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MONDAYAUGUST 9, 2004

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High 87, low 60.> LOCAL B8

IndexBUSINESS E SECTION

CLOSE-UP A3

COMICS, PUZZLES NW LIFE F6, F7

CORRECTIONS A2

CROSSWORD NW LIFE F7

DAVE BARRY NW LIFE F2

DEAR ABBY NW LIFE F5

DEATHS, FUNERALS LOCAL B4

EDITORIALS LOCAL B6

LOCAL NEWS B SECTION

LOTTERY A2

MOVIE LISTINGS NW LIFE F3, F4

NATION REPORT A4

NORTHWEST LIFE F SECTION

SPORTS ON TV, RADIO SPORTS C12

TV NW LIFE F5

WEATHER LOCAL B8

WORLD REPORT A8

Classified ads index D1JOBS D1

HOMES D4

RENTALS D4

AUTOS D6

SPORTSTICKER | M’s rough road trip ends with 5-1 loss to Devil Rays

LocalA LOOK AT THENEW PRIMARYBALLOT > B1

SportsBUD WINS ITSFINAL SEAFAIR> C1

Northwest LifeTHOREAU’S“WALDEN”REVISITED > F1

BY BRIER DUDLEYSeattle Times technology reporter

BANGALORE, India –

Back in 1981, Kris Gopalakrishnan practi-cally begged government officials to lethim and six pals buy a computer so they

could start a software company in their apart-ment. Indian companies didn’t make the ma-chine the young engineers needed, and thegovernment, wary of foreign businesses,

placed burdensomerestrictions andtaxes on globaltrade.

It took two years toget the request ap-proved, and Infosysfinally bought itsfirst computer — amidsize Data Gen-eral.

These days, if Go-palakrishnan need-ed a new computer,he probably couldask the prime minis-ter to hand-deliver it.This past April, he re-ceived personal atta-

boys from both the prime minister and thepresident when Infosys’ annual sales broke$1 billion — a record for a publicly traded techcompany in India.

“In a sense, it signifies the coming of age ofthe Indian IT industry, which contributes somuch today to India’s GDP, to our exports andto the image that India enjoys in the world,”then-Prime Minister Shri Atal Behari Vajpayeesaid in his congratulatory note.

The story of Infosys helps illustrate how, inlittle more than 20 years, this young and im-poverished nation grew an industry that hasbecome the envy of the developing world —

Shifting fortunesPain and gain in the global economy

India parlayseducation,timing intotech boomIN DIA’S R ISE IN THE TECH WORLD,

PART 2 | In little more than 20 years,an impoverished nation has developedan industry with a global reach.

India software pioneerKris Gopalakrishnan,founder of Infosys.

seattle times special report |This is part of an occasional series onglobalization and Washington’strade-dependent economy. This week, we take you from Redmond to India, where the outsourcing of high-tech jobs is a high-stakes game.

> The series online:seattletimes.com/shiftingfortunes

Please see > INDIA, A10

NewslineA quick look

at today’s news

Terror: Al-Qaida mayhave targeted theU.S. Capitol in addi-tion to financial insti-tutions. > A4

Obituary: Famed oil-field firefighter Paul“Red” Adair died at89. > A4

Venezuela: PresidentHugo Chávez is gain-ing in the polls andcould survive a recallvote. > A8

Nuclear: Condoleez-za Rice said the U.S.is not alone in itsmistrust of Iran. > A12

Israel: The Labor Par-ty reported progressin talks on Prime

Minister Ariel Shar-on’s Gaza withdraw-al plan. > A12

County parks: Nego-tiations could lead toSubway restaurantsat Marymoor Parkand the aquatics cen-ter in Federal Way. > Local B1

Muslims: Allegationsthat the FBI is target-ing local Arab Ameri-cans were on manyminds as a North Se-attle mosque held itsannual communitybarbecue. > Local B1

Seahawks: KorenRobinson joinedtraining camp afterbeing out with a hipinjury. > Sports C1

> News updatesseattletimes.com

BY CAROL M. OSTROMSeattle Times staff reporter

Seven Seattle obstetricians are drafting a consentform for pregnant patients, spelling out in graphicterms the dangers their babies face coming into theworld, including death, “permanent severe braindamage” and other lifelong disabilities.

