Wednesday, November 1, 2006

USA continues to offshore engineering jobs: survey

US engineering jobs are being "offshored" to countries like India and China, a trend that is "gaining momentum", says a study that has just been released.

But it says that it is still "not clear" whether this would erode US competitiveness or provide long-term benefits to the West.

"What is clear is that there is insufficient independent research on this study," says the study by the Durham, NC-based Duke University's Pratt School of Engineering Research. The study is titled "Industry Trends in Engineering Offshoring".

Duke University's executive-in-residence Vivek Wadhwa, who conducted the study with two others, said a recent offshoring conference in the US found civil engineering "under threat" and some pessimistic views of the telecom industry where most research and development has started going overseas.

"Some of the findings fly straight in the face of recent reports about India being in trouble," said Wadhwa.

Scouting for raw talent

This study interviewed 78 senior executives of major US firms. It surprisingly found that 75 per cent of the US firms surveyed say that India has an adequate to large supply of entry-level engineers even more than the US and China.

What was also surprising, he said, was that 57 per cent of the companies hire graduates with two-three year diplomas either directly or after they have received additional training.

This, said Wadhwa, may explain why despite the low four-year engineering degree and poor quality of engineering education in India, outsourcing is gaining momentum companies are recruiting raw talent and providing training.

"This also shows another big flaw in the current debate which is focused on four-year degrees," he added.

"This means that despite what you read on the front page of the 'New York Times', the outsourcing trend is continuing and perhaps gaining momentum."

After visiting Delhi and Bangalore and meeting business executives and academics, Wadhwa said he believed the private sector is making up for the deficiencies of the education system.

Making up for poor education

"Companies like the NIIT are taking engineers with poor education and polishing their skills to the point that they become employable. Companies (in the US) are hiring based on skill and competence not just four-year degrees," he said.

Wadhwa said: "Companies also confirmed that the reason they are outsourcing isn't a shortage of engineers in the US there are many other factors with cost being the No1 reason.... the results are very positive for India." He mentioned in another comment that visitors from the US who visited a number of new private schools across India had been "blown away" with the quality of education and infrastructure.

This study was presented at the US National Academy of Engineering in the past week.

Work being offshored

It also noted that jobs traditionally done in the US "are going to India, China and Mexico". A wide variety of jobs are being offshored, including analysis, design, development, testing, maintenance and support.

Companies expect the offshoring trend to continue and expect a wide variety of jobs to go overseas. Only 5 per cent indicated a stabilisation or contraction of offshore operations.

But some types of jobs are unlikely to be offshored: research, conceptual design, IP work, deep technical, communication or business support, customer interactions, project management, marketing, finance, architect level design, network design, management staff, business analysis, and jobs requiring US security clearances. IANS