Offshore Computing Blog

This site has been created to log references to technology issues in underdeveloped countries.
If you have any suggested additions, please contact me.

  Sorry, I am no longer updating this blog ...

You might check with ACM's Tech News for more information.

.From ACM's TechNews, August 21, 2006.

Romanian Rhapsody
Business Week (08/21/06) Matlack, Carol

Bucharest, Romania, is on the verge of becoming the Bangalore of Eastern Europe because of the talent pool and low wages that the local market has to offer. Companies such as Oracle, Microsoft, Hewlett-Packard, and Accenture are investing millions of dollars in Bucharest by opening offices, hiring thousands of IT workers, and buying startups and their technologies. Romania is attractive because 60 percent of its workforce is believed to speak at least one foreign language, and because a programmer can be hired for about $500 a month, which is comparable to salaries in India and is 50 percent less than those in Poland and the Czech Republic. But what sets Romania apart is the excellent training and problem-solving skills of its computer specialists, who can handle more advanced research and development. Varujan V. Pambuccian, a computer scientist who is a member of Romania's Parliament, says the country has about 16,000 software engineers, and about half focus on research and development rather than coding. Oracle will be increasing the number of people it employs for software development and product support in northern Bucharest to 1,000 in a few months, and the company also subsidizes IT courses at local universities. Such investment is even prompting Romanians who have left the country for employment abroad to return home. Click Here to View Full Article

.From EduPage, August 21, 2006.

Romania Arrests 23 For Internet Scams
The Register, 21 August 2006

As part of a move against Internet scam rings operating in Romania, police arrested 23 people in Pitesti, from a group of 63 suspects sought for questioning over accusations of scamming foreigners by posing as well-known firms to clients of those companies. After tricking the e-mail recipients into updating their contact database, the scammers allegedly created false identity documents and collected money from other countries. If convicted, the accused face up to 15 years in prison for identity theft. FBI officials reportedly aided in the investigation.

.From EduPage, August 2, 2006.

China Closes Liberal Web Site
CNET, 2 August 2006

Government officials in China have taken another step in limiting what Internet users in the country can access, causing an uproar among intellectuals and others critical of the Communist Party. During the past week, access inside China to the Century China Web site has been cut off, prompting a petition that accuses the government of trying to control public opinion. More than 100 outspoken individuals--both inside the country and abroad--have signed the petition, which was sent by e-mail to the media. The petition states, in part, "The shutdown of Century China is just another instance of the Chinese government suppressing the freedom of its people." It also describes the Century China Web site as "the one spiritual home we had in the cyberworld."

.Offshoring IT Services: A framework for managing outsourced projects by Mohan Babu

Offshore IT sourcing offers many advantages, but executing offshoring is complicated. Since the number of books on this topic is limited, Mohan Babu K, a technologist at Infosys Techlologies Ltd. has drawn his observations and research in the recently published book “Offshoring IT Services: A framework for managing outsourced projects.” (Publisher: McGrawHill, India) It contains more than 270 pages and is one of the most informative and detailed publications available on the subject. The book includes practical insight, strategic guidelines, interviews with experts, and case studies.

The book examines some of the emerging trends and practices of managing offshored projects and explores practical ideas. It also bridges the gap between offshoring strategies and execution of globally distributed IT projects by introducing an Offshoring Management Framework [OMF], a vendor-neutral way of approaching offshoring strategies for execution and management. The Framework is intended to be adopted by IT executives and managers at ‘both ends’ of the offshoring spectrum: at outsourcing organizations and at service delivery firms, onsite and offshore. The thrust is on enabling managers to be comfortable in managing global delivery projects. The book also addresses the challenges of managing onsite and offshore teams, the time and distance challenges of outsourced projects. More about the book:
Reviews of the book can be found at and in Ubiquity.

.From ACM's TechNews, May 15, 2006.

The Internet Splits Up
Newsweek International (05/22/06) Foroohar, Rana; Villeminot, Florence; Schafer, Sarah

Although the Internet has always been a uniquely bottom-up, nonhierarchical, seamless form of global communication, that is beginning to change as governments, multinational companies, and individuals battle for control of the Web. For example, China has begun tweaking the local search engine so that users in the country who search for Falun Gong, for example, will only get state-approved, anti-Falun Gong Web sites. A number of other countries have also adopted such censorship techniques, which could undermine the global unity of the Internet. Meanwhile, nations such as Iran--who are concerned that U.S. dominance of the Internet could mean that their national domain names will someday be turned off for political reasons--have created their own alternative versions of the Internet. Although they have vowed not to make any politically motivated changes on their servers, governments and political organizations such as Germany's Open Root Server Network could create new, misleading versions of U.S. Web sites, which Internet users could be misrouted to without even realizing it. Some also worry that as nations create their own versions of the Internet, the entire system could collapse. Telecoms' plans to charge content providers such as Google, eBay, and Yahoo! higher rates to guarantee reliable delivery of their new video content have also been a threat to the unity of the Internet. Overturning the long-held principle of net-neutrality will create a two-tiered Internet, which could hamper technological innovation by increasing the cost of startups and changing the whole Web paradigm of forming companies quickly and on a shoestring budget. Click Here to View Full Article

.From EduPage, May 12, 2006.

China Rejects Wikipedia, Starts Its Own Version
San Jose Mercury News, 12 May 2006

Baidu, the leading search engine in China, has launched a site that approximates Wikipedia but with none of the content that prompted the Chinese government to block Wikipedia last year. Chinese authorities exert strong control over Internet content available in the country, and Wikipedia includes enough material deemed objectionable that the entire site is unavailable. Robin Li, chairman of Baidu, said his company's new site, Baike, was inspired by Wikipedia, though he said he has never actually seen Wikipedia. China is second only to the United States in Internet users, and Chinese users have reportedly written more than 25,000 Baike entries in the past week. Li said, "I certainly hope our encyclopedia will be the most authoritative one for any Chinese users."

.From ACM's TechNews, April 26, 2006.

Google's China Problem (And China's Google Problem)
New York Times Magazine (04/23/06) P. 64; Thompson, Clive

Google is taking a lot of flak from U.S. lawmakers for complying with the Chinese government's directives to censor Internet content and stifle free speech in China. Domestic Chinese Internet firms such as Baidu appeal to young people who are nationalistic and attracted to pirated online content, which is so commonplace in China that there are few protections against it, while Google has been a hit with big-city, white-collar Chinese professionals with more cosmopolitan attitudes. However, access to Google was blocked by the Chinese government for two weeks in 2002, and it has been speculated that the driving force behind the shutdown was a domestic competitor--perhaps Baidu--that wanted to get Google out of the way, and complained to the government that the U.S. search engine was allowing people to access illicit content. Google decided that it would adhere to the government's requirement to block access to politically sensitive Web sites, pornography, and other content deemed objectionable by Chinese authorities while alerting users that such information is being withheld through disclaimers displayed on Google co-founder Sergey Brin has argued that Google's Chinese operations still uphold the spirit of self-empowerment his company embodies by giving users access to other information. The Chinese government uses vague language to describe material that should be censored, leaving Internet companies to decide for themselves what content falls into this category; through a combination of self-censorship and hard penalties for offenders, the government ensures that Chinese Internet executives attempt to censor as much content as possible. Chinese censorship practices are not concealed from the public, which may have helped contribute to a general disinterest among Chinese citizens toward democracy. Kai-Fu Lee, director of Google's China operations, believes the Internet by itself will sow the seeds of democracy in China by giving young, apolitical users a platform for public speech. Click Here to View Full Article

.From ACM's TechNews, April 26, 2006.

You Vs. Offshoring
InformationWeek (04/24/06)No. 1086, P. 44; McGee, Marianne Kolbasuk

Despite noticeable pay hikes and a generally better attitude toward IT as a career path, offshoring has bred a less than sanguine IT job outlook among U.S. tech workers polled in InformationWeek's National IT Salary Survey. Sixty-four percent report the elimination of jobs by outsourcing, and almost 60 percent say the trend is having a detrimental effect on morale. Meanwhile, most respondents do not think the salaries of current workers will be hurt by global IT competition, but they are split over whether entry-level professionals will be disadvantaged. Though American IT pros seem increasingly sure their careers can prevail in the face of global IT competition, only a small percentage expect to work on more innovative projects as menial chores are outsourced, or anticipate new hires to support offshoring work. Foote Partners President David Foote thinks workers who combine technical skill with business acumen are less likely to be outsourced, though just 6 percent of managers and 2 percent of personnel polled in the salary survey assign great value in "understanding the company's business strategy." IT pros have a better shot of keeping their employment by updating their skills, yet the survey finds that less than half of staffers and managers receive education and training as part of their benefits packages, while an even lower percentage are reimbursed for tuition. Fifty-three percent of managers and 61 percent of staffers say IT career prospects appear less promising than they did five years ago. E.&J. Gallo Winery CIO Kent Kushar forecasts that cost savings in offshoring will eventually be tightened as other countries try to keep their workforces' skills up to date, thereby increasing the value of U.S. workers with both technology and business knowledge. To view "Globalization and Offshoring of Software--A Report of the ACM's Job Migration Task Force, visit Click Here to View Full Article

.From ACM's TechNews, April 14, 2006.

IT's Input on Outsourcing
InfoWorld (04/07/06) Fox, Steve

Though many IT professionals have grown to think of the words "outsourcing" and "offshoring" as polite euphemisms for layoffs, they must take an active role in the business discussions that determine whether and how companies look to alternative sources of labor, writes Steve Fox. Executives can be easily enticed by the cost savings of business process outsourcing (BPO), but real challenges arise when deciding which software development projects are to be farmed out, and how those projects are to be integrated into the remaining technology operations. Business leaders are increasingly giving IT workers a seat at the table to help with these decisions. "To make the whole BPO process work, business units need IT involvement," says Leon Erlanger, author of "Putting IT in the Director's Chair." "Outsourcing requires much more than simply giving the process to someone else and hoping they handle it for you the way you would want them to." Erlanger argues that instead of protesting the inevitable growth of outsourcing, IT workers should actively seek involvement in the management of the process. If IT workers can demonstrate the ability to develop, implement, and supervise outsourcing programs that add value to the business, their own stock will rise. In response to concerns that outsourcing takes jobs away from U.S. workers, a recent Association for Computing Machinery (ACM) study has found that outsourcing actually drives innovation and creates new jobs. ACM advises workers to keep their education and skill sets current, improve their communication skills, and develop a working knowledge of global software systems. The ACM report, "Globalization and Offshoring of Software," is available at Click Here to View Full Article

. From EduPage, April 14, 2006.

Google Rebuffs Critics, Expands Chinese Research Center
Wall Street Journal, 12 April 2006 (sub. req'd)

Responding to critics of Google's decision to filter certain content to Chinese users, CEO Eric Schmidt reiterated the company's position that it is better to have a presence in China with some restrictions than not to be there at all. Other Internet companies operating in China face the same restrictions as Google--preventing access to sites the government deems objectionable--and Schmidt said Google has not received any complaints from Chinese users. Noting that one-fifth of the world's population lives in China and that many of them are or will be Internet users, Schmidt said Google would comply with applicable local laws and would expand its research operation in the country. The company currently employs about 30 engineers in its R&D facility in Beijing and plans to increase that number to 100. Schmidt also said Google is working with Chinese libraries to include their books in its Book Search program, which is scanning millions of books for online access.

China Adopts New Rule To Address Software Piracy
BBC, 12 April 2006

Following trade talks with the United States, Chinese authorities have issued a new guideline requiring PC manufacturers to load a licensed operating system on all computers before they leave the factory. Although an official from the State Copyright Bureau in China denied that the new regulation is in response to foreign pressure--insisting it was implemented for "the country's economic development"--China has long been seen as a haven for software pirates, with piracy rates as high as 90 percent. Under the new rule, computer makers must install legally licensed operating systems on all systems, and retailers who sell imported computers must do the same. Furthermore, computer manufacturers and vendors of operating systems must report the numbers of computers made and operating systems installed each year to the country's Ministry of Information Industry (MII). The MII also stated that software makers should provide "favorable pricing and qualified service" to computer manufacturers.

.From ACM's TechNews, April 7, 2006.

HP Labs India Shows off Tech Goodies
CNet (04/06/06) Olsen, Stefanie

Researchers at HP Labs India recently showcased several of their inventions that could spread computing in underserved developing nations with vast potential markets. In India, language is a major barrier to technology adoption, as less than 10 percent of the population can conduct transactions or write in English, and just 50 million people are PC literate, executives at Hewlett-Packard say. HP Labs India has developed a special keyboard for India's 14 national languages, though at present the Gesture Keyboard only specializes in Hindi and Kannada. The device enables users to write with a pen with handwriting-recognition software, digitizing the gestures users make to consonants and distinguishing base consonants from phonetic modifiers. HP Labs believes that the Gesture Keyboard will lower entry barriers to computing for millions of Indians. While just 15 million people in India have access to the Internet, 600 million have access to television, so HP Labs developed Printcast, a technique for porting encoded files with television broadcasts so that users can encode content that they have seen on TV into an MPEG 2 file that can be unwrapped and printed. HP Labs has also developed a pen-based device for filling out forms electronically that records the motions of a pen and uploads the information to Hewlett-Packard's backend software. In another project, HP Labs is developing a digital library of educational material called Educenter, based on open-source software developed by the DSpace project, a digital-library initiative undertaken jointly by Hewlett-Packard and MIT. Click Here to View Full Article

.From ACM's MemberNet, April 5, 2006.

Technology Companies Bring Outsourcing Home
Chronicle of Higher Education (04/07/06) Vol. 52, No. 31, P. A43; Carnevale, Dan

To curb the trend of exporting technology jobs overseas, Rural Sourcing is partnering with five colleges to create office parks in three states that will tap the ready-made and inexpensive labor supply of college towns. Rural environments offer low costs and help keep jobs in the United States, while also providing students with practical work experience. While the low cost of living overseas has kept the price of labor down, many companies have found their offshoring initiatives stymied by communication barriers and time-zone differences. Frederick Niswaner, dean of the College of Business at East Carolina University, claims that partnering with Rural Sourcing is a win-win proposition, with the company benefiting from inexpensive student labor, while computer science students gain valuable work experience, often a scarce commodity in smaller towns. Despite the growth in rural computer work, Rice University computer science professor Moshe Vardi believes that many companies are still unconvinced that small towns can provide an adequate supply of workers. "You're not likely to go to a rural area and find a critical mass of skills in technology," Vardi said. "Where you find a concentration of talent, it tends to be more expensive." Vardi also notes that media reports heralding the exportation of technology jobs have sapped student interest in computer science, even though plenty of jobs remain in the United States. That fear will start becoming a reality as companies find a shortage of skilled workers, forcing them to look overseas to meet their staffing requirements. Rural computing centers could handle security-sensitive projects that cannot be sent overseas, notes Gartner analyst Helen A. Huntley. ACM's Job Migration Task Force recently released an exhaustive study of the "Globalization and Offshoring of Software. To review this report, visit Click Here to View Full Article - Web Link May Require Paid Subscription

.From ACM's MemberNet, March 31, 2006.

U.S. Tech Jobs Back on Track
Investor's Business Daily (03/30/06) P. A6; Howell, Donna

The aftermath of the tech bust and the phenomenon of offshoring caused many U.S. IT jobs to disappear, though in recent years the situation has brightened for U.S. workers. With several studies identifying sustained growth and interest in computer science among college students falling off, the industry could actually experience a worker shortage. A recent Robert Half survey found that 12 percent of companies plan to increase their IT workforces in the second quarter of this year, compared to just 4 percent that plan cuts. "Companies have hired in finance, information technology, administration, sales--you name it--over the last six months to a year," leading to a greater demand for IT workers, said Robert Half's Jeff Markham. That demand is particularly strong in the retail sector, where companies are investing, or, in some cases, re-investing, in technology for customer relationship management and business intelligence to enhance customer contact, efficiency, and to better understand buying patterns. Security, enterprise resource planning, and health care are also hot fields for IT workers, according to the placement company Yoh. ACM reports that the approximately 2 percent to 3 percent job loss rate in IT due to offshoring is much smaller than the rate of job loss and creation within the United States, and that tech jobs should stay strong in the areas where they have historically been healthy. The telecom bust, driven by massive over-extension leading up to Y2K, combined with the dot-com collapse to constrict the supply of jobs, according to Moshe Vardi, co-chair of the ACM study and a computer science professor at Rice University. "We essentially had the perfect storm in terms of jobs -- and then there were job losses," he said. "We found IT turned around by late 2002." Still, Vardi said the proportion of college freshman planning to study computer science dropped from about 4 percent in 2000 to 1.5 percent in 2004, because the tech crash caused so many to lose faith in the stability of IT. The ACM Globalization and Offshoring of Software Report is available at

.From ACM's MemberNet, March 28, 2006.

"Offshoring Study Assesses Rapid Changes Driven by Information Technology"

In a study released by ACM's Job Migration Task Force, a team of internationally recognized computer scientists, industry leaders, labor economists and social scientists cited educational policy and investment in research and development as critical elements to staying competitive…

.From ACM's TechNews, February 17, 2006.

Proposed Law Targets China-Tech Cooperation
CNet (02/16/06) McCullagh, Declan; Broache, Anne

Rep. Christopher Smith (R-N.J.) has authored legislation proposing severe penalties for U.S. companies that compromise their ethical duty and product integrity by accommodating "Internet-restricting" policies in China and other countries. Under Smith's proposal, U.S. companies with China-based Web sites must relocate those sites, while U.S. corporations offering search services cannot comply with an Internet-restricting country's request to filter their results. Furthermore, search engine companies must provide an Office of Global Internet Freedom with a list of censored terms "provided by any foreign official of an Internet-restricting country," and Web sites with U.S. operations must frequently give the same office a list of content that is deleted or blocked in response to an Internet-restricting country's request. The bill also deems certain exports to Internet-restricting nations unlawful through a new set of federal regulations. Punishments for transgressions could run as high as $2 million in fines and five years of jail time for executives, depending on the specific prohibition that is violated, while infractions of the relocation rule would carry a one-year prison sentence. American businesses would be ill-served by Smith's bill, which would give companies based in China a competitive advantage, writes Declan McCullagh. There is also concern that the proposal is worded too broadly. Smith's bill could be introduced in Congress as soon as this week, according to politicians at a House hearing on Wednesday. Reporters Without Borders' Lucie Morillon expressed hope that the focus on American companies' interaction and compliance with Internet-censoring foreign governments will spur firms to regulate themselves, but warned that the failure of self-regulation would make legislation the only remaining option. Click Here to View Full Article

Invented in India
InformationWeek (02/13/06)No. 1076, P. 47; Ricadela, Aaron

India is emerging as a hub for strategic research and development and a burgeoning tech-product market. IBM, Oracle, and Microsoft are developing technologies at their Indian branches, as well as outsourcing ancillary product and feature development to Indian firms. McKinsey and India's National Association of Software and Service Companies expect tech and business-process outsourcing to generate $22 billion for the fiscal year ending in March, while technology created and sold inside India should expand from an approximately $4 billion market to a $20 billion market by 2010. India's government also plans to launch 42 "special economic zones" that offer tax incentives, reduced tariffs on some imports and exports, and exemptions from certain legal provisions over the next several months; these and other various measures could ramp up India-based R&D, says Siddharth Mehta with Orrick, Herrington & Sutcliffe. At the heart of almost all outsourcing decisions is an essential platform technology that does not support competitive differentiation, reports Motorola VP of networks research Ken Zdunek. IBM follows an innovation strategy that blends product development for global sales with research into India-specific technology: Developers at IBM's Bangalore software lab concentrate on company products, while IBM's Delhi lab at the Indian Institute of Technology develops such things as a system capable of recognizing spoken Hindi. India-based tech development can yield intellectual property valuable in other markets where prices are very low and customer segments are small and rapidly expanding. Companies are also looking to find success in other emerging nations by developing technologies that do well in India. Click Here to View Full Article

.From ACM's TechNews, February 15, 2006.

Internet Firms to Defend Policies
Washington Post (02/15/06) P. D1; Noguchi, Yuki

Yahoo!, Microsoft, and Google will claim to have struck a balance between business interests and human-rights concerns when they go before Congress today to defend their corporate policies toward China. Yahoo! will testify before the House subcommittee on Africa, Global Human Rights, and International Operations and the subcommittee on Asia and the Pacific that the Internet's presence has a beneficial effect on closed societies even when it is subject to censorship. Yet some human rights proponents plan to argue that American corporations are waiving their ethical duties by complying with Chinese law, which often comes down hard on free speech. Google announced last month that it would expurgate certain results on the Chinese version of its search engine; in December, Microsoft's MSN shuttered a dissident reporter's blog; and in 2005, Yahoo! supplied the Chinese government with email data resulting in the imprisonment of another dissident journalist. "If you're on the ground in China, you have to comply with the [local] law," reported Yahoo! general counsel Michael Callahan, who is slated to testify today. "Fundamentally, being there transforms lives, society and economies." Callahan's argument--one echoed by Google and Microsoft--is that when any government requests information, the company is frequently in the dark about how that information will be employed. Reporters Without Borders' Lucille Morillon said the prevention of future crackdowns on dissident reporters should be facilitated by a combination of corporate self-regulation and government oversight. The State Department announced on Tuesday the establishment of a Global Internet Freedom Task Force that will monitor the censorship policies and information access restrictions of other governments, and make policy recommendations to keep Internet access to a maximum while keeping government attempts to suppress information to a minimum. Click Here to View Full Article

.From Educause, February 10, 2006.

Group Says Yahoo Aided Chinese Authorities
Internet News, 9 February 2006

For the second time recently, Yahoo has been accused of helping the Chinese government identify and prosecute individuals accused of political crimes. In 2005, Yahoo was criticized for providing information that helped Chinese authorities prosecute journalist Shi Tao, who was convicted of revealing state secrets. Reporters Without Borders said that another case has surfaced in which the ISP provided information to the Chinese government that led to the conviction of Li Zhi. According to the group, Li was found guilty of "inciting subversion" after he posted comments online critical of local officials and was sentenced to eight years in prison. Mary Osaka, a spokesperson from Yahoo, said that at the time the company was unaware of the nature of the investigation. In addition, she reiterated the company's position that it is better for Yahoo to have a presence in the country, "providing services we know benefit China's citizens," even if that requires compliance with local laws that run counter to U.S. beliefs and values.

.From ACM's TechNews, February 10, 2006.

A Plug for the Unplugged $100 Laptop Computer for Developing Nations
New York Times (02/09/06) P. C3; Varian, Hal R.

MIT Media Laboratory founder Nicholas Negroponte announced that Quanta Computer will manufacture the $100 laptop using a Linux operating system and an AMD chip during the technology sessions at Davos, Switzerland. The device will have a carrying handle, a spill-resistant keyboard, and a power-generating hand crank, as well as the ability to connect to a wireless network and a screen that is readable in direct sunlight. Negroponte said that network costs would be defrayed by managing the flow of Internet data so as not to compete with commercial data. Microsoft CTO Craig Mundie argues that a device similar to a cell phone would make more sense than a laptop, given that the wireless communications industry is growing steadily in developing countries. While Mundie and other critics have focused on the business value of cell phones, Negroponte stresses that laptops yield the strongest educational benefit. Cheap laptops have business value, too, as they could be used as cash registers for merchants, for example, or even as a sort of ATM if it was networked. Laptops could also record and store legal documents such as contracts, a fundamental element of all modern economies. Should the economies of developing nations become dependent on the laptop, it would also have the added benefit of encouraging literacy. Click Here to View Full Article -- Link May Require Free Registration

. From EduPage, January 25, 2006.

Google To Censor Search Results In China
CNET, 24 January 2006

Google will launch search and news sites in China this week that will block access to information the Chinese government considers objectionable. Chinese officials have a long track record of censoring speech and ideas, and, according to Andrew McLaughlin, senior policy counsel for Google, the new sites "will comply with local Chinese laws and regulations." Search results from which content has been excluded will notify users that not all results are being displayed. Google said that the decision to offer its services even if they are censored reflects the belief that limited access to Internet resources is better than no access, which would be the alternative if Google did not comply with local legislation. "We must balance our commitments," said McLaughlin, "to satisfy the interest of users, expand access to information, and respond to local conditions." Reporters Without Borders, an organization that advocates for freedom of the press, was highly critical of the decision, saying, "The new Google version means that even if a human rights publication is not blocked by local firewalls, it has no chance of being read in China."

.From ACM's TechNews, January 13, 2006.

"Can China Top the U.S. in R&D?"
eWeek (01/09/06) Vol. 23, No. 2, P. 20; Taft, Darryl K.

As major technology companies such as Microsoft, Hewlett-Packard, and IBM are establishing large research facilities in China, continued U.S. supremacy in technological innovation has come into question. IBM has established a massive research park in Beijing largely devoted to Linux development, which is slowly gaining a foothold in China, though most companies still favor commercial software. Microsoft Research (MSR) Asia has devoted the bulk of its research efforts in China to improving search and data mining technologies, which it views as the principal battleground on which the coming tech wars will be fought. "Whoever controls search today drives a lot of Web traffic," said MSR Asia's Harry Shum. In addition to vertical search, mobile search, multimedia search, and unstructured data, MSR Asia is also invested heavily in graphics research. One technique MSR Asia's Wei-Ying Ma and his team are working on is an object-level search-enabled prototype of an academic search engine called Libra, which he hopes to offer commercially by midyear. Ma claims that his lab is unusual in the diversity of the skill sets that his researchers possess, boasting experts in multimedia, data mining, and distributed computing. Another MSR Asia project is a pen computing device known as the Ubiquitous Pen, or UPen, which contains a tiny camera at its tip to capture each stroke with handwriting recognition software. Click Here to View Full Article

.From Knowledge@Wharton, October 24, 2005

R&D in India: The Curtain Rises, The Play Has Begun...

Motorola, Microsoft, Intel and other high-tech firms are launching ambitious R&D programs in India. Many of these projects complement research being conducted in other parts of the world and deal with products meant for the world market. What forces are driving the migration of high-tech R&D into India? Experts say it has a lot to do with the fact that companies expect some of the fastest growth in the future to come from the Asian giants -- India and China. Read the article

.From ACM's TechNews, October 12, 2005

"Study Shows Software Makers Supply Tools to Censor Web"
New York Times (10/12/05) P. C6; Zeller Jr., Tom

The OpenNet Initiative has recently issued a report detailing the supply of filtering software programs by Western technology companies to autocratic governments that use them to censor content on the Web. The report identifies Myanmar, China, Iran, and Singapore, among others, as recipients of technology used to shield their citizens from material on the open Web. Microsoft, Yahoo, and Cisco have all been criticized in the past for their dealings with the Chinese government. Myanmar's Web regulations prohibit the posting of "any writings directly or indirectly detrimental to the current policies" of the state. The OpenNet researchers enlisted the aid of an anonymous volunteer and used network interrogation tools to gauge the accessibility of different sites in Myanmar. Hotmail and other sites offering free email were blocked routinely, as were most sites containing political information about the country. Email was only available through two sites with official approval, both of which could be easily monitored. As filtering technologies become more sophisticated, they have been in increasing demand by repressive governments. The OpenNet report suggests that Myanmar has recently adopted a proprietary filtering system supplied by Fortinet, in favor of the open source technology it had been using in the past. Fortinet maintains that it is operating within the bounds of the law, and does not engage in business with countries under U.S. embargo or sanctions, as Myanmar has been for some time. OpenNet maintains its concern that technology companies such as Fortinet are profiting from censorship abroad. Click Here to View Full Article

.From ACM's TechNews, September 14, 2005

"African Software Gains Global Popularity"
Business in Africa (09/12/05); Wilson, Gary

Having become the most popular Linux platform in the United States in less than six months after its introduction in October 2004, Ubuntu Linux is mounting an increasing challenge to Windows' dominance of the operating system market. Linux operating systems power only about 3.5 percent of U.S. computers, though that figure is much higher in other countries, including China, Germany, and Brazil, whose governments have all switched to Linux; in the United States, Linux's market share is expected to rise to 6 percent by 2007. Though assimilation into the desktop market has been considerably slower, as most computers come preconfigured with Windows, Ubuntu Linux is making some inroads there. Linux itself represents a departure from MacOS and Windows in that it is open source, based around the belief in the stabilizing effect of a communal approach to development. Ubuntu Linux, based on the Debian collection of free software, is especially appealing to schools and other organizations operating under tight budget constraints. It is the absence of the pressures inherent in the commercial sector that gives Linux users faith in its long-term stability. There is a movement underway to develop a version of Linux specifically geared toward the education community, known as Edubuntu, whose developers met in Australia for a global conference in July. Canonical, the company responsible for Ubuntu, owes its funding to founder Mark Shuttleworth, whose wealth from the sale of Thawte helped create the Ubuntu Foundation, a heavily-endowed non-profit that guarantees the project's stability. Click Here to View Full Article

.From ACM's TechNews, August 26, 2005

"Hackers Attack Via Chinese Web Sites"
Washington Post (08/25/05) P. A1; Graham, Bradley; Eggen, Dan

Hackers have been focusing attacks on hundreds of unclassified U.S. government systems through Chinese Web sites for several years, reported anonymous government officials. Analysts are split on whether these intrusions are the work of a coordinated Chinese government initiative to breach U.S. networks and monitor government databanks, or other hackers using Chinese networks to mask the attacks' point of origin. "This is an ongoing, organized attempt to siphon off information from our unclassified systems," said one official, who noted that State, Energy, Defense, and Homeland Security Department networks are among those targeted. With roughly 5 million computers spread across the globe, the Pentagon has more computers than any other agency, making its network the most vulnerable target to both foreign and domestic hackers, the officials said. The Pentagon estimates that China is the No. 1 source of Defense Department hacks, though Lt. Col. Mike VanPutte of the U.S. Strategic Command's Joint Task Force for Global Network Operations said this only proves that China is the probes' "last hop" before they strike their targets. One anonymous government official downplayed the severity of the attacks, while another said an FBI investigation has yet to yield any definitive proof of who is orchestrating the intrusions. U.S. concerns about Chinese military initiatives in general are fueling worries about China-based cyberattacks, and the spate of attacks on unclassified systems has added urgency to the Pentagon's effort to acquire new detection software programs and better train computer security specialists, according to several officials. Click Here to View Full Article

.From Knowledge @ Wharton, August 23, 2005

R&D in India: The Curtain Rises, The Play Has Begun...

Motorola, Microsoft, Intel and other high-tech firms are launching ambitious R&D programs in India. Many of these projects complement research being conducted in other parts of the world and deal with products meant for the world market. What forces are driving the migration of high-tech R&D into India? Experts say it has a lot to do with the fact that companies expect some of the fastest growth in the future to come from the Asian giants -- India and China. Read the article

.From ACM's TechNews, August 22, 2005

"The African Hacker"
IEEE Spectrum (08/05) Vol. 42, No. 8, P. 24; Zachary, G. Pascal; Morris, Daniel

Ghanaian software entrepreneur Hermann Chinery-Hesse created his company, Soft Tribe, to capitalize on his epiphany that Africans cannot take advantage of IT by merely importing European or American software--they must customize the programs for local conditions. Chinery-Hesse is a symbol for programmers, hackers, engineers, and entrepreneurs throughout Africa in his choice to live and work on his native soil and endure hardships such as poverty and technological ignorance, all on the periphery of global technological transformation. Soft Tribe is a supplier of "tropically tolerant" code that is compact, works offline as much as possible, and writes frequently to disk. The company is also where most of Ghana's full-time programmers receive their training, with Chinery-Hesse preferring to recruit malleable minds that have not been tainted by the country's "exceedingly theoretical" educational system. Building a solid software industry in Ghana and other developing African nations is technically and socially challenging. African IT customers are notoriously risk-averse, so regional programmers must explore outside opportunities. Chinery-Hesse, for instance, has an agreement with Microsoft in which his company will sell Microsoft's Navision applications in return for the rights to the source code so his programmers can build add-ons. The Soft Tribe owner's ultimate goal is to create a sustainable homegrown software infrastructure that is a source of pride as well as business growth. Click Here to View Full Article

.From ACM's TechNews, August 22, 2005

"Chinese Developers Should Take Global Open-Source View"
IDG News Service (08/16/05); Lemon, Sumner

Speakers at the LinuxWorld Conference and Expo in Beijing said Chinese companies and developers can and should play a key role in the development of open-source software, both in a technical and non-technical capacity. Novell CEO Jack Messman lauded the Chinese government's support for open-source software and Linux in particular, which together "provide a golden opportunity to develop this country into a global software powerhouse." He explained that Chinese leadership in global open-source projects will require a tighter connection to the international open-source community and greater exploitation of advanced technologies by Chinese desktop Linux development efforts. Messman promised that Novell will serve as a "bridge" between Chinese and international open-source initiatives; this will involve Novell opening a Linux research and development center in Beijing, which will collaborate with Chinese software companies to craft open-source technologies for software internationalization, desktop Linux, and high-performance computing. Messman said open source will eliminate vendor lock-in, which has long been a source of irritation for the Chinese government. Hewlett-Packard's Martin Fink said in his keynote speech that China can contribute to the updating of the GNU General Public License (GPL) so that it may accommodate object-oriented programming and other technological advances. This can be done if the Chinese adopt GPL version 3.0 as a standard for all locally developed open-source software, he asserted. Click Here to View Full Article

. From New York Times, August 15, 2005

New Partner for Yahoo Is a Master at Selling
By David Barboza

Yahoo's huge deal with the high-tech entrepreneur Jack Ma has turned his company,, into the biggest online operation in China. Read the article.