It’s a dramatic departure from business as usual:Women facing a normal delivery typically don’tsign consent forms until they arrive at the hospital,and then, most are vague and nonspecific.

Because pregnancy can be a scary time for wom-en, full of unknowns and fears, the Seattle doctorsbelieve they should protect easily spooked patientsfrom horror stories of childbirth.

But the doctors’ own fears in the medical-mal-practice-lawsuit climate, they say, have driventhem to take this unusual step.

They say their primary intent is not protection inthe event of a suit, and lawyers say the form mightnot insulate doctors from suits. Instead, the doctorswant to force patients — particularly highly educat-

DI S C LO S I N G DA N GE RS | Some Seattleobstetricians are wrestling with how toavoid spooking pregnant patients but stillensure they know there are no guaranteesin the baby-delivery business.

Please see > CONSENT, A13

Doctors spell outrisks of childbirthon consent forms

BY SANDI DOUGHTONSeattle Times staff reporter

QUEETS, Jefferson County – In a giant leap back-ward for the underdog, two young rocketeerswatched the unmanned spacecraft they’ve laboredon for a year explode seconds into its maiden flightyesterday.

The spectacular mishap rained debris on thebeach and into the PacificOcean, and probably endedthe duo’s long-shot attemptto win a $10 million spacerace.

But Phillip Storm, presi-dent of the two-man com-pany called Space Trans-port Corp., said they willcontinue trying to buildrockets that can ferry tour-ists and payloads into spacecheaply.

“We’re disappointed, butnot extremely disappointedbecause this was the firsttest flight,” Storm said,standing by the remnants ofone of the rocket’s engines.

“NASA lost several rockets before they got some-thing good.”

Then he sighed deeply and rubbed his smudgedhands through his hair. “It’s just too bad.”

Wisps of smoke hung over the remnants of a grassfire ignited by the explosion, while stunned volun-

Please see > ROCKET, A9

Taking a shot at $10 million

Underdogs’ spacecraftexplodes on 1st launch

H A R L E Y S O L T E S / T H E S E A T T L E T I M E S

The Rubicon rocket, built by Space Transport Corp., explodes into pieces yesterday on liftoff from a bluffoverlooking the Washington coast near Queets, Jefferson County.

Company co-founder Phillip Storm checks out de-bris from the rocket after the explosion. “We’re dis-appointed, but not extremely disappointed becausethis was the first test flight,” he said. Storm’s part-ner in the endeavor is Eric Meier.

The X PrizeCorporations andprivate donors aresponsoring a$10 million prizefor the first teamthat sends amanned spacecraftto the edge ofspace — 62 milesup — and repeatsthe trip with thesame craft withintwo weeks.

Seattle Times news services

NAJAF, Iraq – Iraq’s interim Prime Minister AyadAllawi and top U.S. military officials visited Najafyesterday in a bid to end the Shiite insurrection,but their failed and they had to be hustled out oftown amid renewed attacks by followers of anti-U.S. cleric Muqtada al-Sadr.

After arriving on a Black Hawkhelicopter and traveling throughthe holy city in a convoy of a dozenheavily armored vehicles, Allawimet with regional Iraqi officialsand U.S. commanders in the citycenter. He threatened to forciblyremove armed fighters if they didnot leave voluntarily.

Elsewhere yesterday, militantsclaimed to have taken a top Irani-an diplomat hostage. A videotapebroadcast on an Arabic-languagesatellite station showed a beardedcaptive identified as Faridoun Jihani, Iran’s consulin the southern Iraqi city of Karbala. The kidnap-pers accused him of inciting sectarian strife in acountry deeply divided between its resurgent Shi-ite Muslim majority and the traditionally dominantSunni Muslim minority.

Violence continued today as a suicide car bomb

Talksfizzlein Najafamidattacks

CLERIC’S MILITIA IGNORES ALLAWI’S THREAT

U.S. officers, Iraqi leaderhustled out of city

MORE IRAQ NEWS |ARREST WARRANTS ISSUED FOR FORMERPENTAGON FAVORITE AHMAD CHALABI,HIS NEPHEW > A12

U.S. Marine killed in action > A12

Please see > IRAQ, A12

Anti-U.S. Shiite clericMuqtada al-Sadr

YELLOW MAGENTA CYAN BLACK• •

• •

A10 News MONDAY, AUGUST 9, 2004 1 ROP

Shifting fortunes Pain and gain in the global economy

and the concern of U.S. tech workerswho fear their jobs could move abroad.

