Stop the tide?
- By Thomas R. Temin
- Mar 03, 2004
Thomas R. Temin
Congress and the agencies are struggling with the issue of whether federal contracting dollars should be spent on software development in low-wage foreign countries. The option is on hold for a year thanks to a provision in the fiscal 2004 omnibus appropriations bill. But that stoppage is comparable to shoveling back the tide.
Like millions of Americans, I enjoy the benefits of global trade and manufacturing that comes from the lowest-cost areas. I'm perfectly happy to buy electronics, household items and clothing made in a veritable United Nations of countries.
Whatever its benefits may be, offshoring'the buzz word du jour for outsourcing to companies in foreign locations'is certainly a difficult idea to warm up to, especially if it's your job heading overseas.
But outsourcing and global trade have been with us for decades: steel, ships, garments, electronics, fasteners, toys'all have substantially moved elsewhere over the past 30 years. Even engineering and design are worldwide endeavors. Overall, it's been good for the economy.
Now software development, which has been fundamental to the last decade's breathtaking advances in IT and telecommunications, is joining the parade to places like India, China, former Soviet Union countries and Mexico.
The Internet and, in some cases, currency manipulation help this trend along, but it is the skill of the workers in those countries that makes it doable. Companies offshoring are simply taking advantage of what has to be acknowledged: IT jobs requiring some serious brain bandwidth, not just the simpler assembly or help desk work, can now be done cheaply overseas.
But if the high-value jobs move to India, people worry, what is here to replace them? A nightmarish vision of a Wal-Mart future?
In the long run, only rising productivity grows the economy and jobs. Perhaps the trend toward offshoring is a wake-up call that the craftlike nature of software production is too expensive for the United States' wage structures.
Offshoring might spur a long-overdue revolution in software techniques. Who knows what sort of new industries our dynamic economy might spawn out of that?