MissouriGovernor Bob Holdenorderedstate agencies not to award contracts to vendors that plan to do the work outside the United States. Exceptions include cases in which a significant and substantial economic cost ctor means that ilure to use the contractor would result in economic hardship to the state.
, a former university professorhimself, said in a widely publicized speech late last year. We preparethem to be lawyers and consultants, instead.
Jobs for Americans Act: Variety of provisions, such as requiring companies to give employees at least three months notice, if they plan to lay off 15 or more workers and send those jobs overseas.
ArizonaGovernor Janet Napolitanoapproved a policy change, whereby future state contracts will require that all work be done in the United States.
President Bush has touted the
If were going to come up with a program to help people make thetransition from jobs that are now becoming competitive elsewhere, Idrather see the benefits go directly to the people, not just thecompanies, said Rick White, a former Republican congressman and nowpresident and CEO of bipartisan industry lobbying groupTechNet.
A community volunteer trains students in networking technology at San Diegos High Tech High.
Not surprisingly, such emphasis on practical skills is welcomed by theindustry. Gartner analyst Linda Cohen says universities must shift theiremphasis from pure computer science to management and business skills,such as how to finance technology operations, how to supervisepartnerships and how to assess the risks of adopting a cutting-edgetechnology.
independentcommissionchaired by former IBM chief Louis Gerstnerrecently published a report indicating that teacher quality is the mostimportant ctor in education but also noting a shortage of qualifiedmath and science instructors. About 56 percent of high-school studentstaking physical science are taught by educators without a background inthe field.
R&38;D budgets are migrating offshore. These are red flags, becausethis is the heart of our business, said George Gilbert, the managingpartner of theTech Strategy Partnersconsultancy and a former market analyst atCredit Suisse First Boston. Its not just labor arbitrage. Now, itsbeing called distributed development.
To counter that trend, some in government and industry say America mustget back to basics. And in this case, that means kindergarten.
in New York, Ron Hira, has argued that government incentives for R&38;Dshould be aimed at workers, rather than companies, to ensure that workremains in the United States. Businesses are tending to move more andmore of that research out to the center of production, not in acentralized lab, he has said.
he signed into law in 2002, which calls for moreaccountability in schools. His administration has also proposedimproving math and science education through a program that would linkelementary and secondary schools with technology-savvy colleges anduniversities.
We dont have anything thats nearly as aggressive as whats going onthere, Carlson said. I dont see the urgency yet in the U.S. about howst the world is moving and how st the other countries are moving tocatch up to us.
SFSUs Gill is taking action to reverse this trend. After cancelingthree classes this semester as a result of waning student interest, thefrustrated professor began recruiting executives such as TrimbleNavigations Denis for ajoint corporate-university programthat employs students on actual projects for participating companies.
The killer app is killing us. Heroes are made only when theres a needfor one, said Sam Gill, chair of the
trade group said in a recent report. The U.S.needs a son of Sputnik mandate today.
Wilson says such federal support is critical to programs that help notonly those who have already been displaced by offshore outsourcing butalso those who may need protection against it in the future. BayTEC isrunning a $3 million, three-year effort to train 759 workers at localcompanies, including IBM, to move up the ladder and therefore helpsafeguard them from losing their jobs to overseas labor.
Workforce Investment Boards are perceived by members to be a goodnetworking activity, said Mike Wilson, CEO of the Bay Area TechnologyEducation Collaborative, an Oakland-based training group also known asBayTEC. Largeorganizations dont care about that, necessarily.
Its really like turning a tanker in the water, he said. The shipsfinally turning in the right direction.
The H-1B program, which allows skilled workers to enter the country for up to six years, is likely to remain a flash point. In February, less than five months into its fiscal year, the federal government had already received enough applications to reach the 65,000 limit allowed for 2004.
For too long, most federally funded training programs were not focusedon employer skill needs, conceded Mason Bishop, a deputy assistantsecretary for employment and training at the U.S. Department ofLabor.
Hira, of the Rochester Institute of Technology, has modeled a trainingsuggestion on the current federal R&38;D tax credit. But he and othersrecommend that any such tax breaks be linked explicitly to employees, toensure companies use the resources for programs that benefit the workforce.
American Manucturing Jobs Retention Act: Through amendments to federal law, would require that any prospective contractor with a U.S. government agency employ at least 50 percent of its employees in the United States.
