Reverse osmosis

Now, a group of lawmakers and tech workers want to stop the flow of jobs to countries such as India, China, Russia and the Philippines. Industry insiders insists outsourcing is good for all in the long-term, while the immediate loss of employment haunts individuals.

Last week, The New York Times ran a story of a young man who outsourced himself to Bangalore, India. Joshua Bornstein is one of the very few foreigners who decided to move to India for employment. He is an odd exception in the software industry where the norm until a couple of years ago was Silicon Valley Ho!

For example, thousands of Westerners moved to live and work in the Persian Gulf. The black gold beneath the sands of the Middle East is irresistible. Also, every major oil company has its own living compounds and ensures a comfortable lifestyle akin to what they would normally have in their home countries or even better. While software may not offer similar benefits to those willing to relocate to other countries, the chances of gaining valuable experience and earning potential is still great. Eventually, more may follow the footsteps of Bornstein.

The dynamics of the software industry has changed in the past few years. With high-speed Internet, connectivity is the last thing big companies have to worry about. As technology removed the last few obstacles of communication, even call centers moved to India. In the larger picture, this is part of globalization and a process in the collective growth of the world economy.

The Western powers pushed and are still pushing Third World countries to reform their economies, lift trade barriers and join the global economic model. Western corporations eagerly lobby for such policies in hopes of gaining access to billions of middle-income households hungry for gadgets and services.

The first wave of such rethinking saw manufacturing explode in China. As the West began funneling billions of dollars to set up shops and production plants there, it also enjoyed the well-trained cheap labor. Driven by a passion for a fat bottom line, corporations moved manufacturing jobs to China.

China also began to see the political advantage behind its reformed economic policy. No Western power could afford to arm twist this giant any more. If China sneezes, the world could catch a cold.

The same has happened in India in recent years. First, technology companies in Silicon Valley and elsewhere wanted thousands of software engineers to handle the millennium bug and later on to propel the dot-com boom. When Wall Street's cry for more profits became louder, the software industry already had the China model to follow.

In an election year, the cry of the common man losing his job in America to outsourcing is amplified. But both Republicans and Democrats know outsourcing in the long run is more beneficial than harmful. The effort to stop the outflow of jobs is just a knee-jerk reaction to yet another trend.

Outsourcing is a double-edged sword. If companies did not use inexpensive labor, their profits will take a hit leading to loss of jobs. In this scenario, those companies that outsource will have a distinct advantage. So our own competitive instincts also amply contribute to this trend.

Opinion about moving jobs abroad is mixed. Industry bodies and business leaders repeatedly emphasize the long-term benefits of outsourcing while labor leaders repeatedly condemn the trend. Lawmakers even banned government contracts from leaving these shores, which can be colored as protectionism. But this might just be the beginning of a larger trend.

The global village could get crowded in the years to come. The movement of talent across the borders might see free movement where talent combines with economic reality. Nations such as China and India produce millions of well-qualified engineers, doctors, scientists, nurses and teachers every year. Even Hollywood may seek cheaper talent in India, which has hoards of well-trained entertainment talent that keeps pace with Hollywood trends.

What does all this convey to the average Joe in America? Be ready to train in newer skills, be ready to take on newer challenges, be ready to move to greener pastures and be ready to carve a niche that will make you unique and indispensable.

Ram Venkatraman's column appears on Fridays. He can be reached at ram@smdailyjournal.com.