Complain? Or adapt?


Leonard Liu has a 40-year head start on globalization.

Liu, born in China, is a globe-trotter who has run companies in more countries than many Americans have even visited. He came to the United States as a student in the 1960s, earned a Ph.D. from Princeton, taught at the University of Michigan, and began working at IBM in 1969. In 20 years at Big Blue, he ran research teams that developed SQL, CICS, SNA, and other really important computer stuff that most of us don't understand but rely on every day. One huge project was building the reservation system for United Airlines in the 1980s.

Then he went to Taiwan to run a computer company for a while. He passed through India routinely. Next, he returned to the United States to help revive a couple of troubled companies here. And his family, as he explained to me over coffee in New York City recently, spread out along the same path as his career. He now has two grown children and two grandchildren who live in Shanghai and another child who lives in Palo Alto, Calif., with two more grandkids there.

The company he runs now is the kind of operation that makes Americans jumpy. Augmentum, a software development firm, is headquartered in Foster City, Calif., near Silicon Valley. About 30 Americans work there, many of them tech experts with master's and doctoral degrees. But the balance of the workforce is in China, where Augmentum employs about 450 computer programmers to do most of the development work. And it's not the software equivalent of sewing socks or doing other low-skill work. Augmentum sells software to some of the biggest companies around, including Microsoft, Dell, and Intel, often through personal contacts Liu has built up over 35 years in the business.

The obvious flash point is those 450 jobs. American programmers, finding it harder and harder to get decent-paying work, could argue that China's gain is America's loss and that Liu has offshored 450 jobs that should have gone to worthy Americans. Of course, there's a counterargument: If Liu's company weren't able to do its work cheaply, somebody else would—probably in India—and Augmentum would go out of business altogether. That's the sort of one-dimensional debate that's becoming more common in Washington, D.C., as protectionist impulses heat up (and an election, by the way, nears).

But there are more important takeaways from Liu's story. First, this is the kind of business that smart entrepreneurs will be setting up in the future—"one foot on the boat, one foot on the dock," as some put it—no matter what regulators do. The spoils will go to those who learn to thrive in this environment, not those who complain about it.

Second, Liu is obviously near the top of the "knowledge food chain," but those who aren't can still learn from his example. It's easier than ever to gain overseas experience these days, whether as a student, an employee, or a mere traveler with a backpack. And today American have as much to learn from foreigners as vice versa.

Third . . . what constitutes a foreigner, anyway? Is Leonard Liu one? He's Chinese by birth and citizenship but an entrepreneur in America. Nationality matters less and less.

Finally, Liu, in a way, is bringing America to China. He insists that all of his workers speak English, and he has culled the best capabilities from more than 10,000 applicants. "All of our customers are American," he explains. "I tell them this is an English-speaking environment." That kind of attitude may forestall, for a time, the moment when Americans need to learn Mandarin Chinese.

--Rick Newman