Articles on India

Silicon Valley falls to Bangalore
SATYA PRAKASH SINGH
[ Monday, January 05, 2004 11:05:18 pm

TIMES NEWS NETWORK ]

BANGALORE: The inevitable has happened. Bangalore , which grew under the shadow of America's Silicon Valley over the last two decades, has finally overtaken its parent.

Today, Bangalore stands ahead of Bay Area, San Francisco and California, with a lead of 20,000 techies, while employing a total number of 1.5 lakh engineers.

Bangalore, which commenced its R&D activities in 1986 when Texas Instruments set up its product engineering centre here, is currently home to the who's who of the global tech fraternity.

The recent recession in the US also forced most corporates there to move thousands of jobs to India in addition to tech giants such as Cisco, Intel , IBM, Oracle and i2 relocating some of their Indian-origin employees from the US centres to Bangalore.

Indian tech workers also returned home in large numbers as jobs dried up in the US.

Said Kanwal Rekhi, Silicon Valley icon and serial entrepreneur, "Bangalore happened at lightning speed because of the Y2K problem, where America chose to depend on India as it was thought to be a one-off situation. And, Indians learned a lot about the applications they were helping to fix."

He added that the American recession was a heaven sent opportunity to the Indians as the corporations trying to save money on IT found India , having used it's services with good results during the Y2K crisis.

According to Nandan Nilekani, CEO of Infosys, the IT sector which employs around two lakh professionals (including ITES) in Karnataka alone, would grow to five lakh people by 2007, while software exports from the state would cross the $10-billion mark.

As India moves through the tornado of a hiring binge, the unemployment rate among the US software engineers has more than doubled to 4.6 per cent in three years. As per reports, the rate is 6.7 per cent for electrical engineers and 7.7 per cent for network administrators.

TORONTO: India is likely to benefit from exodus of high tech jobs from North America as over six million jobs are expected to shift overseas in a decade.

"In the next decade, as many as six million jobs might be sent to India and other nations by US companies in search of lower costs and a tech-savvy, English-speaking workforce," Goldman Sachs Group Inc said in a recent report.

"The shift of North American technology jobs to low wage countries like India cannot be stopped because not only are Indian companies offering a third of the cost, but they actually are better" said Pradeep Sood, President of Indo-Canada Chamber of Commerce.

Indian workers earn as little as one-tenth of their North American counterparts, and India produces 67 per cent more engineers and computer scientists each year than the US, said Sood, suggesting that India should take full advantage of its low salaries and skilled work force.

A number of multinational corporations like Microsoft, Intel , Accenture Ltd and GM Motors have already started taking advantage of cheaper costs in India. Microsoft, that employs 250 workers in India, is on track to double its workforce to 500 by 2005.

Intel, US chip making company, has invested $20 million in an Indian customer service centre of Satyam Computer Services Ltd, one of the biggest software makers in the country. Intel employs about 1,000 people in India and has its largest non-US chip design centre in Bangalore.

Accenture Ltd, which manages business computer systems for clients including AT&T, plans to double its workforce in India to as many as 10,000 by the end of this year. General Motors Corporation, one of the world's most famous auto maker, plans to hire 100 researchers in Bangalore to develop lightweight material and conduct crash tests, according to economic experts in Toronto.

[NOTE: Accenture is the reconstituted Arthur Andersen - the accounting firm that designed the computer systems and audited the books for Enron and Global Crossing.]

WASHINGTON: Former First Lady Hillary Clinton on Wednesday defended the general principles of free trade and outsourcing , while rejecting suggestions that she was allowing Indian info-tech major Tata Consultancy Services (TCS) to take away jobs from the state that elected her to the Senate.

The New York Senator was ambushed by CNN’s Lou Dobbs on his show, a daily outlet for anti-free trade rants, with questions about a TCS center she opened last year in Buffalo in upstate New York despite the company’s reputation as an 'outsourcer.'

"Of course, I know they outsource," Clinton retorted. "But they have also brought jobs and they intend to be a source of new jobs in the state."