Thomas-Voinovich Amendment: This amendment limits the governments ability to outsource functions to contractors performing work outside the United States. (PASSED)
Just as the number of overall jobs moved offshoreis impossible to pinpoint, it is unclear how many technology R&38;D positions have beenexported. Butmajor U.S. companiessuch as IBM, Microsoft and Oracle are establishing overseas researchcenters with thousands of employees.
That movement is precisely what many fear most. While manucturing,basic programming and other types of commoditized work have already leftthe country, the U.S. technology industry has traditionally viewed itsadvanced research as the secret ingredient that keeps it at No. 1.
&149;R&38;D in all fields grew just 1 percent last year to $284billion, according to theNationalScience Foundation, a steep drop from its average annualgrowth of 5.8 percent between 1994 and 2000. Federal budgets havearguably shortchanged technology, given its contribution to the overalleconomy. Life sciences, for instance, received more than half of theestimated $53.4 billion in federal research funding handed out lastyear.
The Bush administration has proposed spending $14.6 billion next year ontraining programs and grants for technical and two-year postsecondaryschools--a 6.7 percent increase on this years budget. The plan wouldearmark $250 million for a new grant program for training in communityand technical colleges.
Companies emphasize the need to cultivate and advance new technologiesthat will expand their own businesses and, in turn, continue the cycleof U.S. innovation that began with the Industrial Revolution. Yet thisfundamental issue has beenlargelyabsentfrom the national campaign platforms in thepresidential race, often drowned out by simplistic platitudes andtiresome finger-pointing.
Still, at least some industry veterans are banking on a secret weapon tomaintain Americas leadership in technology: Yankee ingenuity. And theycaution against overreacting to outsourcing and other trends, concernedthat government regulation will backfire by stifling the creativeprocess that breeds innovation and entrepreneurialism.
Instead of blaming black-hearted CEOs or predatory foreign countries, hecontends that the root of the issue has always remained within U.S.borders, in an institution not often mentioned in todays politicalrhetoric: the classroom.
Phillip Bond, President Bushs undersecretary of commerce fortechnology, said much of the work in the Defense and Homeland Securitydepartments involves physical science and engineering. He also suggestedthe federal focus on life science research will pay off in the realm ofinformation technology. There is a kind of wet-dry, lifescience-physical science convergence that is taking place, he said.
Offshoring: U.S. needs reforms, not rhetoric jacob mineau michigan tech,May 4, 2004, 4:00AM PTAs a senior Silicon Valley executive, Bob Denis hears a lot of talkabout the exportation of jobs overseas--but little that addresses thereal problem.
In recent decades, this country seems to possess some magic talismanthat tells us what will become important to society around the world andto provide what they want, said Andy Oram, of technology publisherOReilly &38; Associates, who is a member of activist groupComputer Professionals for SocialResponsibility. Our position may be defended by short-termboosts, such as retraining workers and granting tax credits for researchand develop
Heres an overview of federal and state efforts related to offshoring.
@import url(/i/ne/sr/digiagenda04/offshore/da_offshoring.css);@import url(/i/ne/sr/digiagenda04/offshore/d1/da_offshore_d1.css);
Forrester Researchhas projected that about 473,000 computer servicesjobs will go offshore by 2015. In addition, research firmGartnerhas estimated that 1 out of 10 jobs at information technology companies willmove to emerging markets and that 1 out of 20 jobs in internalinformation systems departments will move overseas by the end of thisyear.
Some want the United States to make it easier to bring in skilled workers through visas and allow graduates of American advanced-degree programs to stay in the country. Others say the United States has plenty of highly educated technology professionals still looking for work and that guest worker visa programs like the H-1B are rife with abuse and actually fuel the shift of tech work overseas.
Some have a gnawing sense that the roots of the problem may extend back through our education system.The commission recommended that funds for teacher salaries in publicschools should be raised by $30 billion and that educators pay be basedpartly on performance. Each teacher should get a 10 percent raise, thepanel recommended, and the top-performing half should receive a 30percent increase.
Students confirm that university curricula are often based onyesterdays technology. There is definitely a lag time, said JimSeeto, the president of a student group at SFSU that helps membersacquire technology skills beyond the classroom. In one of our projects,we try to focus students on different operating systems. The prevalencethroughout the school is Windows as opposed to Linux, which isup-and-coming. School seems to be a couple of steps behind whats outthere.
are pushing toexpand the federal Trade Adjustment Assistance program, which gives workers up to two years ofincome support and training services, if they lose their jobs to foreigncompetition. Today, however, many technology professionals areineligible for the program, which provides a package worth an estimated$34,000.
