Satyam Computer Services Ltd., India's fourth-largest software company, on Thursday began construction of a major development center, its largest outside India and first in China.
The groundbreaking for the center in the eastern city of Nanjing follows Satyam's announcement of plans for a software development center in Malaysia. Both are part of the company's effort to evolve into a global company, according to Virender Aggarwal, the company's senior vice president and regional director.
Hyderabad-based Satyam's expansion is aimed partly at offsetting rising costs in
India and at developing a base of skilled workers, Aggarwal said in a phone interview.
Like other Indian outsourcing companies, Satyam is trying to win clients outside the United States and Europe, looking to China, Australia and Latin America to diversify risks and build markets.
"China is one of the largest economies in the world and is likely to be the No. 2 economy in 20 years or so. It is very important that we are here," he said.
Satyam has 500 employees in China, almost all of them Chinese, at support centers in Shanghai, Beijing, the southern city of Guangzhou and the northeastern city of Dalian.
The abundance of jobs in India means workers job-hop often. China offers the advantages of a huge labor pool, a plus in Satyam's fight to recruit and retain labor, Aggarwal said.
"The labor market in Nanjing is relatively untapped," he said.
The center will be located in a high-tech zone that is expected to attract more than 300 software companies, Qi Lu, the Communist Party secretary in charge of the zone said in a statement.
Asia-Pacific, Africa and the Middle East contribute around 16 percent of Satyam's global revenue, while Europe contributes about 18 percent and the United States about 65 percent, he said.
Other Indian software companies are expanding in China, too. Infosys Technologies Ltd., India's second-largest software company, plans to open two development centers in China that will employ 6,000 people.
India's top information technology company, Tata Consultancy Services Ltd., has a joint venture agreement with three Chinese partners, with strategic investment from Microsoft Corp., to expand its operations in China.
2/08/2007
Are US engineers up to the global challenge?
Competition is fierce, the need to innovate and be productive never greater. Alan Earls asks, are US engineers up to the challenge?
Despite its eroding leadership position in many key industries over the past quarter century, the US still possesses an enviable collection of innovative and profitable “thoroughbreds”—industry-leading companies like Intel and HP.
But the strategic and long-term picture is more muddled. Does the US have enough engineers—and enough of the right kind—to sustain its leading enterprises and grow the next generation of success stories? Thanks to a lack of interest among young people, fewer talented individuals are going into engineering. What’s more, an increasing number of US-based companies seem happy to play the labor arbitrage game, either outsourcing manufacturing tasks or simply setting up shop in places like India or China, where eager young engineers are happy to tackle any challenge at a cost far below that in the US. This brain drain of skills and intellectual capital has some worried that the US may devolve into a nation only able to consume and unable to add value to raw materials. That would leave the US strategically dependent on others for almost all of its manufactured goods.
Ron Hira, assistant professor of public policy at Rochester Institute of Technology (RIT) and an expert in offshore outsourcing and industrial policy, is one of those who are concerned. “I think engineers contribute in a large degree to US productivity and competitiveness—for one thing, about 65 percent of American R&D is done in the manufacturing sector,” he says. Yet Hira observes a pervasive attitude that if US companies can buy something cheaper in China or India, that’s good because it helps the bottom line. “It is much better to design and manufacture things here because of the local spillover benefits” such as job creation and entrepreneurship by engineers themselves.
Those offshore engineers may be plentiful, but are they better? “The discussion on engineering resources has focused far too much on quantity rather than quality,” says Hira. For example, he notes that major business groups like the Business Roundtable have recommended that the US double its number of engineering graduates. However, this would require huge government resources, since engineering education is heavily subsidized. Instead, Hira suggests we think more about how we differentiate our students from what can be taught in India or China. “If my cousins in India can do the same work for one-fifth of the salary, then companies will begin hiring them instead of me,” says Hira. “We need to figure out what’s going to stay and what’s going to go, and what skills are needed for those jobs.”
Does our existing pool of engineers have the skills for today’s jobs? “If technological change is moving faster, as most people claim, then the obsolescence cycles are probably getting shorter,” says Hira. Quoting William A. Wulf, president of the National Academy of Engineering (NAE), Hira notes that the half-life of an engineer has gotten shorter. This means that continuing education is more critical for engineers than ever before. But the support mechanism of company subsidies has been largely dismantled because employees stay in jobs for shorter durations and companies no longer see benefit in paying tuition. It also means that companies, when they can, likely favor recent graduates over mid-career or older ones.
