yeah: Jim O'Neill predicted that China was the most important of the BRIC countries. Fascinating to read to about that: http://www.amazon.com/Growth-Map-Economic-Opportunity-Beyond/dp/1591844819#reader_B005OH9LTK
Why is this surprising? China has four citizens for every one in the US, and they count 1 out of 6 people on the entire planet. All they had to do is start digging themselves out from under an suthoritarian, restrictive regime, and they can flourish. It's a work in progress.
The article does say that R&D in the US is still growing, but R&D spending in China probably had and has a lot more growing to do.
The fact that our corporations are spending R&D funds in China and elsewhere, and even sending people overseas for that work, much more so than the other way around, is also the result of a much more open system.
This has worked out well for us in the past. But these days, there seems no end to the unfettered greed of corporate executives. Anything can be taken to excess. These guys are so focused on making their 10s of millions of dollars annual incomes that they don't bother to think long term.
Then again, remember how history taught us that southern plantation owners needed slave labor to be profitable? Did they bother to think of the long term consequences? Nope. We'll have to muddle through once again.
Investors no longer allow companies to think long term. Short term growth and profits are required to keep them happy. Until this perception changes, no public company is going to focus on long-term growth.
Oh, we still have Slave labor in the U.S. It's called the H1-B Visa program. And the reason multinational corporations are moving their best paying jobs overseas is that they are run by people who are too stupid - or should I say shortsighted? - to see that for every dollar they spend on an employee in a foreign country, they may as well be throwing ten into the fire in lost revenues. American workers buy from American businesses. Chinese workers buy from Chinese businesses. Indian workers buy from Indian businesses. How many Dells are sold in China? Or India? Or Japan? What percentage of iPhones does Apple sell in China versus how much of the iPhone is built there? I shouldn't pick on Apple, after all, they do have a plant in Texas making the CPU for the iPhone, unlike most other 'American' companies.
First we lost our manufacturing base. Protect our environment and let them dump the hazardous wastes in their own countries. Who wants to work in some factory, anyway?
Then we sent our services and support jobs overseas, people don't care if the person answering the 800 number have a foreign accent. Who wants those jobs, anyway?
Next we sent our software development work overseas, or shipped foreign workers by the tens of thousands to US companies, many living 6 to an apartment and working for much less than Americans. Those were jobs for nerds, anyway.
Now we're shipping our RnD overseas, and loosing the battle for technology leadership with the countries we thought 20 years ago were 'only good enough' to work at slave labor rates on assembly lines so we could buy the products cheap in Walmart, while the workers at the store were paid so little they qualified for food stamps and government health care programs for the poor and indigent.
I assume you are referring to Indian H1B employees when you wrote
"Next we sent our software development work overseas, or shipped foreign workers by the tens of thousands to US companies, many living 6 to an apartment and working for much less than Americans. Those were jobs for nerds, anyway."
I think you are at best misinformed. I am an Indian who graduated from a top US school and work at a top tier management firm that cannot find skilled Americans even in this bad economy. Just look at your schools to know the reason why. The minimum pay on a H1B visa is $60K and I make around twice that amount. Oh by the way, Indians as an ethnic group have the highest per capita income in the country. I want to stay and start my own company in the US but the immigration mess of mixing legal & illegal immigration has ruined my plans. So I will take my ideas back to India where I will use my free US degree paid for by US taxpayers to start my own business. America wants the best minds from the world but if you make it difficult to stay and contribute they will go elsewhere.
I do understand your feelings about the decline of US. In fact, as an Indian I feel that a stronger USA is better for the world. Unfortunately, politicians of all shades in most democracies do not care about the electorate they are more bothered about the lobby and special interest money.
When manufacturing was being shipped abroad the USA should have held other countries to the same labor & environmental conditions. It would have helped better the lives of people across the globe.Contrary to popular belief in the US, labor laws in India are very union & labor friendly unlike in the People's China where unions are banned.
Oh by the way before you go on a rant about software developers from India. Please see that US-India trade is evenly balanced unlike US-China trade.
I rest my case.
