Corporate America’s Conundrum

While individual corporations may benefit from their increasingly global staffs, the loss of thousands of IT jobs could hurt America’s ability to remain a leader in technology innovation. For without a critical mass of IT professionals in the United States, true innovation will be next to impossible.

"In 2010, we won’t have gutted the IT industry in the U.S. or any other currently developed economies in favor of moving somewhere else if we behave the way we should as leaders," says Busch. Hopefulness aside, Busch admits it isn’t easy juggling four major constituencies -- his employees, shareholders, customers and the communities Intel operates in. "It feels like swimming upstream," he says.

Busch is currently trying to increase IT’s presence in emerging economies while continuing to invest to a certain extent in his U.S. workers. "We have to compete with highly skilled IT workers in very sophisticated companies with lower cost structures. But simply substituting lower cost resources to reduce spending or deciding to solve a weak IT organization by sending the work someplace else is thoughtless," says Busch. Rather, CIOs must concentrate on improving efficiency, taking the risks necessary to innovate, and investing in tomorrow’s leaders.

"CIOs who focus exclusively on chasing cost savings around the world will have short careers," agrees Sun CIO Howard. "What matters is smart sourcing that looks at the [total cost of ownership] over the long haul and the many other factors like security privacy, [intellectual property] protection, geopolitical risks, and the potential cost of having to bring it all back in."

Investing in R&D will also be important both in the government and private sector. A lot of IT innovation came out of the space program, for example. "We wouldn’t have computers or the Internet had the U.S. government not invested in the research," says Ron Hira, assistant professor of public policy at the Rochester Institute of Technology. Homeland defense, security and military technology are all areas where federal funding could spur future innovation.

"But we can’t wait for the government to address these issues," Busch says. CIOs in the private sector can do their part by bringing the R&D spend back in their own companies.

Putting a greater focus on R&D and continuing to recruit the best and the brightest into IT are crucial to maintaining our competitive edge as a nation. But bear in mind, the United States has a built-in advantage when it comes to innovation: As a capitalist democracy, it is relatively free of the excessive government regulations, bureaucracy and corruption that stymie IT innovation in other countries.

"The free flow of information and the freedom to develop products is really the U.S.’s ace in the hole," says Maria Schafer, a program director at Meta Group. "That doesn’t exist in China or in Russia, or even in India. It’s why the U.S. has always been the innovator. There’s a tremendous strength in the way IT is done in the U.S."