The Difference Between Offshoring and Outsourcing
First of all, the Information Week article that David uses to build his case seems to equate offshoring with outsourcing. While they are often indistinguishable in the current political rhetoric, it's important to remember they are not one and the same. Outsourcing is merely handing a part of the business process to another company - that company can be local or international, it's outsourcing. Offshoring, on the other hand refers to outsourcing to a foreign company's foreign operations (this is important - if Ford outsourced some of its work to a Toyota plant in the US, it would not be considered offshoring, but would be considered outsourcing).
Paul McDougall's article does not seem to recognize this difference. The only source McDougall is a statement from the US embassy in Colombo, Sri Lanka, and the relevant part of that statement, in its entirety, reads:
There are simply no other mentioned sources - named or unnamed - for the article.
Business Process Outsourcing (BPO) Alliance
To help fill workforce gaps in BPO and IT, USAID is teaming with leading BPO and IT/English language training companies to establish professional IT and English skills development training centers in each of the five districts in the Northern Province. Courses in Business Process Outsourcing, Enterprise Java, and English Language Skills will be offered at no charge to over 3,000 under- and unemployed students who will then participate in on-the-job training schemes with private firms.
Also according to McDougall's own article, it is unclear that the jobs created in Sri Lanka as a result of this program will take jobs away from the US. In fact, it may very well scoop up jobs from India instead:
Sri Lanka's outsourcing industry is nascent, but growing as it begins to scoop up work from neighboring India.So in fact, there is no evidence that this investment by the USAID is going to hurt American jobs. None. So I don't understand. Has David not read the article he's quoting, or is he simply against the United States helping the poorest countries in the world learn technology?
In addition to homegrown firms, it's attracting investment from Indian outsourcers looking to expand beyond increasingly expensive tech hubs like Bangalore, Hyderabad, and Mumbai. In 2007, consultants at A.T. Kearney listed the country as 29th on their list of the top 50 global outsourcing destinations.
Sri Lanka in Perspective - Civil War and Tsunami
I know it's tempting to act on a knee-jerk basis when you hear these reports. How dare the US government spend money on other countries' development when we have an economic crisis of our own? How dare they? The truth is that even with our crisis, we are one of the most fortunate countries in the world. Sri Lanka? Not so much.
It is a country that has been ravaged in civil war and has no real economy (outside of tourism, which has also died off thanks the civil war). The civil war and unrest with the Tamil Tigers lasted 26 years - from 1983 to 2009. It ended just last year. The Tamil Tigers (LTTE) controlled most of the northern province in Sri Lanka for much of that time. And now we are supposed to beat up on the Obama Administration for making technology jobs investment in that very region? Some compassionate people we are.
Sri Lanka's economy? Their per capita income was 148th in the world in 2009 - and their labor didn't count the residents of the northern and western provinces, thanks to the LTTE control during the civil war.
Oh, by the way, does anyone remember the Tsunami in the Indian Ocean in December of 2004? Does anybody remember these pictures anymore? Let me remind you.
But go ahead, keep screaming at the top of your lungs how wrong it is to help this war and tsunami ravaged country train a few IT workers. Go ahead, tell us how evil President Obama and the USAID are for investing in these jobs, and 7,000 others in Sri Lanka.
The Money in Perspective
McDougall's article alleges the US government is investing $10 million in this project, leveraging it with $26 million from the private sector, making a total of $36 million. Let's put that $10 million in context, shall we?
In Fiscal Year 2010, USAID had a total budget (in-budget plus supplemental) of nearly $55 billion. USAID's FY 2011 budget request is $58.5 billion. But God forbid $10 million, or 0.017% of it, go to train IT workers in the only IT industry in existence in a country ravaged by war and decimated by the world's worst tsunami on record. Who would want people in Sri Lanka to speak English anyway - it's not like there are ever any American tourists there, right?
Let's also compare that measly $10 million investment in that devastated country to what the President is doing in the United States on jobs. The Recovery Act alone has invested $4.4 billion in a multitude of job training programs within the United States. In addition, the Recovery Act increased funding for training workers affected adversely by trade by 160%.
Trade Adjustment Assistance (TAA): All TAA programs are reauthorized through Dec. 31, 2010. Current Trade Adjustment Assistance is expanded to trade-affected services sector workers and workers affected by offshoring or outsourcing to all countries, including China or India. Training funds available to states are increased by 160%, to $575 million a year, and a new TAA program is created for trade-affected communities.And that's just the Recovery Act. The health reform law passed earlier this year is also expected to create 250,000 to 400,000 jobs a year. $10 million, the entire sum of the Sri Lanka IT investment by the USAID, was invested in the health care law to train home health care professionals alone. This, keep in mind, is just two of Obama's initiatives.
Democrats in the House, with the support of the President, have introduced a bill to shut down offshore tax loopholes. Is all this enough? No, we need a lot more investment in American jobs. No one will dispute that. But that is not ground to beat up on war and natural disaster-torn countries (and by extension, the President) for a small investment in their IT sector.
Is It About the Geography?
I also missed David's column berating Cisco or the US government when the same reporter (Paul McDougall) in the same magazine (Information Week) reported that the tech giant and the United States Agency for International Development (ahem, USAID) will help IT firms in Palestine - West Bank and Gaza - wait for it, wait for it, handle outsourced business!
Cisco plans to work with Palestinian authorities over the next several months to help IT companies in the West Bank and Gaza Strip bolster their ability to handle large outsourcing contracts from the U.S. and other countries.Hmm, I wonder where the poutrage was back then. Is it the geography? Helping outsourcing investment in the war-torn middle-east is good, but helping outsourcing investment in war-torn and tsunami-suffering south-east Asia is horrible? Is that it? What'd I miss?
The United States Agency for International Development, along with advisory partner Carana Corp., are assisting with the project.
In The End...
So, what gives? Why do we constantly fall for fly-by attacks and depth-less pieces bashing the President? Why are we so quick to give credence to anything posted on the web without looking at the context of the entire situation? Why are our attention spans so damn small? And finally, why do we continue to give inflammatory rhetoric (like "Obama Outsourcing Program") so much value? We have an entire library at our fingertips. Hell a whole lot of us have them in the palms of our hands. With that much access to information, why are we still falling for the oldest tricks in the book?
Please, I urge you, stop lending credence to things without context and without depth. We live in a complicated world where simplistic soundbites do us a disservice.