Filter looks at the day's top technology news through snapshots and analysis of what the world's media outlets are covering. Washingtonpost.com's new Mon.-Fri. feature is penned by technology reporter Cynthia L. Webb. If a technology story breaks, a company falters or triumphs, or there's a new trend in technology, Filter wants you to know about it.
And when jobs are shipped away to one country, they often are shuffled again to even cheaper markets. In a sense, the United States competes with Asian nations for cheaper labor, which in turn lose jobs to India and other spots. Case in point: Motorola of Schaumburg, Ill. "[The] world's second-largest cell phone maker said on Tuesday it was shutting its semiconductor chip-design units in Singapore, Hong Kong and Taiwan, and moving them to India and China. A total of about 50 jobs would be lost in the move," Reuters reported.
• Reuters: Motorola Moving Chip Design Units To China, India
Outsourcing Benefits Are Relative
Jodie Allen, managing editor of US News & World Report, fielded questions yesterday on washingtonpost.com tied to a Sunday opinion piece in The Washington Post on outsourcing. An excerpt: "No doubt the countries receiving the off-shored jobs benefit, though in many the corporate elites who control the means of production benefit disproportionately. But I do think that those countries, from Mexico to China to India would benefit far more in the long run if they invested more of their profits in the well-being of workers and their families including better wages, education and environmental controls." Here is the transcript.
Now for the Bad News...
The New York Times put outsourcing into context. The result? It's one bad facet of a worse situation. "For computer scientists and engineers, the 1990's were close to paradise - until the technology boom collapsed. But even as business has started to pick up again, the job market they operate in has become the toughest ever," the Times wrote. "While this group represents a comparatively affluent sliver of the American work force, it illustrates the broader forces - higher productivity, cost-cutting business practices and increased global competition - that have combined to make job growth throughout the American economy so frustratingly sluggish. The Commerce Department reported Friday that the economy added just 21,000 jobs last month, another disappointing performance, particularly when the economy has been growing strongly since the summer and corporate sales and profit are rising."
More from the article: "'You have multiple effects going on: automation, outsourcing and business strategy all playing a role,' said Ronil Hira, an assistant professor of public policy at the Rochester Institute of Technology. In the 90's boom years, companies scrambled to invest in new technology and hire technology experts, eager to tap the new markets of the Internet and fearful that dot-com start-ups might put them out of business."
• The New York Times: Lingering Job Insecurity of Silicon Valley (Registration required)
A Saucy Take on Outsourcing
New York Times columnist Thomas L. Friedman wrote from Bangalore, India about outsourcing in a Sunday opinion piece. "Yamini Narayanan is an Indian-born 35-year-old with a Ph.D. in economics from the University of Oklahoma. After graduation, she worked for a U.S. computer company in Virginia and recently moved back to Bangalore with her husband to be closer to family. When I asked her how she felt about the outsourcing of jobs from her adopted country, America, to her native country, India, she responded with a revealing story: 'I just read about a guy in America who lost his job to India and he made a T-shirt that said, "I lost my job to India and all I got was this [lousy] T-shirt." And he made all kinds of money.' Only in America, she said, shaking her head, would someone figure out how to profit from his own unemployment. And that, she insisted, was the reason America need not fear outsourcing to India: America is so much more innovative a place than any other country."
Friedman argues that America is in better shape than many people think. "America is the greatest engine of innovation that has ever existed, and it can't be duplicated anytime soon, because it is the product of a multitude of factors: extreme freedom of thought, an emphasis on independent thinking, a steady immigration of new minds, a risk-taking culture with no stigma attached to trying and failing, a noncorrupt bureaucracy, and financial markets and a venture capital system that are unrivaled at taking new ideas and turning them into global products."
• The New York Times: The Secret of Our Sauce (Registration required)
Passport to an MBA
Meanwhile, The San Jose Mercury News reported on Sunday that the slew of jobs going overseas is creating a cottage industry, at least in the education market. "Just as business is going global, so is one of its best-known credentials: the executive MBA. Mid-career training programs for executives -- long a staple in the United States -- are now becoming more common in other countries, especially in Asia, business education experts say. Programs based on the U.S. model are popping up at Asian universities, and others are launched in partnership with American universities," the article said. "The sudden popularity of the executive MBA abroad is in part a reflection of the increasingly global nature of doing business, and the complex trade waters companies must now navigate."
