The Offshore Outsourcing War

Why is it when IT automates jobs, that's progress, but when change threatens your job, that's treason or worse -- terrorism?

March 26, 2004

2 Min Read
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You and your colleagues have automated call-center operators, data-entry clerks, records managers, engineers, sales assistants, customer-service reps, support technicians, application developers, benefits administrators, project coordinators and countless other "nonessential personnel" out of jobs through your IT-driven reinvention of various business processes. So why is it when you make other workers redundant, that's progress (or business as usual), but when change threatens your job, it's treason or terrorism?

Fed Chairman Alan Greenspan has credited IT professionals with boosting national productivity to record levels. Be immensely proud of that accomplishment--not because you drove people out of work, but because your technical prowess has been the engine for low-inflationary growth. The notion that productivity gains lead to business expansion and job creation isn't economic gobbledygook. It's fact.

Business cycles still exact a painful toll on many individuals across all industries. But in the end, more workers succeed when employers can focus on serving customers instead of catering to special interests that claim to know what's best for their people.

If we do choose to clamp down on the cross-border flow of professional services, expect to lose more than we gain. The United States now runs a $53.63 billion trade surplus in banking, computer programming, consulting, engineering, legal, telecommunications and other private services, according to the Commerce Department. Imports of such services--including call center, data entry and application development work outsourced to places such as India and the Caribbean--rose $7.94 billion to $77.38 billion last year, while exports increased $8.42 billion to $131.01 billion. Do we really want to put $131 billion of commerce--and the related jobs--at risk by erecting barriers?

Protectionists argue that companies that send work abroad to cut costs and stay competitive are mortgaging their futures, since they're eroding their base of domestic consumers. This same argument--the middle class will be decimated--was put forth in the 1970s and '80s when U.S. manufacturing jobs were moving offshore, yet we somehow managed to build the strongest economy in our nation's history in the ensuing decade. We created new, even better jobs because entrepreneurs and established companies were (relatively) free to hire and produce on their own terms. In contrast, consider Germany and France, where the unemployment rate is stuck at around 10 percent (compared with 5.6 percent in the United States). In those countries, regulations pretty much ensure that no one can lose a job--but that no one can find one, either.If government has a role here, it's in improving the nation's primary and secondary education systems and providing incentives for corporate investment in R&D and worker training. Let's prepare to meet the impending business challenges rather than hide from them under the cover of "us vs. them."

Rob Preston is editor in chief of NETWORK COMPUTING. Write to him at [email protected].

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