. From EduPage, August 8, 2005

Chinese Search Engine Ipo Takes Off
New York Times, 7 August 2005

Chinese search engine company launched its initial public offering (IPO) of shares Friday on the Nasdaq stock market. The stocks were priced at $27, opened at $66, and rose to $122.54 by market close. Investors in Baidu include Google and several Silicon Valley venture capital firms. Baidu is the top search engine in China, followed by Google, and there is speculation that Google might attempt to acquire the company in the future. (registration req'd)

.From ACM's TechNews, August 1, 2005

"A Brain Trust in Bangalore"
BusinessWeek (07/29/05); Hamm, Steve

India's mix of talented, English-speaking engineers and low labor costs is proving irresistible for Sarnoff, IBM, Microsoft, and other Western high-tech companies eager to set up Indian research operations in the hope of gaining an edge over the competition. Sarnoff CEO Satyam Cherukuri wants to create a model for "global networked R&D" through offshore investments such as a new laboratory facility in Bangalore. He says such collaboration is characteristic of the "third wave" of tech research: "This wave is about harvesting innovations anywhere in the world, with companies using their own employees or third-party researchers like us," Cherukuri explains. A key project at Sarnoff's Bangalore lab is the invention of a self-developed, self-owned technology that supports wireless video compression and transmission on various low-power devices at data speeds as slow as 28 Kbps. MPEG 4 serves as the foundation of the technology, but the production of best quality video is supported by proprietary Sarnoff algorithms. IBM, Google, and Microsoft have also established research labs in Bangalore, and Microsoft Research, India managing director P. Anandan says India is an excellent proving ground for technology designed for use in rural communities and emergent economies. However, recruitment can be difficult: Sarnoff Bangalore managing director Tim Mitchell admits finding engineers and managers experienced with analog-chip design is a challenge. Google expects to attract more leading Indian technologists by promising them status equal to U.S. programmers and researchers, as well as the freedom to devote 30 percent of their time to pet projects. Click Here to View Full Article

"China's High-Tech Challenge"
National Journal (07/30/05) Vol. 37, No. 31, P. 2448; Stokes, Bruce

China's commitment to become a technology--and economic--powerhouse is illustrated by the more than 100 percent increase in China's R&D budget in the past 10 years, the wild growth of Chinese high-tech exports, and the rising number of Chinese science and engineering doctorates awarded, which is expected to surpass those earned in the United States by 2010. Although China's hierarchical societal structure, state-dictated R&D policy, and relatively low production of patents and published research are seen as barriers to its emergence as a tech superpower, Washington feels China is enough of a threat to warrant increased U.S. investment in R&D, science and engineering education, and innovation. Also raising alarms is China's significant progress in fields such as biotechnology and nanotechnology, while the migration of microelectronics manufacturing to China leads Thomas Howell of the Dewey Ballantine law firm to conclude that "China's growing 'gravitational pull' will draw capital, talented people, and ultimately, leading-edge research-and-development and design functions away from the United States." Fueling the growth of China's semiconductor industry is an unquenchable thirst for computer chips because China is the world's leading television manufacturer, as well as the world's largest mobile phone market and second-largest PC market. Though only 5 percent of China's total R&D spending was devoted to basic research in 2001, the Chinese government wants to increase that percentage at least threefold by 2020. More and more multinationals are establishing R&D and production facilities in China to take advantage of a skilled, lower-wage workforce. Other signs of China's rapid growth include dramatic increases in U.S. tech imports from China in the last few years. U.S. experts think stifling Chinese piracy of U.S. intellectual property and preventing Beijing from setting homegrown technical product standards is a wise policy to follow as China becomes a more potent economic power.

"Coder Be Agile, Coder Be Quick"
Computerworld (07/25/05) P. 36; Willoughby, Mark

IT industry veteran and journalist Mark Willoughby writes that agile development has the potential to change everything about software development and make it more intuitive, if it fulfills proponents' expectations. In an agile methodology, programmers write fragments of functionality or iterations that can be completed in a few weeks, and as much attention is devoted to module testing as to the writing of code; upon the completion of one iteration, the developers pinpoint the next requirements, expand the just-completed module's functionality, and begin a new iteration. Agile backers say the technique will dramatically boost developer productivity and lower development costs, although waterfall development methodologies are expected to retain their status as the software development standard for many projects. Agile will emerge initially as part of a hybrid development scheme that mixes both waterfall and agile methods, and software modules with functionality that is likely to change or undefined areas are probable candidates for agile development. Willoughby recommends developers work out a test plan, and then construct and test modules using easily updateable "Tinkertoy" interfaces via agile processes. Willoughby notes that overseas software development can strain cultural practices that play a critical role in agile development, such as instant communication and small teams of developers working in close proximity, but expects offshore developers will also eventually adopt agile. Click Here to View Full Article

.From ACM's TechNews, July 27, 2005

"China Not a Big Tech Innovator, But It's Spending a Lot on R&D"
Investor's Business Daily (07/26/05) P. A1; Tsuruoka, Doug

Some experts say China's lack of technology innovation is keeping its economy from joining the ranks of world leaders such as the United States, although the country is spending billions of dollars on research and development. "China is making a lot of progress in technology, but they are still primarily a tech follower," says Rand political scientist Roger Cliff. He says the chief source of R&D funding is the Chinese government, which takes a heavy-handed approach to investment. On the other hand, a June report from Pentagon analyst Michael Pillsbury cites notable Chinese tech achievements such as a supercomputer that makes 11 trillion calculations per second, the design of a Pentium-style chip, and research into the development of molecular-scale nanotech devices. But CNA analyst Dean Cheng points out that Chinese software development has been poor, compared to hardware development. He also says the Cultural Revolution's bloody purges left the country's educational system in disarray and an entire generation illiterate. The result has been a shortage of Chinese researchers, even though the government is trying to step up its production of technical graduates. As China becomes more prosperous, the gap between the haves and the have-nots (which comprise about 75 percent of the Chinese population) will widen, cultivating social unrest that could represent a major threat to China's economy, according to Cheng.

.From ACM's TechNews, July 25, 2005

"Look Ma--No Wires"
Business Today (Egypt) (07/05); Salama, Vivian

Many IT experts agree that Egypt is on track to becoming a major global IT player, but a lot more has to be done. Industry analysts say Egypt must adopt India's software industry as a template for its own IT sector, and substantially improve the quality of its products in order to become a competitive IT exporter. "[We should] promote the industry itself and develop the competence and skills of the people," recommends Sherif Enayed of the International Information and Communication Technology Center. Egypt has an advantage in the youth and skills of its tech workforce, while the majority of Egyptian IT users are small businesses that software makers classify as target customers. Furthermore, Egypt's geographic location is a plus because it is close to Europe and can add an additional work shift to North America, while the country's dramatic reduction and planned elimination of import tariffs is expected to fuel the Egyptian IT sector's growth and enhance other regional advantages such as the swelling population of talented IT engineers and entrepreneurs, low fixed costs, and proximity to expanding export markets. IT companies and academics cite the Middle East's burgeoning population of Internet users as reason enough to "Arabize" software language so that online content and applications can adapt to specific dialects, local markets, and cultures; however, Arabizing computer education is generally frowned upon, because of the preponderance of English in the world IT market. Microsoft Egypt general manager Karim Ramadan says Egypt's historical role as a leading originator of Arabic culture, media, and entertainment should be applied to IT as well. Enayed and Ramadan concur that hands-on exposure to IT is critical: Enayed says it fills a major gap in academic education, while Ramadan says the Egyptian population needs the experience in order to advance in the IT sector. Click Here to View Full Article

.A new book: Offshoring Information Technology - Sourcing and Outsourcing to a Global Workforce by Professor Erran Carmel (American University, USA) and Paul Tjia (GPI Consultancy, The Netherlands), Published by Cambridge University Press.

The book is written for CTOs, CIOs, consultants and other IT executives. In addition, the book is informative for providers of offshore services and for policy makers and analysts in or around governments. The book even contains a chapter on the marketing of offshore services. It is resource for students and teachers in business and technology programs. The detailed table of contents has been added (including information on how to order the book).

This book explains everything needed to know to put offshoring into practice, avoid pitfalls and develop effective working relationships. It covers a comprehensive range of important offshoring issues: from cost advantages to strategy, from service levels to cultural differences, from country comparisons to the marketing of offshore services. Many real-life examples have been collected, as well as countless stories and anecdotes. As an American IT-manager commented after reading the book: "Had it been available, it would have positively influenced productivity and performance in offshore IT work - and saved sleepless nights for many people!" The book will therefore be a great gift for your managers and staff and for your customers and potential customers.

.From ACM's TechNews, July 20, 2005

"Between Phishers and the Deep Blue Sea"
CNet (07/18/05); Kawamoto, Dawn

Hackers are often based in India, Korea, or China, with differing time zones and language barriers increasing the difficulty facing security enforcement agencies in the United States. The most prevalent cyberattacks are carried out by a network of zombies, or compromised computers that are remotely controlled without notification to the computer's owner. Currently, China is home to 21 percent of new zombies with the United States at 17 percent and South Korea at 6.8 percent, according to CipherTrust. Hackers overseas are carrying out attacks due to a high prevalence of broadband in China and South Korea but a lack of proper security software, according to Anti-Phishing Working Group Chairman David Jevans. Another factor boosting the prevalence of overseas attackers is the fact that even small amounts of money provide significant incentive to a hacker in a developing country than to a hacker in the United States. The Forum of Incident Response & Security Teams, an international clearinghouse for response to security incidents among government agencies, universities, and organizations, recommends companies implement a computer security incident response team, keep security patches and antivirus software updated, monitor network traffic for strange behavior, and join security groups in order to share valuable security information among members. Meanwhile, a broad, international coalition of trade groups, companies, and law enforcement organizations are working to stem cyberattacks from abroad by tightening global cooperation and establishing automatic filtering systems to block email traffic from specific regions. HoneyNet Project President Lance Spitzner says today's hackers are in it for the money not fame. He says, "It's not so much a security issue. It's a crime issue now." Click Here to View Full Article

.From ACM's TechNews, July 18, 2005

"Is China the Next R&D Superpower?"
Electronic Business (07/05) Vol. 31, No. 7, P. 36; Normile, Dennis

Concurrent with declines in America's science and engineering graduate output and U.S. government spending on research and development in the physical sciences is China's dramatic uptick in both these areas, leading industry observers to predict its rise into a major R&D power. The timetable for this emergence is debatable: Ernest Preeg with the Manufacturers Alliance/MAPI argues that China's nanotech research is already equal to America's, while Asian Technology Information Program analyst Robert Haak says major Chinese breakthroughs are 10 to 20 years away. Analysts also point to China's substantial progress in fields ranging from supercomputing to materials science to biotechnology. Denis Fred Simon with the State University of New York's Levin Graduate Institute says China's ascendancy is not precipitous, but rather the result of reforms and policies that have been put into motion over the last two decades, and which have transformed the country's socialist scientific infrastructure into a merit-driven system that fosters competition. The country's leading universities and the Chinese Academy of Sciences are where basic research takes place, while output such as papers and patents are key to securing and sustaining funding and promotions for researchers. In addition, China is producing a more proficient and populous scientific workforce, and top Chinese universities now offer quality advanced training as an alternative to going abroad for doctorates. The expanding talent and volume of Chinese workers has encouraged multinationals to set up R&D centers in China. Challenges China will need to meet to truly become a scientific superpower include devoting considerably more capital to R&D and facilities; more widely distributing cutting-edge equipment to labs; and producing more senior-level scientists to coordinate major initiatives. Click Here to View Full Article

.From ACM's TechNews, July 11, 2005

"Steal This Software"
IEEE Spectrum (06/05) Vol. 42, No. 6; Hood, Marlowe

China is one of the world's fastest-growing technology markets, but an entrenched culture of intellectual property theft is proving to be a difficult issue, not only for foreign software firms but also for the Chinese government. With improved bandwidth, the Internet has usurped disc-based piracy in China as Chinese users can easily find open-access FTP servers with illegal copies of major software releases hosted by entities such as Tsinghua University and the Chinese Academy of Sciences. Chinese consumers point out that purchasing legitimate copies of the software would be prohibitively expensive and that China has traditionally viewed imitation as an "elegant offense." Although 22 percent of software in the United States is illegally copied and 36 percent stolen in western Europe, China's piracy rate is an astounding 92 percent of all installed software. Observers say the Chinese national government subtly supports piracy of foreign vendors' products as a sort of industrial subsidy, while corrupt local government officials utilize stolen intellectual property for financial gain. In an investigation last year, Sony found some 50,000 PlayStation 2 consoles per day were being assembled in a Shenzhen prison, for example. But the national government is also realizing that adhering to intellectual property laws is important for local business; foreign firms may lose some of their overall sales to piracy in China, but local Chinese firms lose nearly all of their sales when their products are pirated, notes Founder Technology Group chief legal counsel Lun Yu, whose firm is the largest Chinese software firm. And China has recently taken a somewhat harder line with intellectual property thieves by changing laws and successfully prosecuting a handful of small-time purveyors of illegal goods. Click Here to View Full Article

.From ACM's TechNews, July 8, 2005

"Plotting Your Future in the Global IT Job Market"
InfoWorld (07/04/05) Vol. 27, No. 27, P. 28; Gincel, Richard

Adaptability is key if U.S. technology workers are to have gainful employment in the face of globalization and companies' increasing reliance on offshore IT outsourcing. Alsbridge's Ed Rankin says creativity and the ability to innovate will continue to be a prized quality for employees, but author John Hagel III warns that innovation alone is no guarantee of job stability. "What's important now is to be building your skills faster than anyone else or you won't be successful," he insists. Successful workers will need to complement their science, math, and engineering skills with business acumen, especially as IT departments play an increasingly vital role in delivering the company's business value. The need for combined IT and business proficiency is spawning new titles such as business transformation architects, and IBM Global Services' Michael Liebow expects workers who can lay out guidelines for the adoption of service-oriented architectures to become even more valuable. Forrester Research analyst Stephanie Moore recommends that current IT employees develop skills in project management, program management, and vendor management, while a recent Gartner study forecasts a rise in stock for third-party delivery managers in the coming years. Senior-level, director roles could become more numerous as a direct result of the overseas migration of midlevel IT positions and increased rivalry for what few job openings remain. Click Here to View Full Article

"Inaction on Offshoring Will Hurt U.S. IT, Author Says"
Computerworld (07/04/05) P. 13; Thibodeau, Patrick

As the IT landscape globalizes in scope, the growing tendency of companies to look overseas for low-cost labor poses significant challenges to U.S. hegemony in the industry. Ron Hira, an assistant professor of Public Policy at the Rochester Institute of Technology, believes the sizeable increases in profitability some companies have demonstrated through offshoring IT jobs has generated a new business model. Even though the United States continues to enjoy a competitive edge in technological innovation, the increasing attention companies are paying to overseas labor casts a shadow over the source of the next generation of innovators. Even if innovation remains the province of the United States, Hira says the interconnectedness of the global economy ensures that much of the wealth a given U.S. innovation would generate will actually be realized by overseas competitors in the form of providing the jobs necessary to support and implement the advancement. Most alarming has been the lack of attention paid to the labor shift by U.S. companies, Hira says. He advocates offering extended trade assistance to software workers, such as unemployment insurance, health care, and money for retraining. Hira is also critical of policymakers for turning a blind eye to offshoring. "We don't even collect data on this. And it's not as though we can't do it; it's a question of having no political will to even collect the data on it." Given the lower cost of skilled labor overseas, Hira sees little hope for reversing the trend of offshoring. Efforts could be made, however, to curb the influence of H-1B visas that open the door to foreign labor and to renew the attention paid to the interconnection of IT and business in our education system. Click Here to View Full Article

.From ACM's TechNews, July 1, 2005

"The $100 Computer Is Key to India's Tech Fortunes"
CNet (06/29/05); Kanellos, Michael

India is winning the race to reach the 5 billion people who still do not use the Internet. The critical ingredient is cost, which the Indian company Novatium will emphasize as it unveils a basic home computer available for around $70. The price doubles to include a monitor, though Indian companies are addressing that by offering secondhand monitors. Low-cost technology has become a driving engine for India's technology economy. A researcher at the Indian Institute of Technology has developed a $1,000 automatic teller machine that doubles as an Internet kiosk for villages. In an effort to cut energy consumption, Jitendra Shah of the Centre for the Development of Advanced Computing is studying ways to establish solar-powered computers linked with battery-powered PCs that work as servers. Computer prices remain a function of their raw materials which, though metal and plastic have become much cheaper, still makes it untenable to offer a fully functioning PC for under $200, some say. The monitor and hard drive are the most intransigent in terms of price. Intel seeks to defray the cost of a computer by spreading the price throughout a village in a cooperative program. India is home to several low-cost initiatives, such as Xenitis' Linux-powered $250 model, and Via's Terra PC, and some see its market potentially embracing the otherwise unpopular thin client, which communicates through a server that stores all of its data and performs it calculations. PCs with limited capabilities could make inroads in India's economy, as a survey of bank employees revealed that 95 percent rely on their computer to perform only one function. Still, Novatium founder Rajesh Jain cautions: "Just because we are an emerging market doesn't mean we want an inferior product." Click Here to View Full Article

.From ACM's TechNews, June 29, 2005

"The Net Effect"
IEEE Spectrum (06/05); Cherry, Steven

China is planning a major Internet upgrade to bring its infrastructure into line with those of other developed nations, but China's traditions of online censorship and intrusiveness are a cause for concern. Experts warn that the upgrade will largely remove the technological constraints that have so far limited censorship, and perhaps allow China to pave the way for a more repressive and intrusive global Internet infrastructure. China Telecom has awarded contracts to four telecom equipment companies to set up the three-layered network routing architecture for the ChinaNet Next Carrying Network (CN2): The innermost layer or ring is made up of core routers that will facilitate the transfer of data packets across regions or to the outside; the outermost ring is comprised of edge routers that businesses and institutions will employ to establish high-speed links between each other and to the world at large; and the intermediate ring consists of metropolitan routers. Internet censorship expert Seth Finkelstein says router-based censorship occurs at any point in the network, and every router provided under the terms of the CN2 contract can be expected to access a database of prohibited names and words, either within the router itself or in a subsidiary or proxy server that is linked to the router. Proxy servers intercept requests by function, and so are regularly used to block access to undesirable sites. Surfers can sometimes turn the tables on this form of censorship by using anonymizing proxy servers. Another way China practices repression is to force all Internet businesses to censor themselves in order to get operating licenses. It is hoped that the spread of advanced communications equipment so necessary for China to have a thriving economy will eventually make freedom of expression too widespread to effectively control. Click Here to View Full Article

.From ACM's TechNews, June 29, 2005

"U.S.-Style Labor Pains From Mumbai to Bangalore"
CNet (06/28/05); Kanellos, Michael

As India's technology industry has been flourishing, it is experiencing the attendant labor problems of recruiting and retaining workers. The average turnover among India's software companies is 15 percent, with some reporting rates as high as 30 percent. Part of the genesis of India's boom was inexpensive labor, though the growth that ensued has led to a demand for labor that exceeds supply, which in turn has increased salaries and competition for capable workers. Salaries at India's tech companies are below half that of America's, though that disparity is vanishing as foreign companies such as Hewlett-Packard and Intel are honing in on the Indian labor market with American-level salaries. The drain in labor is hitting government-run enterprises especially hard. India has deliberately altered its education system to supply labor for its IT industry. In the last 20 years, the number of students concentrating in IT and computer science has jumped from 5,000 to 250,000 per year, while the number of schools supporting those programs has risen from 70 to 1,750, according to the Kanwal Rekhi School of Information Technology at the Indian Institute of Technology at Bombay. In Karnataka, the tech-heavy state that is home to Bangalore, the ranks of technology professionals have swelled tenfold in eight years. Educational programs in India have traditionally concentrated on software, though there have been recent advances in chip design. Admission to an undergraduate program, just like the job market, is staunchly competitive, with some technical institutions reporting acceptance rates of less than one percent. That can translate into a tough job market, but also creates an established talent base that is prone to mobility. "The stickiness of people to companies is very low," said Tejas Networks CEO Sanjay Nayak. "A little bit more stabilization is needed." Click Here to View Full Article

"Exporting Technology"
Boston Globe (06/27/05) P. C1; Weisman, Robert

After failed initiatives in India and Ireland, the MIT Media Lab has joined forces with Taiwan's Industrial Technology Research Institute (ITRI) to establish a Media Lab collaboration in Hsinchu, Taiwan. Members of the NEXT consortium, comprised of an assortment of Taiwanese companies, will utilize the Media Lab. The Taiwan Media Lab, which is essentially a partnership with Taiwan's research community, marks a departure from MIT's previous foreign endeavors, which both unraveled because of disputes with the host country's governments. "This is the first time we're running an international consortium that's living in two places at once," said MIT Media Lab Executive Director Walter Bender. "The idea is to have a collision of cultures, of points of view." From the Taiwanese perspective, ITRI President Johnsee Lee hopes his researchers will absorb the creative spirit of their colleagues from MIT and elevate Taiwan's economic character from mere manufacturing to world-class innovation. The lab will conduct research in a variety of fields, but will give special attention to "human augmentation," or technologies that help people move beyond their limitations and provide real lifestyle applications, such as controlling the speed of a kitchen appliance by the volume at which you speak. "I cannot predict the outcome, but I can see a lot of passion in it," Lee said. "We're working together in a very untraditional way." Click Here to View Full Article

. From EduPage, June 17, 2005

Bringing The Internet To Rural India
New York Times, 15 June 2005

As many as 5,000 villages in rural India may soon be connected to the Internet, thanks to efforts of an international group of companies and organizations, including the World Bank. Many rural Indians do not have easy access to business or government functions, and the project is designed to fill that gap for villages with more than 5,000 residents in the Indian state of Karnataka. The computer centers or kiosks will connect to the Internet either through wired networks or by satellite and will have between 5 and 10 "thin client" computers. In addition to the World Bank, partners in the project include Comat Technologies, an Indian Internet service provider; ICICI Bank, a commercial bank in India; and California-based Wyse Technology, maker of computer terminal equipment. (registration req'd)

.From ACM's TechNews, June 10, 2005

"Innovative Asia: How Spending on Research and Development Is Opening the Way to a New Sphere of Influence"
Financial Times (06/09/05) P. 11; Cookson, Clive

Asian research and development is rapidly maturing, but it is still far from the level of developed Western countries, according to top experts. There is concrete evidence of a research boom in countries such as China and India, where governments are implementing plans to quickly increase their level of science and technology investment, and where a vast pool of science and engineering talent compares favorably against Europe and the United States, where interest in science and technology education is waning; Asian countries also offer lower costs than in the United States, although that advantage is narrowing. The highly competitive nature of the United States causes people to unduly view growing Asian influence as a threat: "Fears in the west about the rise of Asian science are very much exaggerated," says the Indian government's chief scientist, R.A. Mashelkar. Although China and India do not track the specific numbers of scientists and technologists who emigrate or return, a net outflow is likely. Even the growing number of Asian scientists and engineers who return to help build companies in their homelands points to the superior quality of overseas education. Samsung Electronics chief technology strategist Kim Chuljin says the quality of Korean science and engineering graduates is declining and the company spends more time for on-the-job training with Korean graduates than with overseas graduates. Chinese Ministry of Science and Technology senior official Zhou Yuan notes that most of the core technology used in the region is still developed elsewhere, and that advances to date have come from applying those fundamental technologies. The whole idea of a competitive threat may not be helpful, and Western countries should view a maturing Asian science sector as an opportunity, says European Union research commissioner Pavel Potocnik.

"China's Tech Revolution"
IEEE Spectrum (06/05); Kumagai, Jean; Hood, Marlowe

China's transformation into a worldwide economic powerhouse is chiefly due to its technological awakening. The nation's prodigious and cheap workforce, aggressive industrialization, and burgeoning brainpower has helped coax multinationals to do business with or relocate to China, set up Chinese branches, or even sell off whole divisions to Chinese companies, as IBM did with its PC division. The provincial city of Chengdu is a case study of both the advantages and disadvantages of China's economic boom: Positive aspects include the city's expansive and talented population of engineers, who earn significantly less money than their Western counterparts; its numerous universities, which produce around 40,000 graduates per year; and tax breaks and land incentives that have encouraged Intel, Alcatel, and other major corporations to establish facilities for manufacturing and research and development. On the other hand, Chengdu suffers from overcrowding, power shortages, inadequate sanitation, corruption of officials and law enforcement, inveterate land-grabbing, social unrest, and labor disputes. China's remarkable economic efficiency belies the fact that competition is merciless, and that there are too many applicants for a limited number of good jobs. An overreliance on trade means that economic recession and protectionist measures in key trading partners would have a dramatic effect on the country, while the Chinese government's repressive political agenda is another sticking point. Tension is also building between China and its trading partners over such hot-button issues as Taiwan's independence, Japan's rearmament, and China's reputation as a haven for copyright infringement. Click Here to View Full Article

.From ACM's TechNews, June 1, 2005

"Setting the Stage for China's Tech Future" (05/20/05); Swanson, K.C.

Major technology vendors are stepping up research collaborations with Chinese universities in order to curry favor with government policymakers, tailor products for the local market, develop the local technology base, and tap local talent. IBM China Research Laboratory director James Yeh notes IBM has operations in China as well as India, Israel, Japan, and Switzerland because it wants to capture innovations coming from many different places. Another benefit is access to top Chinese academics, who often sit on government policy panels and serve as senior advisers with more influence than university professors have in the West; companies that develop relationships with these people benefit from knowing government stances on topics. The size of university collaborations is growing and intellectual property has been protected, with chief scientists taking responsibility for any leaks as in the United States. Some significant collaborations include Microsoft's work with five different universities, each of which focuses on different technology aspects. Tsinghua University's Microsoft partnership deals with multimedia and networking while the partnership with Zhejiang University involves computer vision and graphics, for instance. IBM China university relations manager Qiu Xiaoping notes that companies involved with budding Chinese technologists have an advantaged position in the burgeoning Chinese market; they are able to introduce technology products and shape curriculum. Chinese researchers tend to think differently than in the U.S., and students are given less creative freedom, but State University of New York provost Denis Simon says it is essential for multinational companies to capitalize on global talent pools. Click Here to View Full Article

.From ACM's TechNews, April 22, 2005

"North America to Have Fewer Developers Than Asia/Pacific"
TechWeb (04/19/05); Gonsalves, Antone

The Asia/Pacific region will overtake North America in overall number of software developers starting in 2006, according to new research from International Data (IDC). "For the large economy of North America, which has historically been the home of most developers, program development automation techniques, offshoring, and increasing productivity are all likely to put downward pressure on the rate at which the number of professional developers in North America increases," says IDC analyst Stephen Hendrick. The number of professional software developers in China will increase at a compound annual growth rate (CAGR) of 25.6 percent through 2008, and at 24.5 percent in India. The markets have huge populations, and will continue to spend heavily on information technology. The Middle East and Africa will have a CAGR of 18.3 percent. By 2008, there will be a total of 14.9 million software developers worldwide, as the number of developers increases at an annual rate of 9.8 percent. Click Here to View Full Article

.From ACM's TechNews, April 15, 2005

"China, India Can Lead Global IT, Says Chinese Premier"
IDG News Service (04/12/05); Ribeiro, John

Chinese political leaders continue to tout the growth opportunities for the IT industries of China and India, if the two markets work more closely together. Wen Jiabao, the premier of China, renewed the theme earlier in the month during his four-day official trip to India, which included a stop at the country's technology center in Bangalore. Chinese leaders are ready to open up their market more widely to Indian IT companies if they are willing to invest more in China, tap global markets through its market, and hire local labor. Tata Consultancy Services, Wipro, and Infosys Technologies are among the Indian software and services companies that have software development operations in China, and Chinese companies are starting to establish a presence in India, but border issues and political differences have kept the markets from exhibiting more cooperation years ago. Also, India saw China as a threat to the software and services markets it has developed. "We have to stop looking at China as only competition and instead look at China as a big market for us," says Subramanian Ramadorai, CEO and managing director of Tata. Jiabao believes China and India can become the global leader in IT. Click Here to View Full Article

.From ACM's TechNews, April 13, 2005

"Russia Looks to Make IT Its Next Natural Resource"
IDG News Service (04/12/05); Pruitt, Scarlet

Russia has committed $650 million to invest in the development of IT as the "flagship industry of its modernized economy," according to Russian Minister of Information Technology and Communications Leonid Reiman at the Russian Economic Forum on April 12. The money will be channeled into programs such as e-Russia, an initiative to establish e-government and services such as online medical records, widen the scope of Russia's telecom infrastructure, and provide Internet connectivity to remote communities. Another goal is the creation of government-backed "technoparks" for IT research and development in which software will play a major role. The chief supports of Russia's IT economy are its strong educational infrastructure and prosperous software development community, and the government expects the entire Russian Federation to be covered by a Global System for Mobile Communications network by the end of April. Reiman noted, however, that 46,000 communities still do not have even one fixed line, and the government aims to rectify this by legalizing a universal service guarantee and setting up a service fund, while also encouraging local operators to extend phone access by promising that they will benefit from future market growth. Reiman said Russia's tech industry has overtaken every other industry with its 20 percent to 25 percent annual growth, and mobile phones are penetrating the country at a national rate of 57 percent. Forum attendees cited corruption, limited funding, burgeoning computer crime, and worries of a heavy-handed government approach to corporations as challenges to Russia's establishment of a robust IT economy. Boris Miroshnikov with the Russian police's cybercrime unit is calling for new international legislation for defining cybercrime, as well as a certification program for IT security firms to weed out bogus security consultants. Click Here to View Full Article

. From ACM's TechNews, March 25, 2005

"Tech That Makes a Difference"
EE Times (03/21/05) No. 1363, P. 1; Goering, Richard

University of California at Berkeley computer science professor and Inktomi founder Eric Brewer sees three major problems with attempts to bring technology to developing regions: Their reliance on existing, off-the-shelf technology, which may not align well with the region; their basis on donations, which makes project sustainability impossible; and a lack of infrastructure in developing nations. Brewer is involved with Information and Communications Technology for Billions (ICT4B), a National Science Foundation-funded initiative to engineer a high-tech foundation for sustainable, charity-independent businesses in the Third World. He reasons that such deployments are possible because the aggregate wealth of people in developing regions is considerable, while personal devices can be kept out of the equation. The most pressing engineering challenge Brewer and colleagues are trying to meet is establishing rural connectivity, with particular emphasis on Wi-Fi modified for extended transmission range. Other major challenges include developing a "store and forward" style network that applications can run on even though links function intermittently, and user interfaces that can recognize speech in unusual dialects. Brewer details several ICT4B projects underway in India, one of which involves the setup of an e-government wireless network in the state of Kerala. Brewer's group is working to deploy kiosks in Tamil Nadu so that residents are no more than 20 kilometers away from a rural health center. A second project based in Tamil Nadu involves enabling kiosks for speech recognition so that villagers can wirelessly access weather reports and other useful information. Click Here to View Full Article

. From EduPage, March 21, 2005

China Blocks Access To Campus Web Pages
Reuters, 21 March 2005

Chinese officials have blocked outside access to a number of online bulletin boards operated by universities. Such bulletin boards have become popular vehicles for discussion about topics including politics, pop culture, and pornography, subjects which Chinese authorities have not been shy about censoring. Tsinghua University's Shuimu Tsinghua bulletin board was one of those restricted recently, joining bulletin boards at Wuhan University and Nankai University, as well as one at Peking University that was shut down entirely. According to a student from Tsinghua University who asked not to be named, the Ministry of Education's reasoning for blocking outside access was "because the bulletin board was only supposed to be a platform for internal exchange within the university." He added, "Students are calm about it, but it seems that non-student users are angry because they can no longer get access."

. From New York Times, November 16, 2004

Microsoft Expands Operations in India
by Saritha Rai

Microsoft is significantly expanding its software development operations in India as it opens a new campus near Hyderabad, its second-largest campus after its headquarters in Redmond, Wash. Read the article.