• The San Jose Mercury News: MBA Programs Going Global
Another Overseas Tech Move
Technology companies are eyeing the overseas markets not just for jobs, but to boost research efforts. Intelannounced yesterday it will set up a new research center in Seoul, Korea for wireless communications and multimedia efforts . "Korea, which has one of the most developed markets in the world for cellular phones and high-speed Internet access, joins other Intel research sites in Asia, including India, Malaysia and China, said Intel spokesman Chuck Mulloy. The move follows a similar investment by International Business Machines Corp., which said last October that it would open a research laboratory in Korea," Reuters said.
• Reuters: Intel Opens Research Center In Korea
EBay's Mail Moment
EBay is partnering up with Pitney Bowes to power the online auction site's online postage plan with the U.S. Postal Service. Pitney Bowes said today that the technology eBay will use "is based on Pitney Bowes' Internet postage technology, enables customers to select a shipping option, print the shipping label and pay for the postage via their PayPal account."
The deal "promises to give Pitney Bowes, based in Stamford, Conn., a substantial foothold in an Internet business that was once perceived as a threat to the company's franchise in postage meters. The deal also marks Pitney Bowes's first foray into the consumer business," The Wall Street Journal said. "For eBay, Internet postage lets the dealers in its selling network avoid the hassle of standing in line at the post office. Instead, under a postal-service system, they can order postage online via their personal computers, printing up shipping labels with postage on their home printer."
• The Wall Street Journal: EBay Chooses Pitney to Provide Technology for Postal Venture (Subscription required)
Oracle Puts Up Its Dukes
In its quest to take over business software rival PeopleSoft, Oracle is going head-to-head with its nemesis Microsoft. "Oracle said on Monday that it would press ahead with its legal efforts to prove that Microsoft is set to become a direct competitor in the application software business, despite indications that its arch-rival had already told regulators it has no such plans," The Financial Times reported, noting that proving Microsoft's "intentions has become central to Oracle's troubled hostile bid for PeopleSoft, another applications software company."
• The Financial Times: Oracle Vows To Prove Its Point
Meantime, Reuters reported last night that Microsoft gave U.S. antitrust officials "a sworn statement that could help the government block Oracle Corp.'s bid to buy PeopleSoft Inc., attorneys familiar with the case said. Microsoft's statement to the Justice Department undercuts one of Oracle's central arguments in defense of the $9.4 billion deal -- that the two companies will soon face competition from Microsoft for a crucial part of their business," the wire service reported. "The department filed suit Feb. 27 to block Oracle's bid for PeopleSoft, saying it would be anti-competitive. Oracle has dismissed such concerns as unwarranted, citing among other things an imminent competitive threat from Microsoft, the world's largest software company. But in the statement given to investigators, a representative of Microsoft says the company has no plans during the next two years to move into the market at issue -- software sold to large business customers to manage things like finances, human resources and sales forces, the sources said."
• Reuters via Yahoo! News: Microsoft Menaces Oracle’s PeopleSoft Bid
Here is former Oracle president Ray Lane in a News.com interview on Oracle's targeting of Microsoft as a competitor: "Microsoft's customer base is very small businesses. The Justice Department has to go out and seek customers' opinions. Let the customers vote. I think that they will feel as if their options have been severely reduced if Oracle takes over PeopleSoft. But if the customers say, 'It doesn't bother me,' then the Justice Department has got to back off," Lane said.
• CNET's News.com: Trouble On Silicon Valley’s Doorstep
Of note: Expect a close watch on Oracle's 2004 third-quarter earnings this week. Oracle is slated to report its latest numbers on Thursday.
Filter is designed for hard-core techies, news junkies and technology professionals alike. Have suggestions, cool links or interesting tales to share? Send your tips and feedback to cindyDOTwebbATwashingtonpost.com. (Yes, those spammers have been having a lot of fun with my e-mail address lately.)
