Outsourcing issue flares up at chip conference

IDG News Service - On Monday, the same day the California Senate passed a bill that would ban state agencies from contracting services to companies that use overseas labor, opponents and proponents of offshore outsourcing clashed at a conference at Stanford University.
A panel of two venture investors, a scholar, a laid-off software engineer and two chip industry chief executives debated the issue. Most panelists came out in favor of moving jobs overseas, to the dismay of many attendees at the Hot Chips event, sponsored by the Institute of Electrical and Electronics Engineers.
"I think outsourcing is good for Americans; it creates jobs in America," said T. J. Rodgers, founder, president and CEO of Cypress Semiconductor Corp.
Rodgers disputed the notion that offshore outsourcing is rampant. "We're not going at a tremendous speed outsourcing jobs. It is simply not true," he said. If critics of outsourcing were to look at publicly available statistics, they would find that "there is no catastrophe," Rodgers said.
But Ron Hira, an assistant professor of public policy at the Rochester Institute of Technology and a member of the IEEE Career and Workforce Policy Committee, took issue with those statistics. There have been only self-interested, industry-sponsored studies that don't tell much, he said.
"How much work has actually moved offshore? No one knows, because nobody has collected data on it. I think this is a major failing of government policy," Hira said. The Department of Commerce is doing a study, but it is unlikely to bring up new information because it is underfunded, he said.
Despite his criticism of the research, Hira said it is clear that offshore outsourcing is accelerating. "It is a really bad deal for workers," he said.
Carl Everett, a partner at Silicon Valley venture capital firm Accel Partners, argued that outsourcing offers an opportunity that companies should take advantage of. By using offshore capabilities, they can bring a product to market faster and at a lower cost, which will increase profitability and ultimately generate jobs, he said.

Natasha Humphries has a different perspective. Humphries was laid off from PalmOne Inc. last year after having trained workers in Bangalore, India, to do her job as a software quality-assurance engineer. "Increased profit margins will create new jobs, but they may not be in the U.S. and they may not pay as well," she said.
Humphries also noted wage depression as an effect of offshore outsourcing. Salaries of between $75,000 and $125,000 a year for individuals with her skills are no longer the norm. "My skills are still