U.S. Tech Bust a Boon for Asia

U.S. Tech Bust a Boon for Asia
By Tim McDonald, www.NewsFactor.com
As the downturn in the U.S. economy in general and the high-tech sector in particular continues, companies in the U.S. and elsewhere are looking to India, China and other parts of Asia for workers, real estate and profit opportunities.





India in particular is proving irresistible to cost-conscious high-tech firms, and the country is not shy about advertising the benefits of its inexpensive real estate as well as a highly-skilled, cheap labor pool. Bangalore, in the state of Karnataka, where India's high-tech sector is centered, is courting Western firms with a vengeance.

"Why Bangalore is smiling...and why you should be too," reads an advertisement in the UK's Economist magazine.

The ads and lures are working. The Indian government said that, on average, one foreign company per week is setting up operations in Bangalore. That figure could grow even higher, as more ads are planned for Silicon Valley publications, according to Indian government officials.

GE and Ford Go East

Bangalore already sports 925 software firms, according to government figures, including some of the world's best-known companies. The most recent American import is Versata Inc. (Nasdaq: VATA - news), which announced a Bangalore opening after cutting 15 percent of its workforce at home.

The Massachusetts Institute of Technology (MIT) plans to invest US$1 billion over 10 years in India, and MIT's Media Lab is set to open a branch in the country sometime this year.

Hewlett-Packard (NYSE: HWP - news) has a plan to establish three research laboratories and triple the number of employees in the country to about 5,000 over the next few years. And Veritax Software said it plans to double its Indian staff to more than 600.

General Electric and Ford are also jumping in -- GE plans to increase its staff from 7,500 to 20,000 by 2003, and Ford recently opened a software development hub in the country.

Work Well, Work Cheap

India boasts a workforce of 80,000 highly-trained software engineers, which the government claims can be hired for as little as $200 per month. Some analysts find the figure suspect, as many Indians have left the country for high-paying jobs in the U.S.

However, some of those are now headed home, though some reports say the U.S. labor market remains strong for top-level foreign workers.

On Thursday, Japanese electronics giant NEC said it plans to dramatically increase its use of information technology workers in China, India and other parts of Asia. The company said it wanted to increase its 1,600 Asian software engineers to 4,000 by 2003.

Net Growth High

India isn't the only Eastern destination for high-tech firms. A recent study by NetValue showed that Asia's overall Internet penetration rate, while lower than that of the U.S., is growing at a much faster rate.

An IDC study said the number of Internet users in the Asia/Pacific region is increasing at an unprecedented rate, and is expected *****rpass the U.S. in 2005.

"Rapid growth coupled with a huge pool of potential users will work to ensure Asia's place at the forefront of the Internet revolution," said IDC's Douglas Jaffe.

Of course, China is expected to bloom, especially when it officially enters the World Trade Organization, which could happen as early as this year. Legend Holdings, China's top computer maker, has scheduled a news conference Monday in Beijing amid speculation it will form a joint venture with AOL Time Warner.

Asia 'Under-Penetrated'

Microsoft said Thursday that its Asia sales would increase 27 percent during its fiscal year ending June 30th, citing consumer affluence and increased government IT spending. Asia currently accounts for 18 percent of Microsoft's total revenues from commercial business.

"It should be noted that relative to other markets, the Asian market is under-penetrated," Microsoft's Asia chief, Michael Rawding, told reporters and investors.

Singapore, which launched an aggressive plan to embrace high-tech last year, is also popular. Its most recent ad***ion is Internet-based U.S. energy marketplace IntercontinentalExchange, which said Wednesday it plans an office in Singapore. Also, Global IP Sound said Wednesday that it will open an office in Hong Kong.





Được sửa chữa bởi - despi on 22/12/2001 07:27