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Niti in Sanskrit means policy/strategy/vision. This blog hosts my political views, along with news and commentary. This blog has moved here.

Wednesday, August 18, 2004

Outsourcing, what Outsourcing? Here comes InSourcing

Heritage Policy Weblog has an excellent post on increasing phenomenon of InSourcing :

By now, everyone's heard of offshore outsourcing, by which American companies can obtain services from overseas. Less known, however, is insourcing, when foreign companies send jobs to the United States. For some time, insourcing has been growing more quickly than outsourcing, but it's still below the political radar. Here are the facts:
U.S. subsidiaries of foreign firms employ 6.4 million Americans for a combined payroll of $350 billion.
These jobs pay, on average, 19.1 percent more than the average U.S. job.
About 34 percent of insourced jobs are in manufacturing.
These subsidiaries count for 22.4 of U.S. exports.
The number of insourced jobs grew by 7.8 percent per year, on average, over the past 15 years; the number of outsourced jobs grew by 3.8 percent per year, on average

See AdamSmith Institute's blog also for a good analysis.

The fact that Outsourcing is resulting in Insourced jobs in US should come as a no surprise to anybody who believes in basic Economic principles. Take for example, the announcement by InfoSys to setup US subsidiary and employ 500 people.

It's reverse BPO; US county woos Indian cos :

Samizdata also agrees that outsourcing is good for US economy overall.

The Economic Development Authority of Fairfax County (Virginia), a suburb of the US capital Washington, has opened offices in Bangalore and Tel Aviv to persuade Indian and Israeli firms to open offices in the county.

The county says its recruitment efforts could help quell the increasingly bitter political debate in the US over the migration of US jobs to India.

"There is a great concern (in the US) that high-end jobs are going to India because the costs are less," Gordon said.

"We are reversing that trend. We are bringing Indian companies here to create their jobs here."

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