Why offshore IT outsourcing can't be stopped
Many workers lost high IT industry paychecks and now struggle financially since their jobs are delegated to lower-cost countries. And no legal remedies do anything to solve this problem – and it is a problem in the long run.
Intel vPro Phase 2
We should note that t American IT people were very indignant when production jobs started going overseas some 30 – 40 years ago.
It is a common practice that IT industry workers are considered overpaid and underworked by plenty of Americans engaged in other industries. Many skilled tradespeople, tend to be slightly scornful of white collar workers in general. On the other side, executives of large corporations consider their IT people so to say strange. And there is nothing new about it. Though, IT people sometimes can be quite strange but their unique skills and knowledge are invaluable for their bosses, so they have to put up with them.
One of the reasons why the Microsoft-fueled PCs are that popular is the idea of a server admin interface that non-technical managers can understand without any help of system administrators.
And as a conclusion, except in California’s Silicon Valley and some other IT industry centers, one can’t hope for a great deal of political support to help keep programming jobs in the U.S.
The enforcement problem
Let us suppose that lots and lots of voters suddenly call for their representatives and require a 500% tax on all IT work performed offshore for U.S. companies. Will this apply only to services on contract or also to packaged software sold at retail?
What about customization of free software?
But where is the line between software-as-product and software-as-service? Will the import taxes be charged on applications used over the Internet and hosted on overseas servers to protect home-grown application service providers? Next issue: will the federal government come to monitoring of Internet traffic to see if software from foreign source is downloaded to charge taxes on it?
Now let us account the software developed collaboratively. How to split which per cent of its value came from U.S. software engineers and how much from their associates in India, China or Russia?
Even if it comes to taxation of imported software and IT services, the expenses for collecting such tax would be that significant that it wouldn’t yield any revenue.
Government purchases are different
Government institutions should also buy from local vendors. For example, New Jersey, and other jurisdictions at least try to make as many service and software purchases as possible from their home-based vendors. And that is good. It’s OK when the tax money are spent where it’ll do the taxpayers some good.
But the situation will change when governments try to compel their citizens to buy locally, even if they have global views. If someone refuses to buy your software products will you in turn refuse to buy, for example, their food products or toys? Or sell them free but to levy heavy import taxes on them? But do remember: if you decide to boycott some country’s products they may in turn decide to boycott yours.
“In the long run…
The moralist’s approach to the concept of transferring jobs offshore is that spreading the IT industry globally will leverage living standards throughout the world and will make everybody better off.
IT workers, adherents of Libertarian, watching their jobs go offshore must be glad from geographic shifts in employment. Their belief “dog eat dog” demands them to rejoice when a marketplace discovers means to increase owner’s profit and pay employees less.
But what about the fact of delegating U.S. IT jobs overseas – it doesn’t concern many people. In this Internet age there are not practical instruments for regulation of global movement of digital data. Probably, the sole effective way to “return IT jobs” is to stimulate more home production of goods through import quotas or punitive taxes. This may cause some trade problems but it will be more efficient than trying to regulate software imports. Increased production and thus more U.S. factories stand for not only more blue-collar jobs, but also work for maintenance and support jobs, more jobs for developers and systems administrators. But this initiative has bitsy chances for becoming a law in the current U.S. political climate.
Finally, all Americans will have to learn how to deal with a truly global IT economy. Some IT specialists might be compelled to leave the IT industry and change it to non-offshorable activity, this does not mean to give up doing computer work at all, since as US economy keeps on shifting away from production toward services, we can see as many non-transferable IT jobs created as if the economic future was best served by endeavoring to return US economy to its traditional dependence on manufacturing.
To summarize: although, thousands of IT jobs will likely to leave the U.S. in the following few decades, the bulk of U.S. IT pros will outlive, and perhaps even prosper in the end, though they may be employed in new spheres and have new bosses. As more and more industries become increasingly computerized, will be created new jobs to maintain mobile data systems.
To stay employed in the IT industry is most often the matter of finding areas of extensive growth and leaning towards them. Its not just about learning new programming languages and how to manage new kinds of hardware, but also following the latest business news to be informed which industries may offer the greatest opportunities. Most often these industries will not be “computer-related” industries in its traditional sense. Computing devices are becoming ubiquitous throughout most industries where they traditionally weren’t a major factor.
The next IT mecca may be the most unpredictable location. But still the computer skills and knowledge may be required there. The point is to find that place and that company.