Some companies arent waiting for that ship to come in. IBM, which hasbeen criticized for moving jobs overseas, recently declared it woulddevote$25 million over two yearstotraining its employees and business partners. There are lots ofgovernment programs, but they train people for jobs that dont exist--inthe past, CEO Sam Palmisano said at the time. This is for futurejobs.
hasracked up top scores on Californias academic performance index--10 outof 10.
MichiganGovernor Jennifer Granholmissueda directive to give preference in state contracts to Michigan-based job providers. The state must also take into account whether work performed outside Michigan or the United States would be detrimental to the State of Michigan, its residents, or the states economy.
What you want to do is make the school place and the workplace morepermeable, Principal Larry Rosenstock said. You want a lot ofscientists and engineers coming into the school on a regular basis.
was deemed ineffective intraining workers for high-skilled jobs--one reason President Bush hasproposed ending it. Local organizations that run training programs areviewed largely as career networking opportunities for executives atsmaller companies, which often have nothing to do with high tech.
Others argue for a more direct form of government help, such as publicinvestment in start-ups. A leader of theCouncil on Competitiveness, agroup of U.S. corporate, academic and labor leaders, has argued that thegovernment can act asa kind of venturecapitalistfor next-generation companies.
For such programs to succeed, the organizations that run them need tomake an important shift from a social-services mentality to aneconomic-development mind-set, Wilson believes.
Cohen argues that many IT jobs sent offshore are not worth trying topreserve in the United States, because they are increasingly donethrough automation and will dwindle over time. Its basically theindustrialization of IT, she said. As technology matures, jobfunctions will be replaced by automation--with or withoutoutsourcing.
Foreign countries are already doing more to attract cutting-edgeR&38;D, according to Curt Carlson, CEO ofOffshoring: U.S. needs reforms, not rhetoric jacob mineau michigan techSRI International, a nonprofitresearch institute based in Menlo Park, Calif. Carlson said Taiwan andSingapore are offering to subsidize 30 percent to 40 percent of thecosts of new technology-focused companies for up to five years.
The states below are considering legislation to prohibit work on state contracts from being performed overseas or by individuals not authorized to work in the United States.
I dont see the urgency yet in the U.S. about how st the other countries are moving to catch up to us.President Bush and likely challenger Kerry agree that the R&38;D taxcredit should be made permanent. Kerry also calls for increased fundingfor key research programs and agencies, such as the National ScienceFoundation and the National Aeronautics and Space Administration.
Sources: CNET News.com, National Foundation for American Policy.
&149;Educators and students concede that university curricula areoften hopelessly obsolete, and enrollment in computer sciences hasplummeted since the dot-com bust. In a survey of Ph.D.-granting computerscience departments in the United States, the
&149;Government programs to train workers have generally iled.For example, a federal program funded by fees from H-1B
Lawmakers in the following states have proposed measures to require call center operators to identify their location in some manner.
The situation is in some ways like in 1957, when President Eisenhowermandated a national program to improve math and science education,pursuant to the launch of Sputnik, the
The most intelligent thing the U.S. government can do is to beef up theeducation system. The K-12 system does a good job of weeding out anystudents interested in math and science, Intel CEO
Although Oaklands board devotes much of its energy to nontechnologyefforts, such as helping local residents get jobs at the citypanding airport, it also is trying to aid displaced tech workers. Forexample, a $400,000 program dubbed Tech to Teachers is assisting 43laid-off technology workers become math and science teachers in urbanareas.
Shelton and others are concerned about the direction of bothgovernment-sponsored and corporate R&38;D efforts. Industry accountsfor the majority of R&38;D spending, but its inflation-adjustedinvestment dropped in 2001, according to the National ScienceFoundation, which estimates the downward trend continued in 2002 and2003.
American R&38;D investments are r greater than those in any othernation in total numbers, but other countries can show a greatercommitment to research and development, when looked at as a share oftheir economy. A European Commission study last year found that R&38;Dinvestments amounted to 2.8 percent of gross domestic product in theUnited States in 2002, compared with 2.98 percent in Japan in 2000 and3.4 percent in Finland in 2000, the last year data were available.
The killer app is killing us. Heroes are made only when theres a need for one.
The key to the schools approach is not training students in aparticular skill that could soon become obsolete, but rather helpingthem develop critical-thinking and project management abilities throughwork with local businesses and other real-world assignments. Studentshave even pitched start-up company plans to venture capitalists and, intwo cases, are getting patents for their ideas.
