OT: Offshore engineering

I've been debating for several days whether or not to post this message. Well...here it goes, we'll see what develops.

I read a disturbing article this last week in Time magazine. It seems to be available online at

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. This article describes the alarming rate at which many types of jobs are being exported to countries such as India, where the work gets done for darn near 1/10th. the cost, or less.

Now, before anybody beats me over the head with a digital club, please know that my intention here is to understand the trend and what it might mean in general. As a small business owner facing the need to hire engineers (FPGA/embedded) within the next six to twelve months I have to ask myself if my competitors have exported these jobs? If that were to be the case, competitive forces alone would almost dictate that I (and others in my position) look for offshore solutions.

Of course this isn't an issue just in the U.S. I imagine it affects other markets where wages and the cost of living and doing business is higher than for some of the offshore providers.

What is interesting and ironic is that some of the technologies that have enabled this (I'm thinking Internet) were invented, funded, deployed and developed by the U.S. Now, improved communications and all related technologies make the all but most barriers to doing business evaporate. The same applies to software, operating systems, tools, etc.

That's another issue: software piracy. The widespread offshore availability of very expensive software for virtually nothing is certainly a factor in shifting the business equation in favor of these providers. I've had to pay tens of thousands of dollars for all of my development software and I know that there's someone out there who paid $6 (if at all) for what cost me $10K. A level playing field it is not, by far.

Where is this going? I'm all for globalization and economic prosperity at every point on the globe, but there are ways of doing it right and, it seems to me, this isn't one of them. This feels like a nasty big knife cutting our own throats on a daily basis. How do we do this so that everyone wins? And, how does someone like me support his local talent pool without going out of business?

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Martin Euredjian
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Martin Euredjian
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I think you'll find that this is a common problem. In NZ we see companies leaving all the time. and places like India and China will always be cheaper. but the likelihood of them pirating your project is high too.. if they will steal 10k or 100k of software think what they will do if your project proves worth keeping!!

But I think you'll find the knife is being held to your own throat by yourself!

The more you try to cut costs, the more likely you are to get burned. And as companies look off shore more and more because of high labour rates in the USA, more and more technology will be off shore. But that's globalization for you. The ideal is not to build anything yourself but sell ideas to other countries so they get polluted not you >:-) only problem is .. sooner or later, they will develop ideas and sell them back to you.

So.. if you want to keep your ideas.. then think local employ staff locally if you can.. but keep the intellectual property in house. will give you something to sell during the next dot-com crash :-)

I myself think you should design local, and if it picks up.. manufacture global. It will cost more up front, but at least you know where your design is going and can be reasonably assured that you will be making the profit from your design. But also only go to respectable manufactures.. so you keep your design

Simon

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Reply to
Simon Peacock

This is not true. But this isn't what I wanted to see discussed here.

People

This is precisely the sort of answer I did not want to see. Please, no insults or attacks.

Of course I know that software piracy is rampant in the US as well. We probably invented that too! However, in some parts of the world virtually nobody buys sofware, ever. I've seen this first hand, in two continents. While travelling I've seen "services" that sell just about any software you want for three to six bucks. The fact that such deals are common-knowledge (to locals) has to mean something.

need.

Again, you got me all wrong. I'm sorry if I didn't make my post clear enough for everyone to understand. Please don't take me as an ego/USA-centric whacko. That I am not. By far. I'm well travelled, speak

4 1/2 languages and even have family in several continents. I love my country, but I also know, understand and accept that it has much wrong with it and much to be ashamed of. But, who doesn't?

This matter of global high-tech resource availability is something that will fundamentally change our lives. Within my small little sliver of the world I'm trying to understand what it means and how to deal with it. How to use it or not. I'm having web site design work done offshore for $1,000 that would cost $20K to $50K to have done in the US. It sort of hurts because I know that someone here isn't getting the work.

