Global CIO: President Obama's Dangerous Campaign Against Outsourcing

For every U.S. job outsourcing displaces, it creates two new ones—so why is the White House so intent on demonizing outsourcing?
"Between 1991 and 2001, employment at foreign subsidiaries of U.S. multinationals rose by 2.8 million jobs; during that same period, employment at their parent firms in the U.S. rose by 5.5 million jobs.

"For every job 'outsourced' to India and other foreign countries, nearly two new jobs were generated here in the U.S" (boldface emphasis added).

And as if that weren't enough of a repudiation of outsourcing's evil nature, Cohen piles it on with this additional insight: "Those new U.S. jobs were higher-skilled and better-paying—filled by scientists, engineers, marketing professionals and others hired to meet the new demand created by their foreign subsidiaries. . . .

"If Congress enacts legislation to stop American companies from outsourcing, foreign governments could do the same—and that could put at risk millions of high-paying jobs in the U.S."

Our president, as well as many members of our Congress from both parties, have chosen to gloss over these types of findings out of fear of angering an American public deeply concerned with employment issues. We should push our elected leaders to respond with facts and self-interested wisdom, rather than playing to voter fears with talk of punishing the "fat cats" who ship "our jobs" overseas.

Earlier this week, I wrote about a compelling suggestion offered to President Obama from Cisco CEO John Chambers and Oracle president Safra Catz for how the administration and Congress could rationally entice U.S. corporations to repatriate the approximately $1 trillion in foreign earnings that those companies are currently holding outside the U.S. to avoid having the taxman plunder up to $350 billion of that total (see Global CIO: Oracle And Cisco Join Forces On $1-Trillion Idea).

In that column, I praised the proposal from Chambers and Catz and suggested that more executives from the IT industry, as well as from the corporate customers gaining so much value from the IT industry, should make their voices heard on policy issues of strategic concern.

Few issues could be more vital to U.S. economic interests and to the competitive capabilities of American companies than the need to gain a clear-eyed understanding of outsourcing, and to help the American public understand the reality of cross-border employment dynamics in a truly global economy.

As Cohen writes in his conclusion, "President Obama has succumbed to this temptation, warning that we should not tell U.S. companies that they will be treated the same 'if you create a job in Bangalore, than if you create one in Buffalo.'

"That may play well in Buffalo," continues Cohen. "But that fact is that for every job outsourced to Bangalore, nearly two jobs are created in Buffalo and other American cities. That's a good deal for America—and something our president . . . should understand."


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GlobalCIO Bob Evans is senior VP and director of InformationWeek's Global CIO unit.

To find out more about Bob Evans, please visit his page.

For more Global CIO perspectives, check out Global CIO,
or write to Bob at [email protected].

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