. From ACM's TechNews, October 20, 2004

"Accessibility Opens a New World"
China Daily (10/20/04) P. 5; Xiaodan, Xu

China supports a handicapped population of 60 million people, many of whom still lack computer access, and the country's first Information Accessibility Forum was held this past weekend to highlight the problem. "Easy access to information is a critical change to a disabled person," maintained China Disabled Persons' Federation Chairman Deng Pufang, who called on the government as well as companies and organizations to invest in accessibility programs both financially and politically; he said that disabled people can use the Internet to build knowledge and skills that could translate into gainful employment and greater independence. Wang Luguang of the China Welfare Fund for the Handicapped declared at the Information Accessibility Forum that the foundation will initiate a program to provide computer access to 100,000 vision-impaired people using donated second-hand computers equipped with audio software. The Chinese government committed $600,000 to fund the development of Sunshine Software, China's first computer software for the blind. Sunshine converts all computer operations into audio instructions via keyboard commands, enabling users to browse Web sites, shop online, chat with friends on the Internet, and write emails in Chinese and English. Unfortunately, most blind people in China cannot afford Sunshine's $139 price. In addition, complicated Web sites can inhibit Sunshine's performance. Most accessibility software solutions for the disabled from IBM and other foreign IT heavyweights have yet to make their Chinese debut, but developed nations such as Japan and Australia make a clear case for accessibility technology as a tool to improve the disabled's employment and educational opportunities as well as a growth industry. Click Here to View Full Article

"India Noses Ahead as R&D Hot Spot"
United Press International (10/19/04); Basu, Indrajit

Multinational companies are building research and development laboratories in India at a frenetic pace, with the current count heading toward 150 research centers. Companies such as IBM, Texas Instruments, DaimlerChrysler, and Hyundai have spent millions of dollars to take advantage of India's vast talent pool. This investment puts India ahead of other international research hot-spots, such as Japan, Israel, Western Europe, or China. Japan's National Science Foundation conducted a survey that found 33 companies out of the BusinessWeek 1,000 had R&D operations in China. Many of the laboratories in India are focused on developmental work, not fundamental research of the type that leads to Nobel Prizes; but that does not mean Indian research is insignificant. Intel, for instance, filed 63 patents from its Bangalore facilities last year--outstripping its other labs in Israel and Malaysia. The international focus on India-based research has also spurred research investment from domestic companies as well, such as Tata Motors, which currently has a groundbreaking $2,400 car on the drawing board. Before economic liberalization in 1992, Indian firms had little incentive to innovate because markets were closed, but now the competition has awakened a need to compete and even develop new products. Geography also plays a role in India's popularity. Oracle's Murali Subramanian says the 12-hour time difference between the U.S. and India enables around-the-clock software development when synchronized with the company's developers in California. Although analysts say India's advantages may be temporary, move companies continue to open R&D offices there; Google is latest company to say it will establish an R&D base in India. Click Here to View Full Article

. From ACM's TechNews, October 18, 2004

"Global Talent. Local Markets. India Calls. Are You Ready?"
Siliconindia (09/04) P. 28; Shankar, Pradeep; Revanna, Harish

A recent SiliconIndia poll of Indian American executives in U.S. corporations found that 60 percent are actively seeking opportunities to emigrate back to their native country, an attitude becoming more prevalent as India's economy and outsourcing market expands and U.S. businesses become more willing to offshore jobs. Also fueling this reverse brain drain are the lack of a global outlook in the United States and an excessively management-centric U.S. market. Most returning Indians are higher management workers with at least 15 to 20 years of professional experience under their belt. They are not returning because they are homesick, but because they wish to take advantage of improvements in the quality of life, better job perks and challenges, greater foreign investment, and the growing presence of cutting edge technology development projects in India. Another plus cited by interviewed returnees is the separation of technology and management in Indian companies, through which they have secured higher positions than they had in American companies. BEA Systems' Bhavin Sheth notes that "The opening up of Indian markets has resulted in availability of the same goods and services one is used to in the U.S. at an affordable price," and adds that these goods and services cost more as a percentage of one's salary in India than in the United States. Most of the interviewed returnees admit to pining for the citizenship-acquired countries they left, but their homesickness is assuaged somewhat by modern communications such as the Internet and IP phones. Returnees are also appreciative of Indian culture for offering their relocated families a more social, less materialistic environment in which to grow up.

. From ACM's TechNews, October 15, 2004

"Endangered Species: US Programmers"
Christian Science Monitor (10/14/04) P. 17; Francis, David R.

Some experts are convinced that U.S. software programmers will die out in the next few years as more American companies offshore programming to low-wage countries and give domestic programming positions to foreign immigrants. The computer-related U.S. job market grew by 27,000 new positions between 2001 and 2003, but Programmers Guild expert John Miano reckons that nearly 180,000 new foreign H-1B workers entered the United States in that period. "This suggests any gain of jobs have been taken by H-1B workers," he remarks. The H-1B visa cap, which currently stands at 65,000, was already reached by Oct. 1 of last year, and U.S. businesses are now lobbying Capitol Hill for additional visas. But the Programmers Guild and similar organizations argue that the existing H-1B quota is already unfairly excessive, given that over 100,000 U.S. programmers are unemployed and an even greater number are underemployed. Criticism has also been leveled at loopholes in the H-1B program that allow employers to hire H-1Bs without first hiring domestic workers, as well as pay H-1B holders less than the prevailing wage, even though it is required. American programmers are mobilizing to fight H-1B and L-1 visas in Congress, but Miano warns that business groups have the advantage in terms of organization, funding, and political clout. The Sphere Institute estimates that almost 25 percent of California's technology workforce has moved to non-tech careers since the dotcom bubble burst three years ago, while another 28 percent have become unemployed, opted for self-employment, or left the state. Click Here to View Full Article

. From ACM's TechNews, October 13, 2004

"India Emerges as Innovation Hub"
Wired News (10/11/04); Joseph, Manu

India has become a center for technological innovations that can benefit Third-world countries by bringing rural, multilingual, and impoverished populations into the information age. The International Institute of Information Technology in Hyderabad is developing Shakti, software designed to translate English prose into several Indian languages, while further research seeks to translate English into an African language. Institute director Rajeev Sangal intends to release a package that translates English into the Indian dialects of Hindi, Marathi, and Telugu in several months. MIT-affiliated Media Lab Asia aims to improve life in rural regions by enabling telecommunications, one example being a deployment of Wi-Fi computing devices in a village in Uttar Pradesh. Meanwhile, Hewlett-Packard's Bangalore research center is working on Script Mail, a device designed to ease electronic communication for people who speak languages that cannot be typed using a standard keyboard. Script Mail features a pad on which a user positions a piece of paper and writes his message with an electronic pen; the device recognizes the handwriting, and the message is displayed for corrections and stored on an attached monitor, and can be emailed via an external modem. Indian Institute of Technology professor Kirti Trivedi has created K-yan, a "compact media center" that bundles a PC with a Pentium 4 processor, a 120GB hard disk, a modem, a DVD drive, four USB ports, a television tuner, and a projector with SVGA resolution into a single box. K-yan is designed for use in classrooms that cannot afford PCs for each student, and Trivedi describes his invention "as an educational tool that can introduce large groups of poor children to basic computing because of the sheer size of the image that can be beamed on a wall or a screen." Click Here to View Full Article

"Tech Major Loses Its Luster"
Raleigh News & Observer (10/03/04) P. E1; Cox, Jonathan B.

Companies may have little choice but to outsource IT jobs overseas, given the 28% drop in U.S. undergraduate computer science majors since 2000, according to the Computer Research Association. "Especially if the quality goes down, companies will feel they're better off going to other countries," remarks Duke University's Pankaj K. Agarwal, whose computer science department has experienced a 25% decline in undergraduate enrollments over the past three years. Those in the field observe that technology jobs have lost a lot of their allure since the dot-com explosion, when high demand for even minimally skilled computer science graduates promised fast money and early retirement; the subsequent meltdown of the tech boom, mass layoffs, and the growth of offshoring has discouraged students. Kevin Jaffay with UNC-Chapel Hill notes that students now perceive computer science as a study-intensive major with little career payoff, while many parents are pressuring students to choose different careers as a result of the tech offshoring boom. Red Hat CEO Matthew Szulik warns that the U.S. could lose its status as worldwide tech leader and become "nothing but a services industry" if it fails to fuel interest in technical fields by overhauling public education to stress science and math more and encourage students to pursue tech careers. Some downplay such warnings, arguing that undergrads' decisions to pursue degrees in spite of the IT downturn is indicative of a higher level of quality and appeal to employers. Other encouraging signs include colleges' inclusion of computer instruction into other majors, and the Bureau of Labor Statistics' prediction that there will be almost 4 million new high-tech jobs in 2012, up from 2.9 million two years ago. Still, Forrester Research forecasts that the number of offshored computer jobs will more than double to approximately 247,000 between 2003 and 2008. Click Here to View Full Article

.From ACM's TechNews, October 6, 2004

"IT Industry Lags Behind Talent"
Moscow Times (10/06/04); Levitov, Maria

Despite Russia's enviable tradition of producing greater numbers of workers with exceptional science and engineering skills than many nations, its domestic IT market is a fledgling compared to countries such as India. Forrester Research estimates that Russia has as many as 40 percent more scientists per capita than Germany, England, and France; Auriga reckons that the 68,126 Russian graduates earning master's degrees in computer science and software engineering this year constitutes an almost 7 percent gain over last year, while the potential IT labor pool may experience even higher growth because there are more graduates with advanced degrees in other, related engineering disciplines. But impeding the expansion of Russia's IT sector is insufficient government support, meager investments, and low consolidation levels. Seventy percent of the country's IT market is currently committed to hardware sales, while Russia's outsourcing effort has barely begun. Yevgeny Butman with the Information & Computer Technologies Industry Association expects a gradual increase over the next few years in the percentage of revenues coming in from government contracts, which currently stands at 30 percent. Meanwhile, $86 million in funding is expected to go toward the development of information and communications technology through the government-sponsored Electronic Russia program. Higher investment levels among IT companies are also anticipated, although Sergei Matsotsky with Information Business Systems cautions that "in the nearest future, the IT market will feel a sharp deficiency in investment necessary for growth." The country's failure to become adept at receiving investment could bring the Russian IT market's development to a halt and hamstring its competitiveness both globally and nationally, he says. Click Here to View Full Article

.From EduPage, September 28, 2004

Russia Added To Starter Edition Program
CNET, 27 September 2004

Microsoft has announced that by the end of the year, it will release its Windows XP Starter Edition in the Russian market. Windows XP Starter Edition is an inexpensive, slimmed-down version of the company's operating system. Microsoft is working to build support for its products in developing markets, including countries such as Russia, Brazil, India, and China, and to be more competitive with products from Linux. Starter Edition is not available to individual consumers. Computer makers using Starter Edition can buy the operating system for about $36, compared to $70 for Windows XP. The Starter Edition program is also designed to discourage software piracy. Some estimates suggest that as much as 97 percent of all software in Russia is pirated. Because updates and patches are available to buyers of the Starter Edition, Microsoft hopes that more consumers will opt for PCs that come with support for the operating system rather than unsupported, pirated software.

. From Information Week, September 8, 2004
Staffing trends--including offshore outsourcing--continue to strip IT workers from their jobs, according to the trade association. Read the article.

.From EduPage, September 20, 2004

Chinese Academic Calls For Site Reopening
Chronicle of Higher Education, 20 September 2004

A law professor at Peking University, He Weifang, has written an open letter calling on the government to reverse a decision to shut down the Yita Hutu bulletin board, commonly referred to as YTHT, its Web address. Last week, government officials ordered that the site be permanently shut down and quickly afterwards prohibited discussion about the closure in other online groups. YTHT was created in 1999 by a graduate student and reportedly grew to comprise more than 700 discussion groups with more than 300,000 registered users. Many of the topics covered on the YTHT site were banned from state-run media coverage, including human rights issues and questions about Taiwan. In his letter, He said the site was "an important source of information and a channel for discussion for tens of thousands of netizens around the world, including the teachers and students of our university." Xiao Qiang, the head of the China Digital News project at the University of California at Berkeley's Graduate School of Journalism, supported the importance of the YTHT site, calling it "the most politically provocative online community in Chinese cyberspace."

.From ACM's TechNews, September 20, 2004

"CMU Project Envisions Computers Even the Poorest Third World Farmer Could Use"
Pittsburgh Post-Gazette (09/20/04); Spice, Byron

Former dean of computer science at Carnegie Mellon University Raj Reddy is focused on bringing affordable Internet access to poor people throughout the world using the PCtvt, a $250 device that consists of a PC, a telephone that uses Voice over Internet Protocol technology, a color TV, and a video recorder while supporting wireless Internet links. The device is also outfitted with a Web cam for accommodating video mail, an important consideration for users who cannot read or write; the computer supports a keyboard and mouse, while a remote control device is offered as well. Meanwhile, researchers at the University of California, Berkeley's College of Engineering are developing inexpensive broadband technology for the PCtvts, using a $3 million National Science Foundation grant. A major area of design--and redesign--for UC Berkeley's Information and Communication Technology for Billions project is the height of the antennas, and the current solution is to mix high and short antennas under the guiding principle that each village should be able to construct its own broadband antenna, provided that it is within range of a neighboring village's antenna. The PCtvt project also involves the participation of researchers at the University of Washington, the India Institute of Science, and India's International Institute of Information Technology. The PCtvt does not use a hard drive as a primary memory component, since it is assumed that a single computer will have more than one user; instead, a flash memory key is issued to each user that can be mated to the units' universal serial bus port. PCtvt users would be charged a small amount of money for each instance of Internet usage rather than a flat monthly access fee. Reddy plans to field-test the prototype PCtvts in China, India, and Africa next year to determine the viability and desirability of sustainable computing. Click Here to View Full Article

"Study: IT Job Market Continues to Be Stagnant"
Computerworld (09/16/04); Weiss, Todd R.

A new study conducted by the Center for Urban Economics Development at the University of Illinois in Chicago reveals that the number of information technology jobs has fallen from 2.1 million in March 2001 to 1.7 million in March 2004, and that approximately half of the 403,300 lost jobs came after the last recession ended in November 2001. The San Francisco region suffered the most as the local market lost 49 percent of its IT jobs during the period. The study only counted positions in three IT employment classifications: at traditional IT companies involving software publishers; Internet service providers, Web search portals and data processing; and computers systems design and related services. The study was based on data from the U.S. Current Population Survey for 2001 to 2004 and from the U.S. government's Current Employment Statistics data. "It is important to recognize that even though the economy has been recovering, in IT the job losses are continuing," says Nik Theodore, director of the center and co-author of the study. Theodore says many employers still have concerns about the health of the economy, and offshore outsourcing is responsible for some of the job losses. Click Here to View Full Article

.From ACM's TechNews, September 17, 2004

"American Programmers Still Alive and Kicking"
IT Management (09/16/04); Pastore, Michael

Edward Yourdon, author of the upcoming book, "Outsource: Competing in the Global Productivity Race," foresaw rough waters ahead for U.S.-based programmers as far back as 1989, when he noted that Indian workers adhered to very high standards of quality and productivity and were willing to offer their services cheap; this was one of the earliest inklings of the offshore outsourcing movement, which has surged in recent years thanks to the economic downturn and improved global collaboration and communications technologies. Yourdon thinks the next phase of the offshoring boom could be fueled by some as-yet unimaginable technology that transcends lingual and cultural barriers, although forecasting the economic cycle is harder. There is little argument, however, that the offshoring wave is unlikely to reverse itself, and the migration of tech positions to overseas workers has U.S. professionals doubting the security of their jobs, while younger people who wanted to pursue tech careers are being forced to re-think their options. Yourdon believes entry-level employees and the bottom 10% to 20% of the workforce will bear the brunt of the outsourcing trend. "One of biggest issues we'll struggle with as a nation and a society is how we'll subsidize and take care of entry-level workers," he predicts. Yourdon suggests that students increase their value to employers by gaining specialized training in another field besides computer science, such as law or biology; complicating matters is the fact that students' desire to study math, science, and technology can wither before they even enter college. He also notes that current industry workers must have a willingness to continue their education and gain new skills to sustain their viability, yet is puzzled that this willingness appears to be so scarce. Click Here to View Full Article

.From Business Week Insider, September 17, 2004

Tech's Future

With affluent markets maturing, tech's next 1 billion customers will be Chinese, Indian, Brazilian, Thai... In reaching them, the industry will be deeply transformed

.From ACM's TechNews, September 15, 2004

"On the Sunny Side of Life?"
Telepolis (08/22/04); Schmidt, Henrieke

Internet researchers from about 30 countries gathered in Karlstad, Sweden, to debate the disparities, potential clashes, and cultural inconsistencies in cyberspace at the fourth conference on Cultural Attitudes Towards Technology and Communication. A major focus was on the origins of the relationship between culture and technology, and an overview of cultural delineations by Minna Kamppura and Markku Tukiainen demonstrated a profound lack of sufficient abstractions; the majority of the presented papers addressed "culture" as an aggregation of national and ethnic characteristics. Chinese researcher Wei Lu illustrated a divergence from linear explanatory models with a "new model of technological evolution" designed to harmonize technological and cultural determinism via reciprocal interaction. Numerous presentations concentrated on the historically and culturally outlined particulars of ICT adoption in Russia, Estonia, and the States of Middle Asia after the collapse of the Soviet Union, while other papers probed how traditional behavioral patterns have impacted the political usage of the Internet in Japan and the situations leading to South American and African ICT applications. In one session, a participant warned of a potential reversion to cultural essentialism if the study of ICT behavior patterns was too narrowly targeted on an isolated analysis of national or ethnic groups. Other areas of discussion included the access and usage of ICT by indigenous peoples and what impact gender has on ICT usage; these issues prompted investigation into the validity of the Internet's role as a dominant technology for buttressing social discrimination. Alternative types of Internet usage by cultures characterized as unserved or marginalized were of special interest. One presentation noted that the lack of correlation between individual ICT usage and economic conditions or cultural behavior patterns in places such as India or South America illustrates the potential inventiveness of these alternative solutions. Click Here to View Full Article

"World Looks to Reap IT Benefits"
Federal Computer Week (09/13/04) Vol. 18, No. 32, P. 56; Lisagor, Megan

The global potential of information technology will be a key topic of discussion at the semiannual meeting of the World Information Technology and Services Alliance (WITSA) scheduled for late September in South Africa. Recently recruited WITSA members such as Senegal, Sri Lanka, and Bangladesh are an indication that IT is rapidly penetrating developing nations, alliance officials note. Harris Miller, President of WITSA and the Information Technology Association of America (ITAA), says that consortium officials will ponder how more countries can reap the rewards of IT "in a positive but nonregulatory manner." Establishing a basic infrastructure in developing countries is critical, according to Michel Laguerre, director of the Center for Globalization and IT at the University of California, Berkeley; the lack of electricity in many nations is a major hindrance to the spread of IT, but Laguerre says sufficient provision of electric power, computers, and training should open up IT's benefits, particularly in the area of education. Miller explains that offshore outsourcing of U.S. jobs is not a major concern among WITSA members, who are more interested in how IT can be applied to areas such as commerce, health, and training. Laguerre cautions that the capitalization of IT in developing nations cannot be realized without investment. WITSA executive director Allen Miller says the South African meeting will emphasize the consortium's legislative plan for next year, with Internet governance and security among the key issues. "It's an opportunity for people to get together [and] work out any differences we may have globally on IT and to share and learn," he explains. Click Here to View Full Article

.From ACM's TechNews, September 13, 2004

"Let a Thousand Ideas Flower: China Is a New Hotbed of Research"
New York Times (09/13/04) P. C1; Buckley, Chris

The world's multinational companies are setting up as many as 200 new research laboratories in China each year, according to that country's Ministry of Commerce. China offers a huge reservoir of skilled and inexpensive researchers and proximity to what is the largest and fastest growing consumer market for many sectors. "A 50-year-old Finnish or American engineer is not going to understand the needs of an 18-year-old Chinese youth," says consultant Martin Hirt. Nokia has moved its software programming operation to China, for example, and many other companies are setting up research centers on par with their other laboratories around the world. Microsoft Research Asia's untested status among the company's other centers in the United States and England gives Beijing-based researchers motivation to prove themselves, says division head Zhang Hongjiang. Microsoft Research Asia is working on computer graphics, speech recognition, text translation, and other areas. Ma Wei-Ying leads a 10-member team in developing new Internet search techniques, and says the Chinese researchers use a more collaborative approach than do researchers elsewhere. China's rapid rise in the international corporate research scene could soon place it as the No. 2 center for that type of work, second to the United States, says Qinghua University management professor Maximilian von Zedtwitz; but he notes that the threat of intellectual property theft could slow that rise, pushing development to competing centers such as India. Another worry is the management and organization of Chinese companies, which could prevent them from fully benefiting from the foreign investment and involvement in their country. Click Here to View Full Article

.From ACM's TechNews, September 3, 2004

"Tech Initiatives Aim to Go Global"
Wall Street Journal (09/02/04) P. B4; Clark, Don

Bringing information technology to the world's underdeveloped areas is the goal of numerous collaborations between academic and industrial researchers involving the design of new, inexpensive communications and computing devices. Advanced Micro Devices' (AMD) 50x15 initiative aims to link half the global population to the Internet by 2015; Intel and several universities have joined forces to enhance networking technology to function in regions vulnerable to frequent blackouts; and the National Science Foundation-funded ICTB4 (Information and Communications Technology for Billions) project is an international effort with multiple objectives, such as expanding the communications range of Wi-Fi and improving rural villagers' access to economically beneficial resources with "proxies" that store data from frequently used Web pages for use when Internet connections are unavailable. PCtvt, conceived by Carnegie Mellon University professor Raj Reddy, involves designing a new category of appliance-like gadgets that will allow semiliterate people to view TV and DVDs, get email with video clips, and make voice calls, all through remote controls. The devices will incorporate cheap chips from AMD and Intel, and streamlined versions of either Microsoft Windows or the Linux operating system. Another Intel project revolves around a new PC that allows parents in China to strictly control their children's access, based on research showing that some parents are concerned that computers and the Internet are drawing their kids away from educational pursuits. Projects such as these, which seek to close the gap between the digital haves and have-nots, illustrate a general agreement that the efforts of governments and charitable organizations are inadequate. University researchers and corporate executives are attempting to forge profitable partnerships with home-grown businesses in developing countries that could help market new technology.

.From ACM's TechNews, August 30, 2004

"Is Technology Adoption Quickening?"
Electronic Business (08/04) Vol. 30, No. 8, P. 16; Haughey, James

Personal computer integration took nearly a generation in wealthy countries, but the market remains largely untapped on the world stage, considering less than 10 percent of adults and teens across the globe have a PC. A variety of social acceptance issues slowed the integration of PCs from the time they first appeared in the late 1970s. Prices are much more affordable these days, and within three years PCs in China and India will be comparable in price to the cost of units in the United States in the early 1990s. How quickly the rest of the world embraces PCs will have a huge impact on the future growth of the electronics market. In China and the Middle East, PCs could be viewed as more useful tools if Internet access was not limited, and steady adoption in these markets would start to bring down prices. Moreover, governments in developing countries will have to deal with monopolies so that the cost of electricity, telephone lines, wireless access and taxes, tariffs, and delivery costs of replacement or upgrade parts do not hinder adoption. Nonetheless, the cellular handset market might offer the most growth for the electronics market over the rest of the decade. The personal communications devices are being adopted more quickly in developing countries, and they are cheaper, easier to use, and require no electricity service, complex local language software, or even literacy. Click Here to View Full Article

. From ACM TechNews, August 23, 2004

"Internationalizing the Web"
Information Today (08/04) Vol. 21, No. 7, P. 15; Peek, Robin

The name "World Wide Web" implies that the global network is international at its core, but internationalization to the World Wide Web Consortium (W3C) is about making content more in line with the cultural and linguistic characteristics of its various users. An internationalized Web would accommodate the unique symbols, punctuation, alphabets, and directionality of text of the entire global audience. Aware that designing the Web with the ISO 8859-1 character, commonly known as ASCII (American Standard Code for Information Interexchange), which only backs Western European languages, W3C created the activity group i8n in 1995 to study the issue of internationalization. In looking at HTML, internationalization would be difficult, but XML and XHTML offers more flexible solutions. In May 2004, i8n released three draft documents that suggest the Web is ready to embrace internationalization. "Ignoring this advice in this document or relegating it to a later phase in the development will only add unnecessary costs and resource issues at a later date," concludes one document. Though making content internationally friendly would not be too difficult for navigation schemes or static data such as an order form, the same cannot be said when working with something more colorful. Internationalization of content brings up the question of practicality, and may even extend to social engineering as much as it does to technological advancement.

. From ACM TechNews, August 18, 2004

"Can You Spell Standard In Chinese?"
Electronic News (08/11/04); Sperling, Ed

China is creating indigenous standards for consumer electronic devices in collaboration with outside partners in the hopes of reducing the country's reliance on intellectual property with costly licensing terms. This development could ripple throughout the worldwide electronics industry if China starts exporting these products. Lili Zheng with Deloitte & Touche's China Services Group reports that Chinese standards can lower royalty payments as well as the cost of consumer product manufacturing, while perhaps being more user-friendly in the bargain. ISuppli analyst Byron Wu explains that the success of standards within China hinges on establishing a balance between the interests of Chinese companies, foreign companies, and the Chinese government. He adds that as many as 10 years could pass before standards penetrate other markets, and technology breakthroughs within China must occur in order for this to happen. A report furnished by Zheng's group lists many consumer electronics standards under development in China, including an advanced DVD standard called enhanced versatile disk; a fourth-generation cellular phone standard that can support videoconferencing, streaming video, and high-speed Internet access with its 100 Mbps transfer rates; a new video and audio compression standard that will compete with H.264 and MPEG-4; a radio frequency ID standard that may or may not interoperate with the international standard; a Linux-based standard operating system being developed in conjunction with Japanese and Korean industry groups; and equipment based on the wireless authentication privacy infrastructure, which the Chinese government has reportedly mandated for national security reasons Read the article.

. From EduPage, August 11, 2004

Microsoft To Offer Basic Windows XP In Developing Countries

Microsoft will distribute a slimmed-down version of Windows XP in five developing nations beginning this fall as part of the company's ongoing efforts to facilitate computer use and literacy. Consumers in Thailand, Malaysia, and Indonesia will see the so-called Windows XP Starter Edition on PCs starting in October; the other two countries in the program were not named. The Starter Edition of the operating system has fewer features than the standard package, and versions are customized for each country, including appropriate languages and items such as screen saver photos that reflect the local landscape. Also part of Microsoft's initiative is a program that offers free operating systems and inexpensive Office software packages to certain schools in 67 developing countries. Prices for the Starter Edition were not announced, though some reports indicated it might be about $36. According to a spokesperson from Microsoft, the low price allows the company to compete with Linux and may also discourage piracy, since buyers of inexpensive, legitimate copies of the software are eligible for patches and updates. CNET, 11 August 2004
Read the article

. From K & E Newsletter, August 11, 2004

Strategic Management - Offshoring: Is an Entrepreneurial Mindset a More Effective Solution

For many U.S. businesses, offshoring jobs is an effective way to save money, boost earnings, and remain competitive. But critics argue that the practice depletes the workforce, erodes communities, and provides only short-term gains for private enterprise. Professors at Emory University's Goizueta Business School analyze the debate and suggest that an entrepreneurial mindset within firms is an equally effective way for business leaders to balance their short and long-term objectives
Read the article.

. From ACM Tech News, July 28, 2004

"Finding a Way to Make the Net Truly Global"
Star (Malaysia) (07/27/04); Moreira, Charles F.

The first-ever ICANN meeting on Internationalized Domain Names (IDNs) was held in Kuala Lumpur, Malaysia, where participants debated how best to incorporate non-Latin scripts into the Internet infrastructure. ICANN Chairman Vint Cerf and Internet Engineering Task Force representative John Klensin argued for a moderated approach that preserved interoperability between different scripts. If the underlying issues were not given paramount importance, Internet architecture might become fragmented so that language groups could communicate internally, but not with other groups. Cerf advocated using Unicode applications with XML and HTML presentation formats, while preserving the 8-bit American Standard Code of Information Interchange (ASCII) that is currently used pervasively in Internet architecture. Other delegates to the ICANN meeting, however, said local groups should play a more important role in the development and deployment of scripts in the Internet infrastructure: Open Forum of Cambodia advisor Norbert Klein noted that Cambodian authorities were not consulted when their Khmer script code table was developed by the Unicode Consortium, and that the script left out a number of necessary characters and included some wrong ones; Cambodia thus had to arrange workarounds with Microsoft to include application support for Khmer script. Multilingual Internet Names Consortium Chairman Khaled Fattal said no language should be dominant on the Internet, and that eventually Internet technologies and standards should be such that languages can be automatically translated for users. The consortium advocates whole addresses written in uniform script that can be read from left-to-right as well as from right-to-left. Cerf and Klensin said that type of capability would require significant change to core Internet infrastructure. Read the article.

. From ACM Tech News, July 26, 2004

"Humanitarian Effort Yields Brilliant Technology, Teamwork" (07/25/04); Gillmor, Dan

The purpose of the Defense Advanced Research Projects Agency-funded Strong Angel II project is to set up a communications system for efficient collaboration between military and civilian personnel to enhance the coordination of disaster relief efforts. Dan Gillmor reports that a recent test of the system on a lava bed in Hawaii was not only significant from a technological point of view, but from a collaborative perspective, as it united people with diverse, often antagonistic, political views. Technologies employed in Strong Angel included laptops running with collaboration software from Groove Networks; Web cameras tested by VSee Lab founder Milton Chen; and both proprietary and open-source software. One demonstration involved a vehicle equipped with wireless networking and laptops that collected and disseminated data as it passed from location to location. Such an approach can enable humanitarian workers to gather data in the field without setting up complex communications systems in disaster areas. Another demonstration involved the capture and recording of Arabic news broadcasts and the translation of their audio and text into English by software. The broadcast and the Arabic and English texts were placed in a database, and a member of BBN Technologies Speech and Language Processing Group extracted the most significant video segments and put them in a file that was sent to a human translator on the U.S. mainland. Such technology would be of enormous help for U.S. forces and humanitarian workers in Iraq, where fast knowledge of media opinions about the war and the American occupation are of great import. Read the article.

. From ACM Tech News, July 23, 2004

"The Outsourcing Hole"
Federal Computer Week (07/19/04) Vol. 18, No. 24, P. 60; French, Matthew

Legislators and industry insiders are worried offshore software development could compromise the Department of Defense's (DOD) IT security, given its predilection for purchasing commercial off-the-shelf software. Software vendors save money by sending a lot of their software development overseas, and some officials are beginning to fear that foreign-based developers could deliberately insert vulnerabilities in the software. DOD officials have recently concentrated on purchasing proven commercial products, but the products still have vulnerabilities, and a lot of it was not meant to be subjected to the high threat level of the agency. To remedy this situation, the House version of the 2005 Defense Authorization bill includes up to $50 million in grants for DOD contractors to find alternatives to outsourcing jobs, such as plant upgrades and worker retraining programs. A Congressional Research Service report says that Congress must deal with the issue, but Congress also recognizes that commercial applications are cheaper and easier to use than customized ones. A Government Accountability Office report notes that DOD officials do not have enough control over software, and that current purchasing guidelines focus too much on external threats such as hacking and unauthorized access. Some companies are focusing on the concern, with Ounce Labs offering a tool that checks code for potential errors, security flaws, or holes. Open-source software is also a problem, and the traditional "many eyes" argument does not negate the possibility someone with malicious intent could sabotage open-source products. While experts admit the economic necessity of some offshore software development, they also say vendors must be held more accountable for their product's integrity. Read the article.

. From ACM Tech News, July 23, 2004

"Democratic Platform Cites Outsourcing, Broadband Issues"
IDG News Service (07/22/04); Gross, Grant

As China challenges India as a low-cost home for software development, the technology industry is becoming ever more globalized. Read the article.

. From New York Times, July 18, 2004

How a Technology Gap Helped China Win Jobs
New York Times, July 18, 2004, by William J. Holstein

As China challenges India as a low-cost home for software development, the technology industry is becoming ever more globalized. Read the article.

. From New York Times, June 2, 2004

"Outsourcing Ax Falls Hard on Tech Workers"
Los Angeles Times (05/30/04) P. A1; Vieth, Warren

Technology workers held enviable positions in the U.S. job market several years ago, but now face lay-offs due to their companies' offshore outsourcing programs. Offshoring is billed as a way to generate more valuable jobs in the United States, but the reality is that it is purely meant to increase profitability, says Washington Alliance of Technology Workers President Marcus Courtney. He notes that just five years earlier, observers estimated hundreds of thousands of more IT workers would be needed in the United States; today, salaries in the technology industry have stagnated and while many who are fired either cannot find work in the field or are forced to take a less desirable position. The situation has created new political and economic divisions, with many U.S. technology workers questioning the globalization policies that once only affected blue-collar jobs. Having laid-off IT workers train their foreign replacements has been an especially sensitive issue, with some critics calling the practice inhumane and members of Congress trying to limit such activities. At Agilent Technologies, the worldwide headcount has shrunk from 44,000 in 2001 to just 28,000 employees under what the company calls its Workforce Management Program; the firm recently hired India-based Satyam Computer Services to take over its IT infrastructure development and management, and requested some of the U.S. workers whose jobs were lost to train replacements. Hewlett-Packard and then Agilent veteran Cliff Cotterill was let go because of the Satyam contract, but holds Agilent's executive management more culpable than the Indian IT workers who he helped train before leaving. "I've occasionally thought they should reopen the House Un-American Activities Commission and bring all the CEOs up to Congress," he says. Click Here to View Full Article

. From New York Times, June 16, 2004

High-End Technology Work Not Immune to Outsourcing
By Steve Lohr

It is generally thought that complex high-technology work does not migrate abroad. But recently revealed Microsoft contracts throw that into doubt. Read the article.

