Offshore outsourcing grows

The Atlanta Business Chronicle ^ | April 18, 2003 print edition | Anya Martin

[Willie Green]

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[1stFreedom]

This is going to cost Bush and possibly the Pubbies the next election.

People are not spending in a way to spur the economy. IT and EE fields are experiencing an unemployment rate higher then the national average. IT people have been out of work for months at a time, and some even over a year.

The companies may indeed be saving themselves money by outsourcing overseas, but they are directly harming the economy.

The pubbies need to understand that the economy won't get better if new jobs are offshore and not here. It takes people spending money to get companies to hire and produce more goods. The companies are waiting for this spending to happen before taking financial risks. But shipping jobs offshore is helping to keep peoples spending at bay.

Basically, we are seeing "Trickle Down Economics" work -- but the trickle down happens to be overseas.

[1stFreedom]

I know that for myself, being a die hard conservative, I will not vote for Bush or pubbies in the next round of elections if they do not stop this outsourcing problem.

[YankeeReb]

Within the next 15 years, U.S. companies will send abroad an estimated 3.3 million U.S. service industry jobs, or $136 billion in U.S. wages, according to Forrester Research.

This is why it's pointless to pursue a career in I.T. It isn't that these companys can't find Americans with the talent to do the work, it's that Americans aren't willing to go through the time and expense, not to mention the stress of keeping up with the latest technology, only to be told they're overpaid and their job is being outsourced. After 15 years I'm done with this field.

Look for this trend to spread to the financial industry.

[Magnum44]

Since when has outsourcing been only republican promoted?

[sharktrager]

Stopping the "outsourcing problem" goes completely against the tenents of a free market.

[YankeeReb]

I have to believe that the unemployment statistics don't paint the real picture. I know plenty of people who have been outsourced, find themselves taking a job often at slightly better than minimum wage, and yet these people aren't counted as unemployed. I'd love to see a comparison of real wages in I.T. over the last 5 years.

[proxy_user]

Having lived through many changes, I predict that outsourcing will not be as successful as hoped. The interests of the offshore companies are not necessarily aligned with those of the US companies, meaning that they will have to have many people in this country watching and supervising their outsourcers. Either that, or they will be totally screwed and ripped off.

Eventually, many companies will decide that it would actually be cheaper to do the work themselves in this country. This does not even take into account the changes in currency valuations that will inevitably come as the standards of living rise in places like India, making their workers that much more expensive. I really think that the big advantage they have now is not cost, but that they have so many well-educated young people who are willing to work hard.

[SauronOfMordor]

Look for this trend to spread to the financial industry.

It's already in the medical industry. X-rays are transmitted to India to be examined by radiologists there.

[StoneColdTaxHater]

I work for MCI and we service data circuits for GE. Their Network Ops center is in Bombay India. I can tell you that while GE saves money from this arrangement, it is difficult to deal with the techs from India. First, there is the language barrier. The techs are also hard to deal with because they do not understand the workings of the US telecomm networks and use a very cut & dried script when dealing with issues. They are inflexible when pursuing issues thus making it hard to work with them effectively.

[RockyMtnMan]

Stopping the "outsourcing problem" goes completely against the tenents of a free market.

So does fast-tracking and expanding H1 and L1 visas.

[Wolfie]

Maybe they should just pass out the paper hats and fast food smocks at U.S. high school graduations and be done with it.

[Wolfie]

...it is difficult to deal with the techs from India.

The general consensus in the software industry is that their work is shoddy and unreliable. The general consensus among management is that at a fraction of the cost, that's more than acceptable.

[newcats]

if they do not stop this outsourcing problem.

And just how would you go about that, without more gooberment regulation of free enterprise?

[RockyMtnMan]

That depends if your building software that is mission critical. Do you want that heart rate monitor programmed by a guy in Bangalor making 5k a year or a guy in Boston that makes 120k a year.

[Wolfie]

If I'm getting the monitor for myself, I go with the 120K programmer. If I'm a management wonk trying to make budget and pump up the bottom line, then the choice is even easier (since its not MY life on the line).

[Libertarianize the GOP]

http://www.freerepublic.com/perl/bump-list

[RockyMtnMan]

Except when the lawyers come after your company and take you for every penny, then it's not so cheap anymore is it?

[Smogger]

The key to this article is:

"Fortune 500 or Fortune 1000 firms have led the trend of offshore outsourcing, with small to midsized companies accounting for just 1 percent of all outsourcing."

Of course small to midsize companies are what keeps the economy going, not giant impersonal behomoths who are always looking for ways to cut another 1000 jobs. Personally, I have little to fear in the way of outsourcing as I am one of only three people that represent the small company that I work fors (200 or so employees) entire IT staff. For small to midsize companies outsourcing is inconceivable.

[Voltage]

A good friend is pres. of a company in So Calif that designs computer perpherial cards, such as VME devices for those of you who know your industrial control systems. About 5 years ago he found it was getting more and more difficult to get circuit boards produced. The reason...etching circuit boards is a messy chemical business, and one that the California EPA frowned upon. Many circuit board companies could not comply with the rules they were burdned with and have disappeared.

One day a salesman who used to work for one of the companies that had folded called on him and offered to get the job done with his new employer in Taiwan. And easy too...just e-mail the circiut board design files. The results..excellent boards and cheaper too!

After a while the same company in Taiwan said they could also do the component installation and soldering. It's that damn dangerous lead you know! Cheaper and better quality than he could do it himself in So. California.

Then they offered to do the compoents purchasing too...also cheaper.

So now the company has no assembly operation at all in So. Calif, just design and sales. Half the employees and double the sales.

Those who lost their jobs of course can thank for California EPA for the improved environment in the unemployment lines.