Outsourcing exec to U.S.: Do the math
BPO Business Intelligence
stealing high-paying American tech jobs.
The chairman of Wipro Technologies, one of the Indian companies that
have rewritten the rules of the global software services market, says
the United States should be more worried about what is taught in its
classrooms -- or, rather, what isn't.
``You need more emphasis on mathematics in school,'' the 61-year-old
billionaire said during a recent visit to Silicon Valley. ``It's a
building block.''
In fact, there is a shortage of information technology engineers in the
United States, said Premji, who in four decades has led Wipro from a $2
million cooking-oil processing company to a $2.4 billion global
technology player. In its most recent quarter, the Bangalore-based
company reported $765 million in revenue, a 41 percent increase from a
year earlier, with profits of $152 million, a 48 percent jump.
Premji has strong ties to the valley. He studied at Stanford University
during the mid-1960s, though his education was interrupted in his
senior year when he had to return to India to run the family business
after his father died. (He finished his bachelor's degree in electrical
engineering about eight years ago through a special arrangement that
allowed him to do correspondence work.)
In 1992, Wipro set up U.S. headquarters in Mountain View and launched
its global business. Now the company has 61,000 employees worldwide,
including about 1,000 in California.
Premji, who owns about 82 percent of Wipro stock, sat down recently for
an interview at Wipro's Mountain View office. Here are edited excerpts
of the interview:
Q Studies suggest a coming shortage of skilled engineers in India. Tech
companies are scrambling to find enough tech workers in India. Does
this concern you?
A The skilled worker shortage is in the U.S., not so much in India. We
are finding there is a huge shortage in the U.S., exactly what you saw
five years back during the dot-com boom. Attrition levels are going up
here. I was with the dean of engineering at Stanford University in the
morning, and I was chatting him up and he said, though the amount of
engineers the United States is producing continues at 100,000, 110,000
a year, the number of engineers going into information technology has
significantly come down.
Q What about the struggle to find workers in India?
A As far as India is concerned, I think the supply of talent is
adequate. I think the growth of the industry there is putting some
strain on talent at the middle management level. Companies are putting
a lot of effort and energy into training. It is not a perfect situation
of supply and demand, but it's manageable. I think it's getting hyped
out of proportion.
Q The problem is more in the United States?
A It's not a crisis. It just forces you to search more for talent
outside the United States. Europe is certainly not a source for talent
because they face the same problems. It's fundamentally linked to the
fact the U.S. is not producing enough engineers, enough IT engineers.
Q Why is this?
A You need more emphasis on mathematics in school. It's a building
block. Two, when this issue of outsourcing gets excessive visibility,
young people say, ``Why should I become an engineer? It's not a secure
job.''
Q Certainly, the issue of overseas employees using H-1B and L-1 visas
to work in Silicon Valley is controversial. Some workers believe
companies have used the visa programs to hire tech workers at cheaper
rates.
A It's a method of competitiveness. Currently, I think it's a non-issue
because the talent is not available in the U.S. So what jobs are we
depriving people of? I'm very clear: You are getting into another
shortage of IT professionals and those who complain they are not
getting jobs, their jobs are getting displaced, are going to be on the
fire list anyway because they were not doing their jobs well enough. I
don't think they are being deprived of their jobs because of
outsourcing.
Q You believe the H-1B visa program should be changed to allow more
than the current 65,000 a year.
A I think it should be expanded. The limit of H-1B visas is 65,000. It
has remained that for five years. Exports of software from India to the
U.S. have gone up probably about three times in that period. It's
become a political issue.
Q What challenges do you see Silicon Valley facing with the rise of
India and China as major technology forces?
A I think it is the center of innovation, no doubt about that. I think
innovation here is improving, getting more aggressive. So I think
Silicon Valley is well-positioned. It's expensive, it's got traffic
problems. But those are manageable problems. There is a huge spark of
creativity here. There is an ecosystem here that is huge. We can
supplement that. We are not going to displace that. It's an ecosystem
of creativity, an ecosystem of entrepreneurship, an ecosystem of
venture capital.
Q How would you say the emergence of companies like Wipro are changing
the global tech services market?
A It's getting more pervasive. It's spreading beyond conventional IT
outsourcing and BPO (business process outsourcing). It's spreading to
engineering services. It's spreading to knowledge services. It's
spreading to clinical services. It's spreading to very sophisticated
R&D services, like we do. Today, we are the largest third-party R&D
outsourcing company.
Source: www.mercurynews.com 03/12/2006