business is growing by word of mouth and that most of
his clients are women who either don't have the time or desire to pick
up the droppings.
"St. Bernard (dogs) are my favorite customers since they poop in large
piles which are easy to find," Relles said.
His "scooper" is a converted ice scrapper duct-taped to a ski pole. He
flicks the poop into a dust pan lined with a plastic bag, then loads
the waste into a large garbage can which he takes to the dump when
full.
"It sure beats computer programming because it's flexible, and I get to
be outside," he said.
4. +++++++++++++++++++++++++++++++++++++++++++++++++++
http://online.wsj.com/public/article/0,,SB111040555382875066-s17v47ybOQtXEvf7bi27R53oMro_20050408,00.html?mod=blogs
TRACKING THE NUMBERS
Outside Audit
Layoffs Seem to Conflict With Tax
Break Meant to Propel Job Growth
By STEVEN D. JONES and MICHAEL RAPOPORT
DOW JONES NEWSWIRES
March 10, 2005; Page C3
There is more evidence that a tax break intended to boost U.S. jobs
isn't getting the job done.
Consider several major companies that say they are considering bringing
home hundreds of millions of dollars in foreign profits under a tax
holiday that is part of the American Jobs Creation Act passed last
year. These include National Semiconductor Corp., Sun Microsystems Inc.
and Colgate-Palmolive Co. -- all of which recently cut staff. These
companies' example calls into question how effective "repatriation"
will be in spurring new jobs, adding to already reported concerns about
the wiggle room the law gives companies in how to spend the money.
National Semiconductor disclosed in January it may repatriate as much
as $500 million in foreign earnings under the tax break. The same day,
the company announced it would cut 550 jobs, or 6% of its work force,
to cut costs and streamline operations.
Sun said in February that it could bring home as much as $1.1 billion
in foreign profits. The company also said it had laid off 3,600 people
-- about 10% of its work force -- during the previous nine months as
part of a plan to reduce costs and improve efficiency.
Colgate-Palmolive said in December that it expected to close about a
third of its factories and eliminate about 12% of its work force -- a
total of about 4,400 job cuts -- in a four-year restructuring plan. In
February, the company disclosed it was considering bringing home $500
million in foreign profits.
In the past 10 weeks, nearly 300 companies have unveiled plans to
capitalize on the one-year tax holiday, one of a number of business tax
changes contained in the American Jobs Creation Act. Under the
repatriation provision, companies will pay a 5.25% tax rate on money
they have earned and invested abroad and choose to bring back to the
U.S., compared with the standard 35% corporate rate. Analysts expect
the law will encourage hundreds of companies to return an estimated
$320 billion to the U.S. economy by the end of the year.
But the law gives companies flexibility to use the cash for purposes
with indirect links to job creation at best. According to the Treasury
Department, companies can use the cash for advertising and marketing,
certain acquisitions, capital investment, research and development and
"financial stabilization" such as debt reduction and payment of legal
liabilities. The Treasury's guidelines require only that companies
attest that the spending "likely would have direct or indirect positive
effects on employment in the United States."
"The bill as enacted does not have a close link between repatriation
and some form of job creation," says Stephen E. Shay, a tax partner
with the Boston law firm of Ropes & Gray. "It's best characterized as a
fig-leaf relationship."
Mr. Shay adds that it is "not inconsistent with the law" for companies
to cut jobs at the same time they are considering repatriating funds
ostensibly meant to create jobs. They are just following the law as it
is written, he says.
Jeff Weir, a spokesman for National Semiconductor, says bringing home
foreign profits won't necessarily lead to higher employment, "because
the nature of the technology business is that we tend to produce more
with fewer people over time." While National Semiconductor is hiring
engineers in specific areas and has since 2001, its total employment is
down to about 9,000 from 11,000 at the peak of the technology boom, he
says.
A Sun spokeswoman says the company's evaluation of repatriating foreign
profits was going on separately from the announced staffing changes. A
Colgate-Palmolive spokeswoman won't comment on the company's plans for
repatriation or job cuts.