. From ACM's TechNews, May 24, 2004

"China Trying to One-Up Technology World"
Associated Press (05/23/04); Hoo, Stephanie

Chinese companies are pursuing their own high-tech standards in order to throw off the yoke of foreign technology. University of Oregon professor Richard P. Suttmeier says cultural pride is at the center of this "techno-nationalism," born out of the country's frustration of lagging behind the Western world's technological progress since the 19th century. Another sore point is having to pay foreign fees for products manufactured and sold domestically, and the Chinese government is concerned that foreign computer operating systems such as Windows are insecure. China Daily reports that the Ministry of Science and Technology intends to funnel $1.3 billion into the domestic high-tech push this year, but experts are warning that without a cautious strategy the country could end up isolating itself further by creating domestic standards that cannot interoperate with the rest of the world. Among the tech standards China is attempting to develop domestically is enhanced versatile disc (EVD), a homegrown DVD technology whose success depends on the release of movies in EVD format; WAPI wireless encryption, whose rollout was delayed when U.S. businesses complained that the technology was incompatible with Wi-Fi-based chips; and TD-SCDMA, a third-generation (3G) mobile phone standard. Datang Telecom President Zhou Huan says 3G and related services could generate up to $2.9 trillion in mainland China alone. BDA China managing director Duncan Clark notes that China may be hoping to force foreign companies to cut back their patent fees just by threatening to roll out a domestic 3G standard. Click Here to View Full Article

"Software Industry Seeks Greater Market Effectiveness"
Granma Internacional (05/20/04); Riera, Lilliam

The 10th International Computer Science Convention and Fair held May 10-15 in Havana, Cuba, focused on the official launch of the Cuban Software Industry (incusoft), notable achievements by Cuban institutions, and security issues, among other things. Deputy minister of Computer Science and Communications Nelson Ferrer noted that incusoft should enable the Cuban software sector to more effectively penetrate foreign markets: He explained that Cuba shipped software to over 20 countries last year, albeit in small amounts, which points to the need to more advantageously exploit software's potential in education, health, telecommunication, and art- and culture-related fields. Confidence was high that Cuban programs designed to spur technological development by introducing over 50,000 computers in 12,000 schools and educate tech professionals will generate solid returns. Among the accomplishments highlighted at the 2004 Fair was an automobile from SIMPRO that teaches people how to drive via a virtual reality software program, which is already in use in the National Automobile School and will be licensed to other nations. The convention hosted a review of the Project Cuba: Information and Communications Technology for All initiative, which involved specialists teaching free tech courses to people of all ages. Also held at the event was the first Congress of Bio-Computer Science and the first Cuban Symposium on Artificial Intelligence. The state of Cuban IT security was detailed at the 7th Ibero-American Seminar, where Segurmatica general director Jose Bidot reported that most cyber-intrusions in 2003 were traced back to users who failed to follow recommendations to install patches or heed warnings not to execute email-attached files. He stated that priorities to educate users about malware and ways to repel it will be maintained. Click Here to View Full Article

. From ACM's TechNews, May 19, 2004

"IT Alliance: Japan, Korea, China Aim to Jointly Counter U.S. Dominance"
NE Asia Online (05/13/04)

U.S. information technology standards could face some challenges from protocols that result from alliances between Japan, Korea, and China. Representatives from the three countries are set to gather in July for a communications policy meeting in which a common fourth-generation communications standard for cell phone service will be determined. Japan, Korea, and China have approximately 30 percent of the world's cell phone subscribers, and essentially want to create a de facto global standard for cell phone service. Meanwhile, Japan wants to lessen its dependence on Microsoft's Windows computer operating system, which runs 78 percent of server OSes and 99 percent of personal computer OSes, and its officials in April agreed with their counterparts in Korea and China that standardizing Linux specifications would help to give the free Linux OS more of a foothold in their countries. Also last month, research organizations in Japan and China agreed to work together on smart-tag technology, following the creation of a similar smart-tag alliance involving the South Korean group RFID in March. The nations are also considering adopting a unique wireless LAN standard that would not work with the global standard for local area networks. Click Here to View Full Article

. From EduPage, May 17, 2004

Forrester Gives New Estimates For Offshoring

A new report from Forrester Research forecasts that a total of 830,000 jobs will have been moved from the United States overseas by 2005. The new estimate compares with about 600,000 projected by Forrester in November 2002. Despite the increase, however, Forrester said the overall outlook for offshoring is not substantially different from the earlier report's forecast. The company had previously predicted a total of 3.3 million jobs sent overseas by 2015; it now puts that number at 3.4 million. Forrester analyst John McCarthy said that after the 2002 report, many companies began looking into offshoring and that providers of such services have expanded their offerings. Wall Street Journal, 17 May 2004 Read the article (subscription required)

. From ACM's TechNews, May 5, 2004

"The Pursuit of Productivity"
CIO Insight (04/04) No. 38, P. 23; Parkinson, John

As companies seek increased productivity, they will be forced to look to offshore solutions, writes Cap Gemini Ernst & Young Americas' chief technologist John Parkinson. Given that companies continually refine their process design and focus, they will be able to achieve steadily improving productivity rates, both in terms of application development and lifetime ownership costs. The unit cost of an hour of effort is about $85 in the United States, combining labor and other support costs, and companies get more output for their money when productivity increases. Offshore solutions, however, offer a big one-time savings opportunity not available in the United States; moving operations to places such as India and China allows for dramatically lower labor costs, which are the largest portion of today's application development expenditures. Resources cost less in offshore locations: Companies can get the same one hour of effort for $65 in Canada or Ireland, for $45 in Eastern Europe or more developed areas of India, and for just $12 in "emerging" areas of India and in China. The cost equation, however, is not so simple, because companies have to factor other issues not present in purely domestic operations, such as the threat of geopolitical instability, cultural impediments, and legal and financial differences; these risks and barriers increase the unit cost of one hour of effort, but offshore options still yield savings. Not all work can be outsourced abroad yet, but the barriers to doing so are increasingly fewer and less daunting. As the forces of globalization, technological advancement, and improved education take effect in India and China, the cost equation of sending IT operations abroad will probably stabilize at about 20 percent savings over U.S. costs by 2010. The digital world is more susceptible to the effects of offshoring than is the analog world, and U.S. political and private sector leaders should adjust to the new reality, concludes Parkinson. Click Here to View Full Article

. From ACM TechNews, April 28, 2004

"Send Jobs to India? U.S. Companies Say It's Not Always Best"
New York Times (04/28/04) P. A1; Porter, Eduardo

Certain U.S. entrepreneurs and executives think that outsourcing IT jobs to India is not worth the lower labor costs when measured against productivity--and ironically, many of these execs are Indian-born. "[Work] that requires more creativity is more difficult to manage at a distance," observes Global Insight chief economist Nariman Behravesh. Bladelogic CEO Dev Ittycheria notes that offshoring IT tasks to India reaped three-to-one cost savings, but there was a six-to-one difference in productivity; Bladelogic CTO Vijay Manwani adds that there will be a migration of IT projects back to the United States once Indian offshoring's "hype cycle" dies down, and people realize that they have failed to reach their productivity targets. Behravesh explains that rules-based tasks are best suited for outsourcing, while more essential tasks will remain in the United States. U.S.-based Indian entrepreneurs attribute Indian workers' unsuitability for certain jobs to geography and business context disparities, not to their work ethic. U.S. programmers are more in tune with customers' needs, for example, and are better equipped to move beyond rules-based programming. Indeed, many Indian tech entrepreneurs who are attracted to the United States note that innovation is being spurred by the needs of U.S.-based businesses. Infosys Technologies VP Bassab Pradhan does not think Indian-trained workers suffer from a lack of creativity, but admits that how well tasks can be offshored greatly depends on physical proximity between the programmer and the final user; he predicts that technology production will be farmed out, while the creation of new technologies and business processes will remain domestic. Click Here to View Full Article

. From ACM TechNews, April 14, 2004

"Where's My Job?"
Technology Review (04/04) Vol. 107, No. 3, P. 74; Lok, Corie

Deborah Wince-Smith, president of the Council on Competitiveness, says companies in the United States are not losing their dominance in IT because they are moving jobs overseas. Wince-Smith says high-tech companies such as IBM are often outsourcing their back-office operations, such as customer support and call center positions. Wince-Smith represents a nonpartisan coalition of industrial, academic, and labor leaders that has embarked on a National Innovation Initiative to create a strategy that will keep the United States at the forefront of technological innovation. However, she is concerned about the outsourcing trend because software programmers and electrical engineers are losing their jobs, which could impact the decision of young people who are considering careers in computer science and engineering. Although India has not become a hub for outsourcing advanced technology programming and services, China is becoming a haven for very advanced systems in the area of semiconductor design, engineering, and manufacturing. The long-term impact of such outsourcing could make China, India, and other emerging nations first-tier competitors with the United States in the highest level of economic activity. Wince-Smith has some concerns about the manufacturing of very complex systems such as microprocessors overseas, but they are connected to the innovation process. She believes that the United States will need to continue to encourage young people to pursue math, science, and engineering, as well as create a regulatory environment down to the state level that encourages entrepreneurship and innovation. She says U.S. will need productivity growth to maintain its standard of living and security, and that requires innovation capacity. Click Here to View Full Article (Access to this article is available to paid subscribers only.)

. From ACM TechNews, April 12, 2004

"Swiss Diplomat Leads Debate Over Policing the Web"
NZZ Online (04/06/04)

At the behest of United Nations Secretary General Kofi Annan, Swiss diplomat Markus Kummer will help shape the international discussions on Internet governance that are expected to be held at the second World Summit on the Information Society in 2005. Kummer says he plans to create a Working Group on Internet Governance that will be charged with giving a definition to Internet governance and presenting a list of recommendations for discussion. The working group, which Kummer expects to be functional by the end of June, will be in charge of setting its own mandate. All stakeholders, including developing countries, will have a voice in the group's work. Kummer raises the possibility that criticism of the current state of Internet governance will lessen once the working group is able to study the issue. Based on the current loose definition of Internet governance, it seems likely that the working group will address issues that go beyond domain names and the Web naming system, Kummer says, noting that privacy, spam, network security, and consumer protection have become important topics. Addressing the status of ICANN, Kummer says that by no means is there an intention to destroy the organization or to cut off communications with U.S. authorities. Click Here to View Full Article

"International Report: Taiwan"
Information Today (03/04) Vol. 21, No. 3, P. 29; Poynder, Richard

China and Taiwan are moving to join the International Commons (iCommons) project of Creative Commons (CC), a nonprofit group that is giving content creators an opportunity to place their work in the public domain without losing control over how others use their copyrighted material. The iCommons initiative gives jurisdictions outside the United States the chance to apply the 11 Creative Commons licenses to local copyright laws. France, Japan, and the United Kingdom are among the nine jurisdictions that are localizing Creative Commons licenses, and 50 other jurisdictions have potential affiliate institutions., which deploys open collaborative research on the Internet, is heading the effort in China, and the Institute of Information Science Academia Sinica, a government-sponsored academic research institution, is leading the way in Taiwan. "With the various indigenous and Chinese legal traditions in Taiwan, the introduction of the CC licenses will induce a re-examination of the culture of knowledge sharing [and stimulate discussion] on the development of copyright law, international IP protection, and the relationship between humans and their creative activities," says Shunling Chen, co-project leader of the effort in Taiwan. Glenn Otis Brown, executive director of Creative Commons, says the one-size-fits-all approach of copyright law does not work well with the Internet. Approximately 1 million Web pages now use CC licenses. "Our goals are nothing less than to have the double-C (CC) become as familiar with the public as the standard copyright (c)," says Brown.

. From New York Times, May 9, 2004

As a Center for Outsourcing, India Could Be Losing Its Edge
New York Times, May 9, 2004, by Noam Scheiber

Though outsourcing shows no sign of fading, rising wages and turnover in Indian hubs may reduce the savings American companies reap when they send work abroad. Read the article

. From Chicago Tribune, April 4, 2004

Global economy strains loyalty in company town
Chicago Tribune, April 4, 2004, by Michael Oneal

Cummins Inc. has long driven the economy of Columbus, Ind., but it says shifting work abroad, to India and China, is necessary to survive. Read the article.

. From New York Times, April 28, 2004

Companies Finding Some Computer Jobs Best Done in U.S.
New York Times, April 28, 2004, by Eduardo Porter

Some entrepreneurs are finding that India's vaunted high-technology work force is not always as effective as advertised. Click here to read the article.

. From ACM TechNews, April 26, 2004

"U.S. Programmers: Bargains Go Begging"
Business Week (04/22/04); Gumpert, David E.

Mark Jennings of Synergroup Systems is offering to provide the services of U.S. programmers to customers at rates competitive with those in overseas markets such as India and the Philippines, a practice dubbed "insourcing." Author David E. Gumpert reports that such a proposal is a tough sell due to the popularity of offshoring and the cost savings it represents. His interviews with customers and prospects reveal that some companies believe overseas rates are still far more desirable than the reduced pay Jennings is offering. Others, such as Ceridian VP John Magrann, claim that offshore firms can not only provide a complete outsourcing package that includes programming, management, and communication, but boast high "Capability Maturity Model" ratings for assessing programming expertise. In addition, Digital Evolution VP Michael Gibson notes that customers expect service providers to use offshoring to some degree--otherwise, "they feel you are not up to the game." Still, Jennings thinks the time is ripe for insourcing, based on U.S. programmers' willingness to work for significantly less money, and his own willingness to settle for lower margins in the hopes that they will be offset by volume. However, Gumpert writes that as things currently stand, major corporations are more likely to look upon Synergroup's services as a fallback in case foreign outsourcing is restricted. Jennings, meanwhile, is trying to bring prospects and customers aboard by appealing to their sense of patriotism, but has thus far only succeeded in finding work for two American programmers. Click Here to View Full Article

"Good Times Roll for Australian IT Jobs, Salaries"
ZDNet Australia (04/21/04); Ferguson, Iain

Australia has reason to be optimistic about job opportunities for information technology workers, as the IT Skills Hub forecasts a 25 percent increase in advertised information and communications technology (ICT) positions over the first six months of 2004. According to the nonprofit organization formed by the federal government and the information technology and telecommunications industry, there was an 18.7 percent increase in ICT job advertisements over the last half of 2003, compared with the first half of last year. IT Skills Hub, which produced the Market Monitor survey, projects a 5 percent increase in ICT salaries over the first half of the year, up from 3.1 percent over the last half of 2003. Executives at the nonprofit say most advertisements will involve security and risk management, open source software, systems integration, and project management. Over the last half of 2003, there was a 67 percent increase for security specialists and a 10.6 percent increase in salary. After a 73 percent increase in advertisements for hardware engineers, the position faces the largest position decrease, and the growing role of general technical support will reduce the demand for operators, database administrators, network administrators, and systems administrators. IT Skills Hub CEO Brian Donovan added, "We do not want to continue the peaks and troughs of skills oversupply and shortages and therefore need to align education and planning and business planning and industry projections to get the right mix of what skills are to be needed and when--including the developments in e-risk management and e-security." Click Here to View Full Article

"Cream of the Science Crop"
InformationWeek (04/19/04) No. 985, P. 75; Murphy, Chris

Recruiting students will be among the challenges Randal Bryant faces as the new dean of the School of Computer Science at Carnegie Mellon University. Although Carnegie Mellon still turns away one in 10 students who applies to the computer-science program each year, the number of applications this year was down more than 40 percent from 2001. Concerns about outsourcing of IT jobs overseas and the end of the dot-com boom has students thinking about careers in other fields. Bryant wants Carnegie Mellon to continue to bring in the best teenage scientific minds. "It's clear if public perception is that IT is dead, or all the jobs are going overseas, we risk losing the best and brightest," says Bryant, an expert in modeling tools for integrated circuits. Bryant is considering embracing robotics, data mining, spoken-language recognition, automation, sensor technology, and other emerging fields to boost the department's appeal to more undergraduates. His colleagues at the computer science department are also considering how to work more closely with schools tied to fields that are increasingly relying on technology. For example, the biology department approached the computer science school about a joint effort five years ago because it knew areas such as genomics have computational demands. Click Here to View Full Article

. From NY Times, April 14, 2004

Indian Services Giant Hits $1 Billion in Annual Sales
New York Times, Saritha Rai, April 14, 2004.

Infosys Technologies, the bellwether of the Indian software-services industry, posted more than $1 billion in annual sales. Read the entire article.

. From ACM's TechNews, March 29, 2004

"Gartner: 1/4 of U.S. IT Jobs Offshored by 2010"
IT Management (03/26/04); Gaudin, Sharon

One quarter of traditional U.S. IT jobs will have migrated overseas by the end of the decade, predict industry analyst researchers, but this migration may not necessarily entail layoffs of American workers in every case: Some of those positions will be created by American firms setting up shop in emerging countries, says Gartner analyst Diane Morello. Gartner VP Ian Marriott told attendees at a recent European IT conference that "The potential cost advantages [of offshoring] are so persuasive that companies that don't consider it, seriously risk doing their shareholders a disservice." He added that businesses that fail to leverage this trend will endanger their competitive advantage and their ability to expand through innovation. Meanwhile, Forrester Research projects that 3.3 million jobs amounting to $136 billion in wages will be exported over the next 15 years, and Deloitte Research forecasts that 275,000 telecom industry positions will have moved overseas within four years. Outsourcing's chief attraction to businesses is the dramatic wage differences between U.S. IT workers and their counterparts in countries such as India, China, or the Philippines: Kevin Schwartz of E5 Systems points out that an entry-level programmer in the United States earns an average yearly salary of $50,000 to 60,000, while a programmer in China earns only a tenth as much money. Challenger, Gray, & Christmas CEO John Challenger calls Gartner's findings alarmist, arguing that IT jobs will stay local because so many such positions are being generated in small- and medium-sized businesses. He notes that the globalization of the IT workforce may put downward pressure on salaries, claiming that such a scenario is "a more realistic concern than to think that such a huge chunk of IT jobs will disappear in short order." Click Here to View Full Article

"Can India Plug Its Brain Drain?"
Technology Review (03/24/04); Hariharan, Venkatesh

The Indian Institutes of Technology (IIT) are setting up startup incubators to encourage the country's best and brightest engineers to stay and make their fortune at home. The list of IIT graduates who fill major positions in the technology industry is impressive, given that just about 3,000 new students are inducted into one of the seven IIT campuses each year. IIT Bombay set up the first incubator three years ago and has since spawned 13 companies, four of which have spun out from IIT; IIT Bombay professor D.B. Phatak says the idea of the incubators is to create more high-value technology business in India--technical innovations as opposed to software services or business process outsourcing. Although the ultimate success of the endeavor is still to be proven, early instances are promising: Vishal Gupta turned down full scholarships at Cornell and the University of Southern California to turn his rules-based event engines into a business software product; his company, Herald Logic, sells software that clients use to monitor key business parameters, such as fund performance at a financial investment firm. Gupta says the IIT Bombay incubator helped in terms of funding and business advise, provided by other incubated companies. He says venture capital is still a challenge, however, since lenders seem more interested in protecting their investment than making the venture successful. Kanwai Rekhi, former Novell CTO and IIT Bombay benefactor, says the success of large Indian technology firms such as Wipro and Infosys have changed the national mindset so that now entrepreneurship is considered a viable career option; the IIT incubation effort and general Indian entrepreneurship plans are getting help from Indians such as Rekhi who have made it big overseas, a phenomenon University of California, Berkeley professor Anna Lee Saxenian calls "brain circulation." Infosys CEO Nandan Nilekani and Cirrus Logic co-founder Suhas Patil are also among the mentors available to the incubator. Click Here to View Full Article

. From EduPage, March 29, 2004

Inexpensive Computer Debuts In India

An inexpensive handheld computer, designed by researchers at the Indian Institute of Science in Bangalore, India, debuted last week. Conceived in 2001 as a way to make Internet technology accessible to millions of poor Indians, the Simputer had to overcome a three-year delay due to lack of interest from computer manufacturers. Funding for development of the Simputer ultimately came from the government-owned Bharat Electronics, which will produce the machines. The computer, which will be called the Amida Simputer, will cost about $240 and will go on sale in April. It uses a Linux-based operating system, employs a stylus, and offers users Internet access. Developers hope that the Simputer will bridge a broad technology gap in a country where fewer than 10 people in every 1,000 have computers, primarily because of cost. BBC, 29 March 2004

. From ACM News, March 26, 2004

"Think Tank: Offshoring Hits High-End Workers"
Investor's Business Daily (03/25/04) P. A4; Howell, Donna

Offshore outsourcing is often blamed for the erosion of U.S. call center and programming jobs, but a new study from the Economic Policy Institute sees a similar overseas migration of high-end software jobs. EPI's Josh Bivens predicts that the real effect of this job exportation will not be felt for 10 or so years, but when it comes it will dramatically drive down salaries for skilled white-collar IT professionals. "These workers who thought they were going to see big wage increases every year, that they had skills that were in demand, are not going to be seeing those wage increases," he contends. Bivens reports that over the last several years, some of the highest-paying jobs in areas such as software publishing and custom software have experienced major declines in employment. Accompanying this steep drop-off is a software job boom in India, where roughly 100,000 new jobs that directly serve the U.S. market have been created over the past four years. Bivens cites anecdotal evidence indicating that computer services imports are down, while other data find that imports are climbing; the economist theorizes that this paradox could be explained if Indian-owned companies based in the U.S. are tackling a major amount of outsourcing work. Bivens acknowledges that measuring software job exports is a difficult task, given that jobs cannot be tagged and processed through ports like goods. "If we really are talking about someone writing a computer program in Ireland or India and sending it over email to someone in the U.S., it's really hard to track that," he observes.

. From ACM News, March 19, 2004

"Some Experts Say Offshore Outcry Masks U.S. Shortage of Technology Labor"
Chicago Tribune (03/14/04); Chandler, Susan

Despite all the uproar about overseas outsourcing of technology jobs, many industry analysts say the United States will soon be facing a serious shortage of IT workers: Increasing computerization, retiring Baby Boomers, and lower enrollments in technology programs at schools will all contribute to an IT worker shortage. On the other hand, the relatively few people who have been displaced by offshore workers, politicians appealing to popular sentiment, and a real overall shortage of jobs are contributing to offshoring paranoia. Forrester analyst John McCarthy notes that technology jobs actually grew by 10 percent last year and that the U.S. economy continues to become more reliant on technology, and he estimates about 290,000 IT jobs, mostly low-level positions such as programmers, have gone overseas since 1999--just a tiny fraction of the 130 million U.S. jobs. McCarthy admits contributing some to the hype in a late 2002 report in which he predicted 3.3 million U.S. service industry jobs would be shipped overseas over the next 15 years; he says that breaks down to just 220,000 jobs each year, about as much as the national economy can produce in one month given a reasonably positive economy. Some of the current anger about offshoring may actually be due to the fact that IT is becoming a mature industry where employees are not compensated as lavishly as in the recent past: "The IT worker has gone from 60 to zero," says McCarthy. Political fashions are not helping address the looming shortage in IT workers, says former Motorola CTO and current vice provost at Illinois Institute of Technology Dennis Roberson, whose school has placed 96 percent of its engineering graduates for each of the last three years. Other experts such as Microsoft's Bill Gates and former presidential Council of Economic Advisors member Randall Kroszner agree. U.S. companies have long been moving their call center and technical support operations to low-cost locales such as South Dakota, says Kroszner. Click Here to View Full Article

. From New York Times, March 17, 2004

Powell Reassures India on Technology Jobs but Presses for Opening of Markets
New York Times, Late Edition - Final , Section A , Page 6 , Column 1; Steven R. Weisman

Sec of State Colin L Powell visits India, assuring government leaders and college students that Bush administration will not try to halt outsourcing of high-technology jobs to their country and asserting that appropriate American response to outsourcing is to press India to drop trade barriers against American investments, goods and services. View Article

. From EduPage, March 17, 2004

China Creates Software Colleges

In an effort to close a growing technology-skills gap with a number of other countries, China began a program three years ago of creating software colleges at 35 Chinese universities. Unlike most universities in China, the software colleges take advantage of significant funding from companies outside China. The School of Software at Peking University, for example, boasts cutting-edge computer labs funded by U.S. companies including IBM, Microsoft, Sun Microsystems, Motorola, Oracle, and Intel. In addition, many of the faculty at the school are from the United States. The Chinese software colleges aim to combine training in technical skills and practical experience (many students are involved in internship programs with U.S. technology firms) with a focus on Western-style management. According to one student, Chinese management structures are based on personal connections rather than merit. San Jose Mercury News, 17 March 2004 .

. From Peter Coffee's eWeek, February 23, 2004

Data Integration Is IT's Frontier
Assimilating new technologies demands new skills
--and depends on outsourcing routine tasks.
By Peter Coffee

Even free-trade advocates are starting to tiptoe around the subject of tech-job outsourcing. In a presidential election year, it's dangerous to suggest that the overseas export of any voter's job is a long-term gain for the U.S. economy.

(Get an overseas perspective on U.S. job migration from The Economist)

But for IT pros, the important trend is not the loss of jobs in slinging code or designing chips or providing generic technical support. The key to job security is certainly not to be found in learning a new programming language or mastering a new set of APIs.

Instead, I suggest that data integration into real-time applications is the task that will get the most leverage from new technologies, such as satellite location services or RFID tags. This will also pose the greatest challenge, only in part because of the sheer volume of data that these innovations introduce into enterprise systems.

(Learn more about the data management challenges created by RFID adoption)

It's plausible, therefore, that jobs in database administration will grow by 60 per cent before the decade is out, according to the Bureau of Labor Statistics; the nature of that DBA task is evolving as well. The next-generation database guru won't be merely designing relational structures, or maintaining data capture and grooming procedures. Instead, tomorrow's data specialist will be actively working with business units to decide which data need to be delivered to which workers, under what time constraints, to create distinctive competitive advantage.

(See the latest BLS outlook for IT systems employment)

The resulting operational knowledge will be much too valuable to share with an outsource service provider. "The sheer scale and volume of data, the variety of data sources and formats, the number of data owners, and the geographic distribution of the suppliers and consumers of data impose real challenges," observed Boeing Co. database expert Suryanarayana M. Sripada in a presentation to the Very Large Database Conference in Hong Kong, late in 2002: this statement described the situation in the aerospace industry, but could readily apply to many others.

(Drill deeper into Boeing's assessment of the data-driven IT challenge)

Sripada is correct in identifying the vital need "to provide the right information, at the right time, to the right people, in the right context, in the right format," adding that "Integration of database and collaboration technologies is still a largely unrealized goal."

Looking over these forecasts and analyses, I'm reminded of the controversy that began in 1948 with the publication of mathematician Norbert Wiener's "Cybernetics," and its dire predictions about the future of labor in the era of computing machines. When digging a ditch was a task that required a strong back, an able-bodied man could make a living moving dirt. But as Wiener pointed out, "There is no rate of pay at which a United States pick-and-shovel laborer can live which is low enough to compete with the work of a steam shovel." Wiener was far ahead of his time in predicting that the same crossing of cost curves would soon take place in the work of the mind as well as the body.

"The modern industrial revolution is similarly bound to devalue the human brain, at least in its simpler and more routine decisions," he wrote, and people have quoted him ever since as a prophet of the doom of the middle class: they cite his warning that "Taking the second [industrial] revolution as accomplished, the average human being of mediocre attainments or less has nothing to sell that is worth anyone's money to buy."

(1950s socialist thinkers read Wiener's handwriting on the wall)

Sure enough, self-service scanners are replacing checkout clerks in stores; data-mining tools are replacing the expert guidance of experienced librarians or booksellers; and at the most general level, a Google search makes many kinds of expertise effectively achievable in hours rather than years. Should we be making plans to ship off the irrelevant middle third of our population to another planet, as did the people of the planet Golgafrincham in the second book of Douglas Adams' "Hitchhiker" series?

(Are "Ark B" types becoming too important in today's economy?)

Yes, bulldozers have reduced the number of ditch-digging jobs, but they've also created jobs in designing golf courses: without a low marginal cost of moving a cubic yard of hill from one place to another, freedom to design what people will pay to enjoy would be greatly reduced. In the same way, when it costs less to write a line of code, there's more return to be gained from writing custom applications instead of tolerating the limits of an off-the-shelf solution. More code gets written, and that code is more specific to a particular business and requires higher-value knowledge to produce.

Wiener's comments can also be taken as a warning that "mediocre attainments" would simply be insufficient for someone hoping to enjoy an interesting career at an attractive wage. In 1955, Robert Heinlein's "Tunnel in the Sky" described a fictional future student's lack of mathematical knowledge: "Being only about to finish high school, his training gone no farther than tensor calculus, statistical mechanics, simple transfinities, generalized geometries of six dimensions, and, on the practical side, analysis for electronics, primary cybernetics and robotics, and basic design of analog computers; he had had no advanced mathematics as yet." I don't know if Heinlein actually expected students of the following century to routinely enjoy such training, or if he was ironically commenting on lack of math and science emphasis in the schools of his own time, but either way the image is worth remembering.

"Mediocre attainments" invite a search for the same skills at a lower price. Strategic IT depends on a commitment to continuing learning.

. From ACM's TechNews, February 20, 2004

"U.S. Firms' Outsourcing to India Reaps Big Savings, Political Heat"
Investor's Business Daily (02/20/04) P. A1; Alva, Marilyn

U.S. companies see undeniable financial rewards from moving their IT and business services work overseas, especially to India: Brean Murray & Co. senior vice president Ashish Thadhani says the general rule is that firms save between $20,000 and $30,000 per worker based in India, while also noting that less than 3 percent of the global IT services budget is spent in India. At the same time, politicians are playing up discontent over American jobs lost to overseas operations--both Republican and Democratic leaders condemned Council of Economic Advisors chairman Gregory Mankiw's statement that global outsourcing was beneficial to the United States, and Democratic presidential candidate John Kerry called business leaders who sent work overseas "Benedict Arnold CEOs." Other prominent economists besides Mankiw say outsourcing actually improves the quality of U.S. jobs in the long term, and will actually be vital to national competitiveness by 2015, when many baby boomers retire. Experts say between 100,000 and 200,000 IT and engineering professionals graduate from Indian educational institutions each year, including from top-flight schools such as Indian Institutes of Technology, which has seven campuses in the country. Despite the political opposition, top U.S. companies are still rapidly moving work to India by expanding their own operations there, while second-tier firms are handing business functions to third-party Indian outsourcers such as Wipro and Infosys. Cognizant Technology Solutions, for example, was able to lower a large client's costs nearly 20 percent while increasing the business volume threefold by moving work to India. Morgan Stanley's Mumbai outsourcing center conducted a study of U.S. firms' Indian growth and found IBM Global Services will employ 10,000 workers in India in three years, Intel 3,000 by 2005, Oracle 6,000 by next fall, and Accenture 8,000 by this August.

. From Business Week, February 20, 2004

Programming jobs are heading overseas by the thousands. Is there a way for the U.S. to stay on top?: Read the article

. From New York Times, February 9, 2004

TECHNOLOGY; Indians Fearing Repercussions Of U.S. Technology Outsourcing
New York Times (02/09/04), Section C , Page 4 , Column 1, Saritha Rai

India's leading technology companies are worried about rising political reaction in United States to loss of some American jobs to overseas workers; executives attending Bombay meeting of India's software industry trade association comment; India's rapidly expanding technology and service industries earned revenue of about $12 billion in fiscal year that ended last March, with about $9.5 billion of that coming from exports.

