Offshore Outsourcing and USSunday, August 21, 2005
US is trying to curb offshore outsourcing by taking steps which can back fire against US IT industry. According to a report, protectionist legislation may result in retaliation. In turn it can affect high tech services of US companies. Report also pointed that, no section is threatened more then high-tech software and hardware industry if US pass protectionist laws. Because, 60% of the revenues of American software companies are coming from outside of US.
According to the report, for each 1 billion dollar export, around 5000 people are employed. These jobs are at risk. Around 20 states are considering partial or full prohibition of offshore outsourcing which will increase the cost of state run programs. According to latest information from Nasscom, there are around 60 bills in various phases in US legislation. But, Nasscom is maintaining its stand that, damage will be under control for Indian software outsourcing industry.
The report also mentions that job loss in the last 3 years is lesser from offshore outsourcing than from the weak economy of the US. It also mentions that number of people who have suffered from offshore outsourcing is exaggerated. Although lower end technology services are being lost to software outsourcing companies in developing countries, higher-end technology services are remaining in the US and will remain in the US.