Bush Administration Won't Impede Offshore Outsourcing

Computerworld - NEW YORK -- Although the Bush administration sees pros and cons in the trend toward offshore outsourcing, it has no plans to impede companies' efforts to move IT jobs to India or elsewhere. Instead, it plans to focus on developing an economic climate that helps create jobs in the U.S., an administration official said last week.
"The answer to economic challenges is growth and innovation," said Chris Israel, a deputy assistant secretary at the U.S. Department of Commerce, speaking at an IT services outsourcing symposium here. He cited the administration's support for increased investment in research and development, education and expanded trade authority for the president as examples of its efforts to improve growth.
If it chose to do so, the White House could create obstacles for U.S. companies that want to move work overseas. It could use its power over regulated industries, such as financial services, to discourage sending work offshore by raising national security concerns. It could also set "buy American" standards for government purchases of IT products or back legislation in Congress to restrict visas such as the L-1, which multinational companies use to facilitate offshore development.
Israel said he understands the ramifications of offshore outsourcing, such as downward pressure on salaries in the IT industry and the potential for a "reverse brain drain," where highly skilled IT workers choose to work in countries other than the U.S. But he also noted that offshore development could have positive effects, such as driving prices down and productivity up.
Although the Bush administration may be on the fence about the effects of offshore outsourcing, Phil Friedman, CEO of Computer Generated Solutions Inc., is not. He opposes moving jobs offshore. Friedman said his company, a New York-based systems integrator and managed services provider, recently opened a technical services center in Atlanta. The company had to fill 300 positions at the new facility, and it received 3,000 applications for those jobs in three days.
"That tells me the story," said Friedman. "We have plenty of talent, so we are not moving jobs [offshore] because we cannot find talent or we don't have the quality of talent in this country. But I'm wondering [if] in the rush to send jobs offshore, we, in some respects, are neglecting the moral responsibility we have with our employees.

Phil Friedman, CEO of Computer Generated Solutions Inc.