It also helps explain how this formerlysleepy town emerged as the heart of In-dia’s Silicon Valley. Bangalore is home toseveral of the country’s blue-chip techcompanies, and to subsidiaries of mostof the leading U.S. software and comput-er giants.

In an echo of 1990s Seattle and SanJose, it boasts sleek new restaurants, ter-rible traffic and stratospheric real-estateprices. Hotels and nightclubs arepacked, and the locals wonder what hap-pened to the slower-paced world of gar-dens and retirees they once knew.

“I tell people that for us, the cultureshock has not really been so much fromRedmond to Bangalore,” says nativeKrish Srinivasan, a Microsoft managerwho moved back last summer to workout of the company’s new customer-sup-port center. “It’s really Bangalore 2003compared to Bangalore in 1991, beforeeconomic reforms.”

Microsoft occupies a midrise towernear the airport, next to buildings occu-pied by IBM and Dell. Not far away: SunMicrosystems, America Online, Google,Novell, Cisco, General Electric, Motoro-la, Hewlett-Packard, Texas Instrumentsand Intel.

Those American companies havehelped boost the population of Banga-lore by more than 70 percent over thepast 20 years, to about 6.5 million.

Infosys alone hires about 6,000 peoplea year; last year, the number grew to9,000.

India’s MITSchool created as cornerstonefor achieving India’s goals

Bangalore’s transformation was notborn of chance and has seeds that wereplanted even before India won indepen-dence from Britain in 1947. Coinciden-tally, it was the dawn of the computingera; scientists were starting to build elec-tric calculating machines, although per-sonal computers were still 30 yearsaway.

Indian leaders saw education andtechnology as the building blocks oftheir infant nation’s future. The corner-stone would be a school, modeled on theMassachusetts Institute of Technology,to produce engineers, leaders and entre-preneurs.

In 1950, the Indian Institute of Tech-nology (IIT) opened in a former prisonwhere the British had once held revolu-tionaries. The elite institute has expand-ed to seven technology schools aroundthe country and a companion network ofmanagement schools known as the In-dian Institute of Management.

The IITs admit only 2 percent of the200,000 annual applicants, giving thema cultlike aura in a nation that has longhonored education. Admission is seen asa ticket to jobs or graduate schools over-seas — and a ticket out of poverty; de-spite India’s growing status in the worldeconomy, only 403 million of its 1 billionresidents are employed, and nearly60 percent of those jobs are in agricul-ture, according to the 2001 India census.

Modern Indian leaders have nurturedwhat their predecessors started. Whenthe tech industry boomed in themid-1990s, the government increasedenrollment at the IITs — 50 percent inthe past seven years — in order to pro-duce more tech workers.

Education investmentGrads leave country, but Indiahopes they’ll eventually return

IIT Bombay sprawls through a lush,lakeside forest. Students slip off theirshoes before stepping into air-condi-tioned computer labs sponsored by com-panies such as Intel.

India’s federal government provides70 percent of the school’s annual budgetdirectly. Government and industry re-search projects cover 20 percent, and therest comes from tuition.

But the campus boasts new buildingspaid for with donations from distin-guished alumni — a testament to the

school’s success at churning out not onlya technology work force but industryleaders. Among them: Infosys Chief Ex-ecutive Nandan Nilekani and formerMicrosoft General Manager Vijay Vash-ee.

The investment in state-of-the-art edu-cation was not without risk, especiallygiven India’s pervasive poverty and stag-gering unemployment. And indeed, mostof IIT’s 4,000 annual graduates leave thecountry to find better jobs and pay thanthey can at home. Although opportuni-ties are growing in India, about half of IITBombay’s computer-science graduates inrecent years left the country, mostlyheaded to the U.S. to work or attendgraduate school.

The gamble was that, over time, Indiawould not just grow a tech-savvy workforce; it would cultivate an industry.

“They were supposed to provide lead-ers in engineering and technology, whichhas been done,” says S.C. Lakkad, deputydirector of IIT Bombay. “But the secondpart was these leaders in technologywould be back in India; that has beenpartly done.”

