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Monday, October 13, 2003

The Indian IT Impact

Will India overtake the US in IT? An interesting question, and Andy Grove answers in the affirmative: by 2010!

Observing that India and China are 'key threats' to continued American dominance in important high technology sectors, Intel Chairman Andrew S Grove has said India could surpass America in software and tech-service jobs by 2010. India's booming software industry, which is increasingly doing work for US companies, could surpass America in software and tech-service jobs by 2010, Grove, one of the founding fathers of America's hi-tech industry and co-founder of Intel, told a global technology summit in Washington via satellite on Thursday.

He warned that America's software and service industries, strong drivers of US economic growth for nearly two decades, are showing signs of emulating the struggles of the US steel and semiconductor industries.

He said that the nation's software and service businesses are under siege by countries like India and China taking advantage of cheap labour costs and strong incentives for new financial investment.

While the US economy as a whole is improving, its high-tech employment is not, he added. According to industry figures, he pointed out, more than half a million technology jobs were lost from mid-2001 to mid-2003. Many of these losses were due to a contraction of the tech sector after the dot.com bubble (in the telecommunications sector) burst in 2000.Grove said the US tech industry itself is responsible for numerous jobs leaving the country, as firms take advantage of considerably cheaper labour costs in India and elsewhere.
Source: Rediff.Com

and the inevitable backlash is growing:

Information technology experts, chief executives of specialised manufacturing concerns and skilled machinists are among the increasing number of white-collared opponents to free trade, owing largely to the shifting of back-office jobs to India and China.

In a front-page dispatch, The Wall Street Journal reports that these white-collar free-trade opponents are linking up with organised labour and old-line manufacturers, deepening the opposition in the United States to liberalised trade and making Congressional passage of any trade pact more problematic.

"At the focus of their ire are big US companies that have shifted businesses to China and India, which are becoming increasingly successful at nabbing service, information technology and high-end manufacturing work that until recently have been the preserve of US firms," the report said. Pointing out that the new combatants have already made a "surprisingly deep impact" on US policy, the report said the lead comes from an unexpected source, co-founder of Intel Andy Grove who wants government intervention to prevent Indians and Chinese taking away American jobs.

He himself is exporting jobs, because he confesses that his concern for American workers is in conflict with his duty to his shareholders who benefit from outsourcing in countries like India and China. Groups like 'Mad in the USA' (adapted from Made in USA) and TORAW are increasingly reflecting the attitude that free trade is not worth it because local jobs are lost. James Pacew, a computer consultant became and early organiser of information technology workers after he realised that many of his friends were being laid off due to foreign competition. TORAW (The Organisation for the Rights of American Workers), which has attracted members in 23 states in 9 months is one of the grassroots opposition groups that have sprung up within the last one year. It is estimated that 200,000 service jobs, a large percentage in IT, have been shipped abroad to US foreign affiliates during the past three years.
Source: Rediff.Com

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