China Leaps Forward In Advanced Tech Education

BY SHEILA RILEY

FOR INVESTOR'S BUSINESS DAILY

Posted 5/1/2007

As policymakers grow increasingly alarmed over the threat outsourced research and development poses to U.S. engineering competitiveness, a new study shows China leading in graduate degree-level engineers capable of advanced research and development.

In a recent Duke University study, researchers said China is overtaking the U.S. and India in advanced engineering and technology graduates.

India produced only about 1,000 engineering Ph.D.s in 2005, not even enough to staff its own universities. The U.S. graduated 7,333, while China came in first place at 9,427.

Even taking into account population differences — China has four times as many people as the U.S., while has India three times as many — the numbers are significant.

"The outsourcing of engineering jobs will continue and gain momentum, and what will go next is research and design," said Vivek Wadhwa, an executive in residence at Duke and the study's lead author.

The report, "Where the Engineers Are," appeared in the National Academy of Science Issues Magazine in March.

The study also concluded that, contrary to popular belief, the U.S. does not face a shortage of engineers.

Previous Duke research contradicted the prevailing thought that India and China graduate many times more baccalaureate-level qualified engineers than the U.S.

Still, the latest findings are renewing worries that the U.S. is falling behind.

More than 60 percent of U.S. engineering doctorates were awarded to foreign nationals, according to data from the American Society for Engineering Education.

The U.S. is producing the same number of Ph.D.s for its citizens as it did in the 1970s — about 3,000 a year, says Michael Gibbons, ASEE Director of Data Research.

According to the report, the engineering doctorate rates for India and the U.S. showed little change from 1995 to 2005.

But China made a huge jump, increasing from under 2,000 Ph.D.s in 1995 to over 9,400 over the same period.

The study's authors say the U.S. needs to adjust its focus to address the looming shift in the international tech hierarchy.

"We worry about the wrong things," Wadhwa said. Those wrong things include outsourcing of lower-level tech jobs such as computer code development, which can be done anywhere.

It's the migration overseas of critical R&D, the kind that requires advanced degrees, that should be a cause for concern, Wadhwa says.

"The next wave of outsourcing is what we have to worry about," Wadhwa said.

Student perceptions of what makes a good career are part of the problem, Wadhwa says. Rather than studying to be scientists and engineers, young students are opting for seemingly more lucrative careers such as investment bankers.

The field of engineering suffers from misconceptions, says Richard Heckel, founder of Engineering Trends, an e-commerce consulting firm.

Murky job data often leads high school seniors to conclude that engineering jobs won't be in demand by the time they're ready to work. Offshoring and lagging salaries contribute to the problem, according to Heckel.

Better media coverage would help, he says.

"The media actually play a significant role in all this," Heckel said. "Engineering achievements are not getting much press."

Duke's report, part of an ongoing look at globalization and engineering, holds good and bad news for the U.S. economy, says Robert Litan, research and policy vice-president at the Kansas City, Mo.-based Kauffman Foundation, which works to advance entrepreneurship.

"The good news is that there's a lot of hype in the India and China engineering numbers," Litan said. "The bad news is that if you look at the masters' and Ph.D.s in China and India, they are rapidly increasing."

Engineering competitiveness is intertwined with immigration issues.

The Duke study focused on highly skilled immigrants or immigrants who want to be highly skilled, Litan notes.

Those immigrants come to the U.S. mainly on temporary visas. That needs to change, he says.

"The best way to keep the research from going offshore is to bring the smart people here," Litan said.

He adds that research shifting overseas isn't all bad.

Though many would prefer research and development to take place on U.S. soil, he says, everyone benefits from R&D successes, wherever it occurs.

"The world is not a zero-sum game," Litan said.

IDC Highlights the Strengths of the Russian Software Development Outsourcing Industry

Twenty Companies Share Experience, Best Practices for Engagement

[USPRwire, Wed May 02 2007] The Russian Software Developers Association (RUSSOFT) today announced the results of a study which focuses on Russia as a location for offshore software development. The study, produced by IDC and sponsored by Russoft, bases its findings on interviews with U.S. and European firms that have outsourced development of software applications to Russian companies. Results and recommendations are summarized in a white paper available for download at http://www.russoft.org/downloads/IDC_research.pdf.

The research finds that stability of the relationship, technical expertise, and relatively low staff turnover are key advantages of Russian software development companies. Though price is often behind the initial supplier choice, these factors influence strongly the quality of service and strength of the relationship that customers value in their dealings with Russian outsourcing providers. Participating companies pointed to the availability of very well educated engineers, strong technical skills, and sound methodologies. Softer factors often mentioned included a closer cultural fit with the U.S. and Europe than Asian suppliers, similar work ethics, a clearer understanding of business issues, and similar time zones.