Even if companies do use their foreign cash to invest in job-creating
projects, they may find that changes elsewhere in their business can
mute job gains.
For example, DuPont Photomasks Inc. is repatriating $24 million in
foreign profits, some of which it is applying to a $30 million
expansion of production capacity at its Round Rock, Texas, plant. But
the company also announced in January that it would close its Kokomo,
Ind., plant -- eliminating 100 jobs, or about 6% of its work force --
and said it is expanding capacity at a Singapore plant.
DuPont Photomasks -- photomasks are tools used for putting computer
chip circuits on silicon wafers -- won't say whether the employment
gains from the Texas expansion are enough to offset the Indiana losses.
But Tom Blake, the company's vice president of marketing, says the
changes are simply "a reflection of changes in the marketplace." The
Kokomo plant produces an older technology and closing it was necessary
to improve total productivity, he says, and the company is expanding in
Asia because it is a fast-growing region. Indeed: DuPont Photomasks is
in the process of being acquired by a Japanese company, Toppan Printing
Co.
National Semiconductor's Mr. Weir, who used to work on Capitol Hill,
says repatriating earnings should be seen simply as a tax break.
Calling the law "the American Jobs Creation Act" was marketing, he
says. "I would not trust the title of any law and what it really says."
5. +++++++++++++++++++++++++++++++++++++++++++++++++++
http://www.detnews.com/2005/technology/0505/02/tech-166896.htm
Saturday, April 30, 2005
Dell to expand India outsourcing by hiring 2,000 people
By S. Srinivasan / Associated Press
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BANGALORE, India -- Computer-maker Dell will hire another 2,000 people
by the end of the year to make India a hub for its software development
and back-office work, its top executive said Friday.
"It has been a very exciting time here in India, running customer
support and internal software development centers," Dell Inc. Chief
Executive Kevin Rollins told reporters in Bangalore, India's technology
hub.
Dell will increase its staff strength in India to 10,000 by January
from nearly 8,000 at present, he said.
Less than two years ago, Round Rock, Texas-based Dell moved support for
some customer calls back to the United States from Bangalore, citing
"customer complaints."
On Friday, Rollins said the November 2003 decision was due to the
company's internal management issues.
"Then, we were doing too much, too fast in too many places. We had to
prioritize and refine," he said.
Scores of Western companies have been cutting costs by shifting
software development, engineering design and routine office functions
to countries such as India, where English-speaking workers are
plentiful and wages are low.
Dell runs three call centers in India, a product testing center for
corporate customers and a global software development center.
"Over time, our Indian operation has grown in technical complexity and
so we are making it a center of competency for software and support,"
Rollins said.
Dell plans to open more offices in India to shift technology work and
to tap India's growing computer market, he said.
"As we move to increase our revenues to $80 billion in three to four
years' time, our growth will increasingly come from outside the U.S.,"
he said.
Dell employs a total of 53,000 people and its revenue reached $49.2
billion in the fiscal year ending in January 2005.
6. +++++++++++++++++++++++++++++++++++++++++++++++++++
http://www.zeenews.com/links/articles.asp?ssid=54&aid=213456&newsid=BUS
Setbacks not to hamper continuation of outsourcing to India
Silicon Valley, Apr 24: Despite some hitches, US businesses will
continue to outsource work overseas as they do not have the internal
resources to do the job themselves, analysts have said.
"There could be some blips, but the long-term factors that favour
outsourcing are still in place," Gartner analyst Frances Karamouzis
told the 'Information Week'.
Businesses have little choice but to continue to outsource it work
because they simply do not have the internal resources to meet their
needs, she said.
"Some big companies are still operating with green-screen applications
because they don't have the it people or the skills to move off legacy
systems," Karamouzis said, adding that much of the work that is
outsourced will be placed offshore because of price considerations.
Alarms were raised in some quarters about outsourcing to India when it
came to light that money was siphoned from Citibank accounts, but most
analysts don't see an end to the offshore-outsourcing boom.
