Turning the corner on offshore outsourcing

Email LinkedIn
Tools


Outsourcing may be coming home, at least some of it, from overseas. With rising U.S. unemployment, a need to cut costs and increase productivity, some tech companies are looking for a new approach that bypasses traditional overseas locations like India. In one initiative recently highlighted on BusinessWeek.com, IBM has focused on two U.S. communities where there is access to skills, a willingness of local universities to cooperate with their business endeavors, and some government incentives to make it economically worthwhile.

This week, we report on these IBM efforts in East Lansing, Mich., where IBM hopes to create 1,500 direct and indirect jobs in five years, and Dubuque, Iowa, where 1,300 people could be employed in two years. Dubuque didn't just open the door and invite IBM into town. They offered Big Blue an enticing package of incentives worth $55 million over 10 years. These include a loan of $11.7 million that will be forgiven if IBM fulfills its hiring pledge. A local development agency also will spend $25 million to rehab an historic former department store.

The new jobs will include setting up, monitoring and maintaining large computing systems. In Michigan, a new East Lansing service delivery center will modernize out-of-date software for states and corporations. Michigan State University has agreed to cooperate on the educational front. 
 
Industry experts say this is only the start of establishing operations in low-costs parts of the United States in the coming months and years. This is a hopeful sign, given the heavy job losses in the tech industry. Evidence of the appeal of some U.S. communities was apparent last year when India's Wipro Technologies opened small service delivery offices outside Atlanta and in Troy, Mich.

Perhaps there will be more to come. Could this be a sign of a new and better future for U.S. tech workers? We'll have to wait and see. - Judi