Saturday, February 28, 2004

Tech execs look to expand--outside U.S.

Title: Tech execs look to expand--outside U.S.
Source: CNET
Date: February 27, 2004

From the article:
    Tech companies are seeing a rebound in business, but top executives said this week that any jobs added to meet growing demand will likely be in countries where labor is cheaper than the United States.

    Executives speaking at the Reuters Technology, Media and Telecommunications Summit in New York said they see increased hiring in countries like India and China, but few jobs will be added in the United States.

    Michael Jordan, chief executive of technology services provider Electronic Data Systems, said the company's employees in low-cost locations like India will rise from 9,000 now to 20,000 by 2006.

    Bruce Claflin, chief executive of network products maker 3Com, said the company's joint-venture with Huawei Technologies of China will add 1,000 engineers, all supplied by Huawei.

    Anne Mulcahy, chief executive of Xerox, which has about 40 percent of its 60,000 employees outside the U.S., expects little hiring. "I don't really think we'll be adding people the way we used to,'' she said. Xerox has already handed over manufacturing of most printers to Flextronics International of Singapore.
The article From programming to delivering pizza describes the same trend. This trend is in the process of completely eliminating the industry of computer programming from the employment landscape in the U.S..

Economically, this makes sense. If there is a new source for labor that costs one-tenth as much as an existing source, companies are going to gravitate toward that cheaper source. However, this is also the reason why wealth is rapidly concentrating. In an environment where automation and outsourcing are building up a large pool of unemployed workers, supply and demand dictate that wages fall. And wages do fall for everyone other than the wealthy. The wealthy use the cheaper labor to increase their salaries/dividends. So the concentration of wealth accelerates.


Post a Comment

<< Home