TECHNOLOGY India fears U.S. will curb outsourcing of jobs

Protectionist sentiment is rising as the U.S. job market stumbles.
CHICAGO TRIBUNE
BOMBAY, India -- The escalating debate over white-collar U.S. jobs moving to India is alive and well -- in India.
The growing election-year backlash against outsourcing drew standing-room-only crowds last week at an international conference put on by the country's leading technology trade association.
"This is certainly something we should be concerned about," said Nandan Nilekani, chief executive of Infosys Technologies, one of the nation's largest outsourcing companies.
Indians worry that a protectionist sentiment, fanned by election year rhetoric and sluggishness in the U.S. job market, will result in legislation restricting the kind of outsourcing work that has driven India's tech boom.
State measures limiting the export of government jobs have drawn sharp attention. A recent move in the U.S. Senate to curb federal job outsourcing has caused more anxiety.
Irony
Indian executives see the backlash as more than a little ironic. The rise of India's high-technology sector, they point out, is a direct result of the country's economic liberalization in 1991, a program launched with U.S. government support. In recent years, India's deep pool of low-wage, highly skilled, English-speaking "knowledge workers" has proven irresistible for U.S. companies looking to cut costs.
U.S. executives routinely say they find the quality of work in India to be as good as or better than the work done at home. That's partly because even low-level employees who answer phones in call centers are likely to have college degrees.
The draw is strong enough that the number of companies putting their own operations in India has increased sharply, as positive results flow in from such pioneers as Motorola Inc., General Electric Co. and Intel Corp.
The numbers
The group estimates that exports of software and services -- mostly to the United States -- will rise to $12.20 billion in March from $3.96 billion in 2000, despite the sharp downturn in the U.S. economy. If growth trends hold, the association predicts that exports could reach $40 billion or more by 2009.
By itself, the industry represents only 3.8 percent of the country's gross domestic product. But the tech boom's impact on India's economy and psyche is much more profound.
So what can be done in the United States? Clemons, Steven Clemons, a conference speaker and executive vice president of the New America Foundation think tank, said Congress and the Bush administration should focus on encouraging innovation.
The U.S. is woefully short on engineering talent, he said.