Saturday, January 14, 2006

Washington Post: Offshored jobs move up the value chain

Washington Post staff writer Mitra Kalita's confirms what groups such as the Programmers Guild and IEEE-USA have claimed for some time now: high level software engineering and management jobs are not immune from offshore outsourcing. Her January 11th 2006 article: "India's New Faces of Outsourcing" reveals drastic changes in business that raise questions about the future of the IT profession in the United States.

Kalita profiles Approva Corporation, a company based in Virginia that has facilities in Pune India, and writes that "outsourcing has evolved in unexpected ways. In the past, U.S. companies gave the marching orders to workers in India. Now, young Indian developers (...) and expatriate Indian business leaders are helping India gain a more equal footing".

A highly skilled Indian employee of Approva is also interviewed. Constancio Fernandes started out as a programmer and is now the Director of Engineering at the company's Pune facilities. According to the article Fernandes said that "Most of the companies in the U.S. used to see Indian companies as sweatshops" but since then "The changes have been phenomenal".

According to the Washington Post "Fernandes represents a generation of Indian workers that is redefining outsourcing from call-center and back-office work into higher-level management and strategy jobs -- areas that Americans workers have often regarded as safe from overseas competition". American IT professionals have claimed for years that high value jobs are not immune from offshoring. Many companies are doing all their software development in India, with architecture, design, and support soon to follow.

The trend to move engineering and high level jobs to India is not limited to a few companies. Kalita writes that "At least five companies from Northern Virginia -- all run by Indian emigres settled in the Washington area -- have opened offices in Pune". Unfortunately the staff in Virginia "works mostly in sales, marketing and management" meaning that the highly skilled technology and engineering jobs once done in the United States are now done abroad.

This article should be a wakeup call to not only American IT professionals but also U.S. policy makers who need to be thinking about how to prevent a brain drain of these high-level jobs. Their blind faith in free markets and trade of services is proving to have dire consequences for the IT industry as a whole. We can only hope that our government does not allow American technology services to follow the path of American manufacturing.


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