Training Toolkit

Outsourced jobs 'will return'

Alorie Gilbert CNET News.com

Published: 22 Oct 2003 11:40 BST

The loss of US jobs due to a shift of information technology work overseas maybe be painful for American workers now, but the discomfort is only temporary, according to a panel of information technology executives gathered on Tuesday.

Executives from Borland Software, BearingPoint and Infosys, and an official from the US Department of Commerce expressed confidence that US companies will eventually reinvest money saved from farming out IT tasks to foreign workers, and expand operations at home. That, in turn, will lead to American job growth down the road, the panelists agreed.

"We need to keep an eye on long-term growth and not take a short-term protectionist approach," said Chris Israel, deputy assistant secretary for technology policy at the Commerce Department, explaining why the Bush administration opposes tariffs and other policies that would discourage the outsourcing trend.

And because the aging baby boomer generation is nearing retirement, the United States may be headed for another work force shortage, said William Miller, professor emeritus at Stanford University and chairman of Borland Software. In the meantime, displaced IT workers should get training and be willing to relocate to find new jobs, he said.

"People have to be prepared to move," Miller said. "That will be one of the requirements of the work force in the future; people must be willing to move where the jobs are."

While the panellists defended the merits of offshore outsourcing, they acknowledged some troubling problems. One is whether foreign companies and workers can be trusted with intellectual property and other sensitive information handed over to them by US clients. Companies in India generally operate under strict confidentiality rules, said Harris Miller, president of the Information Technology Association of America, the trade group that organised Tuesday's panel. But in China, where intellectual property disputes have been more common, it's a bigger concern, he said.

Another question is whether American workers will keep pace in the global market for IT skills, especially at their relatively premium wages. Stanford's Miller noted that technology and science graduate programs at the country's most prestigious universities are increasingly populated by foreign-born students.

Others acknowledged that, taken too far, the push to move work offshore could backfire by bumping up unemployment and thereby sapping domestic demand. "There's no simple answer," to such quandaries, ITAA's Miller said.

In addition, the call for investing in the education of America's work force and the need for job training and other welfare programs for displaced workers come as federal, state and local governments face huge budget deficits and are forced to trim such programs. "I think it makes it more difficult," Stanford's Miller said. "That does hurt us."