Posted on: Sunday, April 20, 2003

Asians made biggest gains in tech jobs, study finds

By Jon Fortt
Knight Ridder News Service

As Silicon Valley's largest companies added tens of thousands of employees during the tech boom, many also spent millions of dollars to attract more women, blacks and Latinos to the white-male world of engineering.

But now that the boom is over, federal employment records from the largest companies show those efforts benefited only some groups — and that disparity in the high-tech industry remains rampant.

The work forces at the 10 highest-grossing tech giants based in the valley were more diverse in 2000, at the peak of employment, than five years before — but a San Jose Mercury News analysis of federal employment records shows that those gains were made almost entirely by Asians. Blacks and Latinos barely held their share, and women actually lost ground.

Even the success stories had their downsides, as highly educated Asians, just as much as women and others, found themselves concentrated in some job areas and largely excluded from others. The analysis found:

• Asians emerged as the only group to substantially increase its share of the work force, to 17 percent from 21 percent. Nearly one in three jobs created at the 10 companies between 1996 and 2000 went to Asian workers. But Asians tended to be found in technical jobs, not in the executive ranks or the sales jobs that can lead to management.

• As a whole, the proportion of blacks and Latinos barely budged. In 2000, about one in 10 employees were either black or Latino. Enrollment statistics at U.S. engineering schools suggest these numbers might not change anytime soon.

• The picture is troubling for women, who made up 35 percent of the work force in 1996 but accounted for less than a third of it at the end of the boom. Many women say they feel they have to leave larger companies to get a chance to advance in the executive ranks.

"Companies that care about diversity in their workplaces are watching those numbers assiduously and looking for explanations and solutions," said Michal Fineman, a management consultant with Organization Resources Counselors.

Asian CEOs not common

The breakout success of Asian engineers is attributed to the fact that more of them are trained in the highly technical fields that formed the backbone of the boom. China, India, Japan, South Korea and Taiwan produce about 600,000 science and engineering graduates each year, nearly three times as many as the United States, according to the National Science Foundation. Asians also earn nearly 8 percent of the bachelor's degrees in all science and engineering fields from U.S. universities, although they comprise less than 4 percent of the nation's population.

The impact on Silicon Valley's high-tech industry is likely to be broad, as many workers use the big companies as launching pads to start their own businesses here and abroad. Such entrepreneurial spirit heightens the chances that tomorrow's tech visionaries will trace their roots to Bangalore, India, not Burlingame, Calif.

"A large percentage of the entrepreneurs that I meet have some large company background," said Sriram Viswanathan, whose job at Intel is to identify start-up companies for potential investment. "What happens is a lot of these companies foster the whole engineering fabric to such a degree, you back entrepreneurial ideas, and quite often a lot of these guys figure that they have to be on a different track and build something of their own."

He sees it firsthand as the managing director of Intel Capital, a $1.3 billion venture fund that the Santa Clara, Calif.-based chip giant uses to keep tabs on emerging technologies. But as a general rule, Viswanathan said, although the technical mind behind many of the start-ups may be Asian, the CEO still tends to be white.

That fundamental difference is evident within large companies, as well. Asian workers often hold highly technical jobs, and are far less likely to be managers or sales associates than their white counterparts, according to the employment data.

Ashish Gupta moved to Silicon Valley in 1998 for a job at IBM, two years after he graduated from one of the prestigious Indian Institutes of Technology, in Delhi. The network of schools across India receives more than 100,000 applications a year — five times as many as Stanford University's undergraduate program.

He was tempted to stay in India, an emerging technology center for engineers, but the chance to develop his skills in the high-tech capital of the world was too good to refuse.

Like so many other engineers in the late 1990s, Gupta was in high demand. Barely seven months after he started at IBM, he was offered a job at Cisco Systems. He accepted a few weeks later.

Among Silicon Valley's highest-grossing companies, Cisco grew the fastest during the boom. It also saw the greatest increase in Asian workers like Gupta.

"In '97, we had 8,821 employees. In '98 we had 12,688. That's a lot of hiring. That's a 50 percent increase in staff," said Kate DCamp, Cisco's senior vice president of human resources. "So you're going to go where there's bulk supply. If you assume we were hiring a lot of engineers, it's not surprising."

But even at Cisco, Asians are as hard to find in the sales department as black and Latino workers. In 2000, for example, the employment data show that 46 Asian employees were in sales, compared with 43 blacks, 48 Latinos — and 1,957 whites.

Though the heavily commission-based salary in sales provides less stability, the potentially high-paying positions can provide a path to upper management.

Across all the 10 companies examined, sales-related jobs were the least racially and ethnically diverse. Nearly 90 percent of sales workers were white.

Communication skills key

Tech leaders said they suspect the low number of Asian workers in that category is in part due to language and communication barriers, as well as the fact that success in sales is as much based on personal connections as it is on the ability to solve problems.

"In order to be a good salesman or saleswoman, you need connections. You also need to be very articulate," said Xipeng Xiao, former president of the Chinese Information and Networking Association, a 3,000-member trade association based in Santa Clara, Calif. "I think that is a reason why a lot of Asian people are in engineering. You don't have to deal as much with people."

In a survey at the association's last annual meeting, members ranked workplace communication as one of the top subjects they wanted to hear more about.

"I think the Chinese engineers come to realize that sales and marketing have more opportunity," Xiao said. "As you grow older as an engineer, it becomes harder to learn new stuff. You become less valuable. In sales and marketing, as you grow older you gain more connections, and you get more valuable."

Wen Chang, president of Clarinet Systems, a company that works in wireless technology for handheld devices, said Asian children need to see examples of successful Asian sales and marketing associates in order to pursue those careers.

"In the technology field, they have enough role models to follow," he said. "In sales there are not enough role models."

Asian groups differ

Not all Asian groups have reached the same level of visibility. Although China and India produce many engineers, professionals from Vietnam, the Philippines and other Southeast Asian countries often pursue other careers.

"Filipinos, at least the ones that have come here, have been traditionally in the medical field. A lot of them are doctors and nurses," said Marissa Peterson, executive vice president of worldwide operations at Sun Microsystems. "There are fewer in the tech space."

Unlike 25 years ago, when Asian immigrants were just beginning to gain their footing in a tech culture that looked upon them with suspicion, many Asian workers today say the valley's large tech companies are a place where they can flourish.

These days about a third of the students in Kathleen Allen's graduate entrepreneurship classes at the University of Southern California are Asian, many of them immigrant engineers with advanced degrees who have come to the United States to learn business savvy.

"There is very much a bent toward entrepreneurship," she said.

A survey of entrepreneurial behavior conducted this year by USC found that "Asian universities were far more interested in creating start-up ventures, whereas U.S. universities were more interested in licensing technologies," Allen said.