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28 February 2009

Does Outsourcing Look Gloomy?

A couple of days back, the United States President Mr. Obama delivered his speech at US congress. During his election campaign, he argued about stopping outsourcing to other countries. This has started to create slight turbulence in Indian IT industry. With the back drop of the current economic slowdown, another blow like this will certainly create a scenario of deeper and much stronger impact and longer recovery of Indian IT industry. If it happens, many "low risk taking" Indian IT compaines will take a heavy beating. These are facts and no exaggeration.

The mess does not stop here. While, many people may be thinking that he is standing by his election manifesto, the hard fact is that the outsourcing brings a net wealth of 1.14 dollar for every dollar that is spent on outsourcing to United States. The president may be thinking of bringing back the job market in US to normalcy by stopping outsourcing. While this may sound good considering the current climate, in a long term this is going to hurt the companies that gain by outsourcing. Also, stopping outsourcing, the developing countries will certainly review their trade policies as it leads to Win-Lose proposition. The entire world will go backwards by hundreds of years.

Let us hope that this is a temporary workaround until job market recovery. I feel, it is. Also, the companies that are outsourcing may use this opportunity to bargain on price which Indian IT industry is already started to review and reduce the price (happily).

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