I spent an academic year in Stanford in 1999-2000, and had an opportunity to watch the Californian information technology boom at close quarters. The demand it created for Indian technology programmers did much to improve the image of India, and made Indians proud. But in California, there were many misgivings about the "unfair" competition from cheap Indian workers. I wrote on them in Business Standard of 30 October 1999.
BODYSHOPPING TODAY
The Indian software industry heavily depends on
body-shopping – on sending out software engineers on contract to fix customers’
problems on the spot. A high proportion of these “bodies” find jobs abroad –
with the customers or with other software companies – and emigrate. This is how
a large community of Indians has emerged in the Silicon Valley.
This is quite a recent phenomenon. Till the 1980s, the
American immigration regulations made no provision for temporary workers.
Either people came on visitors’ visas, in which case they were not supposed to
work; or they went into a process which would lead to their settling down in
America. They might get an immigrant visa in their own country, or they might
come to America as students or dependents, get a green card, and eventually
apply for an immigrant visa. The latter route is still very popular amongst
Indians. But neither route allowed for a worker who came to the States for a
few months and went back.
What led initially to the import of Indian engineers was
not their technical prowess, but a severe labour shortage in the Silicon Valley
software industry. The cost of computing power fell by magnitudes in the 1980s
as chips became cheaper. The hardware industry exploited this cost reduction by
manufacturing in bulk “personal computers” – computers for individual use which
had limited computing power and standardized software such as Wordstar and
Supercalc. The PC revolution changed the
structure of the industry. IBM, the towering giant of the mainframe days, went
down, and manufacturers of cheap PCs, such as Dell and Acer, rapidly captured
the market for small machines.
The PC revolution affected offices as well; secretaries’
lives became enormously easier, paper wastage went down, and electronic storage
began to replace files. Ultimately, of course, it threatened the occupation of
the secretary itself; today, many office workers do their own writing,
correspondence, scheduling etc on the computer themselves.
But the PC did not really meet the internal needs of big
businesses – needs of internal communication and coordination. These tasks
still continued to be done by means of meetings and memos. The technology that
created the PC and its software could meet these needs as well – all that was
needed was greater computing power, common servers, and new communication
software. This has really been the growth sector in the 1990s. The products it
has spawned have far outgrown the corporate requirements and have burgeoned
into the internet of today.
But early on, by the late 1980s, it was outstripping the
supply of engineers in the Silicon Valley; that is when the software
manufacturers started looking for new sources of manpower. At that time there
were no satellite links between India and the US; internet was in its infancy,
and had not reached the Indian shores. The only way of using Indian manpower
was through bodyshopping.
So the software industry amongst others started asking
for a new kind of visa which would be neither an immigrant nor a visitor visa,
but would be a visa for a short-term employee or consultant. This led US
Congress in 1990 to create a new class of visa – H-1B – for workers engaged for
up to three years. The visa could be extended for another three years. It does
not cover only software engineers; even models coming to India for frequent
assignments use them. The initial quota of 65,000 a year proved inadequate;
last year President Clinton raised it to 115,000. A half of the entrants come
from India, the rest from China, Canada, the Philippines, Taiwan, Korea, Japan,
Pakistan, Russia and Britain.
Now the US Congress has appointed a committee to go into
the subject of H1-B visas. It held hearings in Santa Clara in the last week of
September. It will go on to visit Boston, New York and Houston. It may even
travel to India and Israel. It has been given till October 2000 to report.
Many witnesses who testified to the committee were
extremely hostile to the H1-B visa holders. They compared it to indentured
labour and to the import of seasonal farm workers from Mexico. A 57-year old
worker said that he kept one pair of polished shoes for job interviews, and
“they have holes worn into the soles, that’s how much I’ve pounded the
pavement. He said that employers took young foreigners in preference to older
native workers. “There is no American dream for many, many US workers who have
been displaced, folded and mutilated by this government,” he said. A San Jose
resident in his 70s, who has four degrees including a Ph D in chemistry, said,
“Anyone who over 50 has a serious employment problem in this valley; maybe 40.”
He had been looking for work for 2 years without success. A software engineer,
48, said that there was only one person in his company who was older than he;
the average age of engineers in the company was 25 years. He said he had taken
many extension classes to stay up-to-date, but had still been marginalized.
This committee will influence the decision on whether
Indian software engineers continue to find employment in the Silicon valley or
not. Knowing our government, I doubt if it will bother to meet and educate the
committee; it may even refuse the committee a visa. So the fate of the Indian
engineers hangs on the strength of their employers here – on how strong a case
they can make for the engineers’ continued employment. The employers who
testified said that the preference for youth in the industry was inevitable;
the product cycles in the industry had declined from three years till the
mid-1990s to 1 year now, speed was essential, and hence young people were
indispensable. And competition was so intense that there was no alternative to
foreign engineers. These arguments may carry the day; whether they do or not
will decide the fates of thousands of Indian software engineers.
