Execs, gov’t leaders discuss strategies to combat outsourcing

LONDON — Fear of China’s and India’s growing strengths as outsourcing and development centers permeated the U.K. government’s enterprise conference in London Monday, where top technology executives and government leaders met to discuss strategies for developing more business at home.

“By 2015 up to 5 million American and European jobs could have moved offshore, outsourced to countries like India and China as they strive to become the world’s second and third largest economies,” Gordon Brown, the U.K.’s Chancellor of the Exchequer, said in his opening keynote address at the Advancing Enterprise Conference.

Brown’s sentiments were echoed by local business leaders like Vodafone Group PLC Chief Executive Officer (CEO) Arun Sarin. They stressed the importance of developing international business while keeping core jobs and development money in their home country.

Sarin spoke of Vodafone’s top priority of rolling out new 3G (third-generation) services, driven by an annual investment of £5 billion ($9 billion) in the new offerings.

Brown, for his part, announced that the government is currently reviewing a long-term plan for science funding to help make Britain a base for research and development (R&D). Britain already invests £1.25 billion a year in science education and R&D tax credits, he said.

The chancellor also stressed Britain’s partnership with the U.S. in driving business growth and jointly stemming China’s increasing power.

“Even today China’s significance to the global economy is that every year it, on its own, is adding as much output as the whole of the G7 put together,” he said. The threat of losing jobs to developing countries that offer the double punch of educated workers and lower costs is particularly strong in the technology sector, Brown said.

The U.S. technology sector is already well aware of this competitive threat, as companies like IBM Corp. have already moved thousands of jobs offshore.

The U.K. government is hoping to further align itself with the U.S. and its European neighbors to keep technology jobs and investment among its traditional trading partners.

As a sign of its partnership efforts, the government said Monday that Queen Elizabeth II has awarded Microsoft Corp. Chairman and Chief Software Architect Bill Gates an honorary knighthood for his contribution to enterprise, employment and education in the U.K.

Gates is set to give a keynote address at the conference later Monday.

But despite calls by leaders such as Brown and Sarin to stimulate local growth through a set path of technology investment and development, Google Inc. Chairman and CEO Eric Schmidt reminded listeners that the next big boom in technology cannot be predicted.

“For every new programmer we hire, we tell them to spend 20 percent of their time working on something new and that’s where the innovation comes from,” Schmidt said. “People ask me what’s next. I’m the CEO and I don’t know! You’ll have to get used to that,” he said.

Currently high-flying Google, which has shaken up the Internet search market in recent years with its innovative new tools and services has shown little fear of international competition. In fact, earlier this year it started recruiting engineers in India for its first R&D center outside of the U.S.

While the U.K. government and some panel speakers united to fight against Asian rivals, Schmidt seemed to be encouraging them to embrace the change.

“You have a choice — you can get with the program or fight against the program,” Schmidt said.

The U.K. government’s Advancing Enterprise Conference runs until Monday.