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| Subject: | Re: GISList: New outsourcing laws.... |
| Date: |
02/24/2003 10:31:06 PM |
| From: |
GISex* Technologies |
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---------Included Message----------
Date: Mon, 24 Feb 2003 10:50:40 -0500
From: "Anthony Quartararo" <ajq3@spatialnetworks.com>
Reply-To: <ajq3@spatialnetworks.com>
To: <gislist@geocomm.com>
Subject: GISList: New outsourcing laws....
I wanted to share this with the list, it was received this morning by a
good
friend that is a well-known GIS telecom expert. I think it is highly
relevant to our industry especially, and if pushed forward, could upset
a
considerable number of bottom-lines....
- quote
US states may ban contract outsourcing
By Khozem Merchant in Bombay and Demetri Sevastopulo in,Washington
Published: February 21 2003 4:00 | Last Updated: February 21 2003 4:00
(http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1045511009223)
Several US states are considering joining New Jersey in introducing
laws
that would ban the outsourcing of public-sector contracts to low-cost
offshore processing centres such as India.
New Jersey's legislation is close to being enacted, while Massachusetts
is
among the states reported to be considering similar action.
The moves have sparked concern in India's fast-expanding offshore
technology
services industry, which has hired Hill & Knowlton, a US public
relations
firm, to lobby against them.
Although the immediate effect on the industry may be small, as
public-sector
contracts are only a fraction of its outsourced work for US customers,
Indian companies fear the moves could develop into a broader
protectionist
backlash.
Kiran Karnik, president of Nasscom, India's main IT industry
association,
said there was concern because of "the signal the legislative moves
sends
out". Reggie Aggaral, president of the Indian CEO High Tech Council in
the
US, said: "The impact will be minimal, but it sets a bad precedent. You
can
hire a PhD in India for what it costs to hire a high-school graduate in
the
US."
Shirley Turner, the New Jersey state senator who introduced the
legislation,
says the US should be trying to protect domestic jobs and shore up the
economy by not sending work overseas. Groups lobbying against the
legislation say it will have the most impact on the states themselves,
which
are facing huge budget deficits.
"It is going to cost the states a fortune because it is going to vastly
reduce the ability of companies to leverage offshore resources," said
Jeff
Lande of the Information Technology Association of America.
New Jersey is projected to have a $6bn (£3.8bn) fiscal deficit next
year.
But Ms Turner says the extra cost implied by preventing overseas
outsourcing
is justified. "We may be paying more if we have Americans doing the work
but
at least these people will be putting the money back into our economy."
The US accounts for about two-thirds of India's export of software
services,
which are forecast to grow 29 per cent this year. But that disguises a
spectacular 65 per cent forecast growth in business process outsourcing
to
call centres, which currently accounts for less than 10 per cent of
India's
$10bn export-led IT services industry.
Wall Street companies have led the way in transferring business tasks
to
India, where the lower cost of graduate labour and higher productivity
have
made the country a leading offshore technology service provider. Some
Indian
workers earn as little as a tenth of US processing staff.
The US government outsourcing market expanded 65 per cent to $400m in
the
five years to 2001 but is still significantly behind the domestic
private
sector in outsourcing work. Many Indian industry leaders say the US
legislative moves are, at most, a long-term threat.
-end quote
The only way I see this being successful on a larger scale is levy of
more
taxes. Unfunded mandates such as these die pretty quickly. However,
it
does bring into perspective the latent concern that everything is being
outsourced or soon will be, and aside from the explicit and implicit
security concerns, I've spoken with many who question where/when will
outsourcing (to India or elswherre) end? We cannot continue to
outsource
everything, but where is the equilibrium in our industry ?
Anthony
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---------End of Included Message----------
Hello !!!
Yes this news item has not terrified Indian IT industry, whereas, USA in
partially must makeup their mind before jumpin
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