The upside of offshoring

The much maligned concept of offshoring is reaching a critical juncture, at least in the world of IT. There is a lot of discussion these days about the future of labor arbitrage and some companies are creating onshore development centers in low wage areas of the USA. This is a trend that is likely to continue, but it is not likely to completely replace offshoring. We have seen a shift back to the US for call centers for some time now. American consumers decided they didn’t like to deal with a dialect that was difficult to understand when calling a company to get help. Companies found a better and cheaper way to staff their call centers without offshore labor, and the trend began.

That said, it seems to me that the large India software development companies are here to stay. They provide exceptional talent at a fraction of the price.

I recently made a trip to India where I visited with some of these providers, toured their facilities and met with their executives. It wasn’t my first trip and it won’t likely be my last. I was impressed. What impressed me most however was the resilience of the people of India. So many live in conditions worse than any poverty we see here and yet they persevere. I read a CNN article today that talked about the eradication of Polio in India. The last known case was nearly four years ago. Few thought that would be possible. We are seeing a new generation demanding a government that is free from corruption, although there is still a long way to go. There is new development in most major cities, although that money is not yet filtering out to the slums.

So here is the upside to offshoring.

India is a very peaceful country with a very large population. Offshoring is providing the people of India, the entire country, a path forward. The dollars spent there are doing more than making a few people rich. They are helping in the recovery of an entire country. In India, a little goes a long way.

Yes, I have a problem with offshoring taking American jobs, but the truth is that wages in the IT industry continue to grow. They are not experiencing the crazy wage demands of the dotcom era, nor should they be. What we are seeing is modest wage and job growth, while at the same time, the money spent in India is doing more good than I previously understood. As an additional upside, this is done largely by US corporations, not the US government.

I get it. This is a highly controversial topic and I understand that for some, there is no upside to offshoring, no matter how much the country of India benefits from it. But think about this. Hundreds of thousands of young people are growing up appreciating a western way of life, many of whom are muslim. What better way to win the war against our country than to support hundreds of thousands of new minds every year? Maybe, someday, if we don’t get greedy and we can keep our minds and our hearts open, this “investment” will pay off in ways we can only imagine today.

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