Wulf points to the conclusions of a recent NAE report, “Rising Above the Gathering Storm.” The report argues that although the US engineering is very competitive now, there are disturbing signs that our competitiveness is in peril. “We need to do a set of things now to ensure future security and prosperity,” says Wulf; in particular, he says, we need to support the traditional US advantage—innovation—through better education at all levels and more support of research.
“Engineers are the principal source of innovation and have done very well for us,” says Wulf. If the US is to continue to prosper, Wulf suggests that it must prepare engineers for the 21st century, not the 20th. “I am concerned that our Achilles’ heel is that engineering education has changed very little since I was an undergraduate more than 45 years ago,” he adds. Meanwhile, the quality of engineering education abroad is increasing dramatically, shrinking a traditional US lead.
The quality of engineering education and of engineers is also very much on the mind of Bernard M. Gordon, a pioneer in high-tech electronics since the 1950s and a philanthropist who has supported a number of engineering initiatives at MIT, Tufts University, and Northeastern University. Gordon says the problem goes beyond low enrollment, though he acknowledges that issue is important.
Instead, Gordon believes that American engineers are no longer trained to be effective or managed correctly to produce results. They have learned science but forgotten engineering. As a consequence, he suspects the productivity of individual engineers, in terms of the dollar value of products attributable to their efforts, has slipped. He blames a combination of poor attitude among engineers and an emphasis in colleges on scientific training over practical problem-solving skills. Additionally, he says, engineers in the workplace are not monitored and mentored to help them hone and mature their skills.
Although Gordon says he has been raising the alarm on the topic for decades, today there seem to be others sharing his concern. For instance, Dave Gardner, principal of Gardner & Associates Consulting (Reno, NV), says engineers in the US don’t seem to understand the huge difference between research and development (where the focus is really on research) and actual product development. “The vast majority of engineers are involved in product development but seem to behave as though they are in R&D—in other words, they don’t take responsibility for many of the downstream issues that they create,” he says.
“Sadly, too many engineers don’t like to ‘get their hands dirty’ with the day-to-day issues that allow a product to be easily produced. This is particularly true in situation where parts, subassemblies and turnkey products are being outsourced more and more.”
Exacerbating the problem, Gardner says most engineers prefer to talk only to other engineers and, therefore, don’t like to engage directly in the challenges that suppliers and their manufacturing counterparts have producing parts and subassemblies. “It is almost as though these ‘mundane’ issues are beneath them,” he says.
Fixing engineering may not be easy, but it can be done, says Wulf, who points to a recent NAE report that proposes extensive reforms to engineering education (see sidebar). However, he cautions, it’s not about being nationalistic. “I am not one of those who believe we have to do ‘better’ than, say, India or China—on the contrary, I believe we are safer if those countries, and the rest of the developing world, prosper as part of a global economy.” On the other hand, “I don’t want us to fall behind them either, and right now I see them as hungrier than we seem to be.”
Furthermore, Wulf sees a nation that needs more leadership from engineers. “In China, about half of the cabinet ministers were trained as engineers. There are lots of reasons for their incredible economic growth, but I am convinced that a major one is the way those engineers think about their country’s problems and opportunities.”
Despite its eroding leadership position in many key industries over the past quarter century, the US still possesses an enviable collection of innovative and profitable “thoroughbreds”—industry-leading companies like Intel and HP.
But the strategic and long-term picture is more muddled. Does the US have enough engineers—and enough of the right kind—to sustain its leading enterprises and grow the next generation of success stories? Thanks to a lack of interest among young people, fewer talented individuals are going into engineering. What’s more, an increasing number of US-based companies seem happy to play the labor arbitrage game, either outsourcing manufacturing tasks or simply setting up shop in places like India or China, where eager young engineers are happy to tackle any challenge at a cost far below that in the US. This brain drain of skills and intellectual capital has some worried that the US may devolve into a nation only able to consume and unable to add value to raw materials. That would leave the US strategically dependent on others for almost all of its manufactured goods.
Ron Hira, assistant professor of public policy at Rochester Institute of Technology (RIT) and an expert in offshore outsourcing and industrial policy, is one of those who are concerned. “I think engineers contribute in a large degree to US productivity and competitiveness—for one thing, about 65 percent of American R&D is done in the manufacturing sector,” he says. Yet Hira observes a pervasive attitude that if US companies can buy something cheaper in China or India, that’s good because it helps the bottom line. “It is much better to design and manufacture things here because of the local spillover benefits” such as job creation and entrepreneurship by engineers themselves.
