Competing With India and China
A former top executive with General Electric, Vivek Paul was CEO of Wipro, the Indian information technology firm. He recently became a partner with the venture-capital firm Texas Pacific Group, where he will spearhead new investments in medical technology, focusing on India.
Is the United States becoming less competitive with other economies?
Simply put, India and China are rising as a percentage of the world's innovation. But that doesn't mean the United States is falling. Those countries in the past have had too small a share of the global economy. Now the share of the dollars going to those countries is getting closer to the share of souls in those countries.
India and China are rising because people are willing to work for less than in the United States. But that's not sustainable. Wages are already going up. The United States has a system that is sustainable through thick and thin. It is a very nimble economy. The banking system is the best in the world. It has the evergreen rejuvenation of immigration. It has companies that are global giants. It is the only political superpower left. Anybody who says this is the demise of the United States is missing the story.
What about the shift of jobs from the United States to Asia?
The U.S. companies going overseas are not being unpatriotic; they're being smart. Look at the demographics. The number of U.S. workers in the global workforce overall is going to go down. At the same time, India and China are adding workers. If you step back and take a planetary view, this offsets each other very nicely.
That ' s great for companies and their shareholders but not necessarily for employees here in the United States.
Companies have been moving jobs around for decades. The difference is today it's very easy for individuals to see they have to compete with somebody elsewhere in the world. The pressure is not on job availability; it's on who has the skills to do the job at the right price.
If the U.S. workforce continues to be as productive as it is, U.S. workers have nothing to worry about. But there will be a transition while the global economy makes its way to a point of balance. And there are going to be people who are affected. So while that's happening we need a safety net.
How far will the global shifting of work go?
There are downsides to India and China's success. China's success is slowing down its own reform. [Chinese President] Hu [Jintao] came in as a reformer, and he's beginning to look like an old party guy. We could be seeing the rebuilding of political tension in China.
India has gone swiftly from having a big population problem to its population being considered an asset. It will add more people to its workforce in the next 20 years than any other country. If there's no job creation in India, it could lead to massive social problems.
Some U.S. executives, like Bill Gates, say they have to send work overseas because there ' s a shortage of software engineers and other specialists like that here in the United States. But others think that ' s just an excuse to hire the cheapest labor. Do you think there ' s a shortage of talented workers here?
Our customers at Wipro were in a war-for-talent mode. They're not finding it that easy to find engineers and other talented people, whether it's in the United States or India or someplace else.
This story appears in the October 10, 2005 print edition of U.S. News & World Report.