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Tech Industry

Offshore is in--get used to it

Knock off the scapegoating, says CNET's Charles Cooper. Instead, government and industry should consider a technology Marshall Plan.

Are you ready for eight more months of demagoguery about how to stop the loss of American technology jobs? I'm sure you're as thrilled about that prospect as I am. With Lou Dobbs morphing into Howard Beale, ranting against the export of our great middle class existence has reached the level of spectator sport. In the run-up to the fall presidential election, rest assured that the noise is only going to get louder.

In Northern California, unofficial Ground Zero for the debate on offshore outsourcing, or offshoring, the topic has now elbowed aside stock options as the preferred subject du jour of the digerati. Seems you can always find some bloviating big shot publicly wringing his or her hands about the decline of the nation's technology prowess and the threat to America's future as an industrial leader.

The topic has now elbowed aside stock options as the preferred subject du jour of the digerati.
The conversation sometimes turns explosive and angry. So at the risk of callous oversimplification, let me suggest that these folks are too consumed with yesterday's news.

Offshore outsourcing is already a fact and any politician with an ounce of brains already knows that legislation can't stop the further export of jobs. That has not stopped the hired help in Washington from making pledges to press foreigners to comply with (nonbinding) treaties to improve labor and environmental standards. Sounds great. Still, it won't do a thing to raise productivity or protect U.S. high-technology workers.

Truth be told, U.S. manufacturing jobs have been heading offshore for quite some time now. The news is that now information workers are the ones getting pinched. In a certain sense, America's technological progress has become its Achilles heel.

How should Silicon Valley grapple with the consequences of today's new reality? You can be sure that certain companies will ship more jobs abroad. Lots of highly skilled people living in places like Bangalore, India, are capable of doing the same work done in places like Palo Alto, Calif., and at lower cost. A CEO would be negligent not to take advantage of the opportunity afforded by the advent of relatively inexpensive broadband connections.

The other point is that job creation also follows the money. Blaming the hiring of overseas labor for dislocations in the technology industry's job market ignores the more fundamental trends reshaping the map. Ten years ago, the hot spot of job creation was the United States; today it's across the ocean.

"We've probably moved less than 100 jobs that existed here that now exist somewhere else," said Intel spokesman Howard High. "If you look where job growth (is), it's in the markets that are emerging."

Scapegoating may make for a satisfying sound bite on the evening news, but outsourcing is not the enemy.
No doubt tech executives who live and breathe this stuff are anxious to move the needle on the debate. Still unclear is what to do first. Some, like Hewlett-Packard CEO Carly Fiorina, say the answer is to lower the cost of capital access to businesses and increase investment in research and development. Others, like Geoff Tate, the CEO of Rambus, say the solution is to offer American students more rigorous math and science instruction as early as high school.

The right answer probably is all of the above. Budget-starved state and national governments are not in any condition to foot big bills. And if ever there was a time to consider a technology Marshall Plan, this is it.

For starters let the private sector take the lead. Pair up the Coalition for Economic Growth and American Jobs with the CEOs directing the Computer Systems Policy Project and tell them to come up with a proposal in time for this fall. Then get the presidential candidates to commit to the agenda--and see what follows.

Scapegoating may make for a satisfying sound bite on the evening news, but outsourcing is not the enemy. To borrow upon The Bard's wisdom, the fault is not in our stars but in ourselves.