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Engineers, Academics, Policymakers Argue Offshoring Pros and Cons

Offshore outsourcing of the work of high tech and, increasingly, research professionals is one of the most controversial issues in the debate over globalization's impact on the U.S. and its policies for innovation and international competitiveness. Is outsourcing good or bad for the country's competitive position in science and technology? The answers are sharply divided, but below is a letter from information technologist Dave Stern of Virginia Beach, Virginia, who reflects the view of those who have been its victims. His letter appeared, among others, in the March 10, 2007 issue of Information Week. Stern, a business systems manager for a company he chose not to identify, wrote: "Employers worrying about a shortage of IT talent are often the same ones that spent so much time touting the benefits of offshoring. That effort has paid off by impressing upon high school students that it's a dead-end career path. Why get a degree in computer science or IT [information science] when the jobs are going to India? I hear it all the time from students. These employers will need to spend as much, if not more, time impressing upon our youth that offshoring is not serious. Good luck with that. Every call you make to the tech vendors is answered by someone in Bangalore. I don't recommend that my kids go into IT, and I've been in it for 20 years and am paid well. If you scare them away from a career, you can't blame them for not coming back." Concerns for Policymakers That letter illustrates the current debate over outsourcing, which is destined to grow and is a key element in today's globalization juggernaught. Globalization both worries and invigorates U.S. innovation policymakers as they struggle to shape policies for the emerging new phase of international technological competitiveness, where skills become increasingly equalized around the world. The reasons for the concern have their origins in the very fields that are being outsourced--information and networking technologies, plus a growing list of others--which have made outsourcing as smooth to do as pouring milk. Outsourcing is intricate to arrange and has had its failures and disappointments. But on the whole it opens new markets, gives American companies foreign toeholds, lowers labor costs, and widens access to fresh ideas. It also puts good high-tech people out of work. Dangerous Game? Up to now, it has been software, electronics and information technology workers who have suffered most of the disruption. Now, though, there are signs that layoffs are extending to sectors of research and development as American companies expand their research operations in Asia. To hear some critics such as Ron Hira of Rochester Institute of Technology express it, U.S. corporations are playing a dangerous game by their seeming indifference to the pain being inflicted on those laid off. At stake, Hira believes, is the health of America's competitive future, especially if the labor pool, discouraged by dwindling job opportunities, drops in quantity and quality and eventually depletes the country's innovation capacity. Hira has written, with his brother Anil, the book, Outsourcing America: What's Behind Our National Crisis and How We Can Reclaim American Jobs. Published by the American Management Association in 2005, Outsourcing America paints a bleak picture of American R&D unless new policies are established to ensure a dynamic technical work force. Outsourcing can be generically defined as the acquisition by a company of services that were formerly provided for within the company. Offshore outsourcing pertains to services received from other countries. It was an issue during the 2004 elections and is likely to carry over into next year's Presidential campaign. Both the Senate and the House are considering bills to raise the country's level of innovation and competitiveness through packages of support that involve more research funding, support for education programs in science and technology from grade school through graduate school, and establishing a stronger innovation infrastructure. …