Outsourcing works both ways, she told Dobbs and his constituency of anti-free traders who tried to corner her on the issue. While not minimizing the problems of job flight, she said free trade also provided opportunities for the US to attract jobs from around the world if they got the domestic diagnosis right.

The administration and the Congress needed to figure out changes in tax codes and trade laws to provide incentives for companies to keep jobs at home and create new jobs instead of blindly striking out against outsourcing.

"We are not against all outsourcing; we are not in favour of putting up fences," Clinton said firmly, adding that Americans were capable of competing against anyone if they summoned the will.

TCS opened a 10-person center in Buffalo last March at the prompting of the former First Lady and local officials eager to generate local employment. The company also collaborates closely with the University of Buffalo on various projects aimed at galvanising the local sci-tech economy.

But anti-outsourcing elements have targeted the office, arguing that TCS will simply outsource the jobs to India or bring in Indian hands to Buffalo to do the work.

They have also attacked Clinton for inviting TCS, and in some instances accused her of working with what one anti-outsourcing website described as the 'enemy.'

But the New York Senator dismissed the fears on Wednesday, and instead offered various prescriptions aimed at creating more jobs at home, including creating a 'Manufacturing Research Agency.'

Her proposals, amid a slew of other prescriptions and legislations by other lawmakers, prompted speculation that she was moving center-stage with an eye on the vice-presidential ticket alongside John Kerry. But the former First Lady laughed away the suggestion saying she was happy with her work as a Senator.

Tata factfile

*India’s largest info-tech company; first to cross $1 billion in revenues

*Employs more than 25,000 people, including 5,000 in the US and Canada

*Has 50 branches in the US including three in New York State

WASHINGTON: A new bipartisan group called 'Friends of India' has been formed in the US Senate on the lines of the decade-old Congressional Caucus of India and Indian-Americans in the House of Representatives.

About 20 Senators have signed up for the new caucus, the first country-specific body in the Senate. It will be led by Texas Senator John Cornyn and co-chaired by New York’s Hillary Clinton.

Senate Majority Leader and Tennessee Republican Bill Frist and Minority Leader and South Dakota Democrat Thomas Daschle will also be members of the group, Cornyn said at a Capitol Hill Gala Dinner hosted by the American Association of Physicians of Indian Origin (AAPI) on Tuesday night.

The Senate caucus addresses the long-standing feeling among community activists that while India lobbied effectively on the House side, it lacked punch in the Senate, where lawmakers have often been uncaring or unapprised about India’s concerns. The India Caucus in the House has nearly 150 members.

Indian community activists worked to push for the Senate Caucus at a time when the Bush administration is seen as having gone totally overboard in its support and promotion of the military dictatorship of Pakistan. There is also concern in the community over the unexpected backlash against India over the issue of outsourcing.

At a Congressional hearing on Tuesday, House lawmakers grilled administration officials over granting Pakistan a ''major non-NATO ally'' status despite the ongoing probe into the country’s involvement in nuclear proliferation.

''Do you think that the designation of Pakistan as a major non-NATO ally should wait until we've made that determination?'' Democrat legislator Gary Ackerman asked sharply.

But US officials, who have been giving an almost daily serial certification of Pakistan’s good behavior on terrorism and proliferation issues in the face of searching questions from many quarters, contended that the granting of the status was based on ''other factors'' – an oblique reference to Islamabad’s help in hunting for al Al Qaeda elements.

However, there is apprehension among Indian activists that their efforts on the Hill will amount to little if the administration itself continues to bat for Pakistan in the manner it has done so far. At the AAPI event, everyone made the right noises even though the Bush administration’s actions over the past few weeks have frayed Indo-US ties significantly.

Cornyn, who is a freshman senator, said he undertook the job of creating an India Caucus in the US Senate because of the importance of US-India relations and the incredible experiences he had on a recent visit to India. Harking back to the worn out recollection of poor Indo-US ties during the Cold War, Cornyn said ''We have to make up for lost time.''

But Indian officials say privately that while the two countries did make up for lost time in the recent years, Washington had lost the plot yet again.