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The BBC's Maggie Sheils reports
"Silicon Valley will continue to be the economic engine of the world."
 real 28k

Tuesday, 17 April, 2001, 11:34 GMT 12:34 UK
Asian exodus from Silicon Valley?
San Jose, Silicon Valley
Many still believe the future is bright for technology employees in Silicon Valley
by Maggie Shiels in Silicon Valley

Until a few months ago, Silicon Valley was the Mecca for hi-tech workers from around the world.

Tech firms, meanwhile, were pleading with Congress to increase the number of so-called H1-B visas, that allow highly qualified foreigners to work in the United States.

Last year a software engineer was getting four and five job offers a day, today it probably takes a month to get maybe one or two offers.

Mahesh Nagarajaiah, Silicon Valley Indian Professional Assn
But now Silicon Valley is not the happy hunting ground it was a year ago for foreign high tech workers.

On top of lay-offs and job freezes, the latest proof comes from America's Immigration and Naturalisation Service (INS) which shows that the number of specialist H1-B visas being approved dropped dramatically for February, the latest month for which statistics are available.

The INS says US companies applied for just 16,000 H1-B visas, down from 32,000 a year ago.

Only last year Congress approved a substantial increase in the overall number of worker visas under pressure from the high tech industry which warned that without the boost they would suffer dangerous workforce shortages.

"Companies are nowhere near reaching even last years quota of 115,000 for speciality occupation worker visas which Congress raised to 195,000 in October," said INS visa spokeswoman Eyleen Schmidt.

With dot.coms collapsing, software developers issuing dire profit warnings and computer manufacturers slashing their workforces, it would certainly seem that the bottom has fallen out of the market for foreign skilled workers.

Job vacancies

But that is only half the picture in Silicon Valley which still boasts an unemployment rate just over 2%.

Intel, the world's biggest chip maker says it is still looking for qualified engineers despite the fact it is cutting its workforce by 5,000 jobs.

"The downturn does not reduce the demand for highly skilled technical folks in Silicon Valley," said company spokeswoman Tracy Koon.

Over at Cisco, which has just announced that it will cut 20% of the workforce because of falling sales, spokeswoman Laura Ipsen agrees.

"There will always be a high demand for highly skilled engineers," she said.

Craig Barrett, CEO Intel
Craig Barrett, CEO - Intel is still looking for qualified engineers despite the fact it is cutting its work

All of which is good news for a country like India, which has the world's largest diaspora of scientists.

India usually accounts for 41% of the overall H1-B visa allocation, while China uses nearly 10% and the UK just over 3%.

The INS admits that it does not know the total number of H1-B visa holders currently in the United States but a study by Georgetown University puts the number at around 450,000.

Indian expertise

IndUs Entrepreneurs, whose members include the leading Indian software engineers in Silicon valley, claims that 30% of the software engineers in the Valley are of Indian origin.

That is borne out by AnnaLee Saxenian, an economist at the University at California at Berkeley, who maintains there are 750 Silicon Valley companies run by Indians.

The Silicon Valley Indian Professional Association (SIPA) has over 1800 members.

Its President Elect Mahesh Nagarajaiah says, "the present economic downturn is having a great effect on Indian engineers because many of them work in the IT sector which is suffering because every company seems to be cutting their IT budgets."

But with low unemployment, SIPA's Mr Nagarajaiah says its members are finding jobs even if it takes a little longer than usual.

"Last year a software engineer was getting four and five job offers a day, today it probably takes a month to get maybe one or two offers. It is no longer an employees market."

Bright future

However SIPA claims that rather than returning to India, most are staying in Silicon Valley because this is where the opportunities are.

And Jim O'Neil, an analyst from Ernst and Young says it would be foolish to leave Silicon Valley because the future looks bright.

"We talk about the high tech industry, everything is high tech, no matter what the business is today it's being driven by some information technology processing and that means that the Silicon Valley will continue to be the economic engine of the world. The area is extremely bullish."

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