Regardless of the retraining issue, research and development in generalis widely viewed as key to the future of the technology industry in theUnited States.
Technologymoves in quantum jumps, then you have to backfill. Were now in thebackfill phase of this period.
By this measurement, the U.S. really wilted in the 1990s, Sheltonsaid. The investment in physical sciences has been irly flat over thelast 10 years or so.
Opinions vary not only about exporting technology work abroad but also about importing technology talent from foreign nations.
San Francisco State UniversityBushs 2005 budget calls for raising federal R&38;D spending by 4.3percent to $132 billion, but the increase is focused on weaponsdevelopment and homeland security, according to theAmerican Association for the Advancement of Science. The plan leaves all other federal R&38;D programscollectively with declining funding, according to the association.
Industry groups say the federal government can encourage companies tospend more on R&38;D by granting permanent status to a current federaltax credit for research and development. The credit was introduced in1981 and has been extended 10 times through tax legislation.
We spoiled an entire generation with the 90s. The expectation was: Yougo to college, find a product, get venture capital money and, boom,youre a millionaire, said Denis, the chief information officer atTrimble Navigation,a satellite software company based in Sunnyvale, Calif., that has morethan 2,000 employees. The realism is missing: Unless theyre in the top5 percent of schools, they havent got any hope. The very jobs weretraining students to do are the ones were exporting.
Calls for improvements in the U.S. education system have kept coming fordecades, but they have taken on renewed urgency where technology isconcerned.
Much of the work force investment board money gets funneled intofederally mandated one-stop career centers, which provide resourcesfor job searches, said Al Auletta, the Oakland boards executivedirector. Theres not a heck of a lot of funding left for training, hesaid.
As themerits of offshoring American laborare debated thispresidential election year, the ct is that some jobs in manucturing,customer service and other established U.S. sectors may never return.But for the high-technology industry, the more pressing concern is thelabor force of tomorrow, not current losses. Job security in the futurewill be defined largely by the future of research and development--theintellectual capital that has always kept the country at the competitiveforefront.
TheU.S. Bureau of LaborStatisticsestimates that demand for software engineers willgrow by nearly 50 percent between 2002 and 2012. But if the number ofcomputer science graduates at U.S. universities continues to ll, arising percentage of those jobs will likely go overseas.
In addition, Granholm allowed a vendor to be barred from bidding for state contracts, if it is unable to perform responsibly or demonstrates a lack of integrity that could jeopardize the states interest. She identifies offshore outsourcing as a ctor to consider.
Although academic achievement in mathematics and science subjects hasimproved since the 1970s, the National Science Foundation reported in2002 that few students are attaining levels deemed proficient oradvanced. Citing an international study, the foundation said17-year-old American students tended to perform worse than theircounterparts in other countries.
As technology matures, job functions will be replaced by automation--with or without outsourcing.The enrollment decline is most striking in California, home to SiliconValley. Preliminary figures from San Jose State University, whichcounted 765 students in its computer science program in spring 2002,show a drop of about 30 percent, to 535, in the same period this year.Similar decreases have been reported throughout California StateUniversitys 19-campus system, including the one in San Francisco, which had recently considered closing its School of Engineering altogether.
found that the number of new undergraduate majors dropped 18 percentlast year. Prospects appear even bleaker at the high-school level, whereonly 17 percent of 12th grade students scored at the proficient levelin mathematics in 2000, according to federal research.
Others say entirely new government approaches are needed to retrainworkers for the next major cycle of technological innovation. HarrisMiller, president of theInformation Technology Association of Americatrade group, has outlined a plan that would allow adisplaced worker to receive a $10,000 grant and $10,000 in a subsidizedloan to obtain a masters degree or otherwise improve skills. Theproposal would cover 20,000 workers for $200 million annually, Millerestimates--just a slight diversion from other multibillion-dollarprograms.
Without a permanent law on the books, companies cant ctor in thecredit as they assess the value of their long-term research investments,TechNet contends. Yet it is exactly this sustained, long-terminvestment in research and development that will ensure continuedinnovation and the next generation of critical technologies, the grouphas said.
No one has proposed any magic formula to keep advanced technology workfrom flowing offshore. But misdirected efforts in government-sponsoredprograms show there is room for improvement in retraining Americanworkers who have been displaced or are at risk of losing their jobs.
