• Posted by: Technology Staff Editor
• On: 06/19/2008 09:58:54
• In: Information Technology

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ANAHEIM, Calif. — In a discussion here Tuesday (June 10) at the Design Automation Conference (DAC), representatives from the world's two most talked-about--and feared--economies, India and China, painted a portrait of high-tech growth that is proceeding piecemeal in both countries, and at different speeds, toward parity with the West.

Among the more startling predictions, from S. "Jani" Janakiraman, president of the Indian R&D firm, Mindtree, was that within a decade engineers in India " where thousands of U.S. technology jobs have been outsourced " will catch up to salaries earned by their American counterparts.

However, for the same equalization to happen in China, Mcallight Liu, executive editor of ECN China, "is a long way to go."

Janakiraman said the Indian software design industry is growing at an annual rate of 22-25 percent, forcing a huge influx of new engineering graduates. The result for workers is a boost in the salary scale of as much as five percent a year. Not long ago, Indian engineers' salaries were one-third of those in the United States. Now they're close to 50 percent and, in ten years, said Janakiraman, there will be no difference.

"That is something we have to be concerned about," he said.

Meanwhile, Janakiraman added, India's experience in software design is fueling the growth of the nation's homegrown high-tech sector. "Software, a separate industry, became an enabler of the semiconductor industry in India," said Janakiraman. He noted that of the 133 members of the Indian semiconductor industry association, some 40 percent are now Indian companies, not subsidiaries of multinationals.

Ironically, as Americans fret about high-tech work being offshored to India, India is jumping into the outsourcing game. Janakiraman said that less developed Indian cities are now picking up some of the work previously concentrated in technology meccas such as Bangalore and Mumbai.

But Indian is also shipping much of its manufacturing work to Taiwan, Bangladesh, Sri Lanka and China, and taking advantage of the telecommunications skills available in Finland. "And we're looking at a design center in Mexico," said Janakiraman.

By comparison, said Liu, the largest homegrown Chinese high-tech companies are at "survival level," too small to even consider outsourcing. "It's a long way to go," said Liu.

Both countries have infrastructure problems. Despite a national policy of setting up "special economic zones," with enhanced utilities and transportation links -- usually near airports " India's manufacturing capabilities continue to lag.

For China, the lingering issue is intellectual property rights. Liu admitted that China has a well-earned international reputation as an IP pirate. In the past, China tolerated endemic violations of international IP standards because it was a "very poor country," said Liu, whose software design firms, for example, couldn't afford to compete with the West. "It was impossible to ask those people, those companies, to pay a high price to buy some software tools," he said.

Liu, however, followed this excuse of past violations by asserting that China is changing for the better. "The government is aware," said Liu.

"The government is trying to encourage companies, the country, to move forward by innovation," Liu continued. "If intellectual property can't be protected, if patents can't be protected, how can we move forward?... China is becoming much more international. It has to abide by international laws."