Karamouzis noted that the perpetrators in the case were quickly
arrested and jailed by police. "It shows that India has modern, capable
law enforcement," she said.
Adam Frisch, a UBS securities analyst, also doesn't believe the
outsourcing market is about to lose steam.
"We do not think the fundamentals of a growing and still-nascent
industry change in a three-month period," Frisch said in a report.
He believed offshore IT services companies will continue to grow,
particularly as they add new capabilities such as consulting and
infrastructure management.
7. +++++++++++++++++++++++++++++++++++++++++++++++++++
http://counterpunch.com/pardon04162005.html
April 16 / 17, 2005
The "Knowledge Job" Deficit
The High-Tech "Competitiveness" Smokescreen
By JOHN PARDON
"Competitiveness" is a much-abused buzz-word with which "free trade"
enthusiasts often salt their writings. No more prominent or public an
example can be found than the influencial New York Times' columnist Tom
Friedman. When Friedman talks about economic issues, critics of the
corporate managed state would do well to pay close attention.
In an April 15 New York Times column entitled "Bush Disarms
Unilaterally", Friedman criticises the Bush administration for "taking
little interest in America's economic competitiveness" while "focused
on projecting U.S. military strength abroad". Admonishing his
readership that our "economic competitiveness" is the "underlying
engine of our strength", Friedman urges a big-government solution to
this situation: a "New New Deal to make more Americans employable in
21st-century jobs. The hypocrisy of this man is incredible.
In previous columns and in his new book about globalisation, free trade
(and, implicitly, offshore outsourcing of American jobs,) Friedman
celebrates the movement of industrial and high technology work out of
the United States to nations such as India and China. He considers this
situation a "win-win" for Americans but he can't point to "21st-century
jobs" created in the U.S. for Americans as a consequence of offshore
outsourcing. (Sorry Tom, the growing number of low-skilled and
low-paying nontradeable services jobs in the U.S. economy are not the
"21st-century" jobs you imagine.)
Months ago, while writing from India, Friedman noted well-known
"American" corporate branded products in use by Indian companies and
employees engaged in doing work once performed in the U.S. by American
workers. Based upon the simple appearance of some familiar brand names
on the products in evidence, Friedman announced in triumph that
"American products" were being consumed by Indians - a "win" for
American workers.
The truth that Friedman forgot to share or was to ignorant to discern
is that the only thing "American" about the products was their brand
names; the computers and bottled water used by the Indian offshore
workers were likewise made offshore with foreign labor. (Even the
"innovative" and "knowledge age" development of the products is
increasingly done offshore by non-Americans.)
Now, Friedman is warning that the flattened "global economic playing
field" is "enabling young Indians and Chinese to collaborate and
compete with Americans more than ever before." Friedman the outsourcing
proponent and apologist for global labor arbitrage (i.e., replacing
American middle class workers with low-wage Third World workers) is now
warning of the dark threat of declining U.S. "economic competitiveness"
Sadly, or perhaps inevitably, Friedman fails to either acknowledge or
comprehend the fact that the very outsourcing and "free trade" policies
he has breathlessly praised are at the core of why Americans cannot
compete for the "21st century jobs". The "flattening" of which Friedman
speaks is the result of political action -- laws which have enabled
American corporations to simultaneously move work offshore while
continuing to sell goods and services produced by foreign workers in
the U.S. market without restriction. Businesses are able to offshore
jobs and pay Third World wages while continuing to sell the goods and
services at "American prices".
The "21st century jobs" of which Friedman speaks are in high technology
and science. They are the knowledge age jobs requiring advanced
education often focused on scientific, engineering and/or technical
areas of study. Information technology ("IT"), computer science,
computer engineering, biotechnology, pharmaceutical research,
engineering and other areas are involved. These are the well-paying,
"high labor cost" jobs which multinational corporations have targeted
for elimination or sharp reduction in high labor cost developed nations
such as the U.S.