World market explodesIndia positions itself to takeadvantage of high-tech boom

Gopalakrishnan threw in his lot withthat gamble, and stayed home. Four ofthe seven Infosys founders attended IITs;Gopalakrishnan, now 48, graduatedfrom IIT Chennai, on the coast east ofBangalore. All had doubts about startinga software company in 1980s India.

“In 1989 we almost decided to give up,”Gopalakrishnan says. “All of our friendswere doing so well — they had housesand cars, and we had nothing to show forall the hard work we’d done.

“But we decided to give it anotherthree years. Luckily for us, in 1991, the

economy opened up and the governmentpolicies were much more conducive.”

The world market for technology wasexploding. India, poised to take advan-tage of that timing, made its first majorstep toward globalization, reducingtrade tariffs and red tape and settingaside land for industrial parks.

Infosys established its headquarters atone of them, in Bangalore, on a Micro-soft-style campus, where 7,000 workerstap away in 35 low buildings spreadaround lavish gardens and a small golfcourse. Visiting dignitaries have plantedtrees on the grounds. A bull bay, plantedby Bill Gates in 2002, stands near a whitemurdah that Robert Black, the U.S. am-bassador to India, planted the same year.

Not far away are trees placed by BritishPrime Minister Tony Blair and MichaelDell, whose college enterprise grew intothe Dell computing giant.

Inside, employees enjoy a billiard hall,gymnasium and dining halls open to thetropical climate.

They develop custom software and de-sign information-technology systems,working in four-person cubicles, windowshades drawn against the searing sun.Their primary clients are U.S. companies;Nordstrom hired Infosys to develop thesystem that supports its financial and in-ventory-tracking operations.

A key selling point is cost. Infosys paysits engineers about $400 a month in Ban-galore — a tenth of what comparable U.S.jobs pay — so it can charge clients less forits services.

The price advantage is working for thecompany and its employees. As of March31, Infosys had 25,634 employees world-wide. Most work at similarly luxuriouscampuses across India, including oneacross the street from Microsoft’s new de-velopment center in Hyderabad. Andwhile $400 a month is a poverty-levelwage by U.S. standards, in India it is im-pressive: The average Indian lives on$470 a year.

Infosys, which listed its stock on Nas-daq in 1999, was the first Indian com-pany to grant employee stock options;many workers have cashed them into rel-ative wealth. Late-model cars windbumper to bumper through the campusroads — something unimaginable a fewyears ago. Software engineers in their20s are buying houses — something theirparents felt lucky to do by their 40s.

The company is also expanding itsglobal footprint. It’s opening a software-development center in China, where itcan serve Japanese and Korean cus-tomers, and an operation in the CzechRepublic for customers in Germany andelsewhere in Europe.

The company is also expanding in theU.S. with a large center in Fremont, Calif.In April, it announced plans to invest upto $20 million in a new consulting sub-sidiary in Texas.

Americans arriveIndia offers infrastructure, taxbreaks, well-trained workers

After India’s independence, the coun-try’s first prime minister, JawaharlalNehru, called Bangalore the “city of thefuture.” The government located its aero-space company and defense research lab-

Fifty years ago, Indian leaders saw education and technology as the building blocks of their infant nation’s future. Modern leaders have nurtured what their predecessors started.

A M I V I T A L E / S P E C I A L T O T H E S E A T T L E T I M E S

Investment in education is key to the growth of India’s tech industry. About 4,000 students graduate each year from theseven schools that make up the elite Indian Institute of Technology.

Students crowd the streets through the campus of the Indian Institute of Technology, Bombay. While India’s tech boomis creating job opportunities for graduates, a third to half still go abroad for jobs or advanced studies.

< IndiaFROM A1

TECH BOOM IGNITES

Price advantage drawsU.S. customers to India

0

20,000

40,000

60,000

80,000

100,000

120,000

'01'99'97'95'93'91

Engineering U.S.Engineering foreign

Mathematics/computer foreign

Mathematics/computer U.S.

The changingface of technology

T H E S E A T T L E T I M E ST H E S E A T T L E T I M E S

105,178

65,199

Students in U.S. engineeringgraduate programs

Top source of engineeringbachelor's degrees in 1999worldwide

Sources: U.S. National Science Foundation, Division of Science Resources Statistics, WebCASPAR database system

Education statistics suggest people from India and other foreign lands will play a bigger role in technology in the future. Foreign students are a bigger presence in U.S. engineering schools, and other countries are issuing more bachelor's degrees in engineering than the U.S.

