Free Market Advocates Respond

By Larry Dignan  |  Posted 2003-09-05 Print this article Print

Those who advocate procuring talent wherever its available at the best rates dont dismiss Hiras worries about moving development of cutting edge technology offshore and short-term pain for an educated workforce. However, they do argue that the U.S. economy will survive and thrive by embracing such globalization of resources and not circling the wagons.

Gerald Hanweck, a finance professor at George Mason University, says U.S. companies would be under pressure by global competitors using cheaper overseas talent, so it makes sense for domestic businesses to keep an edge.

"You may look at it as exporting jobs, but those jobs would be under pressure anyway," says Hanweck. "From a free-market point of view when you have talent around the world thats less expensive, you should be able to hire that talent."

While acknowledging potential job displacement and likely flattening of technology salaries globally, Hanweck notes that competitive U.S. companies will maintain the tax base better than extinct ones that didnt cut costs.

Ray Bingham, CEO of Cadence Design Systems, a chip-design company, has 1,000 offshore workers in India, China, Russia and even France depending on customer requirements and cost. In July, he told employees he was expanding in India and temporarily contracting operations in North America. "It was not a pleasant message," says Bingham.

Nevertheless, that trend will continue even if business improves, he says. There will be more jobs created domestically, but growth wont come close to matching hiring offshore, says Bingham, reflecting a common theme among executives.

Bingham says the short-term pain is worth the payoff of productivity. According to him, the U.S. economy has something the world doesnt—velocity. That means Americans are uniquely suited to rip up a blueprint and reallocate capital to cook up another growth industry. Ultimately, U.S. workers will be more productive with the competition from other pools of talent around the world. The result: They will drive themselves to become more valuable, he says.

"Its two edges of a knife," he says. "Cadence employees realize its locally inconvenient, but a requirement for winning."

Next page: Balancing business realities against career loss and change.

Business Editor
Larry formerly served as the East Coast news editor and Finance Editor at CNET Prior to that, he was editor of Ziff Davis Inter@ctive Investor, which was, according to Barron's, a Top-10 financial site in the late 1990s. Larry has covered the technology and financial services industry since 1995, publishing articles in, Inter@ctive Week, The New York Times, and Financial Planning magazine. He's a graduate of the Columbia School of Journalism.

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