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6/23/2004
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Bush Official Says Laws Aren't The Answer To Offshoring Concerns

A Bush administration official says the U.S. can best protect IT jobs by investing in training and education and not by enacting legislation to prohibit offshore outsourcing.

A Bush administration official Wednesday said the U.S. can best protect IT jobs by investing in training and education and not by enacting legislation that would prohibit offshore outsourcing. "If we embrace isolation and reject working with the rest of the world, it will be to our detriment," said Phillip Bond, under secretary of commerce for technology.

Bond was speaking at a panel on offshore outsourcing in New York City sponsored by the Information Technology Association of America, a trade group representing high-tech manufacturers, who generally oppose limits on offshoring.

Bond said the Bush administration is focused on creating a business and educational environment that will foster the growth of high-tech jobs. He said the president favors a permanent research and development tax credit under which businesses could write off a portion of expenses related to research. Bond also said the administration wants to create programs that inspire more school children--particularly girls--with an interest in science and technology at an early age. "We lose the women in middle school. We have to stop losing one-half of our talent pool," Bond said.

To date, Democratic presidential candidate John Kerry has sent mixed signals on his view on offshoring. He's said that U.S. federal contracts should be performed "where possible" by U.S. workers. He's also said he favors laws that would require U.S. companies that provide customer service from offshore locations to tell consumers they are doing so.

The issue of offshoring is bound to become more politicized as the November elections draw closer. At present, 37 states have legislation pending that would prohibit sending state contracts offshore. Some state CIOs, however, feel that budget cuts have forced them to consider offshoring as a practical way to deliver services to residents while controlling costs. Last year, cuts forced the state of Connecticut to reduce its IT staff by 20%. As a result, state CIO Rock Regan says he's looked at offshore outsourcing as a way to fill his IT labor gap.

Widespread anti-offshoring sentiment, however, has forced Regan to proceed cautiously when evaluating outsourcing options. "We do things very quietly. We do things under the radar," said Regan, speaking at today's panel. Regan downplays concerns that offshoring could compromise residents' security or privacy. "It's no different from dealing with a vendor in the U.S.," Regan said. "It's irrelevant where people are doing the work."

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