. From ACM's TechNews, February 4, 2004

"Unpopular Argument: Sending Tech Jobs Abroad Is Good"
USA Today (02/04/04) P. 3B; Maney, Kevin

Many U.S. technology executives believe the offshore outsourcing of programming and other IT jobs will bolster the economy and raise Americans' security and standard of living. Subscribers to this belief follow the theory of comparative advantage, which posits that countries that concentrate in the areas they excel at the most will enjoy increased productivity and higher living standards. For instance, though India's low-wage, high-volume tech workforce could perform software programming and innovative technology development at lower cost than the United States, India is "most best" at programming because it lacks the infrastructure or venture capital to support innovation; in contrast, programming is very costly while innovation is very cheap in the United States. It would therefore benefit both India and the United States to devote their energies to their "most best" areas and then trade, thus increasing programming and innovation while lowering their costs. By extension, the savings a computer company realizes by outsourcing programming would trickle down to consumers in the form of lower computer prices, and simultaneously raise the company's profitability so that the firm can recruit more staff and invest in new products. Oracle CEO Larry Ellison claims, "A free movement of labor allows us to become more efficient, produce better products at lower costs, grow more profitable, pay more taxes to the government which, in turn, looks after the people who have been displaced." Concurrently, a rise in living standards in other countries is good news to U.S. workers since so many products that other nations desire--cars, cell phones, etc.--are made in America, argues Opsware's Marc Andreessen. Such views are not very popular, given claims by executives, politicians, and others that outsourcing is eroding America's technological superiority; but the theory of comparative advantage has held up remarkably well since it was formulated almost 200 years ago. Click Here to View Full Article

. From ACM's TechNews, January 21, 2004

"IT Industry Watches Iowa"
CNet (01/19/04); McCullagh, Declan

Democratic presidential hopefuls have had little to say on technology issues, but with the Iowa caucuses and the forthcoming New Hampshire primary, lobbyists are keeping a close eye on candidates' positions on IT offshore outsourcing, a hot-button topic that many companies support as a competitiveness-sustaining measure. Reps. Dennis Kucinich (D-Ohio) and Richard Gephardt (D-Mo.), along with Sen. John Kerry (D-Mass.), are taking an anti-offshoring stance: Kerry's campaign Web site promises that Kerry would, if elected, attempt to slow down offshoring; the Massachusetts senator also introduced legislation last November calling for employees of offshore call centers to identify their location. Information Technology Association of America President Harris Miller argues that such a policy threatens to erode the United States' leadership position on trade issues, and expresses concern that, "in their eagerness to create a policy issue, some [candidates] have engaged in a lot of antitrade rhetoric and antiglobalization rhetoric." Electronic Industries Alliance President Dave McCurdy singles out Sen. Joseph Lieberman (D-Conn.) for being more simpatico with industry on tech issues than the Bush administration; prior to the 2000 election, Lieberman favored continuing the Internet tax moratorium, removing the H-1B visa cap, promoting antispam bills, and extending the research and development tax credit. McCurdy also praises Kerry for his savvy on tech issues, and calls Gephardt out of their league because of his stance on trade and outsourcing. Howard Dean stands out for an Internet policy paper calling for the protection of the Internet's end-to-end nature while at the same time promoting greater federal spending on universal Internet access, while former Army Gen. Wesley Clark's Web site has no tech topic. Sen. John Edwards' (D-N.C.) opt-in spyware bill gives him a strong privacy record, according to Chris Hoofnagle of the Electronic Privacy Information Center, but political experts generally agree that technology will not be a major theme of the presidential election. Adam Thierer of the Cato Institute predicts that both President Bush and the Democratic candidates "will probably just play it safe and stick to bland platitudes and generalities about how 'technology is vital to the U.S. economy.'" Click Here to View Full Article

. From ACM's TechNews, January 16, 2004

"Offshoring--A Hot 2004 Campaign Issue?"
CNet (01/13/04); McCullagh, Declan

Offshore IT outsourcing could be a major campaign issue in the months leading up to November, if IT labor activists can effectively promote the woes of jobless white-collar workers. Democratic presidential candidates have rallied against job losses in the manufacturing industry due to overseas competition, with Dennis Kucinich even advocating taking the United States out of the North American Free Trade Agreement (NAFTA) and the World Trade Organization (WTO). But offshore outsourcing is becoming a bigger issue in the IT world especially with companies such as IBM announcing that thousands of software programming jobs will be shifted to India and China. Forrester Research says the trend will only increase as 3.3 million U.S. service industry workers are displaced by foreign competition over the next 15 years. Washington Alliance of Technology Workers organizer Marcus Courtney says major Democratic presidential candidates have not yet realized the serious threat posed to service-sector jobs, including high-paid engineering positions; his group plans to work with labor and other left-wing groups to promote the issue of IT outsourcing after the candidate field narrows in six to seven weeks. At that time, IT outsourcing opponents will be able to target their message: "We'll have nine months or eight months to gain the momentum necessary to make it a significant issue," Courtney says. Although the Democratic contenders largely hold the same stance against rampant free-trade, President Bush remains close to his party's liberal free-trade stance that creating jobs is more important than protecting them. That fits with many corporate leaders' view as encapsulated in a Computer Systems Policy Project report where CEOs from Intel, IBM, Hewlett-Packard, Dell, and others argued that protectionist policy would seriously harm U.S. competitiveness on the global scene. Click Here to View Full Article

. From ACM's TechNews, January 9, 2004

"U.S. Could Lose Technology Dominance, Executives Say"
Washington Post (01/08/04) P. E5; Krim, Jonathan

The United States' leadership position in the knowledge economy is threatened by expanding tech efforts in India, Russia, China, and elsewhere; the U.S. technology infrastructure must be shored up with more federal funding for research and development, financial incentives for private-sector tech rollouts, and improvements in mathematics and science education, according to representatives of the Computer Systems Policy Project (CSPP) trade group. Intel CEO Craig R. Barrett and Hewlett-Packard CEO Carleton S. Fiorina declared at a Jan. 7 press conference that the competitive edge of the United States is being blunted by falling government R&D budgets and inadequate educational initiatives in the subjects of science and technology in grades K-12. Barrett also warned against knee-jerk protectionist reactions to the offshore outsourcing of IT jobs to lower-wage countries, which he argued is a normal process of business cycles. Fiorina predicted that the outsourcing trend will facilitate a change in the leading tech jobs in the United States, and that skills such as the ability to coordinate multiple systems and networks will be highly valued. She also cautioned that short-term financial and employment issues are a distraction, saying, "The biggest barrier [to solutions] is our nation's attention span." The CSPP has introduced several proposals to help maintain U.S. tech dominance, which Barrett claimed would collectively cost less than the $30 billion federal investment in agricultural subsidies. One CSPP proposal is the Infrastructure Investment Act of 2004, which calls for the institution of special tax and regulatory rules to promote the construction of more broadband networks. Another is the Mathematics and Science Improvement Act of 2004, a proposal to make education and school-testing in those subjects more scrupulous. Click Here to View Full Article

. From ACM's TechNews, January 5, 2004

"'Offshoring' Trend Casting a Wider Net"
Los Angeles Times (01/04/04) P. C1; Dickerson, Marla

The prolonged jobless recovery highlights the effect of offshore outsourcing, or offshoring, on white-collar service jobs: Numerous industries and even some government agencies employ educated workers overseas to achieve cost savings, though laws are being passed that would bar offshore contracts for government work or give preference to American firms. estimates that almost 1 million "new economy" positions--in IT, business, financial services, and others--have moved overseas since the beginning of the downturn in early 2001; Forrester Research predicts a continued outbound flow of service and professional work so that by 2015, 3.3 million jobs will have left the country; and University of California, Berkeley, researchers warn that at least 14 million U.S. service jobs are possible offshoring candidates. Numbers today, however, show the majority of recent job losses has been in the manufacturing sector, which shed nearly 2.7 million jobs in the last three years. In California, the percentage of jobs lost was similar to other states, but the effect was exacerbated by the type of jobs that disappeared--high-paying jobs in the technology sector. Some say that opposition to offshoring in the form of protectionism will only serve to harm the U.S. economy in the long run and that U.S. businesses and government must learn to take advantage of the potential benefits of offshoring. Stuart Anderson recently wrote a report critical of legislative action against offshoring in Indiana, saying that a Tata Consultancy bid $8.2 million lower than the U.S.-based competitor could have saved taxpayers money. Those savings could be invested elsewhere to create additional jobs and wealth; globalization is not a zero sum game, Anderson says. Dave Wyle, whose SurePrep tax preparation firm employs Indian accountants, compares the use of offshore professionals to spreadsheet software that improved productivity and eliminated many paper-based accountant positions.

. From EduPage, December 31, 2003

Israel Turns From Microsoft To Open Source

The government of Israel suspended purchases of Microsoft's productivity software and said that it planned to explore less costly open source alternatives. In the near future, however, government agencies will continue to use Microsoft Office products without upgrading to newer versions. According to an anonymous Finance Ministry spokeswoman, the move was purely economic. Microsoft declined to comment on the decision. San Jose Mercury News, 31 December 2003

. From EduPage, December 29, 2003

Network Planned To Link China And Russia

China and Russia plan to establish the first direct computer link across their shared border by extending a high-speed computer network that already allows scientists in the United States and Russia to collaborate directly on a network separate from the public Internet. The extended network connects Chicago with Amsterdam, Moscow, Siberia, Beijing, and Hong Kong. The National Science Foundation gave $2.8 million to the project, and Russia and China invested similar amounts. eWeek, 26 December 2003,4149,1423040,00.asp

. From ACM News, December 22, 2003

"Offshore Jobs in Technology: Opportunity or a Threat?"
New York Times (12/22/03) P. C1; Lohr, Steve

The offshore outsourcing of U.S. jobs is seen by many as an inevitable and unstoppable trend on the road to a globalized economy, but projections from Forrester and other research firms about the volume of domestic jobs destined to migrate overseas are less alarming than they may seem. American workers have been fearing for their job security ever since Forrester disclosed a report last year predicting that 3.3 million U.S. services jobs would be transferred to lower-wage countries by 2015, with the IT industry at the vanguard of this offshore movement. However, analysts contend that the amount of money a company saves on a development project that employs cheaper overseas IT labor can actually be less than the company would save by relying on domestic IT labor: The analysis, design, and deployment stages of such projects usually involve face-to-face meetings, where cultural and communications barriers can lead to higher costs and reduced effectiveness. Furthermore, the Forrester report estimates that only 14 percent of the 3.3 million jobs expected to be outsourced by 2015 are in computer services, and this number is less cause for worry when one considers that around 3.5 million new private sector jobs have been created every year for the past decade. In addition, cutting technology services costs boosts efficiency and productivity while controlling inflation. Analysts think the IT workers at the greatest risk of losing their jobs to software development offshoring are the pure programmers, while the ones with the best job security are those who can solve specific business problems with their talent, and the move from coder to designer will be beyond the capabilities of some IT workers. Academics and research organizations believe the transition period will be less calamitous to the U.S. IT workforce if certain wage insurance schemes are enacted. Click Here to View Full Article

. From Knowledge at Wharton, December 15, 2003

Information Technology in Chile: Still Awaiting Takeoff

Although Chile has the most advanced telecommunications infrastructure in Latin America, enjoys unequalled economic and political stability, and boasts the highest personal computer and Internet usage rates in the region, investment in technology and its use as a management tool do not show the same dynamism. As a result, Chile is trying to establish a public-private national agenda that seeks to bring investment levels closer to those of more developed countries. In spite of some barriers, analysts and academics are optimistic that the digital industry can represent 3.8% of Chile’s GDP in the near future. Read the article

. From ACM News, December 15, 2003

"In India, a High-Tech Outpost for U.S. Patents"
New York Times (12/15/03) P. C4; Rai, Saritha

U.S. technology companies are increasingly investing in Indian research and development operations, with the total number of internationally employed engineers in India expected to double in the next 18 months, according to personnel experts. As thousands of Indian engineering graduates enter U.S. employment each year, they will contribute to a rapidly rising portfolio of U.S. intellectual property originating in India. Intel wireless broadband technology researcher Ajith Prasad says he and his team are doing the same type of work they might if they were located in Santa Clara. Intel is also building a new 32-bit processor with 1 billion transistors wholly in Bangalore. Intel Technology India President Ketan Sampat says the cost of setting up comparable research groups in the United States would easily double the amount spent in India. Texas Instruments, the first company to heavily invest in Indian research operations nearly two decades ago, has already begun reaping the fruits in the form of 225 U.S. patents awarded to date. A recent design coup from Texas Instruments' Indian engineering group is the fastest-ever analog-to-digital converter. Although much of the new growth comes from new Indian workers, experts say about 5,000 veteran Indian-born technology workers have returned to the country from stints in the United States; many of these experienced workers head up Indian operations for their U.S. employers and help bridge culture gaps. Intel's Sampat acknowledges the Indian scene is still at a nascent stage, however: "The ecosystem of design tools, silicon design, systems design is not completely formed yet," he says. Click Here to View Full Article

"China Tries to Establish Homegrown Tech Rules" (12/14/03); Gillmor, Dan

China is attempting to break away from its reliance on Western technology standards--and the royalties Chinese companies must pay--by establishing domestic tech specifications in diverse areas, much to the chagrin of American and other Western companies who rail at its protectionist motivations. Dan Gillmor writes, "With the largest domestic market on the planet, at least potentially, plus an increasingly creative and well-educated workforce, China is creating its own competitive set of standards for its own market, although the global potential is obvious." In early December, the Chinese government called for the establishment of a wireless communications encryption standard to eliminate the nation's dependence on Wi-Fi, whose security specs are less than sterling--and though Gillmor expects global trade rules to scale back China's success in this area, he admits that the move could be a boon to local industry. The Chinese government, in partnership with software firms, academic institutions, and even other East Asian countries, is making major investments in the adoption of the Linux open-source operating system and the rollout of Linux-related applications. Meanwhile, last month China declared its plans to compete with the DVD standard with the rollout of Enhanced Versatile Disk (EVD) technology, which promises to save Chinese businesses huge royalty payments to Western standard owners and give Chinese video-machine manufacturers a shot in the arm. Other Chinese efforts to set up a homegrown technology base include processors such as the Dragon Chip, which runs Linux; and the next-generation TD-SCDMA mobile phone standard. Gillmor comments that, ironically enough, "the U.S. hasn't been shy about blatantly illegal protectionist measures, either, when the political circumstances deemed to warrant them." Click Here to View Full Article

. From Business Week Online, December 2, 2003: "Growing Concerns," by David E. Gumpert. Read it.

. From ACM News, December 24, 2003

"The Allure of Low Technology"
Economist (12/18/03) Vol. 369, No. 8355, P. 99

China's dedication to turn itself into a technology giant through pride-boosting accomplishments such as October's space mission, strong electronics exports, a low-wage tech workforce, abundant foreign intellectual property, and rising research spending, is not in doubt--but its chances of success are low. At a Beijing seminar on Dec. 10, Ming Zeng of the Cheung Kong Business School brought sobering news: Over a five-year period, he recorded only a small number of successful Chinese high-tech firms. China still has a very constrained technology base, and suffers from a profound lack of capital infrastructure to nurture the production of sophisticated high-tech products; furthermore, the growth in the number of high-tech goods made in China is undercut by the lion's share of value going to foreign companies. China's Ministry of Commerce estimates that only 20 percent of $325 billion of exports last year were truly high-tech, and the majority of those goods were mature products, such as laser printers and DVD players. The country's insatiable appetite for semiconductors and attractiveness as a base for silicon-wafer fabrication far outweighs its home-grown chip industry: Most Chinese chipmaking facilities are foreigner-controlled, and emphasize assembly and testing rather than design and manufacture. China also has the weight of history against it--the country is still reeling from poorly managed and calamitous state-directed technological development, while most private firms are still too small to make sizable innovation investments. Arthur Kroeber of China Economic Quarterly contends that the abundance of low-cost labor in the nation--enough to allow China to compete on labor costs for the next half-century--makes high-tech development less of an incentive. A study by Boston Consulting Group also concludes that Chinese manufacturers are more productive and profitable when they rely less on technology and more on manpower-dependent processes.

. From New York Times -- "Who Wins and Who Loses as Jobs Move Overseas?": Read the article.

. Offshore outsourcing from a different perspective -- "Outsourcing: Key to Future of U.S. Economy" by Zareen Karani Araoz, President of Managing Across Cultures that appeared in India New England: Read the Article.

. From ACM News, November 17, 2003

"China's Internet Revolution"
Online Journalism Review (11/13/03); Glaser, Mark

During a recent interview, Xiao Qiang--the former executive director of Human Rights in China and current head of the Berkeley China Internet Project at the University of California at Berkeley's Graduate School of Journalism--addressed Internet use in China. Specifically, Xiao discussed how people in China are using Internet technology to exchange information and news in new ways. Recently the Chinese government shut down almost 50 percent of the country's Internet cafes, while reportedly nine or more online writers in China have faced arrest recently. Xiao reported that from the earliest phases of Internet development in China, the government began monitoring Internet news Web sites, but he predicted that maintaining such tight control would become more difficult as the Internet becomes increasingly popular among middle-class urbanites. Commenting on Internet technology, Xiao said that "it's started to have input from the bottom up." Though police units are developing in provinces and cities across China to cover the Internet, Xiao said the Internet is still managing to significantly affect Chinese media, with many new foreign-based sites providing news to Chinese users, sometimes by roundabout means. "They depend on what I call human proxies, people who send their friends emails in China to get around the firewall," Xiao explained. Bulletin boards and forums are particularly popular means for such communication, while users also utilize commercial portals, chat rooms, email, and other services. Xiao also discussed how short messaging service--very popular in China--allowed more communication about the SARS outbreak before the government reported on it. He also commented on the Global Internet Freedom Act, self-censorship in China, and the increased popularity of Weblogs. Click Here to View Full Article

. From ACM News, November 14, 2003

"Europe's IT Skills Shortage Evaporates"
Web Host Industry Review (11/13/03); Eisner, Adam

Bleak projections of IT staff shortages in the European Union forecast in the late 1990s by International Data (IDC) and other research firms have generally not come to pass. More and more European tech employees are being forced to seek local employment in response to the United States' recent decision to dramatically reduce the number of work visas for foreign IT professionals. An impending staff shortage was indicated before the bursting of the tech bubble and the telecom market crash effectively canceled it, and made jobs harder to come by while raising the availability of qualified personnel. The outsourcing of IT jobs to India and other countries outside the EU is also creating headaches for European economies. Pierre Audoin Consultants recently reported that Romania could become a center of outsourcing thanks to its abundance of highly skilled, English-speaking IT employees and tech graduates, as well as the return of IT specialists from the United States and Western Europe. Other eastern European countries are also gaining ground as outsourcers. The European IT job market is expected to continue its sluggish growth: The European Information Technology Observatory predicts that Europe's IT services sector will only experience a 2.8 percent gain this year and a 4.7 percent gain next year. A more optimistic forecast anticipates significant growth in broadband technology and services as high-speed Internet proliferates throughout the continent, though not enough to lead to a huge IT staff shortage. Click Here to View Full Article

. From ACM News, November 3, 2003

"High-Tech Jobs Are Going Abroad! But That's Okay"
Washington Post (11/02/03) P. B3; Reich, Robert B.

The economy is picking up along with corporate IT spending, but the number of IT jobs remains mired at 20 percent below what the number was in 2000, writes former Labor Secretary Robert B. Reich. Ostensibly, the culprit is not only the recent economic sluggishness, but also a growing amount of technology work being farmed out overseas. Reaction in Congress has been to let the H-1B visa cap fall back to 65,000 per year, while state legislatures are considering bills that restrict offshoring by those governments. Even U.S. IT workers are organizing to protect their jobs from overseas competitors, demonstrating outside "strategic outsourcing" conferences. The reasons for the rise in offshore outsourcing are fundamental business pressures to lower costs, the cheapness of overseas labor, and increased telecommunications capacities and capabilities. Dartmouth College associate professor Matthew Slaughter points out that IT work is shifted much more easily than manufacturing, which requires physical movement and dealing with tariffs. Though offshoring is a threat to the U.S. IT market, the problem is not as bad as it seems, contends Reich: There is no finite limit to the IT industry, since its innovations and benefits are only limited by human imagination; the U.S. IT industry can continue to grow and prosper at the same time that lower-tier IT jobs are moved offshore. Reich foresees a time when American technology workers are not just in back-room operations or in research, but active in the business side, understanding business needs and finding IT-enabled solutions to those problems. These workers will also formulate company policies in regards to offshore outsourcing, deciding which components are non-critical and which are sensitive and core to the company's mission. Still, Reich warns against complacency and argues for more federal and state support for universities, increased federal investment in research and development, and retraining for high-tech workers. Click Here to View Full Article

"Indian Language Computing Makes Impressive Strides"
Hindustan Times (10/29/03)

Indian Linux and several other major groups in India are working to bring Indian languages to the free software world. Nagarjuna of the Tata Institute of Fundamental Research in Mumbai, Jitendra Shah and colleagues in Mumbai, Tamil, the Government of India computing institutions, and branches of the Indian Institute of Technology are all active in Indian language computing. G Karunakar, an IndLinux team member who is one of the more outspoken advocates for non-English solutions, believes that Indian language computing could make a splash next year now that tools for nine major languages are already functional. Karunakar is heading the localization of the major computing desktop environment Gnome Hindi, as IndLinux has focused on localizing the GNU/Linux operating system and its applications for Indian languages. IndLinux has worked on locale development, fonts, and other details for operating computers in local languages. Karunakar says the new GNU/Linux-based Milan solution allows users to work in nine languages, but there are no free fonts for Oriya and Punjabi. "But in other languages, the fonts are becoming a non-issue, since there is at least one free font for every language," he says. Karunakar adds that email solutions are available and that the team is addressing instant messaging in Indian languages.

. From ACM News, November 10, 2003

"Caught in Pull of Globalization" (11/10/03); Davis, Aaron; Steen, Margaret

The outsourcing of white-collar technology jobs to cheaper overseas workforces has become a flashpoint for grass-roots activists in the United States, while many academics, economists, and business executives take a contrarian position, arguing that the offshoring trend is ultimately a positive one for the U.S. economy. They contend that it will lead to the creation of more sophisticated IT positions that will keep the country at the vanguard of innovation and allow it to compete in a global economy. Former Palm employee Natasha Humphries, who lost her job and was replaced by a worker based in India who she trained, is considered by Rep. Don Manzullo (R-Ill.) to be symbolic of the distress many members of the U.S. tech workforce are feeling. "What Humphries represents--having had to train her own successor--that's like digging your own grave," says Manzullo, who chairs the House Small Business Committee and has called for limitations on the offshoring of federal jobs. Adding to tech workers' feelings of job insecurity is advanced communications technology that can more quickly facilitate the export of domestic jobs overseas; Martin Kenney of the University of California-Davis says this gives American IT workers less time to adjust. The National Association of Software and Service Companies, the premier Indian tech trade group, cites studies indicating that both the United States and India benefit from offshoring, with the United States saving money on software development. Meanwhile, offshoring advocates claim that overseas competition is a natural element of the historic tech commoditization cycle. Still, American corporations are trying to avoid the bad connotations of outsourcing by using broader terminology, such as "partnerships," "sourcing," and "multishoring" instead of "offshoring." Click Here to View Full Article

. From ACM News, November 5, 2003

"Burgeoning Russia IT Blasts Government Policies"
Computerworld (10/30/03); Mainville, Michael

The Russian government's investment to develop the nation's IT industry, especially when it comes to landing lucrative offshore outsourcing contracts, has fallen woefully short of initiatives undertaken by India and China, bemoan Russian corporate leaders. Luxoft CEO Dmitry Loschinin, for one, is bewildered that the Russian government seems to be completely uninterested in the future of the country's IT industry, which RusSoft estimates has been expanding at roughly 10 percent annually for the last four years. Critics contend that Russia has done nothing comparable to India's IT efforts, which include the foundation of software technology parks, the reduction of tech import duties to encourage research and development funding, and the setup of tax-free zones for companies developing exports. The Russian government and private allies are spending $2.4 billion to expand Internet usage across the nation by 2005 under the Electronic Russia program, but this constitutes the only major government high-tech project. Loschinin laments the government's missed opportunity to promote the IT industry during Russia's most recent economic boom through offset programs. Although promises were made to submit proposals for tax-free zones and tax holidays for high-tech firms to Russia's State Duma by the end of 2001, nothing significant has resulted. In September, Alexander Shubin of the Duma's information policies committee told attendees at a Geneva conference that the Russian government wants to institute tax incentives for high-tech companies, including a 10 percent reduction in value-added tax; but he did not set any date for the introduction of such tax breaks. Auriga President Alexis Sukharev calls such a performance typical: "There is a lot of sweet talk, but nothing ever happens," he argues, adding that government inaction is mainly due to confusion over which entities are responsible for developing the high-tech sector. His solution is to invest that responsibility within a single department or officer. Click Here to View Full Article

. From ACM News, November 7, 2003

"Face-off: Should the U.S. Govt. Do More to Keep IT Jobs for Citizens?"
Network World (11/03/03) Vol. 20, No. 44, P. 39; Biggs, Matthew; Turner, Scott

Matthew Biggs of the International Federation of Professional & Technical Engineers reports that globalization is eroding the dominance of U.S. high-tech industries and destabilizing the security of high-tech and IT companies and their employees. Among the globalization-related causes Biggs cites are government-sanctioned free trade policies, a shortage of domestic education, tax schemes that allow and encourage corporations to export jobs to cheaper overseas labor markets, and visa programs that permit foreign guest-workers to displace American workers. "While corporate leaders casually refer to these practices as 'sound business policy,' we in the labor community more accurately describe it as 'corporate malfeasance,'" the author writes. Biggs adds that federal legislators must lobby for "fair and balanced trade policies" and oppose corporate tax schemes and unfair guest-worker visa programs if the United States is to avoid an economic debacle. NaviSite systems engineer Scott Turner comments that IT outsourcing is simply the latest manifestation of the historical commoditization cycle, and he believes that government attempts to control this trend will, in the end, come to naught. "We...have to understand, and accept, that the 'Technological Revolution of the 1990s' was a rare and wonderful one-time occurrence that we were lucky to have experienced, but it is not the job of the U.S. government to artificially and indefinitely extend that boom," Turner argues. The author notes, however, that IT workers can avoid losing their jobs to outsourcing by freshening up their skills and using them to boost the bottom line and thus cement their value to the company. Turner also points out that small-to-midsize businesses are unlikely to outsource personnel because their IT development projects are too small to reap benefits from offshoring, while all companies still need desk-center and desk-side support workers. Click Here to View Full Article

. The Hidden Costs of IT Outsourcing from Business Week, October 27, 2003.

. From ACM News, October 27, 2003

"U.S. May Ease Entry for High-Tech Workers"
Wall Street Journal (10/27/03) P. A2; Schroeder, Michael

Spurred by worries among American multinationals and high-tech firms that the current H-1B visa cap of 65,000 will prevent thousands of skilled foreign professionals from entering the country in 2004, Senate Judiciary Committee Chairman Sen. Orrin Hatch (R-Utah) is pushing for expanded exemptions, which would clear the way for congressional consideration of proposed visa amendments. A representative of Hatch's noted that any initiative put forward would boast additional safeguards for domestic workers, including the reinstatement of a $1,000 fee for every visa that would be devoted to retraining American workers. Intel is lobbying for a visa cap exemption for foreign students with graduate technical degrees: Intel Chairman Andy Grove recently noted that 50 percent of students in U.S.-based technical graduate programs are foreign-born, and argued that the most highly skilled students should be allowed to work in the United States so that the country can sustain its economic competitiveness. The current rules only allow exemptions for H-1B holders who work at universities or nonprofit research and development organizations. American Immigration Lawyers president-elect Paul Zulkie reports that the 2004 H-1B cap is actually closer to 35,000, and estimates that it will probably be reached by March. His organization is lobbying for the cap to be boosted to 115,000. Meanwhile, India's National Association of Software and Service Companies thinks the cap should be raised to between 120,000 and 130,000. Proponents of H-1B exemption programs will have to overcome widespread feelings that the visa program itself is a big contributor to the U.S. workforce's current troubles--anti-H-1B advocates claim, for instance, that many American companies are replacing domestic workers with foreigners because they are willing to work for less.

. From ACM News, October 22, 2003

"Congress Looks for Ways to Slow Offshore Hiring"
IDG News Service (10/20/03); Gross, Grant

Rep. Don Manzullo (R-Ill.), chairman of the House Small Business Committee, argued at a Oct. 20 congressional hearing that the U.S. government's continued purchase of foreign products will only perpetuate the offshoring of American jobs. "If the American people see how the U.S. government is using their taxpayers' dollars to destroy jobs here at home, what type of example does that set?" he inquired. To avoid this, Manzullo contended, Congress should make the purchase of American products a requirement for government agencies; he also recommended that Congress pass a corporate tax reduction to limit the outsourcing of American manufacturing jobs. The hearing placed particular emphasis on the offshoring of IT jobs, although Information Technology Association of America President Harris Miller said both the media and the government have exaggerated the scope of the problem: He said that only about 5 percent of U.S. IT jobs will migrate overseas by 2015. "I don't want to diminish the angst felt by IT workers who have lost their jobs or are in fear of losing their jobs...but I also believe we cannot overreact to what, up until now, has been a short-term situation," Miller insisted. He also warned that if the United States institutes trade policies that frown on offshore hiring and outsourcing, outsourcing countries could be discouraged from buying U.S. products. Laid-off Palm employee Natasha Humphries testified at the hearing that the economic recovery period will only be protracted if offshoring continues unabated, and asserted that the chief reason U.S. companies are outsourcing is to cut costs by hiring foreign labor willing to work for less than their domestic counterparts. Meanwhile, Ronil Hira of the Institute of Electrical and Electronics Engineers urged that companies intending to outsource jobs should have the foresight to notify employees and the government in advance. Click Here to View Full Article

"China's Technological Ambitions Take Flight"
Los Angeles Times (10/19/03) P. C1; Flanigan, James

China is fast becoming a world leader in technology, not just in low-cost manufacturing: As evidence, experts point to a rapidly growing economy, strengthened political will, and growing numbers of skilled workers in China. Milken Institute scholar Rob Koepp notes that China graduates 450,000 engineers each year, equal to the number of annual U.S. engineering graduates. Koepp also cites a "reverse brain drain," saying 75 percent of Chinese students who graduate in America are choosing to go back to China because of increased opportunities there, whereas in the past 75 percent would stay in the United States. He says China's goal is to bring the technological center of gravity back east so that it sets standards for the world; for example, the Chinese government is supporting development of a new 3G cell phone standard that will not only cater to 200 million domestic users, but will also be competitive elsewhere. China is also bullish about the next-generation Internet protocol that would give non-Western countries more addressing resources. Koepp has been hired by the Chinese Ministry of Science and Industry to offer advice on building its own technological infrastructure based on the model of Silicon Valley and other U.S. technology hotbeds. Currently, Chinese researchers are still building on technologies developed elsewhere, but fast-rising economic clout is upping its chances of discovering the next big innovation in electronics, biotechnology, or nanotechnology. Stanford University professor Shoucheng Zhang, who also teaches at Beijing's Tsing-hua University, says Chinese government leaders will eventually have to make decisions to protect intellectual property in the same way the West does.

. From ACM News, October 17, 2003

"IT Jobs Contracted From Far and Wide"
Globe and Mail (CAN) (10/14/03); Saunders, John

There are two forms of IT offshoring--nearshoring and farshoring--that present advantages and disadvantages to North America: The United States appears to be hurting more because U.S. corporate IT operations are increasingly being farshored--transferred to cheaper workers in far-flung countries such as India and Russia; Canada, however, while suffering an IT job drain to farshoring as well, is also bringing in IT work as a nearshore outsourcer, with the United States its primary customer. It remains to be determined whether Canada's farshore losses are offset by its nearshore gains. Everest Group Canada President Frank Koelsch thinks that Canada's industry, on the whole, is encountering less difficulty than the United States. He contends that farshoring's grip on the country is mild, possibly because Canadian companies are smaller and more conservative than U.S. companies. Yet the major Canadian banks, among others, see opportunities in farshoring, and both American and Canadian IT service firms are establishing overseas branches to satisfy customer demand, restore former profit margins, and shore themselves up against the threat of India's three biggest outsourcers--Tata Consultancy Services, Wipro Technologies, and Infosys Technologies. All three firms are eyeing General Motors, a car company that contracts out all of its IT operations, which until recently were primarily handled by Electronic Data Systems (EDS). IT workers at EDS Canada are concerned that their jobs could be threatened as Wipro sets up shop near GM in Windsor, Ontario. Toronto lawyer Alison Youngman believes Canada should boost its standing as a nearshore IT outsourcer for U.S. customers through a national campaign. Click Here to View Full Article

. From ACM News, October 15, 2003

"H-1B Visa Cuts Might Not Have Big Effect in U.S."
IDG News Service (10/14/03); Ribeiro, John

Forrester Research's John McCarthy does not think the October reduction of the yearly H-1B visa cap from 195,000 to 65,000 will have a significant impact on offshore service companies in the short term, given the number of H-1Bs that have already been issued; nor are American clients of offshore outsourcers concerned about the cuts. Indian software exporters do not expect the reduction to dramatically affect their businesses, either: Kiran Karnik, president of the National Association of Software and Service Companies, says the slowdown in the U.S. economy, coupled with growth in Indian offshoring, is scaling back the need for H-1Bs by Indian software firms. However, Karnik argued that the medium-term effects of the current H-1B cap, should it be maintained, could hurt the U.S. economy, U.S.-based customers and companies, and Indian businesses. "Over the longer term, the question becomes whether Congress will be able to act quickly to raise the cap in response to economic growth and new demand, when it comes, or whether the current cap becomes a drag on the ability of IT companies and their customers to grow and prosper," notes Bob Cohen of the Information Technology Association of America. On the other hand, MphasiS BFL Group CFO Ravi Ramu asserts that the long-term need for H-1Bs could significantly decline as clients become more comfortable with offshore outsourcing, which can save money as well. A November 2002 Forrester report predicts that 3.3 million jobs in the U.S. services industry will migrate overseas, with the IT industry at the vanguard. Washington Alliance of Technology Workers President Marcus Courtney insists that "The [existing H-1B] law needs to be reformed so that it strengthens prevailing wage protections, ensures that all employers attest that they cannot find qualified U.S. employees to fill positions, and provides stronger protections for guest workers that come into the U.S. under the program." Cohen, meanwhile, claims that the drop in H-1B usage indicates that the visa program is not, as critics claim, being used to supply cheap labor. Click Here to View Full Article
. From Knowledge@Wharton Newsletter, October 8-21, 2002.

Business Opportunity vs. Backlash: Perspectives on BPO - Part 2
Globalization, which once swept the manufacturing field, is transforming the services sector. Decentralized production of information-intensive services for global markets — coupled with the international integration of labor markets via the Internet — mean that work is moving to countries where it can be done efficiently. As a global supply-chain of expertise emerges, stretching from Manhattan to Madras via places like Mauritius and Manila, these trends pose several questions. In an attempt to answer them, Wharton professor Ravi Aron assembled a panel of experts representing different perspectives on the BPO phenomenon.

. From ACM News, October 8, 2003

"Politics of Offshoring"
Silicon Valley Biz Ink (10/03/03); Tanner, Steve

With unemployment in Silicon Valley hanging around 9 percent and IT offshoring ramping up, politicians are readying their arguments: States such as New Jersey, North Carolina, and Michigan have already seen legislative proposals that would restrict government use of offshore work, but no federal bill has yet appeared. Californian representatives to Congress need to sit down and finalize a strategy, says TechsUnite and Communications Workers of America local organizer Josh Sperry. He says discussions have already begun, but a final, actionable position is needed. However, Sen. Bob Graham (D-Fla.) says America needs to beware of protectionist policies that could hamper its competitiveness on the global scene. San Jose State University business professor Arvinder Loomba says offshore outsourcing is not controversial during economic good times, and notes that just a few years ago Californian companies were eager to have skilled foreign workers come take jobs; instead of forming policies to please the masses, Loomba suggests politicians should work to make their states more attractive to business. Although offshoring does pose a real threat to U.S. jobs, Loomba is confident in America's ability to innovate and create new, greater opportunities. Santa Clara University Center for Science, Technology, and Society director Jim Koch predicts offshoring will be a major topic during the upcoming presidential election. Politicians need to take care of people's sensitivities, but also need to realize the United States must be integrated into the global economy to succeed. Democratic front-runner Howard Dean is proposing tax reform that would discourage offshoring, while President Bush has not yet made offshoring a campaign issue. Click Here to View Full Article

. From ACM News, October 6, 2003

"With Software Jobs Migrating to India, Think Long Term"
Wall Street Journal (10/06/03) P. A2; Davis, Bob

Computer guru Ed Yourdon's performance as an IT job forecaster has been marked by peaks and valleys: In his 1992 book "Decline & Fall of the American Programmer," he prophesied that American programmers will lose their jobs to cheaper Indian professionals, but the apparent failure of this to happen prompted Yourdon to issue an apologia with his 1996 book "Rise & Resurrection of the American Programmer." Yet Yourdon's original prediction seems to be coming true after all with the rise in IT outsourcing to India--some 150,000 U.S. IT jobs have been lost to foreign competitors in the last three years alone--and Yourdon, now a director at Indian software firm iGate, is again forecasting a bleak outlook for American programmers. "It's almost like I've become a turncoat for issuing a warning, and the only ones listening were foreigners," he remarks. Yourdon projects that the least productive U.S. software professionals, which account for 20 percent of the American IT workforce, will vanish because of their consistent failure to update their skills and raise their efficiency. Indian software workers receive 25 percent less money than their U.S. counterparts, and with other poor countries vying for a piece of the software outsourcing market, India is under considerable pressure to maintain the salary disparity. However, India's growing presence as a software outsourcer may work to America's advantage: As more foreign software professionals train or work in the United States, the more talent is added to a pool that could be tapped to build U.S. firms with fast growth potential. Furthermore, as India's economy grows faster so does its potential as a market for products and services made in America. U.S. workers are likely to benefit if overseas competition stimulates more long-term potential for American innovation than short-term potential for jobs.

