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Wednesday, December 01, 2004Alan Deuthschmann writes in his Fastcompany article that the issue for America shouldn't be just the pros and cons of outsourcing grunt work. It should be investing in and cultivating the US "extraordinary, educated, talent-driven workforce" so the work of creativity and innovation isn't offshored as well. Excerpts from the article( with edits and my comments added in between):
If we're really in the new global economy of the 21st century, how come everyone talks about outsourcing as though we were stuck in 19th-century imperialism? The debate casts India and China as colonial outposts of cheap, low-level labor serving the almighty American consumer. Offshoring is shaking up US economy, true, but it's not threatening the ironclad egotism: Most Americans still believe that the US will remain the world's leader in innovation while developing countries can aspire only to unglamorous jobs that require less brainpower or entrepreneurial prowess. But the talk among Silicon Valley insiders is different. Their buzz is that India and China are launching high-tech companies that will innovate brilliantly -- and will bring their creations first to consumers in their own lands, often bypassing our shores entirely. India and China are the world's most promising end markets for technology, while the United States is nearly saturated. So the real issue for the coming decade isn't whether Asia's workers will steal our high-tech jobs; it's whether their high-tech consumers will still buy our products.
The new new thing in Silicon Valley isn't even in Silicon Valley: In September, the Silicon Valley Bank, which lends to tech startups, opened a branch in Bangalore, India. The bank has led two delegations, each of two-dozen top venture capitalists, on weeklong tours of India and China. Legends such as Don Valentine from Sequoia Capital,which invested early on in Apple, Yahoo, and Google; and John Doerr from Kleiner Perkins Caufield & Byers, the moneyman behind Amazon.com, joined the June trek to Beijing and Shanghai. They found India and China to be very attractive for investment - “They were as world-class as anything you'd see.” "As Silicon Valley developed over time," says one venture capitalist, "it attracted more skilled people and then more good things happened. The same will happen for India."
As new funding fuels innovation, Silicon Valley insiders see India and China ultimately eclipsing America as technology markets -- with local companies dominating. Already, Ningbo Bird Co. and other Chinese outfits have grabbed more than half of China's huge cell-phone handset market. India's Wipro is enjoying revenue growth of 40% in its outsourcing businesses, but its sales of hardware and services in Asian markets more than doubled in the most recent fiscal quarter. Mike Moritz of Sequoia Capital, the hottest venture capitalist of the moment, visited Bangalore this year and told India's Economic Times, "The raw energy among Indian companies is just unmistakable." Although Sequoia has yet to invest in a startup based in India, it backs at least 35 companies with operations or footholds there. "Cost is clearly part of it," he said, "but what is more important is the extraordinary, educated, talent-driven workforce that constantly gushes from the Indian institutes. It's like Silicon Valley. As Silicon Valley developed over time, it attracted more skilled people and then more good things happened. And the same thing will happen for India." The issue for America shouldn't be just the pros and cons of outsourcing grunt work. It should be investing in and cultivating our own "extraordinary, educated, talent-driven workforce" so the work of creativity and innovation isn't offshored as well. In Part -II, we shall cover related perspectives and the challenges being faced by these countries - mostly India in capitalising these opportunities and the views of the industry captains based in India in getting India ready to catch up. |
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