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To print article, click Print on your browser's File menu. Go back Posted 10/10/2003 |
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Forbes Intel chief: U.S. losing tech lead, jobs It's not just that hundreds of thousands of technology jobs have been shipped overseas, Andrew Grove says -- it's that technical leadership seems headed that way, too. By Lisa DiCarlo, Forbes.com Andrew Grove is depressed. The chairman of Intel "I'm here to be the skunk at your garden party," Grove told a group of about 150 beltway types gathered in Washington, D.C., this week for the Global Tech Forum, hosted by lobbying group Business Software Alliance. New on Forbes.com • Most expensive homes in America • 200 best small companies • The taming of Napster • Forbes.com home page Why is the United States waning? Grove says it's because of offshore outsourcing, lack of federal support of sciences education and a "ho-hum" telecommunications infrastructure. "We've lost more than 500,000 tech jobs in the last two years to foreign competitors." Indeed, many U.S.-based companies are either thinking about or have already sent white-collar jobs outside the country. Companies can often cut costs and boost productivity dramatically by hiring skilled labor in India and other countries. Much of that work lately has involved software development and professional services.
It is this area where Grove fears the United States will lose technical leadership and market share. As proof, he said that the U.S. market share for steel and semiconductors has dropped precipitously over the years. "Is software and services next? It's a very valid question, and it would be a miracle if it didn't happen," Grove said. A call to arms To pull off the miracle Grove is going to need help, and he knows it. "We must fight protectionism here and abroad, double our productivity and raise the hurdles for intellectual property litigation. We must rally around this goal." That might be tough, given that companies aren't ignoring the cost benefits of going offshore. In a morning session at the conference, the chief executive of Internet Security Systems How can the industry rally against offshore outsourcing of jobs when there is such a difference of opinion? Grove says he's been there before, particularly in the 1980s when American semiconductor companies were getting the tar kicked out of them by the Japanese. "This is a democracy. Debate is good." Grove also is depressed about the state of sciences education in the United States, which could eventually put the country in the position of relying on others for innovation. "More than 50% of graduate students are foreign nationals," says Grove, who says the United States needs to attract foreign talent "with appropriate immigration policies." Grove himself emigrated from Hungary in the 1930s and went on to co-found Intel in the late 1960s. Where will outsourcing stop? Grove says that the U.S. government should invest more to attract and retain talented students. After all, the United States, he points out, has committed more than $60 billion in subsidies and aid to farmers, oil and steel companies and airlines. "One billion a year (to promote science education) would help us reach this goal." Phillip Bond, undersecretary for technology at the U.S. Department of Commerce, in a brief interview, disagreed with Grove's gloomy outlook. "Education is one of the administration's top priorities (and) we are committed to bringing talent here." That may be true, but it's worth noting that one of the tasks of the Commerce Department's technology group is to study foreign competitors. That includes warning against advancing or surpassing U.S. capabilities, which could prompt some federal funding to relevel the playing field. One example: the U.S.-funded development of Cray Grove says it's wrong to assume that low-skilled jobs being outsourced now won't eventually work their way upstream to more critical tasks. When that happens, the United States could lose its edge. The People's Republic of China, he said, had stated a goal in 2001 to produce more world-class engineers. "Do we have the national will to take productive action? When the problem becomes obvious, it will be too late -- and the outcome will be too depressing, even for me." (c) Copyright 2003 Forbes.com. All rights reserved. |
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