32,219

NOTES: Foreign citizen includes temporary residents only. U.S. numbers include black, white, Hispanic, Asian/Pacific Islander, and American Indian/Alaskan Native.

China

EuropeanUnion

Japan

Russia

India

United States

195,000

135,000

103,000

82,000

82,000

61,000

As percentageof the world

21%21%

15%15%

11%11%

9%9%

9%9%

7%7%

51,910

Continued on next page >

About the series |

OUTSOURCING AND THEGLOBAL FAMILY, PART 1> Yesterday

INDIA’S RISE IN THE TECHWORLD, PART 2 > Today

THE EFFECTS IN INDIA, PART 3> Tomorrow

THE EFFECTS IN PUGET SOUND,PART 4 > Wednesday

> For the complete global economy series,

including our earlier report on Washington’s

agriculture industry:seattletimes.com/shiftingfortunes

“[The institutes] were supposed to provide leaders inengineering and technology, which has been done. But the

second part was these leaders in technology would be back inIndia; that has been partly done.”

S.C. LAKKADDeputy director, IIT Bombay

YELLOW MAGENTA CYAN BLACK• •

• •

1 ROP MONDAY, AUGUST 9, 2004 News A11

Shifting fortunesPain and gain in the global economy

oratories there, providing the base forits shift toward computer technology.

Citicorp had established the firstAmerican high-tech beachhead in Indiain 1984, with a software subsidiary inBombay. Two years later, Texas Instru-ments opened a software-developmentcenter in Bangalore, followed by Hew-lett-Packard in 1989.

Texas Instruments established a satel-lite link between Bangalore and its Dal-las headquarters and shared that linkwith other companies. That opened apath for Indian companies to do dataentry and basic programming for over-seas clients. Rather than send softwareprogrammers to work at client facilities,or mail computer tapes back and forth,Indian tech workers could just jump onthe Internet.

Again, the timing was perfect. U.S.companies were desperate to meet thegrowing demands of new, technology-based systems; Indian workers and ven-dors stepped in with ready-to-go exper-tise.

Sharing the English language was aplus, although accents and cultural dif-ferences can complicate transactions.The 12½-hour time difference from theWest Coast to India also proved an ad-vantage: Indian tech workers are on thejob during what is night in the U.S., thusextending the productive work day to24 hours.

As demand for services grew, Indiakept pace by improving its power andcommunications infrastructure, espe-cially to serve dedicated technologyparks, such as Bangalore’s ElectronicCity and Hyderabad’s Hitec City.

Infrastructure led the way to taxbreaks and other financial incentives tolure tech companies. For example, com-panies that locate in Hyderabad’s desig-nated technology parks are exemptfrom zoning and pollution regulationsand receive discounted electricity ratesand a 50 percent reduction in leasetaxes and business-registration fees.

The state of Andhra Pradesh, whichincludes Hyderabad, also gives compa-nies a $400 rebate in land prices for ev-ery job created, and offers grants of upto $40,000 to offset construction costs.

Lure of outsourcingPractice grows in U.S., as doescontroversy surrounding it

As Infosys and other Indian softwarecompanies were coming into their own,the U.S. had already developed a longtrack record of outsourcing work.

Work peripheral to companies’ opera-tions — from transportation to janitorialservices — had been contracted to out-side vendors for decades. Throughoutthe 1990s, business giants such as Gen-eral Electric’s Jack Welch and manage-ment guru Tom Peters trumpeted thevalue of “focusing on core competen-cies” and farming out everything else.

So when U.S. companies startedspending on technology as they startedto recover from the 2001 economicslump, India was again poised to stepinto the void.

Gartner, a consulting and researchcompany in Stamford, Conn., estimatesthat 80 percent of U.S. companies areconsidering whether to outsource tech-nology work. Through 2004, about halfare expected to increase their use of out-sourcing by up to 30 percent.

At a Gartner seminar on outsourcingin Seattle last year, the attendees were awho’s who of the region’s public compa-nies: Microsoft, Paccar, Safeco andAT&T Wireless.

Governments, too, have embracedoutsourcing, both foreign and domestic,as a way to privatize, streamline andlower costs.

But the practice has become as con-troversial as it is common, especially asthe U.S. — and particularly the PacificNorthwest — tries to turn the corner ona struggling economy and stubborn un-employment rates.

