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IBM's India moves provoke praise, criticisms by Julie Moran Alterio


Well, the not-so-secret secret is out.

After years of hedging about exactly how many jobs were going to India, IBM Corp. has boldly declared its head count (43,000) and its investment plans ($6 billion in the next three years).

IBM's big event in Bangalore yesterday was a bit like a coming-out party for the company's India agenda.

Never before had IBM shared so much about its plans to be the top computer company in the high-tech nirvana of India.

Former IBM employee Lee Conrad, coordinator of the Alliance@IBM, a budding union, felt vindicated by the confirmation that IBM's India work force is bigger than anyone thought.

"For a couple of years, we said 30,000 to 40,000 jobs would be offshored, and people were skeptical. Now they are up to 43,000 jobs, up from 9,000 in 2003," Conrad said. "It's not job creation in India, it's job shifting."

IBM's investment plans were greeted with kudos by globalization experts who say Big Blue has no choice but to compete in a marketplace where abundant Indian technical talent comes at a fraction of the cost of similar expertise in the United States.

Educators responded by calling for more science and math in schools.

And computer workers, such as Steve Rock of Mahopac, viewed the development with dismay.

Rock lost his job with a White Plains technology firm when it was taken over by a Canadian company, but before that happened, most of the development work had already been sent east to India, Pakistan and Belarus, according to Rock.

He now works as a temporary employee for a German-owned pharmaceutical company in Danbury.

"I believe that this is the last decent-paying job I'll be able to land, and I'm grateful for every paycheck of it. I worry about the future possibilities for all my fellows in the field of technology and those recent college grads who majored in information technology," Rock wrote in an e-mail.

Hugh McCabe, acting chairman of the international business program at Westchester Community College, said companies such as IBM must go overseas for talent because of a science and math gap here in the United States.

"We're either going to import people to do the jobs or we're going to export the jobs to other countries. China and India are producing about 500,000 engineers a year. The U.S. produces about 70,000," he said.

Susan M. Merritt, dean of the Seidenberg School of Computer Science and Information Systems at Pace University, said her faculty is preparing students for the reality that India will continue to be a tech powerhouse. Students in the Pace program traveled to India in January to study outsourcing and security.

"We're trying to educate them with the understanding that they will be part of the global economy. There's a lot that's exciting and we're engaging them in being leaders in that," she said.

Author and blogger John Patrick, who was vice president of Internet technology at IBM before he retired in 2001, said students and workers should be glad when American companies such as IBM tap resources around the globe to remain competitive.

"If you don't take advantage of the most cost-effective skills wherever they are, then you're not going to be competitive and you're not going to be profitable. If you're not profitable, then you have a real problem with jobs," he said.

What's new about IBM's approach to the offshoring trend, Patrick said, is a strategic approach to creating a truly global company aided by speedy computer networks that erase the gap between continents and allow work to follow the sun in a 24-hour cycle.

"It's not just moving all the work to India," he said. "It's using the skilled work force in India as part of a global network to solve problems for other global companies."

J.P. Donlon, a Pound Ridge resident and editor of Chief Executive Magazine, said business leaders such as Palmisano cannot subscribe to parochial national interests.

IBM, for instance, has customers in 160 countries and earned 61 percent of its $91.13 billion in 2005 revenues from outside the United States.

"The senior management is thinking on an entirely different plane than the typical employee who is much more national in his or her outlook," he said. "Palmisano has to think in terms of the overall cost to the enterprise as it competes in markets other than the United States."

Though it might be tempting to speculate on the local impact of IBM spending $6 billion closer to home, it would be foolhardy, said Justin Wright, executive director of the New York Council for the AeA, formerly the American Electronics Association.

"What role would that have had in opening up one of the largest international marketplaces? The net impact of this investment will be positive for New York because at the end of the day IBM will be a more successful company," he said.

Moreover, IBM is far from alone, noted Rob Mulligan, the AeA senior vice president for international issues.

"Intel, Microsoft and Cisco have all had their CEOs head out to India in the last six month to announce cumulative investments of $3 billion. They all see it as key to competing globally," he said.

Scott Kirwin, a Philadelphia area technology worker and founder of the IT Professionals Association of America, said a global outlook might be great for IBM but isn't so terrific for U.S. employees who fear losing their jobs to India despite advanced degrees and years of experience.

"IBM is doing a Madonna. America has built it up and made it successful, but it's turning it's back on us. We as Americans have to understand that IBM is no longer an American company."


 

 

 

 

 
 
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