The efforts of US legislators to punish American companies that outsource jobs to India and elsewhere will never succeed because "there is too much economic logic to outsourcing", says award-winning New York Times columnist and free-market advocate Thomas Friedman.
In an exclusive interaction with DNA in Hong Kong on Tuesday, the author of The World Is Flat and, more recently, Hot, Flat, And Crowded, said outsourcing "really took off for economic reasons, because there was huge efficiency in outsourcing". As long as that economic logic is there, "outsourcing will thrive", he said.
Asked if efforts to make it unattractive for companies to outsource jobs would succeed, given the political and economic environment in the US , Friedman responded with an emphatic "No". "The outsourcing industry itself may take different forms," he said, "and may focus on different areas… But as long as these companies are providing innovation advantage and financial advantage and insight, I don`t think they will die."
Did he think the "economic equation", which currently favours outsourcing, could be skewed by, for instance, a tax in the US on companies that outsource jobs, as president-elect Barack Obama had pledged during the campaign?
"I don`t see that happening," Friedman said. "That`s because the best companies outsource these jobs to save money to invest it somewhere else. Why would you want to stop that?"
The thing to remember, he said, was that outsourcing benefits America in the long run. "I`ve written a whole book on that… The biggest outsourcing companies — like IBM — are companies that are outsourcing to grow, not to die. It`s not their last gasp; it`s the smart thing to do."
In an exclusive interaction with DNA in Hong Kong on Tuesday, the author of The World Is Flat and, more recently, Hot, Flat, And Crowded, said outsourcing "really took off for economic reasons, because there was huge efficiency in outsourcing". As long as that economic logic is there, "outsourcing will thrive", he said.
Asked if efforts to make it unattractive for companies to outsource jobs would succeed, given the political and economic environment in the US , Friedman responded with an emphatic "No". "The outsourcing industry itself may take different forms," he said, "and may focus on different areas… But as long as these companies are providing innovation advantage and financial advantage and insight, I don`t think they will die."
Did he think the "economic equation", which currently favours outsourcing, could be skewed by, for instance, a tax in the US on companies that outsource jobs, as president-elect Barack Obama had pledged during the campaign?
"I don`t see that happening," Friedman said. "That`s because the best companies outsource these jobs to save money to invest it somewhere else. Why would you want to stop that?"
The thing to remember, he said, was that outsourcing benefits America in the long run. "I`ve written a whole book on that… The biggest outsourcing companies — like IBM — are companies that are outsourcing to grow, not to die. It`s not their last gasp; it`s the smart thing to do."
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Sushanth 23-04-2009
Outsourcing is not going to die so soon at least in India. As more and more companies learn how in such an economy outsourcing save them from bankruptcy and help achieve those numbers by spending 1/3 the amount by outsourcing their work to countries like India.
Perhaps it Indian based IT companies that have bit hit bit due to few clients coming back to them for newer projects.
Perhaps it Indian based IT companies that have bit hit bit due to few clients coming back to them for newer projects.