Unemployment among computer pro-fessionals hit a record high of 5.2 per-cent last year in the U.S., while electri-cal-engineering unemployment rose to6.2 percent, according to the Institute ofElectrical and Electronic Engineers, atrade group critical of outsourcing andits effect on U.S. jobs.

State outsources, tooOfficial says government seeks“best value” for tax dollars

Labor groups pounced on Washingtonstate last winter for hiring two compa-nies using Indian labor for technologyprojects. One instance involved a$25 million contract with IBM to devel-op a tracking system for the Departmentof Corrections that the labor groups al-leged would be done by IBM workers inIndia. The other, a $3 million contractto develop a Web page to administer De-partment of Social and Health Servicesbenefits, went to Texas-based Health-Axis and Hyderabad’s Satyam Comput-er Services.

“You have state departments that areletting out contracts that are flowing tooffshore vendors and the work is beingdone in India — that’s displacing notonly Washington jobs but U.S. jobs,”says Marcus Courtney, president of theWashington Alliance of TechnologyWorkers, a Seattle-based organizingunit of the Communications Workers ofAmerica.

State officials say the contracts wentto the lowest bidders. “We go after thebest value for the taxpayers’ dollar to dothe development work,” says Roy Lum,deputy director of the state Departmentof Information Services.

And the 2004 Legislature spurnedproposals that would have prohibitedthe use of foreign labor on state servicescontracts. Even if approved, such at-tempts might not have the intended re-sult: Indian companies could still bid oncontracts and do the work at their U.S.offices, and the Washington proposalstill would have allowed state work tobe done by foreign workers in the U.S.with short-term work visas.

While labor groups suggest India andother emerging markets are permanent-ly taking jobs, business groups arguethat outsourcing lowers their costs andenables them to create jobs in the U.S.while keeping the price of consumergoods down. They contend that if U.S.

companies don’t take advantage ofglobal markets, they will lose businessto companies that do.

“If you go for a protectionist response,that’s going to compound the problemof adjustment because we are a highlyintegrated international economy,” saysJagdish Bhagwati, a Columbia Univer-sity professor and economist. “We arethe biggest traders in the world. We’rein competition with countries like Brit-ain. If they outsource to buy cheaperservices and we are not allowed to byprotectionist policies, we will lose out inthe international competition.”

But the backlash against outsourcingis being felt in India. At Infosys, someprojects have been delayed by U.S. cus-tomers who don’t want to invite furthercontroversy, Gopalakrishnan says.

“We are sensitive, because losing [a]job is a difficult thing,” he says. “But Ithink it’s really driven by macroeconom-ic factors, more than any individualcompany’s influence. Globalization ishere to stay; everybody’s looking at themost efficient way to provide productsor services. Consumers and customersare demanding the lower costs.”

He says it’s important to look at thebigger picture: India’s middle class hastripled — from 100 million to about 300million — in the past 15 years.

“All these are new consumers andpeople who buy stuff,” he says. “Look atthe most popular drink in India — Pepsior Coke. All the cars are now imported.”

And he notes that concern about glob-alization cuts both ways. A recent pro-posal to import U.S. seeds to India wasopposed because, in a country that is 70percent agricultural, there were fearsthat India would become dependent onthe United States.

Brier Dudley: 206-515-5687 orbdudley@seattletimes.com

B R I E R D U D L E Y / T H E S E A T T L E T I M E S

Infosys modeled its Bangalore headquarters in part on Microsoft’s Redmond campus. In addition to lush landscaping and modern buildings, Infosys provides high-qual-ity cafeterias, athletic facilities, pool tables and other amenities.

New Delhi

INDIA

NEPALNEPALNEPALNEPAL

Bay of Bengal

ArabianSea

Bombay

SRI LANKA

CHINA

Population: 4,292,223Pop. growth rate 1991-2001:34.80% (urban), 12.21% (rural)Workers: 2,563,853Slum populations: 345,200Area: 1,358 square miles

PAKISTAN

Source: Census of India 2001

MILES

3000

T H E S E A T T L E T I M E S

Hyderabad

< Continued from previous page

M I C H E L E L E E M C M U L L E N / T H E S E AT T L E T I M E S

'70'70 '71'71 '73'73 '74'74 '75'75 '77'77 '78'78 '79 '80'80 '82'82 '87'87 '93'93 '00'00 '01'01 '03'03'83'83 '86 '90'90 '91 '92 '94'94 '95'95 '97'97 '98 '99'99 '02 '04'72 '76 '81 '84 '85 '88 '89 '96

Sources: Software Technology Parks of India; United Nations; Andhra Pradesh Department of IT & Communications, Nasscom

1972 Computer- hardware imports allowed for the purpose of developing software for export.

1976Hardware-import duties reduced from more than 100 percent to 40 percent; incentives created for software exporters.

