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[ThatHawaiiGuy]

It's unstoppable: High tech jobs ditching US

The need to stay competitive will benefit countries such as India, China and even Singapore, where labour costs are lower

EVEN though the United States' ailing technology sector looks poised to recover, the bad news for job-seekers in the world's largest economy is that they won't benefit.

Faced with intense competition and the need to cut costs, one in 10 technology jobs is likely to move overseas within the next 18 months, says research firm Gartner.

The beneficiaries will be countries such as India, China, Vietnam and Singapore, which are seen as being able to deliver cheaper and faster software development, manufacturing and tech support.

The trend appears to be an unstoppable force, and that not just infuriates jobless workers but also worries some economists who say it may ultimately hinder the US economic recovery.

'This is part of why the economy is still sluggish,' said director Mac Clouse of the Reiman School of Finance at the University of Denver. 'It's not the traditional economic model any more,' he said.

'Businesses may be spending, but they're not spending their dollars here - it's not going to result in new jobs and increased economic activity.'

However, US business executives say they can't compete, let alone keep their companies alive, if they hire US IT workers for US$40,000 (S$70,000) to US$80,000 a year while their competitors hire the same talent in India for US$8,500 to US$9,800.

So, when Denver-based software company Quark was deciding where to build a new facility that will employ 1,000 software and technology workers, it chose Chandigarh, India.

Late last month, news leaked that IBM would move 1,000 jobs overseas.

A couple of weeks earlier, Microsoft said it would hire 5,000 more people, up to 2,000 of them outside the US. At about the same time, Oracle said it will almost double workers in its Indian unit to 6,000.

'There's a lot of interest,' said the company's president Robert Welch. 'American software teams are awesome for innovation, but in terms of being able to crank things out in a productive manner, they're not the best on the planet.'

Three years ago, Louisville-based Storage Technology moved its manufacturing operations to Puerto Rico. Agilent Technologies also shipped hundreds of its Colorado Springs jobs to India and China. Also in the Springs, broadband device maker Actiontec sent several hundred jobs to India, and computer storage firm Quantum sent 865 jobs to Malaysia.

Denver tech consulting firm Ciber revealed a few weeks ago it will create new software and IT-related jobs in India.

Chief executive Mac Slingerlend of Ciber argues that by using Indian workers, his firm ultimately saves US jobs.

For instance, Ciber lost work from a major client, American Express, when the financial firm sent half of its software development work to India.

Because Ciber didn't do work in India at the time, the company lost the business and was forced to cut 100 jobs in its Phoenix office, Mr Slingerlend said. 'I've cost American jobs by not doing work on India.'

That doesn't provide much consolation to the thousands looking for work, some of whom say they were replaced by foreign workers.

Yet jobs have been leaving the US for years in a number of other industries. The automotive industry began hiring offshore in the 1960s as clothing, shoe and widget manufacturers did a decade later. In 1970, manufacturing jobs made up 15 per cent of the Colorado workforce. By 2000, they made up just 9.3 per cent.

And more recently, customer call centres started moving overseas.

However, critics say that while manufacturing jobs in the 1970s were replaced with new and higher-paying jobs in technology, the future for today's jobless tech workers is not clear.

Still, Colorado's secretary of technology John Hansen said the solution is not regulation. That, he said, will strangle businesses' global competitiveness.

Instead, US companies and citizens must innovate and come up with technologies that create new companies and ultimately new jobs. -- AP

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