Outsourcing Debate Rages On - Page 2

Others took the viewpoint of the employers.

Industry gadfly T.J. Rodgers, chief executive of Cypress Semiconductor, said he began his career at Cypress determined to protect American jobs. After being photographed jogging around Tokyo in shorts decorated with the American flag in the 1990s, he built a test and assembly center in the Valley. But he soon realized that paying American employees $10.50 an hour where competitors were paying a fraction of the cost to employ workers overseas "was a poor move." Rodgers and Cypress were forced to close the plant, laying off 250 workers in the process.

Rodgers said he became a converter from the religion that companies do best by doing best by their employees. "The data just doesnt support it," he said, arguing that increases in productivity nudged employees into different fields. In 1870, for example, half of Americans were forced to work on farms to support Americas agricultural needs. Now, fewer than 2 percent of the population work the same fields, he said.

Dham, who managed the Pentium program at Intel Corp. and served as vice president responsible for Advanced Micro Devices Inc.s processor products, now runs NewPath Ventures, an Indo-Silicon Valley venture-capital firm. According to Dham, semiconductors have reached commodity status, and working with foreign workers is necessary to keep the business profitable.

"From all the things I have read, we need to stop whining about offshoring, or outsourcing," he said. "The train has left the station. We need to control its direction. … Any attempt to block it will cause economic hardships and disasters."

/zimages/5/28571.gifIs outsourcing good for business but bad for America? Read David Courseys view.

Rodgers, Dham and others said Silicon Valley must become the management capital of the world, coming up with the ideas that its legions of engineers would nurture into reality. One audience member countered by claiming that the shift would put the technological center of gravity overseas, turning the Silicon Valley staffers into a sales and marketing appendix.

According to one anecdote Rodgers recalled, a Caterpillar executive traveled to China, seeking to sell his companys tractors. The executive stood amazed at hundreds of workers shoveling dirt, and told them how much time a few bulldozers could save them.

"But look at all the jobs you will throw away," the Chinese officials allegedly said. "Then why dont you give them spoons?" the Caterpillar executive responded.

Carl Everett, a former Intel microprocessor executive and most recently head of Dell Inc.s Personal Systems Group, said it is likely future companies will be formed by a small cadre of Silicon Valley employees, then quickly absorb foreign engineers as a cheap work force. Everett, now a partner with Accel Partners, called those companies that look overseas for talent "entrepreneurs."

"You have to educate these kids on how to learn to adapt to a new career," Dham added.