“American and Western European companies perceive Russian companies as a source of sophisticated technical expertise, which is absolutely necessary for approaching complicated technological tasks. We are also much closer culturally to Europe and the US than popular outsourcing locations in Asia, which makes Russia an attractive destination to base sourcing operations. We believe Russia should be a key technological component in any multi-sourcing strategy,” said ¬¬¬¬Valentin Makarov, President of RUSSOFT. “One of the common misperceptions in outsourcing is that having more people on a project is better. In reality, having the right people is more important and will actually reduce project time and costs.”

“Several factors work as Russia’s differentiators on the world market, such as the large pool of highly skilled professionals with mathematics and science backgrounds, capable of solving complex and math-intensive problems, and the ability of Russian companies to manage high-end, complex projects,” said Vladimir Kroa, Regional Director for IT Services Research, IDC Research. “Also, Western European and American organizations often perceive Russia as being a closer cultural fit than countries like India, China, or the Philippines.”

IDC anchored the research by conducting in-depth interviews with senior management from 20 U.S. and Western European companies in the IT (hardware, software, and services) and telecoms sector. Each of the 20 companies had nearshore / offshore experience with Russian suppliers for application development, from specific tasks to full R&D processes, including design, testing, and continuous maintenance. Company revenues ranged from $10 million to $100 billion, with offices spanning one country to near 100.

The results of the research are contained in a white paper available for download by clicking here http://www.russoft.org/downloads/IDC_research.pdf. For more information about nearshore / offshore outsourcing options to Central and Eastern Europe, visit RUSSOFT’s website, www.russoft.org.

# # #

About RUSSOFT
The Russian Software Developers Association (RUSSOFT) is the nationwide association for software development companies from Russia, Belarus and Ukraine. RUSSOFT unites more than 80 companies with 17,000-plus highly qualified programmers and software engineers with advanced graduate level degrees in Technology & Computer Science. www.russoft.org


For more information, please contact:
Cheryl Gale / Eric Seymour, March PR
russoft@marchpr.com
+1 617 475 1571 / +1 617 475 1564

Philipp Agapov, Russoft
philipp.agapov@russoft.org
+7 (495) 940-6569

RACINE, Wis.,– SC Johnson China has been named a Best Employer in China, by Hewitt Associates. SC Johnson China ranked third on this year’s list.

RACINE, Wis.,– SC Johnson China has been named a Best Employer in China, by Hewitt Associates. SC Johnson China ranked third on this year’s list.

“Congratulations to the people of SC Johnson China for this wonderful achievement,” said Steven Stanbrook, President – Developing Markets. “This award speaks to our commitment to developing and maintaining great workplaces in all our offices and plants around the world.”

In the Best Employer study, Hewitt identified several characteristics that all Best Employers share, including effective and committed leadership, a high-performance workforce, strategic HR functions, and a commitment to addressing customer needs as a way of building a sustainable business.

“To be selected from among so many great companies as the third best employer in China is truly an honor,” said Darwin Lewis, Vice President and Group General Manager – Greater China. “My thanks go to everyone at SCJ China who works to maintain a work environment that provides the best place for the best people.”

SC Johnson has been named a best employer or great place to work in more than 10 countries around the world. Only ten companies were named to this list, including FedEx, Accenture and the Four Seasons Hotel in Shanghai. In selecting the ten best companies, opinions were collected from almost 34,000 employees from more than 150 companies. Hewitt Associates, which developed the list, is a provider of human resources consulting and outsourcing services.

What's the Weak Point of China's Current IT Outsourcing?

BEIJING, May 2 /Xinhua-PRNewswire/ -- The information technology outsourcing (ITO) industry in China is still in a starting stage. But, it has already shown a strong growth momentum. Software outsourcing has been the most outstanding aspect. CCID Consulting, China's leading research, consulting and IT outsourcing service provider, and the first Chinese consulting firm listed in Hong Kong, recently released the 2006-2007 Annual Report on China's Software Outsourcing Services Market, which shows that in 2006 China's software outsourcing market reached a size of $1.43 billion, up by 31.56% over $920 million in 2005.