. From New York Times, October 5, 2003

"A Missing Statistic: U.S. Jobs That Went Overseas", by LOUIS UCHITELLE: Read the Article

. From ACM News, October 3, 2003

"Leaping, Then Looking"
Baseline (09/03) No. 22, P. 17; Dignan, Larry

Few executives are taking time to consider IT outsourcing's potential ramifications--on worker morale, the American economy, national security, and other areas--before moving software development overseas in order to cut costs and remain competitive. "From a free-market point of view when you have talent around the world that's less expensive, you should be able to hire that talent," contends George Mason University finance professor Gerald Hanweck. Gartner predicts that one in 20 jobs at U.S.-based IT product and services companies will be outsourced by the end of next year, and Forrester reckons that 3.3 million services jobs will move overseas over the next 15 years; meanwhile, conservatively estimates that $50 billion in wages, $60 billion in economic activity, and $13.4 billion in taxes will be lost with the expected outsourcing of around 800,000 back-office jobs through 2008, assuming a typical worker earns $60,000 annually. Free-market advocates claim that the U.S. economy will adjust to the changing job landscape: For one thing, a large segment of American programmers and tech execs will reach retirement age in the next 12 years, and there will be fewer domestic replacements to take up the slack. Ronil Hira of the Rochester Institute of Technology is concerned that the outsourcing movement is proceeding faster than the labor market can adapt, and is especially worried that cutting-edge research and development will migrate overseas. He urgently recommends that outsourcing be studied in detail before it is too late for the U.S. economy to catch up, emphasizing such points as determining the number of tech jobs that are outsourced, the quality of services, and compensation for workers driven into unemployment by outsourcing. Cadence Design Systems CEO Ray Bingham argues that the short-term disadvantages of outsourcing will be offset by the increase in U.S. workers' production in response to the international competition, while at the same time insisting that "core" R&D--at least for his company--will remain domestic. Click Here to View Full Article

. From Edupage, September 22, 2003

The Association of South East Asian Nations (ASEAN) has announced a plan in which member countries will cooperate in the battle against hackers. All ASEAN countries--Singapore, Malaysia, Thailand, the Philippines, Indonesia, Myanmar (Burma), Vietnam, Cambodia, Laos, and Brunei--will share information about computer crimes, and each country will create a Computer Emergency Response Team by 2005. At least six ASEAN nations already have response teams, according to Virgilio Pena, the under secretary for the department of transportation and communications in the Philippines. Pena said ASEAN hopes to broaden the cybercrime initiative to all of Asia and then to the rest of the world. USA Today, 19 September 2003

. From ACM News, September 17, 2003

"IT's Global Itinerary: Offshore Outsourcing Is Inevitable"
Computerworld (09/15/03) Vol. 31, No. 43, P. 26; King, Julia

The tremendous cost savings posed by outsourcing in today's economy will prompt 40 percent of companies to shift at least part of their IT operations overseas by 2004, according to Gartner; offshoring also enables companies to boost the flexibility of their IT staff as well as tap into a growing pool of world-class IT talent. The overall outsourcing trend is characterized by a number of sub-trends, such as the use of multiple outsourcers in different countries, a practice known as multisourcing. Accenture CEO Joe Forehand predicts that multisourcing will ramp up because "There's no one provider who is best-of-class across all services." With the overseas migration of application development and maintenance, domestic IT staffs are applying their skills to more managerial and business process-related duties, such as business analysis, accounting, negotiation, and compliance monitoring. New outsourcing services are emerging, and outsourcers are broadening their scope to include human resources, call center, finance, and accounting operations; infrastructure services such as desktop support, help desk, and network monitoring functions are also experiencing dramatic growth. Though most companies want to outsource technical work to save money, labor costs in mature offshore centers such as India will inevitably rise as demand increases, and experts caution users to watch out for lowest-cost deals. In an effort to lower their own fixed IT costs, outsourcers are "daisy-chaining." One daisy-chaining strategy is for service providers to sell a piece of their fixed IT assets back to hardware and software providers, while another is for mature outsourcers to subcontract IT work to younger and cheaper outsourcers.

. From ACM News, September 17, 2003

"Software Quality Is Still a Work in Progress, Offshore and in the U.S."
Computerworld (09/15/03); Willoughby, Mark

Overseas software developers--India especially--are adopting software quality development certification standards such as the Software Engineering Institute's Capability Maturity Model (CMM), which SEI fellow Watts Humphrey says can reduce faults and boost security. He observes that "To do good security, engineers need to be using good design methods, and engineers historically have not done a good job of design." Oracle chief security officer Mary Ann Davidson reports that global development processes must be implemented in order to accommodate the globalization of software development. "No matter where you build the software, you must have a culture of security with good internal processes," she declares. Humphrey notes that the topmost CMM certification level, CMM 5, does not enable code modules to be traced to individual programmers, but the SEI plans to add that traceability with the emergence of Team Software Process (TSA), which is being intensely deployed by Indian software firms and a few American software developers. Humphrey says that CMM 1-rated organizations typically boast 7.5 software defects per 1,000 lines of code; CMM 5 organizations usually have only one defect per 1,000 lines; and TSP-rated organizations usually detect only 0.06 defects for every 1,000 lines. Steve Lipner, Microsoft's security engineering strategy director, says that buffer overruns are a persistent security problem, because new overruns are always being discovered even though Microsoft has built automated buffer overrun detection and blockage tools. Microsoft is also applying Common Criteria testing to its Windows operating system, though Shawn Hernan of the CERT Coordination Center cautions that such evaluation does not solve software quality and security problems. Click Here to View Full Article

. From ACM News, September 15, 2003

"'Perfect Storm' of Factors Sweeping More U.S. Tech Jobs Overseas"
Investor's Business Daily (09/15/03) P. A4; Howell, Donna

Information Technology Association of America President Harris Miller attributes the offshore outsourcing of U.S. tech jobs to a "perfect storm" of factors--sluggish national and international markets and escalating global rivalry. Both large and small companies are outsourcing to cheaper labor markets in order to save money, a factor that has become a major pressure point in the last few years, according to Miller. ICode CEO Bijal Mehta argues that outsourcing has actually helped save jobs, at least for his firm, by enabling it to survive: 80 percent of ICode's workforce is based in India, and this has lowered operational costs significantly--the development of a new line of software, a $60 million proposition in America, only cost $8 million thanks to overseas labor. But WashTech co-founder Marcus Courtney estimates that over 10,000 American high-tech workers have lost jobs in the last two years because of outsourcing, and alleges that a skills shortage has nothing to do with it. "We're talking to workers every single day who tell us they're training their replacements," he says. Courtney accuses some firms of exploiting the L1 visa program--ostensibly set up to help multinational managers travel to the United States for business reasons--to train foreign workers who later displace Americans. Several proposals to apply stricter visa requirements are making their way through Congress, but immigration lawyer Mitchell Wexler thinks a better solution is to impose penalties on employers that abuse the visa program. Meanwhile, Congress has commissioned the General Accounting Office to scrutinize the effects of outsourcing in a report due next spring.

. From Forbes Magazine, September 11, 2003

"Giant Sucking Sound"
Forbes Magazine, Thursday September 11, Robyn Meredith

White-collar jobs--in engineering, programming and accounting--are leaving America's shores for low-cost locales at a pace of nearly 4,000 a week, according to Forrester Research. The U.S., Europe and Japan combined are losing 600,000 a year, says McKinsey & Co. Read the article

. From ACM News, September 10, 2003

"IT Jobs That Belong Overseas"
NewsFactor Network (09/05/03); Hill, Kimberly

With offshore IT outsourcing having become a fact of life, experts such as Challenger, Gray & Christmas executive VP Rick Cobb and Deloitte & Touche's Maria Grant observe that some jobs are well suited for overseas migration while others are not. Cobb sees little difficulty in moving software development, data collection, and analysis operations offshore, provided the project environment is well-established and the only required communication is intermittent staff reports. "These are more pure math, and they can be moved to the cheapest place they can be done," he explains. Cobb says that outsourcing team-oriented projects can increase the complexity of IT-management procedures and practices, while both language and cultural barriers can hinder such large-scale initiatives. Transactional and routine jobs such as software debugging, network maintenance, and coding for well-defined software modules lend themselves very well to outsourcing, according to Grant. Programming, network administration, and help desk functions can also be outsourced, as long as security and confidentiality issues are addressed. Grant dissuades enterprises from offshoring "strategic tasks" that involve business-process decisions, which play a key role in the implementation and customization of customer relationship management and enterprise resource planning suites. She also notes that modifying software to line up with an organization's business processes is a task best left to domestic staff. Click Here to View Full Article

. From Edupage, September 8, 2003


China, South Korea, and Japan are jointly researching an open-source software computer operating system to compete with Microsoft Windows. Current alternatives, such as Linux, will be explored rather than attempting to build a new system from scratch. The intent is to offer alternatives to Windows that will allow manufacturers more choice and help insulate the countries’ systems against cyberattack. The Japanese government, which spearheaded the project, has already earmarked one billion yen ($85.5 million). Top officials of the ministries of trade of the three countries will meet later in September to further discuss the project. BBC, 8 September 2003

. From ACM News, September 8, 2003

"Worlds in Transition: IT in Eastern Europe"
TechNewsWorld (09/06/03); Halperin, David

Although the economies of Eastern European countries have been characterized by turbulence since the fall of the Iron Curtain, Ned Cabot of the U.S. Trade and Development Agency says Eastern Europe may be experiencing faster growth than any other region because of its efforts to transition from state-owned monopolies to liberalization in order to be accepted into the European Union. The same desire for membership in the EU is spurring IT developments in Eastern Europe: Romania, for example, is considering a sophisticated smart card to satisfy the EU's national ID card prerequisite. There has been a heavy concentration on IT security in Eastern Europe, which is mainly attributed to the region's notoriety as a hotbed of political corruption. Notable developments in this area include Microsoft's acquisition of the GeCAD security firm in Romania and the award-winning BitDefender antivirus software from Romania's Softwin SRL, which recently drew media attention because it helped uncover details about the SoBig.F virus. The Central and Eastern Europe Business Information Center also lists Hungary as an important area of software innovation thanks to such products as ScanSoft's Recognita and Graphisoft's ArchiCAD line. Unsurprisingly, the wealthiest countries in Eastern Europe--Poland, Hungary, and the Czech Republic--are the region's IT leaders. Many Eastern European concerns hope to use the IT outsourcing trend in Western Europe to their advantage and follow a similar strategy. An anonymous representative of the U.S. Commerce Department reports that American firms consider Eastern European code-writing and technology to be of "much higher quality" than anywhere else. Click Here to View Full Article

. From ACM News, September 3, 2003

"Heavyweights Sending R&D Overseas"
Silicon Valley Biz Ink (08/29/03); Tanner, Steve

Offshore IT outsourcing is no longer limited to low-level programming, as evidenced by research and development work being exported to inexpensive overseas labor markets by major Silicon Valley companies. Washington Alliance of Technology Workers President Marcus Courtney says this trend will have an impact on almost every U.S. tech worker, and thinks Silicon Valley and other traditional centers of tech innovation could become less attractive as a result. Intel recently announced plans for an $80 million R&D facility in Malaysia, and company representative Chuck Mulloy did not mention how many employees would be hired, insisting that Intel's long-term goal "is to keep the U.S. work force stable and to expand outside the United States." Yahoo! disputed claims of a new Indian R&D center reported by Reuters and its own Indian news site, though Yahoo! India CEO Venkat Panchapakesan was quoted on India for saying that an already established R&D facility will boost its staff soon. Meanwhile, an Aug. 19 story quoted Silicon Graphics COO Warren Pratt's statement that his firm was open to offshoring both low-end and high-end jobs. Adobe outsources R&D work in several countries, and company representative Katie Juran says such a strategy complements the global reach of Adobe's products and services. But Courtney argues that companies are using such claims as a rationale for outsourcing jobs to minimize operational costs. "They do not want the public and their employees to know about their true plans," he claims, adding that he believes high-level tech professionals will mobilize to fight outsourcing. Click Here to View Full Article

. From ACM News, August 27, 2003

"Can the Tech-Job Drain Be Stopped?"
NewsFactor Network (08/25/03); Hill, Kimberly

Although the outsourcing of high-tech jobs to cheaper overseas labor is attractive to U.S. businesses from a financial point of view, opponents argue that cost-benefit studies often overlook important variables. Marcus Courtney of the Communication Workers of America's WashTech affiliate contends that replacing domestic employees with offshore workers results in a drain of knowledge that can put companies at a disadvantage. Software development projects are often divided between groups, and this division causes discontinuity throughout development cycles, according to Courtney. He says that WashTech and other labor organizations are readying a multi-pronged strategy to fight the migration of jobs out of the United States, including educational campaigns that focus on the issues at hand. "One of the things we've found out is that members of Congress are not educated when it comes to the outsourcing of white-collar jobs," Courtney observes, noting that this discrepancy can be corrected by lobbying for new legislation; WashTech in particular is calling for a General Accounting Office-sponsored federal analysis on the overseas outsourcing of technical positions. Courtney also says that his organization is trying to close a loophole in the L-1 visa program that is being exploited to bring in foreign workers while putting their American counterparts out of work. Maria Grant of Deloitte and Touche is doubtful that outsourcing will be halted by labor groups' efforts, and she suggests that individual U.S. workers can improve their job security by becoming competent on multiple levels. Adding analysis and decision-support skills to their technical know-how is one way American professionals can keep their jobs, while IBM's Ray Schreyer notes that a combination of technical skill and leadership qualities can also boost high-tech employees' value.

. From ACM News, August 13, 2003

"U.S. Tech Workers Training Their Replacements"
Associated Press (08/11/03); Konrad, Rachel

American tech workers are frustrated and disgusted that they are being forced to train replacements from India and other foreign lands brought in on visas such as the L-1. The L-1 classification permits companies with U.S. branches to send workers to America for as long as seven years, supposedly for their "specialized knowledge" or to train them in corporate culture--and allows employers to pay these professionals less than prevailing U.S. wages. The number of L-1s approved by the State Department rose almost 7 percent between the first six months of fiscal 2002 and that same period in fiscal 2003; Rep. Rosa DeLauro (D-Conn.) proposed legislation in July calling for an annual cap of 35,000 L-1 visas. Intel's Gail Dundas acknowledges that her company needs domestic workers to train L-1 workers so that the latter can competently run offices in Russia, China, and other emerging markets, but insists that American workers are not displaced. And Dan Larson of Texas Instruments says that decreasing numbers of U.S.-born science engineering graduates is forcing companies to look overseas, where tech talent is booming. Some labor experts advise programmers to quit complaining and redirect their energies to expanding their marketable skills, but out-of-work tech professionals retort that the offshore outsourcing of lucrative positions makes such efforts pointless. Click Here to View Full Article

. From ACM News, July 25, 2003

"The New Geography of the IT Industry"
Economist (07/19/03) Vol. 368, No. 8333, P. 47

A geographical migration is occurring as the IT industry shifts from innovation to execution, and companies outsource IT operations to services in India, China, and elsewhere. Silicon Valley is in the midst of a downturn and has lost many tenants, while IT's center of gravity has relocated to the home turf of industry giants such as Dell, IBM, SAP, and Microsoft; the Indian city of Bangalore, where Wipro Technologies makes its home on the Electronics City campus, is also thriving. Stanford University economics professor Timothy Bresnahan contends that these changes are typical, given the protean nature of computing's technological advancement. Nevertheless, there are signs that Silicon Valley is starting to recover: Sun Microsystems, Hewlett-Packard, and Oracle are among the Valley-based companies adopting the development and marketing models of IT industry leaders such as IBM in order to boost their share in the tech sector. Meanwhile, the emergence of cheaper and more powerful computer systems has allowed companies such as Google to erect robust and well-oiled infrastructures, clearing the way for the development and rollout of new services. Most notably, Collaborative Economics President Doug Henton says the Valley's "innovation habitat" will likely allow the region to turn the merger of bio-, info-, and nanotechnology to its advantage. Offshore IT outsourcing, which is primarily seen as a cost-cutting measure, has attracted much criticism and inspired lawmakers to pursue limitations on how many foreign workers should be allowed into the U.S., as well as bans on the outsourcing of certain services; however, Forrester Research estimates that the number of IT-related jobs expected to cross the ocean by 2015--3 million--accounts for roughly 2% of total American employment today. Furthermore, there are indications that establishing development centers abroad would increase the number of jobs and help keep companies competitive and focused on their core strengths. A possible future IT model could be one in which maintenance, customer support, and programming is handled by outsourcers while design and marketing remains onshore.

. From ACM News, July 23, 2003

"Making It Illegal to Hire Abroad"
Wired News (07/23/03); Glasner, Joanna

State and federal lawmakers are considering legislation that limits overseas outsourcing in response to more and more U.S. companies shifting technology and service jobs to countries where the labor pool is cheaper as well as larger. The New Jersey state assembly is expected to vote on a proposed law requiring companies to employ only citizens or legal U.S. residents for certain contracts in the fall, while another bill under consideration focuses on restricting offshore call centers. Meanwhile, a bill the Maryland legislature is mulling over would ban overseas workers from being hired for government contract jobs. Rep. Adam Smith (D-Wash.) recently declared that concerns over whether federally funded programs may be training American workers for jobs that are being outsourced overseas prompted to him to request a report from the General Accounting Office detailing how the technology job market is being affected by offshore outsourcing. Gartner analyst Debashish Sinha doubts that outsourcing is chiefly responsible for fewer job opportunities available to U.S. IT workers, and attributes most job losses to diminishing demand for services as a result of the economic downturn. "It seems the overseas outsourcing market is being used more as a scapegoat for the troubles the U.S. IT industry is going through," Sinha attests. Economic Policy Institute economist Josh Bivens concurs, saying that recent data from the U.S. Commerce Department's Bureau of Economic Analysis supports the conclusion that the IT job market is following the same downward curve of the overall economy. Bivens acknowledges that there will likely be an increase in the overseas outsourcing of call center operations and other lower-level service jobs, but believes businesses will continue to keep their top people in the United States.,1367,59677,00.html

"Controversy Surrounds Employees on L-1 Visas"
Dallas Morning News (07/22/03); Godinez, Victor

Critics claim that the L-1 visa program, which allows companies to transfer foreign staff to the United States for the purposes of consultation, cross-training, or management education, is being exploited to essentially replace American workers with overseas professionals willing to work for less. Immediate past president of the Institute of Electrical and Electronic Engineers LeEarl Bryant says the law authorizing the approval of L-1s contains a loophole that allows employers to bring workers to the United States and then outsource them to other companies, thus displacing American personnel. "It's even worse [than H-1B abuses] because it's manipulating the system to avoid paying those people prevailing U.S. wages," Bryant notes. Chris Bentley of the Bureau of Citizenship and Immigration Services reports that the government acknowledges the loophole's ramifications, and his agency is evaluating the L-1 program as well as probing possible abuses. However, he points out that the sluggish economy is apparently causing the number of L-1 visa holders and H-1B holders to decline. The office of Rep. John Mica (R-Fla.), who proposed a bill in May that would eliminate the L-1 loophole, issued a statement that certain employers are threatening to deny severance pay to American workers if they refuse to train their L-1 replacements. L-1 visa holders are allowed to remain in the United States for up to seven years. Click Here to View Full Article

. From ACM News, July 14, 2003

"India's Tech Industry Defends H-1B, Outsource Roles"
EE Times (07/10/03); Krishnadas, K.C.

India's National Association of Software and Service Companies (Nasscom) issued a report to quell concerned American and Indian parties' worries about outsourcing and the H-1B visa program, which critics claim are taking jobs away from American workers. The report estimates that the number of H-1B visas approved for Indian engineers declined by more than 50 percent between 2001 and 2002, and is anticipated to fall even further this year. In an effort to forestall a ban on outsourcing, Nasscom contends that the practice has enabled some U.S. companies to avoid mass layoffs: The association claims that transferring jobs to India allowed U.S. banks, insurance companies, and financial-services firms to save $6 billion over the past four years, and channel part of those savings into the creation of 125,000 additional jobs. Nasscom estimates that Indian IT firms employed almost 60,000 people in the United States in 2001, while roughly 170 such companies possess U.S. branches. To reassure people that outsourcing to India will not end, Nasscom released a McKinsey & Co. report projecting that Indian software and service exports to the United States will total $8.5 billion in 2003-04, while the United States will save between $10 billion and $11 billion through outsourcing to India in the same period. Meanwhile, the United States is expected to export $3 billion in high-tech products and services to India. India's software export services industry could be hit hard by H-1B visa restrictions, given that Germany recently decided to set limits on the number of annual green card allotments to foreign professionals. Meanwhile, outsourcing restrictions are particularly worrisome for India's IT-enabled services sector.

"Job Exports May Imperil U.S. Programmers"
Associated Press (07/13/03); Konrad, Rachel

American programmers are worried their jobs are being endangered by the offshore outsourcing of highly-skilled tech positions to India, China, Russia, and other developing countries where the workforce is cheaper. Furthermore, outsourcing opponents are concerned that U.S. tech leadership could be shattered by this trend, which reportedly provides nations such as India and China with the support needed to bolster their own tech infrastructures. A November 2002 Forrester Research study estimates that the number of tech jobs farmed out overseas will balloon from about 27,000 in 2000 to 472,000 by 2015 if the current rate of outsourcing continues. Cap Gemini Ernst & Young reckons that the average wage for an Indian computer programmer, including benefits, is $20 per hour, while an American programmer with commensurate expertise earns an average of $65 per hour. Executives argue that outsourcing's advantages extend beyond cheaper salaries: Convergys' Jean-Marc Hauducoeur notes that Indian workers display greater staying power, thus saving a great deal of money in employee recruitment and training. The approximately 350,000 college engineering graduates India produces annually is also attractive, note many U.S. executives. Boeing, Dell, Motorola, and Intel have all opened Russian branches, while Microsoft is exporting software development jobs to its India Development Center in Hyderabad. Executives claim that programming skills alone do not guarantee American workers job security, and say the really secure positions are found in nanotechnology, biotechnology, and other emerging fields.

. From New York Times, July 7, 2003

Uneasiness About Security as Government Buys Software
July 7, 2003, By JOHN MARKOFF

Sitting at his laptop computer in a hotel near Toronto one day last October, Gregory Gabrenya was alarmed by what he discovered in the sales-support database of his new employer, Platform Software: the names of more than 30 employees of the United States National Security Agency. Read the whole article

. From ACM News, June 25, 2003

"In Search of Africa's Silicon Valley"
BBC News (06/23/03); Hale, Briony

Several countries in Africa are attempting to follow India's lead by developing high-tech hubs and become the African equivalent of India's Bangalore. The African nations of Uganda, Togo, Senegal, and Ghana, for example, are trying to break into the global low-cost outsourcing market that is already flourishing in Eastern Europe, Central America, and the Philippines. Ghana recently attracted the interest of several large American firms seeking alternatives to India, where they say competition is already too intense. U.S. contract call center operator Global Response is expanding its operations in Ghana and will soon employ 2,500 people in the capital city of Accra. Global Response Chairman Frank Schooster considers Ghana's talent and resources equal to that of India, and just lagging those in the Philippines. Affiliated Computer Services (ACS) is moving more of its basic data entry operations to Accra, where it will employ 2,000 people in a new building near the airport. ACS has a Bangalore facility that is smaller and handles more sophisticated analytical and technical work, and turned to Ghana for its abundant labor pool. ACS' Jim Charles says he regularly receives calls from U.S. ambassadors and other firms about his company's operations in Ghana. "It just hasn't caught on yet, but more companies will start coming over soon," he predicts. International Computer Science Institute research fellow Gregg Pascal Zachary says Africa needs a concentration of technology firms that will attract others. The goal is build a critical mass of operations, generating a magnet effect that will attract other firms and concentrate talent.

. From ACM News, June 20, 2003

"Report Sheds Light on China's Evolving R&D Centers"
EE Times (06/17/03); Leopold, George

IBM, Hewlett-Packard, and other U.S. computer makers have played a key role in the development of the high-technology research and development network in China. The initial interest of U.S. computer makers in China as a potential hub for R&D led a number of technology companies to gravitate toward the market, which now boasts about 200 joint R&D centers, according to the Henry L. Stimson Center, a national security think tank. A new Stimson Center study found that having China join the World Trade Organization (WTO) has resulted in key advantages for high-tech companies in the United States and other foreign countries. While WTO membership for Beijing assures foreign owners that they will maintain strong controls over their technology and intellectual property, Kathleen Walsh, a senior associate at the Stimson Center and report author, adds that globalization is a benefit in that there is a rapid transfer of technology. The loss of proprietary technologies remains a risk for foreign companies in China, but Walsh says she is less concerned about the issue because of the collaboration now taking place between U.S. and Chinese firms. A number of research partnerships have been established in the areas of computers and telecommunications, but a lack of hard data makes it difficult to determine other characteristics of China's R&D infrastructure.

. From ACM News, June 9, 2003

"Jobs Squeeze for Indian Workers"
Wired News (06/06/03); Delio, Michelle

India is currently the offshore tech support outsourcer of choice for U.S. companies, but Forrester Research speculates that preeminence could shift over the next 10 years as American firms look to nations where IT labor is even cheaper. IBM, Boeing, Intel, and other U.S. companies have started awarding more outsourcing contracts to Hungary, Romania, the Czech Republic, and Russia, though most of the jobs involve software testing and development rather than technical support, according to International Data's Traci Gere. This complicates an already difficult situation for Indian workers, who must contend with an American effort to staunch the migration of tech jobs to India. Gere's research indicates that the Philippines has a strong presence in outsourcing "call centers and sweat shops," but political shakiness could undercut the country's attractiveness. Gere notes that Vietnam is particularly eager to gain prestige as a center of IT expertise, which makes it the most probable Asian challenger to India's tech support domination. Indian entrepreneur Farhat Gupta, who owns several call centers in Bangalore, says that local training programs devote more time to learning U.S. culture than on building technical skills. It is not unusual for call center employees in training to spend the first week watching American films and TV programs to familiarize themselves with the many nuances of U.S. lingo. Forrester calculates that more than 3 million American jobs will be exported overseas by 2015.,1367,59126,00.html

. From ACM News, June 2, 2003

"North Korea's School for Hackers"
Wired News (06/02/03); McWilliams, Brian

South Korean intelligence officials have claimed for nearly a decade that the Democratic People's Republic of North Korea (DPRK) is training people in the arts of hacking, virus-writing, and other forms of cyberwar at the so-called Automated Warfare Institute at Mirim College, while a South Korean general declared at a cybersecurity seminar last month that North Korea is "reinforcing its cyberterror capabilities." However, Pentagon and State Department officials note that such claims remain unverified, and some American defense specialists doubt that North Korea has the means to impede the U.S. military via cyberspace. Nautilus Institute executive director Peter Hayes adds that the DPRK lags behind other nations in terms of IT infrastructure, partly due to trade sanctions and its lack of basic resources; the American Registry for Internet Numbers and Asia Pacific Network note that neither of North Korea's two "class C" Internet address blocks are apparently active, while its .kp top-level domain remains undeployed. Furthermore, the country has a limited number of Web sites that are hosted by Chinese and Japanese servers. Still, President John Pike has little doubt that North Korea is attempting to make its military infowar-capable, given the nation's soldierly tendencies. The Pentagon's Alexandre Mansourov agrees that this is a likelihood, given that South Korea has made little effort to hide its own cyberwarfare-enablement initiatives. Moreover, Hayes admits that the DPRK possesses "competent, if not world class" software development proficiency, while the country reportedly has connected government offices via a massive intranet. He acknowledges that North Korean hackers could disrupt low-level U.S. military operations, but doubts that mission-critical systems would be affected, given their decentralization and seclusion from the Internet.,1283,59043,00.html

. From ACM News, May 30, 2003

"Can ICANN Meet the Needs of "Less Developed" Countries?"
Digital Freedom Network (05/19/03); Reddy, Shravanti

ICANN has come under criticism for not actively encouraging representatives of less developed countries to participate in ICANN's development of global domain name and Internet policy. "ICANN, through its actions and inactions, has succeeded in sidelining the interests of developing countries," says Kwasi Boakye-Akyeampong, founder of the Ghanaian chapter of the Computer Professionals for Social Responsibility. ICANN has new leadership in Dr. Paul Twomey, and the newly elected president and chief executive officer has suggested in interviews with the Seattle Times and the Digital Freedom Network that reaching out to developing countries is on his agenda. However, skepticism abounds about ICANN's willingness to have broad representation from the global Internet community. Observers take issue with ICANN's heavy reliance on the Internet for outreach efforts, the publishing of all ICANN documents in English, the lack of an ICANN ambassador in each country, and the cessation of Internet users voting for ICANN board members. Critics say that encouraging governments to become involved in GAC would improve the situation, and Internet experts want ICANN to do a better job of bringing the Internet to less developed countries on the offline side of the digital divide. In some developing countries, the high cost of national ccTLD registries and local infrastructure is driving local Internet pioneers to using TLDs for their Web sites rather than in their own domain. ICANN should embrace international participation, writes Digital Freedom Network's Shravanti Reddy.

. From ACM News, May 19, 2003

"India Seeks To Be Global R&D Center"
EE Times (05/15/03); Krishnadas, K.C.

Indian government and information technology industry officials would like to see the local industry take the next step to becoming a hub for research and development. Already a market of choice for low-cost software development, India could become a major player in IT globally if the local market starts to design, develop, and produce hardware, officials say. The Department of Information Technology, an Indian technology agency, plans to conduct a study that officials say will determine the feasibility of positioning the local market as an R&D center. Several Indian companies, such as Wipro, operate as R&D laboratories, while a number of global IT companies, such as Cisco Systems and IBM, have R&D centers in India. "The government and the industry need to position India as a nation of technological excellence, or the perception will forever remain that we are only providers of inexpensive services," says S. Devarajan, president of the Manufacturers' Association for Information Technology (Mait). India could become an excellent R&D market for chip design, embedded software design and development, intellectual property, interoperability, gaming, software development, and hardware and software co-design, Gartner Group consultants in India suggest.

. From ACM News, May 7, 2003

"Why Free Software Is God's Gift to India"
Express Computer (05/05/03); Hariharan, Venkatesh

In his address at GNUnify 2003, IndLinux co-founder Venkatesh Hariharan declared that India's adoption of free software, in the form of the GNU/Linux operating system, will open up new opportunities for cultural, political, and economic freedom. He noted that nearly all software applications and operating systems are English-based, while the environments where computers are used are predominantly English as well; yet only 5 percent of India's population speaks English. Hariharan said he found it perplexing that the same country that developed the concept of "0" has until now been unable to build an Hindi-based operating system, and IndLinux chose GNU/Linux because tweaking proprietary operating systems was not an option. He used the address to announce the launch of Milan, the first release of IndLinux Hindi, a version of GNU/Linux localized to Indian languages that aims to "spark off a revolution in computing." Hariharan predicted that, as with the TV industry, market pressures will trigger an explosion in regional-language applications in the Indian computing industry. GNU/Linux allows language localization to be achieved in a more culturally sensitive way than any centralized process; Hariharan backed this argument by observing that 70 percent of the Indian population lives in rural areas, where "desktops" and "files and folders" are mostly unknown, and called GNU/Linux "an ideal platform" for bridging this cultural gap. He added that the openness of GNU/Linux makes it a very appealing choice for a sovereign India from a political perspective, while the platform being freely available makes it affordable for the masses.

"Offshore Coding Work Raises Security Concerns"
Computerworld (05/05/03); Verton, Dan

IT professionals attending last week's Techno-Security Conference expressed concerned about the security risks of U.S. companies outsourcing software development and other essential IT services to countries where labor is cheaper. Attendees were especially concerned with the outsourcing of IT work to China, which has a reputation for economic espionage directed toward U.S. technology, as well as to Southeast Asian countries that are known to shelter terrorist networks. "Whether you like it or not, our national secrets are already being preserved by people who built these parts of the core infrastructure, and they're not U.S. citizens," conceded Oracle chief security officer and conference panelist Mary Ann Davidson. She also pointed out that there is no reason to think that American workers pose any less of a security risk. Northrup Grumman chief information assurance officer Tim McKnight recommended that companies make a sizeable financial investment to deploy a comprehensive system for ensuring the trustworthiness of offshore outsourcers. As a former security officer at Cisco Systems, he saw firsthand how the company sent teams overseas to monitor outsourcers' activities and carry our risk assessments. Most conference attendees expressed doubt that software companies are able or willing to make thorough background checks of foreign coders. The fact that few U.S.-based companies check the backgrounds of their own staff makes such an attitude typical, said Alta Associated CEO Joyce Brocaglia. Click Here to View Full Article

Click Here to View Full Article

. From ACM News, May 5, 2003

"International Backlash"
IDG News Service (04/28/03); Ferranti, Marc

Changes may be in store for the way in which IT services and back-end business processes are outsourced as advocates of IT workers in the United States and Europe increase their pressure on government officials to support the local job market. Companies have increasingly shipped their software development and business processing needs offshore as a way to lower their operational costs. IT worker advocates do not necessarily have a problem with such a business strategy, which has resulted in worker permit schemes, but say they are very concerned about improving the job outlook for IT workers. Offshore outsourcing of IT work has become a larger issue of late because economies are slowing down, which means it is becoming increasingly difficult for IT workers to find jobs. But there was not as large an outcry over offshore outsourcing when the economies were more brisk because many IT workers were able to find new jobs rather quickly. In the United States, several states plan to follow the lead of New Jersey State Sen. Shirley Turner (D) by introducing legislation that limits state contracts to workers who are U.S. citizens or legal aliens--unless no other candidates with the required skills can be found. And in April, an executive for i-flex Solutions was arrested in London over allegations of violating visa regulations in the Netherlands. "We may see more nontariff barriers to [IT] service exports because of large unemployment in Europe and the U.S.," says Arun Shourie, minister for communications and information technology for India, which is a major target market for U.S. and European offshore outsourcing business. Click Here to View Full Article

. From ACM News, April 16, 2003

"Indian Software Industry Worried by Arrests, Protectionism"
EE Times (04/10/03); Krishnadas, K.C.