One of my sisters is part of a sportswear startup and their contract manufacturer in China has started to outsource to Tanzania, which is stable. Other firms are using Madagascar, where there is a fairly large ethnic Chinese population (some families are even older than American families who landed on Hawaii and the west coast over 150 years ago!).
"a top tier management firm that cannot find skilled Americans even in this bad economy"
Please list the necessary qualifications and salary range. Could it be that your firm cannot find skilled Americans willing to work for the salary your firm is offering? Could it be that your firm is unwilling to offer a bit of training to new employees?
"We will dump 6 million Indians in US and capture their entire IT market and no American will ever come to know about this. We will throw these Americans out of their own country. They don't know what we are doing over here."
Many of the posts below seem to focus on bashing India & China (notice that some how Japan & S. Korea were spared!) and their industrial espionage, etc... But they completely miss the fact that these countries DID invest some serious money in R&D, much more in China in comparison to others. And they IMPROVED their education system! These efforts do deserve some credit... whereas it is easy to critisize their service economy models for overseas opportunities with cheap(?) labour, etc. But seriously, the latter has a lot to do with corporate greed than anything else!
You forgot to mention that much of our governments financial debt is now payable to foreign-owned countries, many of the same countries that have benefited from the corporate out sourcing. A fundamental shift of power is occurring globally, from the US and Europe to China, India, etc.
R&D area is highly critical,sensitive,risky. It is not counted with volume or quantity. As for as R&D is concerned the out put is only with qualified experts and does never stands on any volume of money or % of people. I see no worry about this for US or China or for any other country.Where as production cost is oriented with % cost involved in the human work hours.
Perhaps all this is part of a natural social phenomenon. First manufacturing was sent abroad, then the US people start studying finance and MBA degrees, now the R&D jobs are being sent abroad. What will come next? is this the beggining of the fall of USA? I've heard that 30% of the USA income is thanks to electronics and this is thanks to knowledge in semiconductor physics and quantum physics. I hope USA is able to catch-up now that they're starting to invest in STEM education again.
In my opinion what is being outsourced out of US is applied R & D , related to the commercial industry. The Basic R & D, The Space related research and all the advanced R & D work in fundamental sciences and technologies is not being outsourced. And that is where US is likely to hold sway over the rest of the world. And it can continue to do so as most of the top class brains from developing countries yearn to work and settle in USA as US citizens and contribute to US knowledge wealth while monetarily helping their mother nation.
I think there are various factors contributing to the narrowing of the gap. I have found an interesting article in NYTimes. http://www.nytimes.com/2012/01/22/business/apple-america-and-a-squeezed-middle-class.html?pagewanted=1&sq=apple
What do you expect. We pay atheletes more than engineers and scientist. Then we bore the hell out of those few who enter the hard sciences and treat them like crap after they graduate.
If you want good R&D done in the US, you have to reward it. Our society would rather spend all day drinking and watching TV. What's a talented person to do, but go where the best jobs are.
They no longer exist in the US.
Most of these foreign workers are, in fact, industrial spies. 15 years ago, before all this started India and China couldn't compete at all with the US in science and tech. 15 years ago the US was the undisputed leader. Now we're losing competitiveness? I thought all those foreign workers we've been importing for 15 years were going to help keep us competitve?
I am a New Zealand, married with two children. I have just completed my PhD in physics (NMR). I would like to move to the US.
I have found that US companies generally do not reply to my emails, they have websites with application forms that look like they were designed in the 1990s (Haliburton), they even require you to post your CV !!! in a real paper envelope (Philips) which I did.
Once a company does start talking to you, the requirements to get into the US are a sticking point. They point out the paperwork and costs involved.
By contrast, Australia and Europe are much better. They reply. Their websites are generally better in my experience.
Conclusion: the US is making it hard for the US to employ highly educated people.
RWNZ, do the U.S. companies that have bothered to reply to you say you must get a high-tech, or H-1B, visa to work in the U.S? Some other visa category? U.S. companies frequently complain that they can't find employees with the skill sets they seek. Seems like a U.S. company would therefore be willing to handle the paperwork and cover the visa costs if your qualifications were what they are looking for.