To: epicure who wrote (4538 ) 1/8/2004 4:49:37 AM From: Dale Baker Read Replies (1) | Respond to of 7834 U.S. Could Lose Technology Dominance, Executives Say Group Sees Need for New Government Incentives Barriers to global commerce are not the right response as more technology jobs move overseas, Intel chief executive Craig R. Barrett says. (Dennis Brack -- Bloomberg News) By Jonathan Krim Washington Post Staff Writer Thursday, January 8, 2004; Page E05 An organization of high-technology executives yesterday renewed industry calls for government spending and tax cuts to spur research, improved mathematics and science education and policies that make building technology infrastructure a national priority. With India, China, Russia and other countries rapidly becoming technology centers, the executives warned that without such measures the United States could lose its dominance in the knowledge economy. "Our competitiveness as a nation is not inevitable," said Hewlett-Packard chief executive Carleton S. "Carly" Fiorina. At a press briefing alongside Intel Corp. chief executive Craig R. Barrett, Fiorina cited declining federal government spending on research and development compared with other countries, as well as a kindergarten through 12th grade educational system that "remains a source of competitive disadvantage." Barrett also cautioned against erecting global barriers to commerce, a response to mounting concerns that technology and other companies are transferring tens of thousands of support center, data entry and software engineering jobs overseas to take advantage of lower wages. By some estimates by financial consulting firms, 10 percent of jobs at U.S. information technology vendors will move offshore by the end of this year. Throughout all U.S. companies, Forrester Research predicts the loss of about 3.3 million jobs by 2015. Already, some Democratic presidential candidates have criticized the practice. Sen. John F. Kerry (D-Mass.) has introduced legislation that would require employees of call centers to identify their location. Organizations of technology employees, many of whom remain out of work after the post-tech-bubble downturn, argue that companies are simply reaping greater profits at the expense of U.S. workers. In November, Indiana Gov. Joseph E. Kernan (D) canceled a $15 million contract with an outsourcing firm that would have had engineers in India upgrading state computers, even though a domestic contractor cost more. Barrett, chairman of the trade group Computer Systems Policy Project (CSPP), said such protectionist responses endanger the ability of U.S. firms to compete. He said Intel hires overseas often to gain local expertise, so that it can sell more products in those markets. Moreover, he said, migration of lower-paying jobs overseas is hardly new and is part of a recurring business cycle. He noted that a sizable portion of technology hardware manufacturing has moved overseas, without dire economic consequences. Fiorina said that what is likely to occur is a shift in the kind of technology jobs that will predominate in this country, such as those that requiring the ability to manage multiple systems and networks. She said the country cannot afford to be distracted by short-term financial and employment concerns. "The biggest barrier [to solutions] is our nation's attention span," she said. Fiorina insisted that the CSPP is "not lobbying." But the group put forth several proposals, and promised that its executives, who also include Michael S. Dell of Dell Inc. and Samuel J. Palmisano of International Business Machines Corp., would continue visiting Congress and the White House throughout the year to press its case. Palmisano and Intel Chairman Andrew S. Grove have made similar appeals in the past six months, under the banners of other trade groups. Among the CSPP proposals is an Infrastructure Investment Act of 2004, which would provide more favorable tax and regulatory rules to encourage building more broadband networks. The group also is pushing a Mathematics and Science Improvement Act of 2004, which would fund more rigorous education and school-testing in math and science. Fiorina said she could not estimate the cost of the proposals. But Barrett said they would be less than the $30 billion in agriculture subsidies that he scorned as investment in "19th-century technology."