So, while corporatations are busily drawing up outsourcing plans, and
eliminating their costly American knowledge workers on the basis of
labor cost savings, Tom Friedman is urging the Bush administration to
spend more money on national projects such as high-speed broadband and
internet access by mobile phone. This is ludicrous.
The nonsense continues. Friedman thinks that more American innovation
will occur if tax law changes alter the treatment of stock options.
This, he says, will allow "U.S. high tech firms" to "attract talent".
Friedman is silent about the declining number of Americans entering
high tech areas of study because they fear outsourcing or replacement
by low wage foreign workers in the U.S. under a form of corporate
welfare known as "non-immigrant visa" (NIV) programs. The sad fact is
that formerly "American" high-tech firms treat their American workforce
as a costly disadvantage and are rapidly shedding American workers --
noteably highly-educated and experienced software engineers and
programmers. It's cheaper to use Indian and Chinese workers in the U.S.
under NIV programs or offshore work to "subsidiaries" and foreign
outsourcing firms, you see...
Against such a backdrop of massive job outsourcing and use of NIV
replacement workers, it is truly ridiculous for Friedman to attack Bush
administration cuts in the "Pentagon's budget for basic science and
technology research" or "slash[ing] the 2005 budget of the National
Science Foundation by $100 million".
What is the point of spending money on funding for research and
education in the sciences if American citizens -- American workers are
not the beneficiaries of this spending?
Friedman does not have an answer. He has shown that he does not have
the capacity to rationally discuss the real problems of American
competitiveness. The demands for a costly "big government" "New New
Deal" to make the American economy "competitive" and stimulate the
creation of "21st-century jobs" indicate that at the core, the "free
trade" policies of politicians and outsourcing policies of business
have failed. They are destroying the American middle class and creating
an environment in which knowledge-age jobs can only exist offshore in
developing nations or will be filled in the U.S. by imported low-wage
NIV workers.
It does not have to be like this. Perhaps the only point with which one
may agree with Friedman is with this, "Economics is not like war. It
can be win-win." The first action which policy makers must undertake is
to re-examine the rules of international trade with an eye toward
benefitting American workers and maintaining a middle class society
which will offer widening middle class employment opportunities for
American workers. The present "trade" and "business" policies
rationalised by terms such as "competitiveness" guarantee the loss of
the knowledge age jobs by Americans will not be reversed.
John Pardon is a software engineer and writer. In 2004 Pardon
summarised the job loss situation faced by American information
technology workers in a widely-read Computerworld article, "Lost Your
Job Yet?". Pardon is the policy analyst for Rescue American Jobs (and a
supporter of the ITPAA (www.itpaa.org) and WashTech.
8. +++++++++++++++++++++++++++++++++++++++++++++++++++
http://www.expressindia.com/fullstory.php?newsid=45988#compstory
Indiana outsources to India
Thomas L Friedman
Posted online: Monday, May 02, 2005 at 1642 hours IST
Updated: Tuesday, May 03, 2005 at 0433 hours IST
In 2003, the state of Indiana put out to bid a contract to upgrade the
states computer systems that process unemployment claims. Guess who
won? Tata America International, which is the US-based subsidiary of
Indias Tata Consultancy Services. Tatas bid of $ 15.2 million
came in $ 8.1 million lower than that of its closest rivals, the New
York-based companies Deloitte Consulting and Accenture. No Indiana
firms bid on the contract, because it was too big for them to handle.
In other words, an Indian consulting firm won the contract to upgrade
the unemployment department of the state of Indiana! You couldnt
make this up. Indiana was outsourcing the very department that would
cushion the people of Indiana from the effects of outsourcing.
Tata was planning to send some 65 contract employees to work in the
Indiana Government Center, alongside 18 state workers. Tata also said
it would hire local subcontractors and do some local recruiting, but
most workers would come from India to do the computer overhauls, which,
once completed, were supposed to speed the processing of
unemployment claims, as well as save postage and reduce hassles for
business that pay unemployment taxes, the Indianapolis Star
reported on June 25, 2004.
