Offshore Outsourcing: A Natural Law?

 
 
By David Morgenstern  |  Posted 2003-11-05
 
 
 
Following a recent article about offshore outsourcing of IT jobs, I received another barrage of e-mails from readers that threatened to tip my ISP bandwidth allocation over the edge. What were the hot-button issues? Everything.

Reading the messages, I grew intrigued by the widespread belief that jobs must flow out of a country to find the cheapest source of production, regardless of the long-term consequences to the society and economy of a country. Or to the company itself.

Many readers believe that this practice is a natural law and not just the result of short-term thinking by business managers as well as the considerable lobbying efforts of huge multinational corporations.

Charles Macleod considered offshore outsourcing of IT just a part of the capitalist ecology. "Its about money—quality and company loyalty now seem secondary, and their importance to an outfit depends on the individual values of any one organization."

"Unless we are interested in supporting a mechanism of tariffs and other protectionary measures (for example, the farming subsidies that prop up American farmers vs. the much-cheaper Third World crops), IT people will remain a part of a global resource pool. ... The bottom line is that all companies look to streamline operations—to cut costs and pass on savings to consumers in the form of more competitive pricing of their products. Thats capitalism baby. We all benefit from it (depending on your beliefs) even if we are also the current victim du jour," Macleod said.

According to Steve Loy, associate professor of CIS at Eastern Kentucky University in Richmond, the outgoing tide of jobs could threaten fundamental technology research as well as jobs. He described a domino effect for the entire tech industry.

"The astute students will recognize the rapidly dwindling job opportunities for CIS/MIS majors and will chose other programs of study," Loy warned. "... Thus, a self-feeding cycle of loss of domestic IT jobs will cause fewer people to pursue IT degrees, which will lead to reduction in IT faculty, which leads to fewer IT programs, which leads to a workforce with less or inadequate IT knowledge to compete in the high-tech world economy."

"As an IT educator, I wonder if its moral to encourage American students to major in IT programs. I also wonder when state governments will realize that their efforts to attract high-paying, high-tech jobs are doomed to fail. I wonder when voters and politicians will realize that high-tech labor is now a commodity item in which cost is the primary factor, and that reductions in taxes and cutting government regulations will not turn return prosperity to the U.S. economy," Loy observed.

So where will these freshman techno-geeks look for a major? Biotechnology? Maybe. Linguistics? Not much of a hiring opportunity there. Perhaps they will all be MBAs or lawyers? For a moment, thats almost as worrisome a thought as offshore outsourcing.

Other readers were also concerned with the transfer of knowledge. A reader named Vinn said IT admins need to counter the offshore outsourcing message by pointing to the values of experience, knowledge, trust and pride within a company.

"What is happening is this: experience is being exported. If low-level (or labor intensive) tasks are sent offshore, then so is the experience gained from performing those tasks. When the time comes to perform higher-level tasks, where previous experience is mandatory, there is no alternative than to go offshore—because that is where the experience now resides," Vinn said.

"Many company plans imply that higher level tasks (the architectural decisions) will remain performed on-shore, while the lower-level tasks are performed 12,000 miles away. This is short-sighted because eventually the required experience will be offshore," he said.

Vinn is exactly right. Management has grown comfortable with relying on outside resources to perform many tasks, instead of developing the expertise in-house. Perhaps the wholesale move of some IT function offshore is seen as matter of degree. Even though that "degree" is halfway around the world.

Meanwhile, Joel Tompkins, a senior IS engineer, said the IT field may be ripe for unionizing, he considered unions "as corrupt as the companies they fight."

"Without some sort of organization, the average IT worker is going to find himself or herself as an expendable commodity, and not capable of commanding salaries and benefits so many were recently used to. The downside of unionization is that it will add to the push to go overseas."

Joel has some good points. However, I disagree with his framing of the relationship between companies and their workers. The "fight" here is not for the company itself, rather, its about getting the bosses to recognize the values Vinn described above—experience, knowledge, trust and pride—that are expressed in their workers and the jobs they perform.

Now, that process can at times be adversarial. Because there are often times when people dont want to listen.

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eWEEK.com Storage Center Editor David Morgenstern is a longtime reporter of the storage industry as well as a veteran of the dot-com boom in the storage-rich fields of professional content creation and digital video.

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