1981Import duties raised on hardware, but firms are allowed to use hardware to develop software for domestic market as well as exports. Software companies are allowed to import borrowed computers.

1984Import process simplified for computers and software, duties reduced from 135 percent to 60 percent for hardware and 100 percent to 60 percent for software. Software recognized as an industry and licensing process simplified. Income-tax exemption on export earnings reduced from 100 percent to 50 percent.

1985Citibank establishes export-oriented software company in Bombay.

1986Texas Instruments opens Bangalore subsidiary.

1986Imports of hardware and software further deregulated. Export-only companies are allowed to import computer hardware duty free. India firms are allowed to sell and distribute foreign software within India.

1988Governmentstarts todevelop Software Technology Parks of India, with dedicated equipment for data communications. First parks open in 1991 in Bangalore, Pune and Bhubaneswar. Hyderabad park launched in 1991.

1989Hewlett-Packard opens Bangalore subsidiary.

1991India embraces globalization with broad liberalization of its trade policies, rupee devaluation. Special charges for satellite links reduced; duty-free imports of telecom equipment allowed in state technology parks; special conditions on hardware imports reduced; import duties on application software cut to 20 percent, 65 percent for operating systems.

1992Software exports get tax exemptions that other exporters receive. Income-tax exemption offered to export companies located within special enterprise zones.

1996State of Karnataka, which includes Bangalore, passes first state information- technology policy.

1998Microsoft opens India Development Center.

2002State of Andhra Pradesh, which includes Hyderabad, creates policy that largely eliminates technology- industry regulations, exempts IT parks from zoning and pollution regulations. Offers grants of up to $40,000 to help tech companies build new facilities.

2004Government cuts excise duty on PCs in half.

Tech jobs: 56,000

Tech jobs: 6,500

Tech jobs:160,000 Tech jobs: 650,000

Residence: Mercer Island

Employer: Tektronix; Electro Sci-entific Industries; Microsoft, 1982-2001, retiring as general manager

Education: Indian Institute ofTechnology, Bombay; Cornell University, M.S.; University of Chicago, MBA

Family: Married, father of three

Networking: At Microsoft, Vasheewas assigned to mentor 50 workersrecruited from India in 1988. Started Seattle chapter of The In-dus Entrepreneur group in 2000.

Philanthropy: Established foun-dation that supports single parentsat Bellevue Community College,where he is a trustee. Endowedcomputer-science professorship atIIT Bombay.

Quote: “Any nation that doesn’t take care of its children is ... mort-gaging its future, and I see too much of that happening around me.”

ABOUT 30 Seattle-based tech companies straddle the globe with headquar-ters here and extensive operations in India. About half are connected to Vash-ee, the don of Seattle’s Indian tech community.

A global outlook came naturally to Vashee. Born in Zimbabwe, he returnedto his family’s native country to attend the prestigious IIT, followed by gradu-ate study in the U.S.

In 1982, he became Microsoft’s second employee of Indian descent. In 1988Microsoft made a recruiting trip to India to hire 50 IIT graduates, and Vasheewas assigned to be their mentor and help them adapt to the U.S.

“Give me enough time, I can find enough tentacles to reach out and findenough friends to make something happen,” he says. “In Bangalore, there areprobably six individuals I know who can get me a connection to anything Iwant to get done in Bangalore.” He says the Indian tech community has aclose network that’s central to how things work.

“Sometimes people call it corruption,” he says, laughing. “But it’s a very in-volved thing.”

Changes from globalization are challenging but inevitable, Vashee says,and are doing remarkable things to India: “The more people are empowered,the more people feel like the situation has changed, the more they can galvan-ize the economy of the country.”

Brier Dudley, Seattle Times staff reporter

The India network: The mentorVijay Vashee, 53

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