PDF: 2962 pages, 5.2 MB - Bay Area Council Economic Institute

Global Reach
Faced with rising costs, congestion, and attrition and job-hopping in their workforce, Indian and
global IT firms that were once based predominantly in Bangalore and the National Capital
Region (New Delhi, Gurgaon and Noida) are now increasingly looking to Tier 2 and 3 cities such
as Hyderabad, Chennai, Chandigarh, Jaipur, Pune, and Kolkata for expansion. Major IT firms are
also expanding their global presence by establishing service and employment centers to serve
regional markets outside India. Locally based software development and customer support centers
now operate in the U.S., China, Southeast Asia, Western and Eastern Europe, the Middle
East, Mexico, Canada, and Brazil.
In 2007, five of India’s seven leading IT companies had a presence in China, often with multiple
locations. Geographic expansion is also happening through acquisitions. While employees at
these overseas sites are largely Indian, efforts are underway to increase local hires. In the United
States, TCS has a facility in Ohio employing 1,000 professionals. Wipro employs more than
8,000 professionals across the U.S., principally in locations such as Austin and Atlanta with high
concentrations of educational institutions and trained workers.
The flow of talent has not been exclusively one-way: when a shortage of more highly-skilled
R&D center workers in India became apparent in 2006, large Indian firms began recruiting from
U.S. universities, first placing graduates in India and then eventually returning them to the U.S. in
positions starting in the $50–60,000 annual salary range. To date, the number of such recruits
does not appear to be large, and retention levels are unclear.
To H-1B or Not to H-1B
A debate over U.S. visa policy began in the early years of this
decade, extending from Washington, D.C. to Silicon Valley to
India, with no resolution in sight.
Until the early 1990s, there was no cap on the number of H-1B
visas issued to foreign workers with special skills admitted to the
U.S. to work for sponsoring companies or organizations. In 1991,
however, Congress set a cap of 65,000 visas. As the U.S. tech
industry grew during the 1990s and companies increased their
reliance on foreign engineers and programmers, the cap was
raised in 1997 and 1998. Congress approved temporary increases
to 115,000 visas in 1999–2000 and to 165,000 in 2001–03.
The higher caps expired in 2004, and with the technology sector
in a post dot-com slump, they were not renewed. The current
65,000-visa cap has two exceptions: an additional 20,000 visas are
reserved for master’s and doctoral graduates of U.S. universities,
and U.S. universities and academic research institutions are exempt
altogether from the cap.
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