You can probably guess how the story ended. Top aides to
then-Gov. Frank OBannon had signed off on the politically sensitive
four-year contract before his death (on) September 13 (2003), the
Star reported.
But when word of the contract was made public, Republicans made it a
campaign issue. It became such a political hot potato that Governor Joe
Kernan, a Democrat who had succeeded OBannon, ordered the state
agency that helps out-of-work Indiana residents to cancel the contract
- and also to put up legal barriers and frictions to prevent such a
thing from happening again.
Who is exploiter and who exploited in the India-Indiana story? The
Indian consulting firm that proposes to save the taxpayers of Indiana $
8.1 million?s
He also ordered that the contract be broken up into smaller bites
Indiana firms could bid for - good for Indiana firms but very costly
and inefficient for the state. The Indianapolis Star reported that a
cheque for $ 993,587 was sent to pay off Tata for eight weeks of work,
during which it had trained 45 programmers in the development and
engineering of up-to-date software: The company was great to work
with, said Alan Degenet, Indianas commissioner of workforce
development.
So now I have just one simple question. Who is the exploiter and who is
the exploited in this India-Indiana story? The American arm of an
Indian consulting firm proposes to save the taxpayers of Indiana $ 8.1
million by revamping their computers - using both its Indian employees
and local hires from Indiana.
The deal would greatly benefit the American arm of the Indian
consultancy; it would benefit some Indiana tech workers; and it would
save Indiana state residents precious tax dollars that could be
deployed to hire more state workers somewhere else, or build new
schools. And yet the whole contract, which was signed by pro-labour
Democrats, got torn up under pressure from free-trade Republicans.
Sort that out.
In the old world, where value was largely being created vertically,
usually within a single company and from the top down, it was very easy
to see who was on the top and who was at the bottom, who was exploiting
and who was being exploited.
But when the world starts to flatten out and value increasingly gets
created horizontally (through multiple forms of collaboration, in which
individuals and little guys have much more power), who is exploiter and
who is exploited gets very complicated. Some of our old political
reflexes no longer apply.
Were the Indian engineers not being exploited when their
government educated them in some of the best technical institutes in
the world inside India, but then that same Indian government pursued a
socialist economic policy that could not provide those engineers with
work in India ...
Are those same engineers now being exploited when they join the biggest
consultancy company in India, are paid a very comfortable wage in
Indian terms, and, thanks to the flat world, can now apply their skills
globally? Or are those Indian engineers now exploiting the people of
Indiana by offering to revamp their state unemployment system for much
less money than an American consulting firm? Or were the people of
Indiana exploiting those cheaper Indian engineers? Someone please tell
me.
Who is exploiting whom in this story? With whom does the traditional
left stand in this story? With the knowledge workers from the
developing world, being paid a decent wage, who are trying to use their
hard-won talents in the developed world? Or with the politicians of
Indiana, who wanted to deprive these Indian engineers of work so that
it could be done, more expensively, by their constituents?
And with whom does all the traditional right stand in this story? With
those who want to hold down taxes and shrink the state budget of
Indiana by outsourcing some work, or with those who say, Lets
raise taxes more in order to reserve the work here and reserve it just
for people from Indiana?
If you are against globalisation because you think it harms people in
developing countries, whose side are you on in this story: Indias or
Indianas?
9. +++++++++++++++++++++++++++++++++++++++++++++++++++
http://informationweek.com/story/showArticle.jhtml?articleID=161502292
IBM Workers In Europe May Strike Over Offshoring
Shareholders at IBM's annual meeting this week will vote on an
anti-offshoring resolution.
By Paul McDougall, InformationWeek
April 25, 2005
URL:
http://www.informationweek.com/story/showArticle.jhtml?articleID=16150
2292
IBM workers in Europe may strike this week over what they say is the
company's ongoing movement of jobs to low-cost countries such as India
and China, according to union sources. Meanwhile, a U.S. employee group
is asking IBM stock owners to vote on an anti-offshoring resolution at
the company's annual meeting Tuesday.
