from the guy who lobbyed for more green cards!!!!

[ron browning]

Gates warns against reliance on outsourcing
Urges investing in R&D to keep competitive edge
	

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>  	Blogs: Microsoft: Biggest R&D outsourcer of all
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>  	Q&A: Inaction on offshoring will hurt U.S. IT,
author says
>  	Gates warns against reliance on outsourcing



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News Story by Paul Kallender

JUNE 29, 2005 (IDG NEWS SERVICE) - TOKYO -- Companies
should not outsource their core business functions and
staff, Microsoft Corp. Chairman and Chief Software
Architect Bill Gates told a group of Japan's top
businessmen today.

Gates, who was speaking at the Nippon Keidanren (Japan
Business Federation), Japan's biggest and most
influential business group, urged IT companies to
beware of outsourcing too much to save costs and to
keep their key engineering resources and intellectual
property at home.

"If you rely too much on people in other companies and
countries ... you are outsourcing your brains, where
you are making all the innovation," he said.

The need to maintain a competitive edge by investing
rather than cost-cutting was a theme that Gates
returned to several times in an address to a group of
leading Japanese IT and consumer industrialists that
included Hajime Sasaki, chairman of NEC Corp., and
Tadashi Okamura, chairman of Toshiba Corp., both of
whom had front-row seats.

Too many U.S. companies were cutting their research
and development budgets at a time when investment in
these areas is needed to cope with an increasingly
competitive global market economy, he said.

At a national level, both the U.S. and Japan need to
train more and better engineers if their economies are
to stay at the cutting edge of technological
innovation, which would create value that helps
support both countries' high standards of living, he
said.

Gates cast the U.S. and Japan as competing in a global
market economy that had grown from about 1 billion
people 20 years ago to 4 billion people. In this
expanded, increasingly competitive economy, India and
China are training engineers who are driving their
economies forward, yet Japan and the U.S. aren't
keeping up, he said.

"The number of students in engineering and IT is going
down. ... Staying ahead means setting a very high
bar," Gates said. 


		
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