To be somewhat on topic, I can get FPGA work done offshore for 1/10th of what it would cost to hire one FPGA guy here. Or, seen another way, I could have a team of ten FPGA guys offshore for the same cost of one guy locally. That's mind boggling. Large companies are exporting whole departments. You follow this to conclusion and, I begin to have doubts about coaxing my son towards technical fields (he's 4 1/2, so this will be a reality to contend with in his adult life).

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Martin Euredjian
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Martin Euredjian

Ultimately venture capitalists will invest their money offshore and get the whole company for 1/10 the price. The only thing left in the US might be some sales people who actually have to meet the clients (i.e., to suck any remaining wealth out).

Recently I've been thinking about our class system with respect to off-shoring both white and blue-collar jobs. I think that the really rich people in this country support these policies because they think that wealth is a zero sum game- if they could just decimate the middle class they will be really really rich by comparison.

But don't worry, it can't go on forever: when this happened in France, Robespierre guillotined all of the bastards.

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Joseph H Allen

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From people I've spoken to down here in Southern California, most of the 'famous' high-tech companies (Broadcom, Connexant, etc.) have already begun investigating outsourcing engineering/design work. My contact at Connexant says some departments there already outsource some portion of back-end (place/route) designwork to Indian firms. Broadcom is likely to follow soon (if they haven't started already.)

At this point, the engineering-design capabilities of these outsourcing companies are 'fairly basic.' As the practice is in its infancy, the work-quality is decidedly mixed, varying from company to company and project to project. Projects which require ongoing input from the (US-based) spec-writers often run into complications, due to communication errors or other logistic problems. (Sitting down face to face still beats out email/video-conferencing any day!) I suspect that as time goes on, project managers will become more familiar with the process of outsourcing, and adapt to the logistic issues.

Likewise, as the outsourcing companies compete against one another, the better performers will garner repeat work, increase their design capacity and sophistication.

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an

"Martin Euredjian" ha scritto nel messaggio news:ChpYa.49$ snipped-for-privacy@newssvr14.news.prodigy.com...

If you really are for economic prosperity everywhere, you must accept the fact that when the cake needs to be split in more parts, the slices are smaller. So those who ate almost all of the cake in the past, now will have less to eat.

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Lorenzo
Reply to
Lorenzo Lutti

It's hard to discuss the topic when these sorts of arguments are presented. I think I rather jot this one down as a mistake --something I should have not posted in the newsgroup. For that I apologize.

If someone has the genuine ability to engage in a discussion (on adult terms) as to the effect that the "offshore revolution" will have on technology, markets, product development, IP, manufacturing, the FPGA world, etc. I, of course, welcome it.

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Martin Euredjian
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Martin Euredjian

"Martin Euredjian" ha scritto nel messaggio news:TGyZa.7$% snipped-for-privacy@newssvr14.news.prodigy.com...

I was deadly serious, and the concept, though very simple, is also very hard to confute. When you have a working force ten times bigger, that works more hours a day for (a lot) less money, how can you think to compete? In my opinion, the real childish attitude is to blame the piracy rate.

Some big countries are growing (at least) ten times faster than the "rich" ones. While in the beginning it was simple for the multinationals to slave entire villages of mid-east asians for making shoes at 30 cents/hour, now (luckily, I might add) their demands are growing. It is still a great deal for multinationals, but the margin is smaller, and someone has to pay.

In a smaller scale, there is the same "problem" here in Europe: countries like Germany, France or Italy move more and more frequently the production to east-european countries (Poland, Bulgary and so on), because it costs a lot less. We are just at the point the USA were in the mid-eighties: only the "easy" production (not engineering or other "creative" activities) is moved offshore. But engineering is just the next step. All men are equally smart, if they get an appropriate instruction.

By the way: I'm not a supporter of globalization, at least of the kind of globalization we have seen in the last 20 years. This "conquistadores" way of globalizing will become a boomerang for the big corporations. And for us, of course.

I think there won't be any technical change, the only effect will be the change of economic barycentre.

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Lorenzo
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Lorenzo Lutti

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