Trade unions representing IBM workers in Germany have called for
protests at IBM locations countrywide on Tuesday. Employee groups at
IBM France have voted to strike at facilities in Toulouse and Marseille
on Wednesday. IBM workers are unionized in parts of Europe but not in
the United States, though some U.S. workers belong to a loosely knit
employee association.
IBM union leaders in Europe blame recent layoffs and facility closings
on the company's shifting of jobs to low-cost countries in Asia and
Eastern Europe. In an E-mail distributed over the weekend to IBM's
European workers, union officials outlined their position succinctly:
"Our main slogans are no offshoring, no layoffs!" IBM employs about
100,000 workers in Europe. The company recently said it might close
German offices in Hannover and Schweinfurt.
An IBM spokesman in France says he's unaware of the impending job
actions, but adds he doesn't expect any disruptions to customer service
or other IBM operations. "We would expect any labor action to be held
responsibly," he says.
Meanwhile, the offshoring controversy is hitting IBM closer to home.
Members of a U.S.-based employee group have succeeded in placing
several pro-labor resolutions on IBM shareholder ballots. One
resolution requests that IBM's board of directors establish an
independent committee to study the effects of offshoring on the
company's "brand name and reputation." Another resolution calls for "an
end to age discrimination in retirement policies." Stockholders will
vote on the resolutions Tuesday in Charleston, S.C., at IBM's annual
meeting.
Rick White, a staffer at Alliance At IBM, which is affiliated with the
Communications Workers of America, says he doesn't think the offshoring
resolution will pass, "but we nonetheless want to raise public
awareness of this issue."
10. +++++++++++++++++++++++++++++++++++++++++++++++++++
http://www.denverpost.com/Stories/0,1413,36%257E33%257E2837994,00.html
Pair float idea to send jobs offshore
They plan to put 600 global software engineers on a cruise ship just
out of U.S. reach but close enough to bid on contracts.
By Hiawatha Bray The Boston Globe
Wednesday, April 27, 2005 -
Don't start with the pirate gags - eye patches, pieces of eight, Johnny
Depp with a cutlass. David Cook and Roger Green have heard them all.
Still, it is hard to resist the analogy. Here we are, with thousands of
American software engineers clamoring for more work, and these two guys
have a plan to carry even more jobs offshore. Not to India this time,
or to China. Just ... offshore. They figure 3 miles out in the Pacific
should be far enough.
Roger Green is a software entrepreneur. David Cook was once a
supertanker skipper who spent 15 years hauling crude oil through the
world's sea lanes.
Now the two men have announced a remarkable venture called SeaCode, a
company that plans to hire 600 superb software designers from every
corner of the world and house them in a luxury cruise ship just out of
reach of U.S. immigration law - but close enough to bid on
multimillion-dollar U.S. software contracts.
It sounds goofy, but Cook and Green say that since news of their plan
got out last week, their website has nearly been hammered flat by
engineers around the world who are eager to sign on. Of course, the
SeaCode concept isn't nearly as popular with Americans worried about
the loss of jobs to foreign competitors.
"All it would do is be a further contribution to eroding the job
opportunities for skilled American workers," griped Jack Martin,
special-projects director for the Federation for American Immigration
Reform.
Why send work to a ship at sea, when you can easily send it to
Bangalore or Beijing? Because many companies are disappointed with
their forays into overseas outsourcing.
"It seems perfect until you actually go and do it," said Green, who did
his share during an 18-month stint with an Atlanta company that ran
overseas help-desk services. "There are some major problems with
managing something that is halfway around the world. You end up sending
key executives on three-week trips to Third World countries."
There are language difficulties, squabbles over timetables and
specifications. The result, in many cases, is lower quality and higher
cost.
Many of these problems fade away when your engineers are a few minutes
away from the beach by water taxi.
Why would any worker choose to live that way? The same reason millions
of Americans take ocean cruises every year.
"Do you remember the Love Boat?" Cook asked. "That's the kind of
facility we're talking about."