Recent international arrests and U.S. legislation are cause for concern throughout the Indian software industry, which is interpreting such incidents as a sign of fear among other nations that Indian engineers are encroaching on their job markets. In December, Polaris Software Lab Chairman Arun Jain and a fellow executive were arrested and held for a week by Indonesian police while in Jakarta to settle a dispute with a local bank. A large number of software engineers, including several Indians, were detained by Malaysian authorities on March 9 for supposedly violating visa regulations; their passports were vandalized and none of the detainees was allowed to contact friends or Indian diplomats. The Malaysian government officially apologized last week and promised that action would be taken against the policemen involved in the incident. I-Flex Solutions' Dutch subsidiary CEO Senthil Kumar was arrested in the Netherlands on March 26, as were 12 visiting Indian engineers who allegedly possessed invalid work permits. Meanwhile, New Jersey, Washington, and other U.S. states are considering bills that would restrict the offshore outsourcing of software development projects by government agencies. The tremendous international success of India's software exporting segment has fostered concern among other nations, particularly those suffering from unemployment, that Indian software engineers will take even more jobs away from citizens. "India is becoming a powerhouse of software competencies globally and some countries' attitude require a change," declared Jain.

. From ACM News, April 11, 2003

"India Builds Tflops Computing Cluster"
EE Times (04/07/03); Krishnadas, K.C.

India has entered the international supercomputing arena with last week's announcement of the Param Padma, a 1-teraflop computing cluster developed by the Center for the Development of Advanced Computing (C-DAC). The cluster incorporates up to 248 1 GHz Power4 processors and an AIX operating system from IBM, and features 54 four-way symmetric multiprocessors (SMPs) and one 32-way SMP. The machine has a 500 GB aggregate memory, 4.5 TB of internal storage capacity, and a peak computing power of 1,005 gigaflops. IBM's p630 and p690 systems serve as the cluster's compute nodes. The nine-ton device, which is spread out over 1,800 square feet, will be used primarily for seismic data processing, computational chemistry, fluid dynamics, and atmospheric science projects, according to C-DAC, which developed all of the system's software. "Constraints and restrictions imposed from time to time by advanced countries have made it all the more important for India to take multipronged initiatives to build expertise and systems in high-performance computing, an area of strategic importance," C-DAC declared. Indian minister for communications and information technology Arun Shourie noted that the country's supercomputing initiative was spurred by the U.S. prohibition of supercomputer exports to India as a result of nuclear tests carried out by India and Pakistan in 1998. An industry Web site reported that the Param Padma's peak performance lags behind all but 14 of the top 100 systems ranked by November 2002.

. From ACM News, June 6, 2003

"IT Boom Reverses Brain Drain"
Moscow Times (06/04/03) P. 9; Martin, J. Quinn

As a result of the weakening U.S. IT sector, many Russian programmers and engineers are returning to their native country to seek jobs. Experts say 10 percent of high tech job seekers in Russia are recently retuned from aboard, including those who held H-1B visas. Experts expect that the trend could last for at least another two years, allowing Russia to regain many of the tech professionals it had lost over the course of more than a decade. "When American or European companies need to downsize, foreign employees are often first to go," says Larisa Lukashyova, human resources manager at Moscow-based software firm Spirit. Tech professionals are also returning in high numbers because the Russian IT sector is steadily expanding, she says. The sector has been growing at 20 percent annually recently, and salaries are also increasing but still not on par with those in Europe and North America, says Lukashyova. Russians who return from abroad have the added advantage of knowing English, which accounts for their higher salary compared to residents who have never been overseas, says Oleg Tsetovich, an IT consultant for recruiting firm Avenir & Partners in Russia. He adds that returnees have gained valuable international business understanding, strong corporate contacts, and unique skills.

"India Fears Impact of Bid to Curb Jobs Exports"
Financial Times (06/04/03); Alden, Edward; Foremski, Tom; Merchant, Khozem

India is apprehensive about recent efforts by U.S. trade groups and legislators to stem overseas IT outsourcing as IT sector unemployment rises in the United States. More than 472,000 IT jobs will be relocated to foreign countries by 2015, according to Giga Information Group, compared to 27,000 jobs in 2000. Meanwhile, unemployment in the IT segment reached 5.2 percent in 2002, compared to 3.7 in 2000. Firms such as Microsoft plan to take advantage of lower labor costs and productivity gains realized overseas. Microsoft spent $400 million on IT and education deals in India last year, the firm's largest foreign expenditure. Microsoft also wants to double the number of engineers to 500 at its Hyderabad, India, facility within three years. In May, congressional lawmakers introduced bills designed to prohibit India-based employees from being transferred to their U.S.-based subsidiaries, citing an infringement of L-1 visa stipulations. Also, in a growing backlash to the loss of tech jobs to overseas workers, legislators in four states have proposed bills barring their state governments from doing business with companies that outsource to other countries. India's the National Association of Software and Services Companies (Nasscom) says companies are realizing productivity gains of 20 to 25 percent when outsourcing to Indian firms, and have saved $8 billion over the last four years. Nasscom also believes that legislative efforts to prevent outsourcing could be challenged under WTO.

. From ACM News, April 4, 2003

"Gaining Ground"
InformationWeek (03/31/03) No. 933; Hayes, Mary; McDougall, Paul; Soat, John

Indian high-tech companies thriving as IT outsourcers plan to fortify their position in order to maintain their market supremacy in the face of growing competition from China, Russia, Eastern Europe, the United States, and elsewhere. Key to their efforts is the addition of high-end consulting, business-process modeling, and systems design services, as well as more strategic relationships with American clients. In response to India's dominion, U.S. services companies are expanding their international reach and deepening their roots in overseas markets. EDS' "Best Shore" effort, launched in late 2002, is designed to enhance the company's presence in many regions, including Argentina, Canada, Europe, South Africa, Mexico, and India. Indian firms' international operations are primarily based on the Indian subcontinent; EDS says its widely dispersed services, along with sophisticated relocation technology, gives it a strategic advantage. Mark Langlois of IBM estimates that India will remain the most advantageous IT outsourcer in terms of cost for about five more years, after which China will take the lead. However, C.K. Prahalad of University of Michigan Business School believes that Indian firms will retain their dominant position through training and process-control methods. Meanwhile, many Indian companies are setting up shop in the United States to have greater control over project management.

. Volume 13 of EJISDC, edited by Erran Carmel of the American University in Washington DC, USA, is devoted to the study of third world technology development. Dozens of nations around the world are trying to be the "next India" – to launch successful software exporting industries. There is enormous excitement around this idea. As Erran writes in his editorial introduction to the special issue,
"While many articles have been written on individual nations' software successes in recent years, this issue represents the first coming together of so many in-depth analyses on this new generation of software exporting industries. In this special issue we probably have the first thorough analyses of the nascent software exporting industries in Iran, Indonesia, Vietnam, and Bangladesh".

. From Edupage, May 9, 2003


Citing disagreements with the new Indian minister of information, the Massachusetts Institute of Technology (MIT) has decided to end its participation in Media Lab Asia. The lab was started two years ago to perform research that would benefit the Indian people, and funding was supposed to come from the Indian government, corporations, and MIT. To date, all funding has come from the Indian government, and the new minister of information reportedly disagreed with the approach to salaries at the lab and with the lab's research focus. Management of the program will be turned over to the Indian government, though the name may remain Media Lab Asia. MIT said despite this decision, the institution remains interested in supporting similar labs in other countries. New York Times, 8 May 2003 (registration req'd)

. From ACM News, May 2, 2003

"Harvard Event Showcases Russia as Outsourcing Site"
IDG News Service (05/01/03); Roberts, Paul

The second annual Russian IT Seasons event held this week at Harvard University is an opportunity for Russian firms to highlight the advantages of outsourcing software research and development to their country, including lower wages and a large pool of skilled programmers. Russoft President Valentin Makarov said that Russian tech talent is focused toward design and development work, which fosters the creation of unique and patentable products. He and other American and Russian representatives spoke highly of Russia's stability; BridgeQuest CIO Lee Erlikh said that Russian engineers are highly motivated, contrary to the stereotypical view of an unenthusiastic workforce. He noted that his firm helped Relativity Technologies in the United States retool its signature product using an R&D team that was more than 90 percent Russia-based. Meanwhile, Luxoft official Derrick Robinson estimated that U.S. companies could save up to 65 percent on development costs by outsourcing to Russian firms. Unlike other offshore development centers, Russian programmers are more devoted to accuracy, documentation, and contingency planning--factors that could boost upfront development costs, but also yield compensation "when things don't go right," according to Robinson. Outsourcing to Russia is not without its difficulties: Projects could be impeded by language and management barriers, while Robinson noted that companies should not try to set up an offshore development center on their own, but rather team up with a well-entrenched "trusted partner" such as his company. Erlikh advised companies to establish a formal management architecture and communications channel with Russian development teams. Click Here to View Full Article

"Exporting IT Jobs"
Computerworld (04/28/03) Vol. 37, No. 17, P. 39; Hoffman, Thomas; Thibodeau, Patrick

The number of U.S. companies hiring cheap offshore labor for routine IT operations is increasing as a result of their need to reduce IT costs and balance out desired, salaried employees and workers they can temporarily hire on an as-needed basis. CIOs are looking for IT talent that are also adept project managers and business/IT liaisons, in keeping with the corporate goal to achieve "specialization and reliability," according to Mark Hauser, CEO of Cap Gemini Ernst & Young's Americas division. A November 2002 report by Forrester Research analyst John C. McCarthy predicts that 3.3 million white-collar jobs and $136 billion in wages will be outsourced to Russia, the Philippines, India, and other countries by 2015. Meanwhile, Maria Schafer of Meta Group anticipates that outsourcing increases and the desire for more flexible schedules and project variety will spur as much as half of the American IT workforce to switch to contract work by 2007. Also driving the erosion of the U.S. IT job market is a corporate shift away from building software in-house in favor of purchasing off-the-shelf products. "If you buy the argument that a lot of IT has become commoditized, [then] we are becoming inventors, creators, integrators and architects, and we are going to send the production offshore," argues Cutter Consortium consultant Steve Andriole. The current economic climate is fueling the offshore outsourcing of programming, but Gartner analyst Rita Terdiman reports that application development and infrastructure support operations are also being exported. The outsourcing boom is forcing IT employees to consider blue-collar strategies, such as union membership, to ensure their livelihoods. Click Here to View Full Article>

. From Edupage, April 14, 2003


Kabul University in Afghanistan will soon offer computer-networking courses, including some classes with only female students. Afghanistan was long cut off from the technological developments happening in other parts of the world, and, under Taliban rule, women were denied education altogether. According to the United Nations Development Program (UNDP), almost no one in Afghanistan is able to handle computers due to the country's 20 years of relative isolation. A statement from the UNDP said, "The new academy fills a critical void for women and men alike in Afghanistan." Associated Press, 13 April 2003
. From ACM News, April 14, 2003

"Master of Innovation?"
Business Week (04/14/03); Einhorn, Bruce

China aspires to become a technology standards-maker by leveraging its growing consumer base, national brainpower, low-wage workforce, and central government control. Although many technology products are made in China today, Asian neighbors Japan and Korea have moved ahead into design and intellectual property. Chinese leaders see an opportunity to take the reins away in many areas, including digital media, cell phone technology, and computer software and hardware. Government-owned companies are collaborating with independent Chinese firms and outside players, an example being Datang Mobile and Siemens' joint TD-SCDMA cell phone protocol venture. Besides providing better phone performance, TD-SCDMA would allow China, the world's largest cell phone market, to avoid paying license fees to foreign firms. Similar motivations lie behind other initiatives, such as a Chinese consortium effort to develop "enhanced videodisc" (EVD) technology, a successor to the DVD standard created by Japanese firms. The Beijing government has pledged $2.4 billion to start 35 software colleges around the country that would foster a homegrown software industry creating Chinese operating systems, for example. The Chinese military is already expert at encryption, security, and Linux systems, and uses the open-source platform to create supercomputers not available for export from the United States. Dell Computer Asia Pacific President William J. Amelio says it is only a matter of time before China becomes the world's largest PC market. Still, China risks spending its resources on standards with little value outside China, while analysts say pressure from China is pushing Japan and Korea to stay ahead in the technology race, particularly for such emerging areas as nanotechnology. Click Here to View Full Article
. From ACM News, April 4, 2003

"Gaining Ground"
InformationWeek (03/31/03) No. 933; Hayes, Mary; McDougall, Paul; Soat, John

Indian high-tech companies thriving as IT outsourcers plan to fortify their position in order to maintain their market supremacy in the face of growing competition from China, Russia, Eastern Europe, the United States, and elsewhere. Key to their efforts is the addition of high-end consulting, business-process modeling, and systems design services, as well as more strategic relationships with American clients. In response to India's dominion, U.S. services companies are expanding their international reach and deepening their roots in overseas markets. EDS' "Best Shore" effort, launched in late 2002, is designed to enhance the company's presence in many regions, including Argentina, Canada, Europe, South Africa, Mexico, and India. Indian firms' international operations are primarily based on the Indian subcontinent; EDS says its widely dispersed services, along with sophisticated relocation technology, gives it a strategic advantage. Mark Langlois of IBM estimates that India will remain the most advantageous IT outsourcer in terms of cost for about five more years, after which China will take the lead. However, C.K. Prahalad of University of Michigan Business School believes that Indian firms will retain their dominant position through training and process-control methods. Meanwhile, many Indian companies are setting up shop in the United States to have greater control over project management.
. From ACM News, Jamuary 6, 2003

"Experts See Vulnerability As Outsiders Code Software"
New York Times (01/06/03) P. C1; Schwartz, John

Analysts and others say the growing trend of outsourcing, in which American companies transfer their software coding processes overseas to take advantage of cheaper labor, carries with it the risk of lessening security. Programmers such as Ken O'Neil of Long Island, N.Y., warn that offshore hackers could install "sleeper bugs" or back doors, while factors such as political upheaval, government-encouraged surveillance, terrorists, and organized crime could further endanger security. Their criticism is part of a larger struggle for domestic workers trying to remain employed as outsourcing and the flood of immigrants entering the United States on H1-B visas increases. The U.S. government is also concerned: Howard Schmidt of the president's Critical Infrastructure Protection Board says that ensuring the security of software outsourced to companies both overseas and within the United States is critical, using spies such as Aldrich H. Ames and Robert Hanssen as examples of internal security leaks. The growth of overseas software coding was encouraged by the success of offshore outsourcing to make U.S. networks Y2K-compliant. Companies that supply software outsourcing services claim that they make sure their employees are trustworthy and their code is secure, but firms such as Electronic Data Systems (EDS) acknowledge that the threat of outsourcing-based sabotage is no myth. Paul D. Clark, chief information security and privacy executive for EDS, says that his company follows rigorous security and testing standards, regardless of the locale. "Whether it's India or Indiana, it doesn't make any difference," he insists.

. From ACM News, March 14, 2003

"Two Programmers Speculate on the Future of Software Development" (03/14/03)

The next five years for the software development industry will see an increasing amount of work being done offshore, in places such as India where costs are cheaper, according to former CNet developers Dan Seewer and Kevin Cobb. Cobb said software development would follow the path of the automotive industry in terms of offshore work, but also expressed doubt over quality control in offshore production. Seewer said another change was a shift from legacy code maintenance to programs that are written from the ground up overseas, and added that smaller, in-house development projects had a better chance of not being outsourced offshore because of project management issues. Cobb and Seewer both expected experienced software engineers in the United States to have work even with development going overseas, and also said that documentation libraries for software developed offshore would not be a problem for future re-purposing efforts. Meanwhile, Cobb and Sewer both supported a software engineering licensure that would certify developers for specific, critical jobs, such as developing air traffic control software or that used in medical systems. Seewer referred to an article on the topic published in the November 2002 issue of the Association for Computing Machinery's Communications of the ACM magazine. Click Here to View Full Article

. From ACM News, March 12, 2003

"Indian Programmers Still Dream of Jobs in the U.S."
Sydney Morning Herald (03/11/03)

Many Indian software programmers are waiting for the global economy to bounce back so they can pursue their dreams of working in the United States. India churns out 350,000 engineering graduates yearly, many of whom want to go the United States for various reasons, not the least of which is to make money. They are also attracted to U.S. employers' "freedom of work" and the opportunity to use state-of-the-art technology, according to Indian engineer Abhishek Bagchi. The downturn forced many U.S.-based Indian engineers to return home rather than accept major salary cuts. The economic situation has also spurred Indian programmers to reevaluate their job goals. "[Software engineers] are becoming wiser and looking for a firm which gives them job security and stability," notes engineering student Nitesh Khadiya. However, outsourcing is generally frowned upon by students, who consider it beneath their talents. "The challenging jobs are ones which involve core technology, which you can only find in the U.S.," declares computer graduate Vijay Shivaramakrishnan.

"Argentina Makes Its Software Play"
Wired News (03/10/03); Rabinovich, Eleonora

Cheaper labor, a reputation for creativity, and a domestic recession are positioning Argentina to become a major software development provider to outside markets. The Chamber of Software and Computing Services Companies (CESSI) estimates that sales of Argentine computing products and services to the foreign market skyrocketed from $45 million in 2001 to over $100 million in 2002, and are expected to reach $200 million by 2004; the chief markets for Argentine software exports are Spain, Mexico, the United States, Chile, and Brazil. "We are considered to be intelligent, creative and quick to put out fires, something we are forced to do all the time in Argentina," notes Gartner Argentina research director Maria Luisa Kun. "Now we have to prove that we are also reliable and foreseeable." Last November, the Argentine government earmarked $20 million for the Argentec program, which will provide grant subsidies, training scholarships, and company loans. So that software companies will be encouraged to establish a track record, the National Congress is considering a bill that would make such companies eligible for various tax incentives. Kun says that the most daunting task is preventing Argentina's tech talent from defecting to other countries where they can earn bigger salaries and take advantage of better educational systems. Meanwhile, the low labor costs are spurring multinationals that already have Argentine subsidiaries--IBM and Intel among them--to leverage those branches further in order to capture a piece of the foreign market.,1377,57929,00.html

. From ACM News, January 3, 2003

"IT Staffing Crisis Looms in India"
Wired News (12/31/02); Sinha, Ashutosh

Many multinationals turn to India for their IT-enabled services and business processes so that they can take advantage of cheaper labor and low operations costs, and consulting firm McKinsey reports that Indian outsourcing companies could earn as much as $24 billion in revenues by 2008--if they can weather a shortage of experienced middle and senior-level management personnel. More than 200 Indian universities churn out over 1 million graduates each year, but there are far more entry-level employees than experienced managers. Furthermore, many third-party outsourcing firms are young companies in a young industry, which increases the difficulty of finding qualified management. It is less difficult to attract such personnel for captive business process outsourcing centers that are basically branches of Europe- or U.S.-based companies that can afford to train new managers. This leaves newer companies with the difficult task of hiring people away from such firms. However, National Association of Software and Service Companies President Kiran Karnik points out that this strategy alone will not encourage growth in India's IT sector. What is needed is more investments in employee training, he insists. Dr. Sridhar Mitta of e4e Labs observes that "the shortage of people is similar to the one faced by IT service companies a few years ago.",1377,56167,00.html

. From ACM News, February 24, 2003

"IDC: Asia to Lead in Developers by 2005"
InfoWorld (02/20/03); Roberts, Paul

The Asia-Pacific region will surpass North America in numbers of software developers by 2005, according to a newly released report from International Data (IDC). North America holds the top spot with 2.6 million professional software developers counted in 2001, but that number dropped half a percentage point from 2000. In the same time period, the number of professionally employed developers in Asia grew by 6 percent to 1.7 million, edging past Europe's 1.6 million developers. IDC says there were 7.8 professional developers in 2001, but predicts that number to rise to 13.3 million by 2006. IDC says that China and India, which have low tallies of developers in relation to their overall populations, will experience the fastest growth. The Middle East, Eastern Europe, and Africa are also set to see rapid expansion. The IDC study also showed that the United States dominates with nearly 30 percent of worldwide software developers in the country as of 2001. The No. 2 country in terms of overall share was Japan, which claimed approximately 6 percent of the world's developers. IDC used a statistical model for its study rather than actual census or historical data, and defined a developer as an employed programmer that uses development tools to create applications.

"India May Face IT Worker Drought"
CNETAsia (02/18/03); Chai, Winston

India could experience a deficiency of 235,000 IT workers within five years, according to a study by Nasscom, a national IT trade group in India. The study estimates that India will need 1 million IT workers in 2008, but only 885,000 are expected to be available. To counteract this, Nasscom President Kiran Karnik says educational disparities in India need to be addressed, and both private and public organizations should work together to provide IT-focused training. He adds that training should be targeted toward what the IT industry needs. The study also forecasts that India will have 650,000 IT services and software workers by March 2003, up 24.4 percent from last year. In addition, salaries for IT professionals increased by an average of 8 percent last year, with most firms connecting salary to performance. And most new IT workers in India were hired in South India (44 percent), and the fewest in India's eastern region (6 percent). Among software professionals, the average age was 26.5, and 79 percent were men; 42 percent of software/knowledge workers had over three years of experience. Click Here to View Full Article

. From ACM News, February 22, 2003

"Russia Is Ripe for a Tech Boom, Officials Say" (02/21/03); Davis, Aaron

Speakers at the second U.S.-Russia Information and Communication Technology Roundtable declared yesterday that the former Soviet Union is poised to become the next major technology hot spot, thanks to several years of economic growth, elevated consumer spending, and a more than 20 percent average annual growth rate in its technology market. Alex Freedland of Mirantis said that Russia's tech growth could be attributed to the country's longtime reliance on self-sufficiency. Cisco Systems CEO John Chambers said that his company plans to extend its Russian operations were due to efforts by the Russian government to nurture a friendly business climate. Leonid Reiman, the Russian Federation's minister of communications and informatization, noted that such efforts include increasing Internet access to the public, reorganizing the nation's regulatory architecture into a business-friendly, anti-piracy model, switching government operations to the Web, boosting high-tech training and education, and establishing Internet connectivity for rural areas outside of Moscow. He noted that Russia's high-tech growth has bested that of Europe by a ratio of 2 to 1 for the last three years. Ernst & Young estimates that 14 percent of Russia's populace, which numbers approximately 150 million, own personal digital assistants and cell phones, over 50 percent of which were bought by consumers in 2002; 8 percent of Russians own PCs. One of the key differentiators of Russian IT workers is their unique ability to innovatively solve problems.

. From ACM News, February 7, 2003

"New Chapter in Success Story"
Financial Times (02/05/03) P. 6; Merchant, Khozem

India's IT market is soaring due to weak markets in mature economies, such as in the United States, which is driving software programming and mundane business processing overseas. Indian firms deliver quality code, such as at Infosys, where programmers average less than two errors per 1,000 lines of code. Meanwhile, last year's fears about an imminent war between India and Pakistan have dissipated, re-igniting growth in the Indian IT market. Infosys CEO Nandan Nilekani says, "Every twist and turn overseas in recent years...has been good for Indian IT." But although revenues and employment rolls are growing rapidly, Nasscom President Kiran Karnik says companies need to differentiate themselves based on other aspects besides cost. Major IT firms in India--Wipro, Tata Consultancy Services, and Infosys--are ramping up their services arms in an effort to offer broader solutions, even as global IT service providers such as Accenture and Cap Gemini Ernst & Young build up their own Indian components. Bombay-based software interest Mastek has taken a different route, partnering with Deloitte Consulting in a joint venture. Other concerns worrying Indian firms include increased scrutiny of overseas IT outsourcing in the United States, as well as the rise of eastern Europe as a low-cost competitor. Tata Consultancy Services' S Ramadorai notes that legal concerns about data protection have arisen in the United States after Sept. 11, 2001.

. From ACM News, December 27, 2002

"India Is Regaining Contracts With U.S."
New York Times (12/25/02) P. W1; Rai, Saritha

Indian companies and the India-based units of overseas firms are taking more outsourcing contracts after a lull following the Sept. 11 attacks in 2001. In Bangalore and other high-tech nodes in India, companies such as Wipro, Tata Consultancy Services (TCS), and Infosys are building up their ranks. Indian firms provide manpower for staple back-office functions, software development, and call center operations, but are also moving up the value-chain by taking on more core business components. Wipro vice chairman Vivek Paul says his company started out doing simple application development for U.S. firm Home Depot, but has since moved on to maintain the computer software that runs operations in Home Depot stores. Outsourcing now comprises 3 percent of the Indian gross national product, and is expected to make up 7 percent by 2008, at which time the National Association of Software and Services Companies, the Indian IT trade group, says back-office services will contribute $21 billion to the national economy, up from previous projections of $17 billion. This rising tide of overseas work has angered some U.S. interests, especially at a time when the national IT industry is ailing. New Jersey state senator Shirley K. Turner is supporting a state law that will require companies that take state contracts to employ U.S. citizens, legal aliens, or otherwise prove that overseas workers are necessary for the job. Still, Gartner warns that India needs to keep atop quality control concerns and continue to build infrastructure, lest it lose out to global competitors such as China. Click Here to View Full Article (Access to this site is free; however, first-time visitors must register.)

. From ACM News, January 22, 2003

"In Software Industry, a Passage to India"
Boston Globe (01/20/03) P. C1; Kirsner, Scott

Software programming is set to follow the pattern of the textile industry in the United States as the low-end, hands-on work of coding gets done overseas. But, just as with apparel manufacturers today, design, marketing, and retailing operations are likely to stay here, according to experts. Forrester Research estimates that almost a half-million U.S. tech jobs will be siphoned to other countries by 2015, mostly to India. A number of companies in Massachusetts are already making the switch, in part because of the general tech slowdown. Shikhar Ghosh, founder of e-commerce pioneer Open Market and former Massachusetts Software & Internet Council chairman, is currently selling the assets of Verilytics, his most recent effort. He decided to hold onto his company's 20 programmers in India while laying off workers in Burlington, Mass., because of simple cost reasons. Whereas each U.S.-based worker costs the company $10,000 per month, the entire Indian operation, including rent, costs Verilytics just $25,000 per month. PTC, the largest software firm in the state, has over 200 Indian programmers in Pune, but vice president of research and development Rich Butler says overseas programmers in general are less productive than those close to the company's corporate base, and that complex development projects are better done in the United States. However, some firms are looking overseas for high-end skills as well, such as GGA Software in Cambridge, which keeps a staff of 120 in St. Petersburg, Russia, working on statistical modeling, drug discovery, and other scientific applications. John Russo, who heads the computer science department at Wentworth Institute of Technology, says his school is re-positioning its curricula to make sure its graduates know skills valuable for the future, such as how business and IT intersect.

. From ACM News, December 13, 2002

"U.S. Firms Move IT Overseas"
CNet (12/11/02); Frauenheim, Ed

The growth of competing Indian technology services firms are prompting U.S. IT services companies to shift their offerings overseas, where wages are cheaper, says Gartner analyst Frances Karamouzis. Forrester Research says the development of low-cost, high-bandwidth telecommunications connections, online collaborative tools, and standardized business applications are also influencing the move offshore, and estimates that 3.4 million U.S. jobs and $136 billion in wages will migrate to India, Russia, China, the Philippines, and other countries by 2015. Hewlett-Packard already supports several thousand IT services workers in India, and services chief Ann Livermore announced that the company intends to transfer a significant portion of its IT services operations to that country. Meanwhile, IBM and Electronic Data Services are currently employing "Best Shore" strategies and boosting the number of IT staff and resources in nations such as New Zealand, Brazil, Venezuela, Canada, and China. Gartner predicts that over 80 percent of U.S. firms will have considered outsourcing IT services to other countries by 2004, while more than 40 percent of American corporations will have carried out an overseas IT pilot program or will be using partly-offshore IT services by that time. Between 2000 and 2005, the number of computer jobs moving overseas will skyrocket from 27,171 to 472,632, according to Forrester. Norm Matloff, a computer science professor at the University of California at Davis, notes that these trends may not necessarily be calamitous for the U.S. IT industry--programming projects will still have an essential need for face-to-face interaction.

. From ACM News, December 2, 2002

"Purdue Panel Maps Safer Wireless World for United Nations"
Newswise (11/25/02)

Addressing the security of wireless networks is critical, especially for developing countries hoping to enter the Information Age without taxing their limited financial resources, according to a report that Purdue University's 2002 Wireless Security Forum presented at the United Nations. "Wireless technology holds the promise of with economical access to global data networks, but the risk is that their most sensitive information could be stolen right out of the air if their wireless systems are not adequately protected," declared forum organizer Eugene Spafford. Forum members recommended several strategies to help businesses ensure secure wireless network deployment, including giving vendors more feedback to instill security in new products, and establishing security and employee awareness initiatives. Technical suggestions on subjects such as encryption levels and wireless access points were also furnished in the report. Accenture global security technologies expert David Black, who presented the report to the U.N., said the market-driven global deployment of wireless technology is inevitable. "It is our goal to help this happen as securely as possible," he added. The report is the end product of discussions between 18 federal, industrial, and academic computer specialists who convened in Washington, D.C., at the invitation of Accenture and Purdue's Center for Education and Research in Information Assurance and Security (CERIAS). Black commented that the report was apparently "well-received."

Eugene Spafford is co-chair of ACM's U.S. Public Policy Committee,

. From ACM News, December 6, 2002

"How China Is Making the Pen as Mighty as the PC"
Washington Post (12/04/02) P. E1; Goodman, Peter S.

Digital ink, a technology that allows handheld computers to translate words written by pen on a screen into text, is just one of many breakthroughs coming out of China that are raising the country's stock and influence in the global high-tech sector. Multinational tech companies are setting up offices and branches in China because of the country's vast market potential and its huge workforce of cheap, skilled labor; over 50,000 computer science engineers graduate from Chinese colleges annually, compared to roughly 30,000 in the United States. J.P. Morgan estimates that Chinese firms and consumers accounted for about 7 percent of worldwide PC sales last year, while International Data (IDC) reckons Chinese spending on IT products and services in 2001 totaled $16 billion. By 2010, one-fifth of the world's PC sales could come from China, if it sustains its current growth rate. Domestic computer maker Legend Group currently owns the biggest portion of the Chinese market. The country has also set a two-year goal to build enough semiconductor plants to become the second-largest chip manufacturer in the world. However, Case Software founder Wu Qiang sees the Chinese software industry's development being hampered by cultural forces--he reports that Chinese programmers, while highly skilled, do not work well in large teams. Another hindrance is the immaturity of the Chinese stock and bond markets; bank loans remain the principal means of finance.

. From ACM News, November 20, 2002

"Nearly 1 Million IT Jobs Moving Offshore"
EarthWeb (11/19/02); Gaudin, Sharon

Almost 1 million IT jobs will be farmed out overseas over the next 15 years, predicts a new report from Forrester Research, which warns that such a development could threaten the positions of base- to mid-level American programmers unless they acquire more business-centric skills. Forrester's John McCarthy says the IT industry migration will be the first step toward the offshore transition of 3.3 million American jobs and $136 billion in wages to nations such as India, Russia, the Philippines, and China. He predicts that the next 16 months will be a heavy period of offshore migration, followed by a two-year lull, with even more overseas transference expected between 2005 and 2015. In addition to cheaper labor and less restrictive labor laws overseas, the quality of work by foreign IT professionals is better, according to McCarthy. "[Overseas workers have] done the most to turn IT development away from a mystical black art to a real business process... 'Just wing it' is not part of the culture there," he says. Illuminata analyst Gordon Haff insists that high-end, strategic IT jobs will stay in the United States, but people with low-end skills such as basic programming and maintenance programming are likely to have their job security threatened when the offshore transition occurs.

. From ACM News, November 22, 2002

"Russia Joins Tech-Worker Game" (11/21/02); Ackerman, Elise

Information technology currently accounts for roughly 1 percent of Russia's gross domestic product, and although Russian IT workers currently number 70,000, about 1.3 million Russians have a computer science or engineering degree. In order to find employment for these people, Russian outsourcing companies are hoping to net lucrative overseas contracts at the second U.S.-Russia Technology Roundtable. Intel Russia President Steve Chase notes that the country is bustling with creative and highly disciplined tech talent that is underused. Furthermore, such people are willing to work cheap. "Russia is where India was 10 years ago," Chase comments. Aberdeen Group research director Stephen Lane singles out Russian developers for their ability to tackle core engineering projects. "When it comes to solving mathematical algorithms, they are basically unbeatable," says Chase. But with well-entrenched firms securing larger contracts, Russian IT professionals need to build skills in other areas in order to compete, Lane explains.

