Willie Sutton, a famous bank robber in the United States in the 1920s and 1930s, was once asked why he robbed banks. His reply: 'Because that's where the money is.'
You get a similar response from companies competing in today's global markets when you ask why they hire technologists in China, India, and other parts of Asia. That's where the engineers are. China alone produces 220,000 basic engineering graduates a year, compared with the United States' total of 60,000.
In addition, emerging markets are where the economic growth is. Manufacturing output is growing at 8% in emerging markets but only 3% in the United States. As multinational companies scramble to increase their manufacturing and marketing presence in these countries, they look to native engineers to take on design and research tasks-rather than relying on design-at-a-distance from the United States or Europe. Globalization is causing a basic shift in the location of research, design, and development: It follows the market.
In the past, many US engineers felt threatened by foreign engineers working in the US under H-1B visas. These engineers would, according to the word around the water cooler, accept lower salaries than US engineers. Companies seeking to increase the allotment of visas argued that lower salaries were not their motivation; rather, there were simply not enough engineers to be had in the United States.
This scenario is now dated. It harks back to a time when an engineer's physical presence was necessary for employment. With the advent of the Internet, technical jobs can literally be shipped overseas. Rather than bringing the engineer to the job and wading through the red tape of visas, companies can outsource the job to the technologist. And that's what some IT (information-technology) companies have done with their relatively low-level technology jobs, such as customer support.
However, although outsourcing has become a political lightning rod, perhaps the outcry in the United States over the loss of jobs is overdone. According to the US Labor Department, the number of US jobs that shifted to lower-wage countries in the first quarter of 2004 was just 4633.
One reason for the low number is that the outsourcing concept does not match today's global economy. Outsourcing assumes that the company is located in the United States or Europe and subcontracts its technology service to an independent overseas subcontractor that supplies low-wage service workers to replace workers in higher wage countries requiring the service. But in the new global economy, the parent company is most often a multinational with offices in, for example, New Delhi, which hires full-time salaried employees to be on the spot as the Indian economy booms.
DSP-Merrill Lynch predicts that India's economy will grow by close to 75% this year. Meanwhile, Goldman Sachs predicts the Indian economy will be worth US$1 trillion by 2010, at which point India will be producing 500,000 engineering graduates annually. And rather than the technical but less challenging positions of IT service, multinationals are setting up engineering research and development centers.
In the global economy, the new motto for emerging countries seems to be that there's no need to steal jobs when you can create your own based on a growing economy and a huge source of well-educated engineers and scientists.