China still lacks experiences in IT outsourcing when compared to other countries. There is a need in research efforts in summarizing IT outsourcing theories and models that suit enterprises and the actual situation in China. However, as Chinese enterprises further deepen their IT applications, there is no doubt that the IT outsourcing industry has a bright future. Some have predicted that China will be among the world's top 3 countries in terms of IT outsourcing businesses between 2007 and 2010. It is already 2007 now. Has China really been among the World's top 3 countries in terms of ITO? What problems still need to be urgently solved on the road towards the goal? CCID Consulting will make the following analysis:

Direction of development remains unclear

Currently, many experts and scholars are talking about which model China should follow to develop ITO. CCID Consulting argues that any development road, be it the India model or other models, needs to depend on the actuation of a country. There is no contradiction between inherent experiences and innovations. China should decide the road that it is to take based on its national conditions. ITO is still in a starting stage in China. It is not mature yet. The country must start with ''doing processing work'' for others and can only become independent and then gradually establish its own brand after reaching a certain scale of and experiences in technology, personnel and management. Before establishing its independent brand, China must be the ''processing'' for others. Through outsourcing, enterprises can grow and become stronger in a short period of time, improve their international competitiveness and form their own brands faster.

Shortage in talent reserves

In pace with the fast growth of ITO, there is also a growing talent demand from enterprises. However, this is such a situation: On one hand, there are large numbers of university graduates who cannot find jobs each year. On the other hand, enterprises cannot find suitable persons to fill in their position vacancies. Some enterprises even say that if there is sufficient human resources support, there will be no problems for us to get orders. What is the reason behind this? Firstly, there is more examination-oriented education rather than qualification education in China. One-sided pursuit of enrollment quotas has made our students lack a spirit of innovations. Secondly, theory is separated from practice. We are too conventional in setting up university majors and lack a link with practice . The students which we train are sole bookworms and cannot quickly adapt to the work needs. In addition, students also have problems in their employment mentality. While there is anything wrong for students to look for enterprises with strength when they seek employment, many students have grandiose aims but puny abilities. Enterprises have to pay a very high training cost even if they want to recruit such students. This will increase corporate burdens. Finally, there is shortage of compound talents. Compare with people with monolithic skills, compound talents can save manpower cost for enterprises and more suit the requirements of work posts. This can shorten the talent training cycle and give full play to the strength of talents. This is why enterprises generally scramble for compound talents and practical talents. But at present, there are relatively few compound talents. This has made it entirely impossible for enterprises to build up their human resources reserves.

Lack of industry organizations that represent enterprises

When talking about technology outsourcing, many people are willing to compare China with India. Other aspects aside, India does have advantages in industry organization which China cannot rival. In India, there is an industry association called NASSCOM. This is a non-profit association registered in the form of company. It is no exaggeration to say that India's outsourcing success is attributable to this organization to a certain extent. It functions like the market department of a company. What is different is that it is the international ''market department'' of India's outsourcing industry. When a US company needs business outsourcing, its first reaction is to turn to India, because NASSCOM has done its work to the best. For China to be among the world's top 3 countries for technology outsourcing, it is very important to set up a non-profit organization that can represent the industry to take part in international competitions.

Lack of experiences in large-scale team management

In China, a development team of over 100 persons will be considered a very big team. For India, big teams are often defined for 1,000 or even several thousand persons. Technology outsourcing enterprises in China need to find projects and solve the problem of personnel management. How to distribute a large project level by level and how to achieve seamless connection between employees and project teams and minimize management cost are the problems that a technology outsourcing company needs to solve.

Lack of ability to provide solutions to big international enterprises

Through surveys, experts at CCID Consulting think that no relationship of frontal conflict has been formed between China and India in technology outsourcing. It can be seen from the projects, which China has undertaken, our services are still at the rather low end of the industry, such as software development and testing. China has almost not involved in high-end services such as solution provision. This is mainly because the country does not possess too big strength in the fields ranging from consulting to design.

To sum up, there is still a long way for China to go to be among the world's top 3 countries in terms of IT outsourcing services between 2007 and 2010. There are also many problems for China to solve. But, there is one aspect which is certain: China must clearly understand its strengths and characteristics, find a road which suits its national situation and take it in a down-to-earth and persistent way. It is not just the responsibility for some enterprises to gain a place for China in the international technology outsourcing market. But, enterprises alone are not enough. The government should also offer corresponding manpower, materials and policy support.