. From ACM News, November 8, 2002

"Kofi Annan's IT Challenge to Silicon Valley"
CNet (11/05/02); Annan, Kofi

Secretary General of the United Nations Kofi Annan wants Silicon Valley to become more proactive in the forging of public-private partnerships that will allow developing countries to bridge the digital divide and make the latest information and communication technologies available to everyone, regardless of social or financial status. This development is critical if the new economy is to be successful, and it also dovetails with the Millennium Declaration that UN member states adopted in September 2000, he writes. Initiatives Annan supports include an effort to increase Wi-Fi penetration in developing nations and the creation of an open international university. "Governments need to do much more to create effective institutions and supportive regulatory frameworks that will attract foreign investment; more generally, they must also review their policies and arrangements to make sure they are not denying their people the opportunities offered by the digital revolution," he explains. Cooperation between governments and the private sector is also a critical component, and Annan notes that fostering such cooperation is a chief function of the UN Information and Communications Technologies Task Force. He urges Silicon Valley decision makers to participate in the World Summit on the Information Society, which the UN General Assembly will host under the aegis of the International Telecommunication Union; one of the goals of the conference will be defining a long-term strategy for public-private collaboration. Other UN efforts to close the gap between technology haves and have-nots include the UN Information Technology Service, which supplies IT training to developing countries, and the Health InterNetwork, which builds Web sites for third-world medical outfits.

"The Reverse Brain Drain"
Fortune (11/11/02) Vol. 146, No. 9, P. 39; Brown, Eryn; Kirkpatrick, David

Many foreign-born technology personnel who moved to the United States to take advantage of the tech boom are returning to their homelands, either because they were laid off and no longer have visas, or are so disheartened by the economic downturn that going home is a much better option. American Electronics Association lobbyist Thom Stohler notes that the number of H-1B work visas has fallen from 163,000 last year to an expected total of 90,000 this year. Indian-born engineers such as Rama Velpuri have elected to go back to India, where housing is more affordable and running a company is less expensive. Meanwhile, major tech companies are concerned that the U.S. dominance of the tech sector is being threatened. At the recent Agenda technology conference, Intel CTO Pat Gelsinger and Microsoft strategist Craig Mundie appeared to agree that the United States is on track to become "a second-class citizen in the world of IT." Also at the conference, Cadence Design Systems CEO Ray Bingham estimated that the U.S. granted 37,000 graduate degrees in electrical engineering in 2001, while China produces 200,000 electrical engineering graduates annually. He added that 54 percent of U.S. engineering doctorate recipients were foreign students who returned to their native lands upon graduation. Moreover, the low broadband penetration in the United States, compared with other countries, and an apparent reduction in the national commitment to IT research and development is also discouraging news for tech executives. Click Here to View Full Article

. From ACM News, October 28, 2002

"Will the U.S. Fall Behind in Tech?"
Fortune Online (10/22/02); Kirkpatrick, David

Leading tech executives at the recent Agenda technology conference voiced concerns that the United States may lose its competitive edge against global IT rivals, and attributed this trend to three factors: A severe reduction in national IT research and development; a profound shortage of engineering graduates; and a much lower broadband penetration rate than other countries. Intel CTO Pat Gelsinger and Microsoft CTO Craig Mundie were both concerned by the falloff in IT R&D. Mundie said that less than 50 percent of the gross domestic product spent on government-funded R&D in the 1950s is being spent today. Gelsinger added that the United States' broadband deployment effort lags behind that of many Asian countries, including China, Korea, and Japan. He observed that broadband access in Japan is faster, and is also in many cases cheaper than it is in the United States. Broadband adoption is seen as essential to economic growth, because it will spur enormous spending in hardware and software, and will be a platform for many future applications. Meanwhile, Cadence Design Systems CEO Ray Bingham estimated that China churns out 200,000 electrical engineers annually, while the total number of U.S. electrical engineering degrees handed out last year, including graduate, doctoral, and undergraduate degrees, was 107,000. Furthermore, many U.S. graduates are foreigners who eventually go back to their native lands.

. From ACM News, October 28, 2002

"Slowdown Sending Tech Jobs Overseas" (10/21/02); Bjorhus, Jennifer

Experts note that more technology jobs are being shifted overseas as a result of the economic slump. Giga Information Group's Stephanie Moore reports that roughly two-fifths of Fortune 500 companies ship software operations overseas, and reckons that global revenue from this sector will total $7.68 billion in 2002. Furthermore, the practice has begun to migrate to non-technological industries. U.S. companies are finding it cheaper to outsource overseas, especially as their budgets shrink and the need to generate profits increases, but Congress has been asked by a major engineering organization to study whether the unemployment of American engineers is partly attributable to this trend, along with the import of foreign engineers to the United States on H-1B visas. IEEE-USA estimates that overall engineering unemployment rose 2 percent in the second quarter of 2002, and climbed even more for electronics engineers and computer scientists. However, Norman Matloff of the University of California-Davis says the number of software positions moving overseas is much smaller than assumed, and will remain so. Basic maintenance and applications development comprise the majority of software work shipped overseas, but software architecture, strategy, and systems design is also being offered by vendors. Some experts attribute the uptake in offshore tech services to fervent marketing campaigns by India-based companies such as Wipro Technologies, Infosys, and Tata Consultancy Services, while U.S. firms such as Electronic Data Systems, IBM Global Services, and Accenture are scrambling to set up overseas branches.

. From Knowledge@Wharton Newsletter, October 9-22, 2002.

The Case For, and Against, Shifting Back-office Operations Overseas
The World Bank, GE Capital and British Airways have something in common. Each organization has moved back-office operations from the West to the developing world. So far only a small proportion of back-office work has moved overseas. Advocates claim, however, that this is just the beginning.

When Back-Office Work Moves Overseas, What Happens to Workers?
Advocates argue that when business process operations are outsourced to countries like India or the Philippines, U.S. employees who lose work may eventually find higher-skilled positions. Critics, however, don’t buy that version of globalization. So far, just a few companies have outsourced back-office work overseas. But as that number increases, the debate will grow louder and angrier.

. From ACM TechNews, October 11, 2002.

"U.K. Rule Restricts Hiring of Foreign Engineers"
EE Times Online (10/09/02); Krishnadas, K.C.

Indian software engineers looking to get employment overseas usually try to find jobs in the United States, with England being their second choice. However, new British work permit rules in effect since September could limit their options. The rules do not allow jobs to be filled by foreign workers unless it is firmly established that there are no British counterparts available, and they also require foreign engineers to have at least six months of previous corporate employment in order to qualify for a U.K. work visa. "This ensures that we have to anticipate business requirements well in advance and employ accordingly," notes Wipro CEO Laxman Badiga. Indian companies that have subsidiaries in England can circumvent the new requirement, but most Indian firms possess U.S.-based subsidiaries. Processing visas takes longer because of the rules, which means consultants are delayed in flying in to client sites, according to Badiga. Britain is increasingly popular among Indian engineers because the business downturn has had less impact there than in the United States, where demand for engineering talent is continuing to fall. However, Advantage CEO C.N. Kumar contends that the institution of the new employment regulations signifies that "There is in fact, no demand from the U.K. at all."

"Guerrilla Warfare, Waged With Code"
New York Times (10/10/02) P. E1; Lee, Jennifer 8.

A number of grass-roots groups are emerging to battle repressive government Internet filtering in countries such as China and Saudi Arabia. These "hacktivists," or hackers with political motivations, want to enable Web users in those countries to be able to access the Internet without fear of monitoring or recrimination. Solutions include software that erases online identity, peer-to-peer file-trading networks, and proxy sites. The peer-to-peer network Freenet China is created through the thousands of computers comprising that network, each with installed software that can be passed around on just one diskette. Because information is traded directly between participant computers and not through central servers, the only way for Chinese authorities to shut down the network would be to shut down every individual node. The Triangle Boy software from server maker SafeWeb makes users anonymous online and received backing from the CIA, but has since been discontinued while awaiting new funds. Rep. Christopher Cox (R-Calif.) wants to support such efforts through a new Office of Global Internet Freedom that would follow the same premise as the Voice of America radio program. Meanwhile, the Hacktivismo group has released encryption-based Web access software, called Six/Four after the date of the Tiananmen Square incident, that aims to hide the origination of requests for data from government monitors. Hacktivismo member Nat Villeneuve, a University of Toronto computer science student, says, "I think of hacktivism as a philosophy: taking the hacker end of understanding things by reverse engineering and applying that same concept to traditional activism." (Access to this site is free; however, first-time visitors must register.)

. From ACM TechNews, September 27, 2002.

"Offshore Upstarts"
eWeek (09/23/02) Vol. 19, No. 38, P. 25; Musich, Paula

India retains the top spot in international software development outsourcing with 85 percent of the market, but other countries such as Russia and China are working to catch up. Gartner analyst Ian Marriott says that Russia should capture 5 percent of that market by 2007, adding that Russian companies lag Indian firms in terms of average Capability Maturity Level (CMM). Dmitry Loschinin, CTO of Russian development firm Luxoft, declares that Russian scientists and engineers are well prepared for software development because they are trained to deal creatively with difficult problems, and are versed in advanced mathematics. However, Russia lacks industry representation on the level of India's National Association of Software Services Companies, which lobbies both overseas and nationally for government support. Meanwhile, China is catching up in that regard as the Chinese government is taking deliberate steps to ready its huge IT graduate pool and business regulatory environment for software development. The country's advantages include an excellent educational system that has a heavy emphasis on IT, according to E5 Systems CEO Gordon Brooks. The global software outsourcing market continues to grow rapidly, leaving room for all players to bring in big business. Last year, India saw its software exports jump by 19 percent to $6.2 billion, despite the unstable political climate.,3959,545591,00.asp

. From ACM TechNews, September 27, 2002.

"China's Software Exports Only Four Years Behind India: Gartner"
Indian Express (09/23/02)

China will catch up with India in software exports by 2006, generating $27 billion in exports, compared to $850 million in 2001, predicts Gartner researcher Dion Wiggins. That represents an average annual growth rate of 620 percent, he says. Wiggins also predicts that Indian firms operating in China will provide 40 percent of China's total exports in the software and service industries, about $108 billion by 2006. Currently, China has more than 6,000 software companies, nearly double that of India, but exports totaled just $850 million in 2001 compared to India's $6.2 billion. Wiggins noted that Chinese software firms suffer from poor project management, low technology levels, and small employee groups. As a result, Chinese firms do not often win major software deals from foreign companies. Meanwhile, India companies such as Infosys, TCS, and Satyam have recently launched operations in China. TCS' Girja Pande says China's proximity to Japan is convenient for capturing Japanese outsourcing orders.

. From ACM TechNews, August 26, 2002.

"Israeli Tech Slump Hits Workers Hard"
Reuters (08/25/02)

The global technology downturn has made a sizable impact in Israel, where formerly high-paid IT workers--at least, those who were able to find employment after being downsized--must accept smaller salaries and fewer, if any, job perks. Israel attracted engineers from around the world in the 1990s when the country was considered second only to Silicon Valley as a high-tech center. However, the tech crash and the constant threat of terrorist attacks have dramatically cooled Israel's economy. A laid-off tech worker who calls herself "Maya" says that "The [jobs] situation is bad, even if you are well qualified and have lots of experience." Israel's economy is now in a recession because of its dependency on the high-tech sector, and Israeli tech unemployment has climbed more than 10 percent. In 2003, 11.5 percent of the population could be unemployed, leading to a total of 300,000 jobless. Startups are being hit especially hard by the tech implosion: The Israel Venture Capital research center estimates that 200 startups have closed this year, causing as many as 6,000 workers to lose their jobs. Another tech worker who uses the alias "Ronen" adds that the difficulty of finding employment, the tax burden, and rampant terrorism could prompt many unemployed tech workers to seek work outside of Israel.

. From ACM TechNews, August 26, 2002.

"Shortage of Tech Personnel Hampers Appalachia, Study Says"
Associated Press (08/24/02); McCormick, Gavin

The Appalachian region spanning 13 states has a small technology economy that grew only 75 percent as fast the region's general economy between 1989 and 1998, according to a new University of North Carolina report. The region, which covers 200,000 square miles from New York State to Mississippi, lacks IT professionals in its urban areas, and produces less industrial engineering degree holders than other U.S. areas; the region's two-year colleges also graduate significantly fewer computer science degrees than other U.S. regions. Most federal research grants for Appalachia are awarded to organizations in Ithaca, N.Y.; Pittsburgh, Pa.; Huntsville, Ala.; and Blacksburg, Va. State-funded programs for Appalachia are avoiding the areas of information technology and biotechnology, though these two fields are expected to be the most robust IT fields through 2010.

. From NY Times, August 30, 2002.
Intel to Invest Up to $200 Million in India
Reuters, Filed at 12:45 p.m. ET

NEW DELHI (Reuters) - Intel Corp, the world's No 1 chipmaker, said on Thursday it could invest up to $200 million in India to ramp up its software design center and more than triple the number of engineers to 3,000 in a few years.

Intel's three-year-old development center in India's technology capital, Bangalore, designs and develops software to power chips that drive personal computers and high-end network computers for Internet-based applications.

``We would have to invest something in the range of $100 million to $200 million just to support that increased headcount,'' Craig Barrett, chief executive officer at Santa Clara, California-based Intel (INTC.O), told a news conference.

Intel's center in Bangalore, the chipmaker's largest non-manufacturing site outside the United States, currently has around 1,000 engineers.

``Our initial plans would be more on the engineering and design aspect as opposed to manufacturing and production,'' said Barrett, on a two-day visit to India as a part of an Asian tour.

Barrett said Intel would set up a new design team in India to work on ``32-bit Intel architecture microprocessor design and development.''

Several global technology giants including Microsoft Corp (MSFT.O), IBM (IBM.N) and Oracle (ORCL.O) have set up software development centers in India to tap the country's large pool of low-cost and high-quality engineers.


Barrett said the company was exploring strategic investments in local firms working on technologies that ``would make commerce and communication easier on the Internet.''

He said Intel ``continued to actively look at opportunities to invest in both here in India, in Asia in general and the world.''

Intel has invested in close to 30 Indian startups, among them privately-held Sasken Communication Technologies, out of a total basket of some 500 firms around the world.

Barrett said the Indian software sector had shown strong growth compared to the rest of the world in the past year but companies now needed to move away from offering just outsourcing services.

India's software exports grew 29 percent to $7.5 billion in the past year to March 2002, of which some 60 percent went to the United States.

``I would assume that for the health of the industry, it needs to increasingly move toward the value-add sector which is the creation of products and services as opposed to providing just sub-contract support,'' Barrett said.

Barrett met Indian Prime Minister Atal Behari Vajpayee and Information Technology Minister Pramod Mahajan during his visit. He will be in Bangalore on Friday.

He said his discussions with Indian officials centered around improving infrastructural facilities in India and tariffs on information technology products.

``Perhaps the government will be well served by reducing tariffs more quickly, even taking them to zero,'' Barrett said.

On Tuesday, Barrett told a news conference in Malaysia he expected only a modest growth in third quarter earnings over the preceding quarter and that he could not say when the slump in corporate technology spending would end.

. From ACM TechNews, August 23, 2002.

"Rivals Envy Chinese Mix of High Tech, Cheap Labor"
Reuters (08/22/02)

Zhang Hongjiang of Microsoft Research Asia's Beijing Laboratory says that China's high-tech effort and educational investment of the last two decades has produced an exceptionally skilled and inexpensive domestic workforce that may have no other international equivalent. Fifty percent of Chinese computer science graduates choose to remain in China rather than find outside jobs because of a strong economy and better research and career options, according to Hongjiang's colleague Harry Shum. As a result, multinational companies are more attracted to China as a place to establish research and development centers. Foreign businessmen are also eager to gain a foothold--for example, more mobile phones are sold in China than anywhere else. Beijing estimates that China's entry into the World Trade Organization will prompt managers and bureaucrats to institute reforms so the country can become more economically competitive, but National Economic Research Institute director Fan Gang expects the country will be too busy handling its domestic problems to make an impact on global economic policy for quite some time.

. From ACM TechNews, August 19, 2002.

"Egypt Gets Into Gear on the IT Superhighway"
Reuters (08/15/02); Noeman, Rachel

To build itself into a major IT development hub, Egypt has instituted free Internet access in some cities as well as government-supported IT clubs in about 390 locations, where low-income citizens can expand their computing skills. Such initiatives have helped raise the local IT industry's status considerably, but low Internet penetration--1 million subscribers out of approximately 70 million people--remains a formidable challenge. The success of private IT ventures such as and LINKdotNET is also an encouraging sign, one demonstrating that Egypt's greatest strength is in its domestic talent pool, according to Microsoft's regional general manager Ali Faramawy. Other indicators of a rapidly growing Egyptian IT base include the proliferation of cybercafes and the construction of IT business parks. Communication and Information Minister Ahmed Nazif notes that new IT investments skyrocketed from 290 million pounds to 1.05 billion pounds between 1999 and 2001. Click Here to View Full Article

. From ACM TechNews, August 16, 2002.

Russia Becoming IT Powerhouse"
Datamation/IT Management (08/13/02); Robb, Drew

Russia's software development outsourcing industry is gaining clout on the global scene as companies continue to look for top-notch programming talent at cheap prices. The country's outsourcing sales have grown 50 percent per year, even while the general technology sector in that country grew 19 percent last year. Corporations such as Siemens, Intel, Dell, and Motorola have large development centers in Russia, while a number of other U.S. companies outsource their software development to Russian companies. AMR Research analyst Laura Carrillo says Russia's education system produces well-trained and highly-specified scientists and engineers, whereas India's schools usually teach generic programming skills. As a result, Russian software development laboratories are better suited to take on tasks involving complex algorithms and programming. Boeing CIO Scott Griffin says its Russian software development partner, Luxoft, has completed several high-level projects for the company, including a Web-based catalog system for all the company's updateable documentation, an enterprise-wide PDF utility, and a modernized version of Boeing's old blueprint distribution system. Click Here to View Full Article

. From ACM TechNews, August 9, 2002.

"Italy Sponsors Technology Transfer to Developing Countries"
Associated Press (08/08/02); Rizzo, Alessandra

Italy, under the leadership of technology minister and former IBM executive Lucio Stanca, has embarked on several projects to make information technology accessible to the poor people of developing countries. Reducing the digital divide in these nations will increase transparency and accountability in public administration, which would improve their chances for receiving traditional forms of aid such as loans and investments. Projects that Italy is undertaking include demographic survey computerization in Albania, an e-procurement system for Jordan, a Tunisian electronic tax collection database, and real estate databases for Mozambique and Nigeria. The Italian program received support and sponsorship from Premier Silvio Berlusconi at the last G-8 summit in Canada. Thus far, Italy--with the assistance of the World Bank and private telecom firms--has raised most of the 12 million euros that are being channeled into the projects' initial phase. Click Here to View Full Article

. From ACM TechNews, August 5, 2002.

"China Set to be World's No. 2 Market for Web and PCs"
Reuters (08/01/02); Auchard, Eric; Greenberg, Jonah

China now ranks as the second most active Internet population, passing Japan in its share of global Internet traffic. Still, Japan retains a lead in the number of individual Internet users, largely because of strong growth in mobile phone connections. According to Web monitoring firm WebSideStory, China represents 6.63 percent of all Web traffic, compared to 5.24 percent for Japan. The United Kingdom and Canada follows Japan with about 3.9 percent each, while Germany lags behind them with 3.64 percent. The China Internet Network Information Center reports that China added 12 million new Internet users in the first half of this year and now has 45.8 million Internet users, while the number of Japanese users is set to grow to 59 million by the end of this year, according to International Data (IDC). Separately, Intel's Christian Morales says China will pass Japan as the second-largest PC market this year, two years ahead of previous projections. The United States accounted for 42.65 percent of the world's Internet traffice in July, down from 45.02 percent in the same month last year. Meanwhile, IDC says wireless phones have surpassed PCs as the biggest driver of new Internet growth, as 70 percent of all new Internet users go online via handheld devices.

. From Edupage, June 28, 2002.

Microsoft To Invest In Software Industry In China
Wall Street Journal, 27 June 2002

On Thursday, at the end of a two-day visit to China, Microsoft chief executive Steve Ballmer announced that his company would invest roughly $750 million over the next three years in the Chniese software industry. The money will support education, manufacturing, and a number of local Chinese software companies. The move is seen as partly a response to widespread software piracy in China. According to that argument, if there is a strong Chinese software industry that has a stake in protecting its intellectual property, the incidence of software piracy will significantly diminish. Ballmer's announcement also included plans to establish a software college in Shanghai. (sub. req'd),,SB1025200584265700160,00.html.

. From ACM TechNews, June 26, 2002.

"India Tech: What's the Matter U?"
Wired News (06/25/02); Sinha, Ashutosh

The Indian Institute of Technology (IIT) has a reputation for nurturing highly skilled tech talent that have gone on to find success overseas, but the institution is currently suffering a faculty shortage. Throughout its branches in Delhi, Bombay, Madras, and elsewhere, IIT is having trouble finding qualified candidates to fill the void left by retiring faculty. In the Delhi school alone, 15 faculty members retire each year, while only 40 have come aboard in the last five years; meanwhile, the student population has increased 45 percent in the last eight years. For one thing, faculty do not make a lot of money: The senior-most instructors receive $674 a month, while 35 percent of the extra revenue they earn from consultancy projects goes to the IITs. Furthermore, the number of patents the typical IIT was granted in 1996-97 fell way behind those of Stanford Engineering and MIT Engineering, as did the number of faculty citations received for 1993-98, according to a McKinsey study. To alleviate the shortage, IIT Kharagpur has courted operating systems engineering expert Dr. Bruce Montague to teach as a visiting professor, while IIT Delhi and IIT Bombay are working on similar initiatives. IIT alumni and private-sector companies such as Cisco have also donated considerable sums to help fund efforts to improve IIT, such as wiring the IIT Kharagpur campus and establishing labs for research and knowledge sharing.,1367,52942,00.html

. From ACM TechNews, June 19, 2002.

"India Tech's Plea: Come Back"
Wired News (06/17/02); Joseph, Manu

India's software industry is launching a public relations campaign to allay fears about a war with Pakistan, which prompted many foreign companies to return to their native lands. Companies are going so far as to assure clients that they have solid business continuity and disaster recovery plans in place, guaranteeing that software projects will be backed up and safeguarded in other countries even in the event of a nuclear exchange, improbable as that may be. Tata Consultancy Services, for example, has sent "contingency measures" tailored to each of its approximately 100 leading clients, and keeps project backups in centers throughout India, the United States, and Europe. Meanwhile, Infosys is relaying to customers that fears of war are exaggerated via direct mails, teleconferences, and films, and has given 2,400 India-based workers visas that allow them to fly to safety upon client request. Such visas are standard for core workers in all major software companies. A group of companies have criticized the British High Commission and the American Embassy for creating panic that contributed to a mass exodus of foreigners. Onward Technologies Chairman Harish Mehta expects the hysteria to have "an adverse long-term impact" on the nation's software sector.,1367,53201,00.html

. From ACM TechNews, June 14, 2002.

"High-Tech Companies Act to Safeguard Operations in India"
USA Today (06/13/02) P. 3B; Swartz, Jon

Although tensions between India and Pakistan have eased slightly, the threat of a conflict or terrorist act has caused many software companies with operations in the region to scramble to protect India's $7.8 billion software-export business, which has risen 700% in the last five years. U.S. companies such as Hewlett-Packard, Oracle, and Sun Microsystems have spent nearly $5 billion on Indian-manufactured software in the last 12 months ending March 31, says India's National Association of Software and Service Companies. Infosys Technologies has 2,400 employees in India with work visas who can transfer immediately to the U.S., and iGate only needs one day to transfer employees between its four Indian sites. Infosys is also showing clients its disaster plans in order to ease their fears, and some other companies have also begun investing in operations such as satellite links and redundant data lines outside of India in order to reduce the risk of business interruption. Furthermore, Tata Consultancy Services established a development center in Uruguay this year, and Megasoft maintains backup sites in the U.S. However, most small- to medium-sized enterprises are unable to afford these logistical maneuvers, so they must sit tight and ride out the storm.

. From ACM TechNews, June 10, 2002.

"India-U.S. Business Group Seeks Broader Base" (06/10/02); Schoenberger, Karl

Silicon Valley's South Asian networking group, The Indus Entrepreneurs (TiE), is looking to expand its reach overseas and across ethnic and gender barriers. Since its founding in 1994, TiE has linked together venture capitalists, business minds, and software talent in a freewheeling manner unique to Silicon Valley. So far, TiE has succeeded in establishing 19 chapters across America, as well as 14 international chapters in India and other locations with significant South Asian populations, such as Sydney, Singapore, London, and Dubai. Kanwal Rekhi, founding member and venture capitalist, TiE wants to link up with other minority groups, such as ethnic Chinese, in Silicon Valley and elsewhere. He discounts cultural barriers, saying that business is a common interest that has helped TiE grow even its ranks of Pakistani members in the face of taut politics between Pakistan and India. In fact, TiE delegates met with Pakistani leader Gen. Pervez Musharraf and obtained his blessing to set up new TiE chapters in that country. There are approximately 8,000 TiE members worldwide, with 2,500 located in Silicon Valley. Although some question whether TiE can successfully cross ethnic borders, Rekhi believes that the group's ethnically neutral "innovation ecosystem" approach can work anywhere.

. From ACM TechNews, June 7, 2002.

"India Success in Software Is Set Back by War Talk"
New York Times (06/06/02) P. W1; Rai, Saritha

India's software industry is bracing for the impact of war as tensions run high between India and Pakistan in the Kashmir region. Representatives of software firms say visiting teams from foreign buyers have ceased, though confidence remains that India's position as a cheap source of outsourced programming is a fundamental strength that can last any war. Infosys' Phaneesh Murthy says his company has taken pains to ensure the continuity of their business by establishing hot sites for data backup and increasing security. However, National Association of Software and Service Companies (Nasscom) President Kiran Karnik says a prolonged standoff could strain the sector, which has experienced phenomenal growth in the last few years. Some firms, such as DSL Software, have set up redundancies in other countries, such as the United States. And, while a robust undersea fiber-optic infrastructure and satellite connections have convinced some that communications are not a problem, the recent evacuation of embassy staff from the United States and other countries could pose a threat. Since foreign buying teams are not coming to India, sales representatives and others would have to travel abroad, but the lack of embassy staff could keep them all from getting visas on time. (Access to this site is free; however, first-time visitors must register.)

. From ACM TechNews, May 24, 2002.

"India Tackles the Digital Divide"
IDG News Service, (05/14/02); Ribeiro, John

The Indian government, community-oriented companies, and technology vendors are working to break down the barriers keeping India's rural masses from accessing the Internet. HP Labs India, for example, is focusing on three tracks representative of other efforts to bridge India's digital divide--native language access, connectivity, and low-cost devices. The group's director, Srinivasan Ramani, says his lab is currently developing an experimental PC that facilitates four simultaneous users and Indian languages. HP Labs India is also working on speech recognition software that would employ VoiceXML to pull information from a database, enabling those without English skills to use computers. Meanwhile, Media Lab Asia (MLA), set up by MIT's Media Lab, is planning, with the Indian government, to deploy a Wi-Fi network stretching between 25 rural villages. Besides access, organizations seeking to bring Internet functionality to the poorer Indian countryside will also have to help locals overcome their inhibitions in using the technology, as well as develop workable, entrepreneurial plans for business. Although it is too early to say whether these and other efforts will work, Ramani says, "Our visits to villages have shown that there are enthusiastic and innovative users (of information technology) in areas outside the big cities."

. From ACM TechNews, May 22, 2002.

"Low PC Sales in India Could Hurt IT Ambitions"
Reuters (05/21/02)

India's PC sales will continue to lag behind those of China, despite forecasts of an upturn by Skoch Consultancy Services. The firm estimates that the economic slowdown and the dampening of IT career ambitions caused Indian PC sales to dip 6.3 percent by value and 7.0 percent by volume in calendar 2001, to total almost 1.6 million units sold. Nevertheless, the consultancy believes almost 2 million PCs could be sold next year, placing India ahead of the 3.2 percent global growth rate anticipated by International Data (IDC). However, high taxes have had a stifling effect on PC penetration in India: Skoch reckons that only 7.5 million PCs are in use throughout the country, while a mere 6.59 million households in India's 16 largest metropolitan regions have the means to purchase a computer, which currently costs about 43,000 to 45,000 rupees, says Skoch's Sameer Kochhar. Kochhar says, "India will have a grassroots IT revolution when PCs are available for 15,000 rupees." China and other nations with plans to develop IT-enabled services have a higher PC penetration rate in comparison to India.

. From ACM TechNews, April 29, 2002.

"Software Wars: China vs. India"
Wired News, (04/25/02); Joseph, Manu

There are fears that China could overtake India as Asia's leading digital software provider, but National Association of Software and Services Companies (NASSCOM) vice president Sunil Mehta claims that it will be at least three years before China is a serious threat. India has the advantage of greater revenues as well as a more skilled workforce and better product quality and project management capabilities, he declares. Mehta adds that the Chinese government officially projects that its 2005 software exports will total $1.5 billion, compared to India's $23 billion. However, investors and industry observers such as Mahesh Murthy are not as optimistic. Indian service firms, which currently charge American companies an hourly rate of $6 to $9 (down from $75 to $90 a year ago), could be devastated when China institutes a $3 hourly rate for the same services, according to Murthy. The 2002-2003 growth rate forecast for Indian software companies is about 20 percent, compared to annual growth of over 100 percent a short time ago. Experts such as Infosys CEO Nandan Nilekani believe that China, with its 34 million Internet users and expanding Internet technology presence, could prove to be a lucrative market for telecom, financial services, and manufacturing, as well as software development.,1367,51706,00.html

. From ACM TechNews, April 17, 2002.

"Perplexing Argentine Hack Law"
Wired News, (04/17/02); Delio, Michelle

Argentine federal judge Sergio Torres' ruling that Web site defacement is not prosecutable because it does not harm material objects does not give the country's hackers license to commit cybercrimes, according to sources close to the matter. However, those sources are also worried that Argentine virus coders could be encouraged by the decision to wreak similar havoc. Attorney Gustavo Moreno, for one, says the country's growing hacker community is cause for concern. Torres' ruling stems from a case in which a group of hackers defaced the Supreme Court Web site to protest an alleged court cover-up of the murder of journalist Jose Luis Cabezas. The judge cautioned that Argentina is home to a "dangerous legal void" because the law cannot be applied to crimes that do have a direct impact on people, animals, or things. "The kids are quite familiar with the law," warns an anonymous, reformed virus writer. "They know they will not be arrested for releasing viruses unless there is a huge international incident that embarrasses Argentina." On the other hand, Moreno and others note that the ruling is not precedent-setting, since Argentine judges do not have to adhere to previous rulings.,1283,51860,00.html

. From ACM TechNews, April 8, 2002.

"Italy Pushes E-Government"
International Herald Tribune, (04/03/02) P. 11; Friedman, Alan

The Italian government is pioneering the first steps in bridging the digital divide between countries in the G-8 group and developing nations. Leaders from the G-8 countries agreed on such a course in Genoa, Italy last year, but have not yet acted, leading Italian Prime Minister Silvio Berlusconi to give Lucio Stanca, the minister for technology and innovation, authority to build five e-government projects abroad. He will meet with representatives from developed nations, the United Nations, the World Bank, and leading technology providers next week in Palermo, Sicily. Stanca, formerly head of IBM's Europe, Middle East, and Africa group, says the projects are designed to help countries with some existent infrastructure modernize and pave the way for more foreign investment and aid. He says initiatives such as the real estate database in Nigeria and the e-procurement system in Tunisia will increase the transparency and efficiency needed to give foreign lenders confidence. Ideally, each of the countries in the G-8 would commit to building a similar number of e-government projects in emerging economies around the world, Stanca says. The countries currently working with Italy are Jordan, Mozambique, Nigeria, Tunisia, and Albania.

. From ACM TechNews, March 8, 2002.

"India to Build Grid of Supercomputers"
Reuters, (03/05/02); Madhavan, Narayanan

India's Center for Development of Advanced Computing (C-DAC) is planning to build an I-Grid, a nationwide network of supercomputers to be used for data-heavy applications such as environmental simulation, satellite image analysis, chip design, and equipment modeling. C-DAC executive director R.K. Arora says the project resembles Napster's peer-to-peer file-sharing system, only larger and more complex. He adds that the Indian institutes of technology (IITs), the Indian Institute of Science in Bangalore, and other academic I-Grid members would be connected to the grid by C-DAC. C-DAC has pressed on with its supercomputing initiatives despite 10 years of sanctions imposed by the United States on India's technology exports. Other fields that Arora and officials say the I-Grid could be used for include bioinformatics and analysis of capital market derivatives and data.

. From ACM TechNews, February 15, 2002.

"Offshore Outsourcing Grows to Global Proportions"
InformationWeek, (02/11/02) No. 875, P. 56; Greenemeier, Larry

Offshore outsourcing continues to mature as a market for U.S. companies in search of inexpensive technology skills. India is considered the premier destination for offshore outsourcing, but U.S. firms are starting to look at markets such as China, Russia, and the Philippines as well for workers with programming talent. India will have about 625,000 IT workers by 2005, but market demand will be for more than 1 million offshore IT workers by then, according to Forrester Research. The rising demand for offshore programmers and project managers comes at a time when U.S. companies must lower their costs to survive the downturn in the economy. Through offshore outsourcing, U.S. companies can expect to save as much as 25 percent of what it would cost to do similar work domestically. U.S. manufacturers have a huge head start in offshore outsourcing, but U.S. professional-services companies such as IBM Global Services and Accenture are catching up. Forrester found in an interview with 50 IT executives that their firms spent an average of $8 million--about 12 percent of their IT budgets--on offshore outsourcing in 2000. However, by 2003, Forrester projects that companies will spend an average of 28 percent of their IT budgets--$28 million--on offshore outsourcing."

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