Monday, December 05, 2005


The US technology industry is witnessing a spurt in outsourcing of technology jobs and it is continuously on the rise. Industry experts opinionated that this trend is inevitable as the 1980s off shoring of rust belt manufacturing jobs to South East Asia and Latin America. The year 2000, saw around 27,000 jobs shifting to developing countries like India, China and Russia. No one is able to predict an end to this phenomenal trend in near future. A study by Forrester Research, says that around 472,000 technology jobs would be outsourced to developing countries like India, China and Russia, by 2015. They also predicts that companies in the US and Europe will spend 28 percent of their information technology budgets on outsourcing. The huge investment made by key market players like, Microsoft, Dell, Motorola, and Intel in this segment illustrates this upwardly spiralling trend. Most of these technology jobs vanishing from the US shore are high-end jobs, which require great skills and competence. This is in contrast to the outsourcing of low-level technology jobs like data entry and system support, which is in practice for more than a decade.

Developing countries like India, China and Russia have vast pool of cheap technology work force, this the prime attraction for major US companies. India alone produces 350,000 graduates engineers from it engineering colleges. More than that an average computer programmer in India costs $20 per hour in wages and other benefits compared to $60 per hour for an American with same qualification and experience.

Apart from the lure of highly productive technology work force, developing countries like India, China and Russia are also the fastest growing markets, so a footprint in theses countries will give US companies a strategic advantage in the long run.
But most of the American technology workers are skeptical about outsourcing business and they believe shifting of core technology jobs could pose a big threat to American technological dominance. This high-end technology outsourcing business will help the countries to build their own technology industries. This would be detrimental for Americans in the future. Even though many of the US technology workers welcome the free-trade and Globalization, they are more concerned about their minimal salary growth, which is not in pace with inflation rate and also about the looming unemployment in the offing. A recent study by an independent Economic Policy Institute has highlighted the disparity in salary growth rate and inflation rate for the technology workers. Critics of the technology out sourcing also feel that the technology conundrum along with layoffs from other sectors could further worsen the recession hit US economy. Washington Alliance of Technology Workers, a union of technology workers is persuading US Congress to study and possibly regulate the technology outsourcing business to address the concerns of the US technology workers.

But the business fraternity is bullish over the prospects of technology out sourcing and they refute all the ant-outsourcing charges made by the workers. They believe that out sourcing would liberate valuable monetary and human resources, which could be better utilized for upscaling their performance, and move up in the value chain. American are making great strides in the realms of Nanotechnology and Biotechnology, the learnability and flexibility attributes of the US work force will provide them the needed job security and a sustainable future in theses technological arenas rather than simple software coding jobs.