The plan is to purchase a cruise ship and refit it as a lavish floating
hotel. There'll be private rooms for 600 software engineers and plenty
of creature comforts.
"They are fed, housed, and their laundry is done for free," Cook said.
There'll be a crew of 300 to attend to their needs; there'll even be
free medical care. But this ship is also a floating software factory,
with workers toiling around the clock, while clients buzz in by
helicopter to check up on them.
Workers will spend four months on board and then get a two-month
vacation, with the company paying to fly them home. Since they live and
work at sea, the engineers won't need the costly and controversial H-1B
visas used by U.S. firms to import technical talent. But that doesn't
mean they're marooned.
During off hours on the ship, they'll be able to take a boat to shore,
just like sailors on a visiting merchant ship.
"They can't live ashore, they can't work ashore, but they can come
ashore and spend money," Cook said.
With their expenses covered by SeaCode, these nautical nerds will have
plenty of spare doubloons to spend. Green said that SeaCode will pay
them several times what they could earn in countries like India. But
Green admits his employees will still get much less than U.S.
engineers.
"Part of the move to outsourcing is to cut costs," he said. "There's no
question about it."
The SeaCode plan doesn't sit well with activists who fret over lost
American jobs. Not that they're planning to row out to the ship and
scuttle it.
"I think it's a pretty farfetched business proposition," said Ron Hira,
vice president for career activities for the U.S. chapter of the
Institute for Electrical & Electronics Engineers. "When I first heard
it, I thought it might be a hoax."
Even if Cook and Green launch their project, the 600 engineers on board
represent a fraction of the engineering work that has migrated away
from the United States.
Despite this, Hira says the SeaCode plan is a harbinger of hard times
for U.S. workers.
"It shows you the interest that's out there in terms of trying to take
advantage of low-cost labor," he said. "There's a real hunger for that,
which should make U.S. workers pretty worried."
The job market for electrical engineers and computer science got much
better over the past year, but Hira and his fellow techies are still
fretful.
They should be. Demand for foreign-technology workers is as intense as
ever. The federal government went through its entire 2005 quota of H-1B
visa applications in a single day. Congress authorized another 20,000,
and U.S. businesses want even more.
11. +++++++++++++++++++++++++++++++++++++++++++++++++++
http://www.siliconrepublic.com/news/news.nv?storyid=single4772
Dublin: 05.05.2005 06:01AM
IBM job loss speculation in Ireland mounts
04.05.2005 - Fears that up to 120 jobs may be lost at IBMs EMEA
operations in Ireland have risen in recent days over speculation that
jobs may be transferred to India as part of an overall global
restructure of the computer giant. The company declined to comment when
contacted by siliconrepublic.com last week.
In recent days there has been mounting speculation that IBM is
considering dismantling certain parts of its EMEA operations at the
companys operations in Mulhuddart, Co Dublin and that up to 120 jobs
may eventually be transferred to India where call centre workers can be
paid as little as 177 per month.
IBM is one of the jewels in Irelands technology crown, having had a
sales presence in the country for more than 50 years. In the
mid-Nineties the company ramped up its presence in Ireland considerably
upon the construction of a technology campus in west Dublin.
More than 3,000 people are employed by IBM in Mulhuddart in a variety
of roles ranging from software and hardware design to manufacturing and
logistics as well as customer support.
In recent weeks Sanford Berstein analyst Toni Sacconaghi said globally
more than 5,000 to 10,000 jobs at IBM may be lost as part of a major
restructuring at the computer giant after the company reported a
sizeable earnings shortfall a 9pc earnings miss in its most
recent quarter. At an analyst briefing following the results IBM
admitted that a sizeable restructuring of the company was on the
cards but declined to say what shape or scale the restructuring would
take.
Speculation on what the impact of such a restructuring locally would be
was heightened by recent television reports on the subject. When
contacted by siliconrepublic.com IBM declined to comment on the matter.
By John Kennedy
www.ZaZona.com
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