More Companies Plan to Put R&D Overseas

Wait, wasn't R&D the piece of a corporation's work that was going to stay in the US, because every worker here was talented, good at problem solving and so forth?

"Five years from now, Mr. Wadhwa said he believes Indian workers will be developing software on par with programmers in Silicon Valley."

Russian/Estonian/[insert any country] are doing that for a while. Just not in their own country, but in Silicon Valley (50% of Silicon Valley startup has at least one founder that's not from USA). For creme de la creme products you need more than just good Indian "worker".

Note the bit about Infosys establishing comprehensive training programs, implying they are taking STEM graduates and bringing them up to speed on the current technologies. 30 years ago Intel had training programs (I don't know if they do now). So did Apple in the late 80's. (n.b., I was employed by both). Now the expectation for many large employers is that the applicant have already mastered the technologies. "No training for you!"

How much is attributable to "R$wages + R$cost of training" < "US$ wages" I cannot say.

I've been thinking this for years. Why not just outsource management?

As far as outsourcing stories go, I find this one to have a very nice silver lining for developed countries.

R&D is not factory floor oppressive work for people who have no options and often little political power. It is the domain of the intelligent; people with options who are more fully aware of what their options are. IOW, a true middle class. The more the thinking class grows the better all of us are.

R&D is not a zero sum game like manufacturing. With manufacturing there is only so much demand for the manufactured goods; only so much material with which to make the goods etc. With R&D the only limiting factor that comes to mind is the size of R&D budgets. It is relatively easy to increase the size of that pie if R&D brings results.

This class of people will be in a better place to act on opportunity as well compared to the low payed laborers whether it be to move to more developed countries once they have some valuable experience or to take their ideas and experience and create enterprises on their own or to simply demand higher compensation with these other options in mind. I'd bet they'd also have more political clout as well.

In short, more R&D in these countries will accelerate parity with their counterparts in more developed countries and might even pull their labor class with them.