About CCID Consulting

CCID Consulting Co., Ltd. (also known as CCID Consulting), the first Chinese consulting firm listed in the Growth Enterprise Market of the Stock Exchange (GEM) of Hong Kong (stock code: HK08235), is a direct affiliate of the China Center for Information Industry Development (hereinafter known as CCID Group). Headquartered in Beijing, CCID Consulting has so far set up branch offices in Shanghai, Guangzhou, Shenzhen and Harbin, with over 300 professional consultants and industry experts. The Company's business scope has covered over 200 large- and medium-sized cities in China. Apart from home market development, CCID Consulting is establishing international cooperation links across the United States, the Asia-Pacific region and Europe, by setting up agents in the U.S., Japan, South Korea, Australia, Singapore, Italy and Russia, with the aim of going global.

Based on four major competitive areas of the powerful data channels, industrial resources, intense knowledge and deep understanding of information technology, CCID Consulting provides customers with consulting, research and IT outsourcing services covering strategy planning, IT application, marketing strategy, human resources and information technology outsourcing. Our customers range from industrial users in IT, telecommunications, energy, finance, automobile, to government departments at all levels and diversified industrial parks.

CCID Consulting is committed to becoming the No. 1 brand for strategy consulting, the No. 1 consultant for enterprise management and the No. 1 expert in market research. For more information, please visit our website at http://en.ccidconsulting.com/ .

For more information, please contact: Grace Gao CCID Consulting Co., Ltd. Tel: +86-10-8855-9020 Email: gaojie@ccidconsulting.com

CCID Consulting Co., Ltd.

CONTACT: Grace Gao of CCID Consulting Co., Ltd., +86-10-8855-9020, or
gaojie@ccidconsulting.com

Web Site: http://en.ccidconsulting.com/

Talk of India, China dominates Wharton summit

Panelists suggest countries crucial to global business

By G. Venkat Ganeshan

PHILADELPHIA — India and China were the main topics of interest at The Wharton Economic Summit held last month by the University of Pennsylvania's The Wharton School in Philadelphia.

Several panelists across all sessions highlighted the underlying importance of the two Asian nations and the value they hold for companies to do business. Senior economists and top-level managers stressed the need for companies to look at China and India and their booming potential.

Their message was succinct — multinationals cannot encompass the concept of globalization without having set foot either in India or China.

In a lunch session, Wharton professor of finance Jeremy Siegel took this a step further in discussing some of his findings from closely monitoring China and India. According to his research, China and India will jump to the first and third positions, respectively, in terms of consumption of goods by 2050. The United States will be sandwiched between the two and he pointed out that companies should not view this Asian explosion as a threat, but should consider it an opportunity to target a population of almost 2 billion and the vast potential it holds.

Following Siegel's thoughts, panel sessions focusing on outsourcing and emerging markets drew some of the largest crowds of the summit.

In the session on emerging markets, Manuel Montero, the chief executive officer of SAFTPAY, a non-credit card company that offers a payment system allowing bank customers worldwide to make e-commerce transactions, said that 86 percent of the world population is part of emerging markets.

"Even though 86 percent of the world population comes from these emerging markets, they constitute only 23 percent of the world economies," Montero said. "So, it's very difficult to find the perfect partner country. You have to select the country and have to understand the culture and how the country functions. You have to make sure that you have a commitment and also a strong, close and continuous management."

Montero focused predominantly on the Latin American markets while Rohit Aggerwal, co-founder and managing director of RAS Capital Management, focused on India.

He laid out several favorable facts that would entice potential entrepreneurs to do business in India. A 13-year veteran of handling foreign investments in India, he said that the greatest asset of India was its human capital.

"The greatest asset that has India going is its population," Aggerwal said. "Fifty percent of the population is under 25 and that represents a large, potential workforce entering employment."

He attributed India's sudden spurt of growth to a favorable economic climate in the last 10 years.

"Between 1998 and 2007, cable subscribers have gone from 25 million to 85 million," Aggerwal said. "Cell phone users have gone from a million to 120 million. There has been a huge explosion in consumer service.

"The interest rate has come down from 40 percent to 10 percent," he said. "Inflation has fairly come under control. There is a strong flow of foreign investment and that has resulted in an increase in mergers and acquisitions."

Finally, Shiv Khemka, vice chairman of the Sun Group, summed it up when talking about choosing the perfect partner to do business with in emerging markets.

"You have to choose the right partner," Khemka, who spoke about the benefits of Russia, said. "Get the best human capital and have a long-term view in these emerging markets. These are the keys to succeed in these regions."

Rajat Gupta, senior partner at McKinsey & Co., was the keynote speaker of The Wharton Economic Summit. Panels throughout the two-day summit, held on April 12 and April 13 at the Pennsylvania Convention Center, covered a number of business topics, including the future of technology, "Wall Street meets Hollywood," sports business, real estate and security.

The summit also featured a focus on ethical issues confounding business organizations and on equity markets.