U.S. agency funds offshore training in enterprise Java

USAID helps to create 3,000 offshore jobs in Sri Lanka

The U.S. Agency for International Affairs (USAID) is funding development of Sri Lanka's offshore outsourcing industry, with the goal of creating some 3,000 jobs in an area of the country that has been especially brutalized by civil war.

The U.S. embassy in Sri Lanka on Friday posted a press release announcing a number of initiatives, including a joint program with business process outsourcing and IT companies "to establish professional IT and English skills development training centers" in the country's Northern Province.

The training programs, which are available through cooperation with unidentified private companies, are intended to provide specific training in offshore business process support, English and enterprise Java, to a population that has suffered through some 26 years of civil war, USAID said in a follow-up blog post Wednesday.

In June, the United Nations Industrial Development Organization said it was helping the Sri Lankan government provide jobs to an estimated 40,000 widows in the island's northern and eastern regions.

A USAID spokeswoman said the program "will not displace American IT workers."

"The program's goal is to prepare young adults in this very fragile, post-conflict environment to find jobs in the local economy and to build a basic local skills base that will encourage large Sri Lankan companies based in the south and east to invest in this region, USAID said.

USAID said the IT training is part of a larger effort that it has under way, that is mobilizing $65 million in private sector investments by Sri Lankan companies in horticulture, construction, computer programming certification, business process outsourcing, aquaculture, logistics, and garment manufacture, the spokeswoman said.

The IT training program is intended to help the "marginalized population in Jaffna who has, for the last 26 years of conflict, not been exposed to even basic IT technology," USAID said.

The U.S. is contributing about $9 million to the effort, with private-sector companies matching it about 3-to-1. The money will help fund some 10,000 jobs in a variety of industries, including textiles. The story was initially reported by Information Week.

Growth in offshore outsourcing has been helped, in part, by large IT offshore providers that set up satellite offices in countries where wage rates can be lower than those in India or China.

Sri Lanka, with its proximity to India and relatively low wages, already has a developing offshore industry, with 50,000 people employed in IT and BPO industries and a workforce that is growing at 20% annually, according to the Board of Investment of Sri Lanka. The country's population is about 21.5 million.

But Sri Lanka is also a very small player in the offshore universe, and the addition of 3,000 jobs makes almost no difference in this vast global market. The Philippines BPO sector, for instance, created about 70,000 new jobs in 2009, bringing total BPO employment by the end of last year to more than 442,000, according to the U.S. State Department.

A little credit for this growth of outsourcing in the Philippines may belong to the USAID, which has been supporting development of outsourcing in Mindanao and has worked to "jump-start" investment in that area, according to an agency report.

Despite the humanitarian effort to help war victims, USAID's use of its funds to help offshore development may raise questions about whether it is at cross purposes with President Barack Obama's goal of slowing the movement of U.S. jobs overseas. His administration has been attacking the U.S. tax code as a facilitator of offshore outsourcing. In a speech last year, Obama said the U.S. has developed "a tax code that says you should pay lower taxes if you create a job in Bangalore, India, than if you create one in Buffalo, N.Y."

Patrick Thibodeau covers SaaS and enterprise applications, outsourcing, government IT policies, data centers and IT workforce issues for Computerworld. Follow Patrick on Twitter at @DCgov or subscribe to Patrick's RSS feed . His e-mail address is pthibodeau@computerworld.com.

Copyright © 2010 IDG Communications, Inc.

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