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Training seen as way to counter offshoring

IT market analyst Edward Yourdon argues for more worker training in a new book

By John Ribeiro
August 13, 2004 12:00 PM ET

IDG News Service - Protectionist barriers such as visa restrictions may only accelerate the trend by U.S. companies to outsource software development work offshore, IT market analyst Edward Yourdon says in a book on outsourcing set for release in October.
Yourdon, a co-founder and fellow of the Cutter Consortium, an IT advisory firm in Arlington, Mass., had forecast over a decade ago in his earlier book, Decline and Fall of the American Programmer, that software development jobs would move offshore to countries like India that could deliver similar or better quality software at lower costs.
That forecast was largely accurate, though the dot-com boom helped cushion the impact on American workers. Although the American programmer is far from extinct, tens of thousands of U.S. software jobs are being moved to countries like India and Russia.
In Yourdon's new book, Outsource: Competing in the Global Productivity Race, the new threat is not only to U.S. software development jobs but also to all kinds of knowledge work, from call centers and help desk operations to legal services and clinical research operations in the pharmaceutical industry.
Knowledge work of all kinds is more likely to be a global commodity, and companies striving to compete in a global economy will continue to seek the lowest-cost, highest-quality providers of products and services, wherever they may be located, according to Yourdon.
However, the business decision to outsource is predicated not only on the comparatively lower cost of workers in offshore locations, but also on their relative productivity and quality. The productivity argument can be used effectively to justify keeping some knowledge-based work in the U.S., according to Yourdon. Some software companies, for example, prefer to hire in the U.S. because the productivity of the U.S. staff is far higher than in India for the work they are doing.
Although India has emerged as the archetypical example of an offshore outsourcing location because of its cheap, well-educated and English-speaking workforce, China may not be far behind, according to Yourdon. The country can offer cheaper staff than India, and workers who are as well educated.
It might take another generation to produce a core of Chinese knowledge workers who can speak English "comfortably and effectively," according to Yourdon. But the consensus among executives in the Indian IT industry is that it might be less than a decade before China reaches the same level of knowledge-based exports that India has taken 15 to 20 years to achieve, he said.
China's emerging knowledge-based outsourcing industry will not only affect American jobs at the low end, but could also affect product developers. An

Reprinted with permission from Story copyright 2014 International Data Group. All rights reserved.
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