An estimated 1.2 million students quit high school each year, accordingto a study by the nonprofit
has proposed a human capital investment taxcredit that would allow companies to recoup more than 100 percent ofthe cost of training their employees.
In scores of interviews with government officials, business leaders andacademics, CNET News.com has identified three points that are crucial toany national agenda devoted to keeping advanced R&38;D in the UnitedStates: education reform, professional retraining and researchinvestment. If these areas are neglected, the nation could ce direconsequences that transcend the outsourcing issue and threaten toundermine the countrys historical status as the world leader intechnology:
These issues go r beyond immediate economic concerns and challengesome fundamental principles of American culture. Many believe that U.S.society, which has always placed a premium on breakthroughs byindividual achievement, must redefine its notion of success to includeincremental advancements, often produced by committee in relativeanonymity.
In considering the issue of expanding our skilled work force, some havea gnawing sense that our problems may be more than temporary and thatthe roots of the problem may extend back through our education system,Federal Reserve Board Chairman Alan Greenspan said at an offshore-outsourcing conference at Boston College in March.
MinnesotaGovernor Tim Pawlentydirectedthe state, when it judges contract bids, to take into consideration where work will be undertaken. He also issued a requirement that vendors disclose the location where services and subcontracted services will be performed.
Call Center Consumers Right to Know Act: Would require employees at a call center to disclose their physical location.
Industry organizations want more funds to be specifically designated fortechnology workers. TheInstitute of Electricaland Electronics Engineersand
Democratic challenger John Kerry has a number ofhigh-tech educationproposals, as well. He backs after-school programs that focus on mathand science, and he plans to increase education funding, partly througha State Tax Relief and Education Fund that would allocate $25 billionover two years. He has also put forward a plan for a tax credit on thefirst $4,000 of tuition for each year of college, to make highereducation as universal as high school.
Duane Shelton, president of theWorld Technology EvaluationCenter, a nonprofit research group, points to the number ofpublications in research journals as a worrisome barometer of decliningR&38;D efforts in America. In 1981, the United States led inpublications in 17 of 20 research categories, when compared with sfrom the European Union and the Asia-Pacific region. However, it wasfirst in only 7 categories in 2001, according to data fromThomson ISI.
Genuine American Flag Act: Requires that six months after the legislations enactment no flag of the U.S.A....that is the product or manucture of any foreign country or instrumentality may be imported for sale.
AnIndianalaw gives preferential treatment in contract bidding to local businesses.
Its better for us, as a university, to let the industry lead it andcommit to it, because then it will happen, Gill said, acknowledgingthat the situation needs to be tackled more quickly than academia, withits bureaucratic pace, usually does. It will upgrade whats beingtaught in the classroom to reflect the needs of industry. We hope thatour program can serve as a model for campuses across the country.
Federal law now calls for billions of dollars in annual training fundsto be directed by local organizations, whose leadership boards includemany industry representatives. Yet these Workforce Investment Boardsgenerally attract smaller businesses, not those that lead industrytrends. Case in point: The 42-memberWorkforce Investment Boardfor Oakland, Calif., includes just one major technology company--SBCCommunications.
The K-12 system does a good job of weeding out any students interested in math and science. We prepare them to be lawyers and consultants, instead.A public-policy professor at the
Hands-on education is a cornerstone of theGary and Jerri-Ann Jacobs High Tech High Charter School, a small San Diego public school that hasrecorded some impressive results. The
Educators hope that such programs will revive flagging interest intechnology at the college level as well.
But all these ideas may be thwarted by a problem that no amount ofpolitical rhetoric can fix: a lack of teachers. An
United States Workers Protection Act: Would prohibit federal contract work from being carried out overseas, unless in the U.S. national security interest. Would also apply to state contract work funded by federal grant.
Congress and more than 30 states have proposed measures to keep government work from flowing offshore. But just a handful of bills have become law, and that legislation doesnt always expressly oppose overseas outsourcing.
AnAlabamalaw encourages state and local entities to use Alabama-based professional services.
, and the jobless rate among these dropouts is rising.About 2.4 million dropouts between the ages of 16 and 24 were unemployedlast year, 9 percent more than two years previously, the research found.And the problem may be even worse, because states routinely inflatetheir graduation numbers--in some cases by more than 30 percent, thereport contends.
We spoiled an entire generation with the 90s.Various researchers have put forward other types of governmentincentives with similar goals. Catherine Mann of the
InMaryland, state agencies are required by law to take into consideration whether a contractor is onshore or offshore.