Those offshore engineers may be plentiful, but are they better? “The discussion on engineering resources has focused far too much on quantity rather than quality,” says Hira. For example, he notes that major business groups like the Business Roundtable have recommended that the US double its number of engineering graduates. However, this would require huge government resources, since engineering education is heavily subsidized. Instead, Hira suggests we think more about how we differentiate our students from what can be taught in India or China. “If my cousins in India can do the same work for one-fifth of the salary, then companies will begin hiring them instead of me,” says Hira. “We need to figure out what’s going to stay and what’s going to go, and what skills are needed for those jobs.”
Does our existing pool of engineers have the skills for today’s jobs? “If technological change is moving faster, as most people claim, then the obsolescence cycles are probably getting shorter,” says Hira. Quoting William A. Wulf, president of the National Academy of Engineering (NAE), Hira notes that the half-life of an engineer has gotten shorter. This means that continuing education is more critical for engineers than ever before. But the support mechanism of company subsidies has been largely dismantled because employees stay in jobs for shorter durations and companies no longer see benefit in paying tuition. It also means that companies, when they can, likely favor recent graduates over mid-career or older ones.
Wulf points to the conclusions of a recent NAE report, “Rising Above the Gathering Storm.” The report argues that although the US engineering is very competitive now, there are disturbing signs that our competitiveness is in peril. “We need to do a set of things now to ensure future security and prosperity,” says Wulf; in particular, he says, we need to support the traditional US advantage—innovation—through better education at all levels and more support of research.
“Engineers are the principal source of innovation and have done very well for us,” says Wulf. If the US is to continue to prosper, Wulf suggests that it must prepare engineers for the 21st century, not the 20th. “I am concerned that our Achilles’ heel is that engineering education has changed very little since I was an undergraduate more than 45 years ago,” he adds. Meanwhile, the quality of engineering education abroad is increasing dramatically, shrinking a traditional US lead.
The quality of engineering education and of engineers is also very much on the mind of Bernard M. Gordon, a pioneer in high-tech electronics since the 1950s and a philanthropist who has supported a number of engineering initiatives at MIT, Tufts University, and Northeastern University. Gordon says the problem goes beyond low enrollment, though he acknowledges that issue is important.
Instead, Gordon believes that American engineers are no longer trained to be effective or managed correctly to produce results. They have learned science but forgotten engineering. As a consequence, he suspects the productivity of individual engineers, in terms of the dollar value of products attributable to their efforts, has slipped. He blames a combination of poor attitude among engineers and an emphasis in colleges on scientific training over practical problem-solving skills. Additionally, he says, engineers in the workplace are not monitored and mentored to help them hone and mature their skills.
Although Gordon says he has been raising the alarm on the topic for decades, today there seem to be others sharing his concern. For instance, Dave Gardner, principal of Gardner & Associates Consulting (Reno, NV), says engineers in the US don’t seem to understand the huge difference between research and development (where the focus is really on research) and actual product development. “The vast majority of engineers are involved in product development but seem to behave as though they are in R&D—in other words, they don’t take responsibility for many of the downstream issues that they create,” he says.
“Sadly, too many engineers don’t like to ‘get their hands dirty’ with the day-to-day issues that allow a product to be easily produced. This is particularly true in situation where parts, subassemblies and turnkey products are being outsourced more and more.”
Exacerbating the problem, Gardner says most engineers prefer to talk only to other engineers and, therefore, don’t like to engage directly in the challenges that suppliers and their manufacturing counterparts have producing parts and subassemblies. “It is almost as though these ‘mundane’ issues are beneath them,” he says.
Fixing engineering may not be easy, but it can be done, says Wulf, who points to a recent NAE report that proposes extensive reforms to engineering education (see sidebar). However, he cautions, it’s not about being nationalistic. “I am not one of those who believe we have to do ‘better’ than, say, India or China—on the contrary, I believe we are safer if those countries, and the rest of the developing world, prosper as part of a global economy.” On the other hand, “I don’t want us to fall behind them either, and right now I see them as hungrier than we seem to be.”
Furthermore, Wulf sees a nation that needs more leadership from engineers. “In China, about half of the cabinet ministers were trained as engineers. There are lots of reasons for their incredible economic growth, but I am convinced that a major one is the way those engineers think about their country’s problems and opportunities.”
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