Global CIO: The Ugly And Dangerous Prejudice Against Outsourcing

If American businesses yield to the anti-outsourcing caterwaulers, then don't be surprised to see them go after other equally legitimate business tools next.

Bob Evans, Contributor

March 25, 2009

4 Min Read

Just this week, U.S. Rep. Robert Brady of Pennsylvania described as "outrageous" the plans of JPMorgan Chase to accelerate the integration of Washington Mutual and Bear Stearns by stepping up its business with Indian outsourcing firms.

"We would like to remind you that the taxpayers of the United States of America contributed $25 billion to your company to help stabilize our economy, not send jobs overseas," Brady recently wrote to JPMorgan CEO Jamie Dimon, as reported by my colleague Paul McDougall.

In the same vein, those CIOs and other business leaders can't afford to let recent broad but clearly protectionist comments from President Obama intimidate them from pursuing the business practices that will let them create the most-competitive products and services possible by fully leveraging global sources of talent and innovation as well as global sources of raw materials and finished goods. Because it's those companies that will succeed, which means they'll grow, which means they'll need to hire new engineers and designers and marketers and developers and salespeople and production workers and accountants and drivers and managers.

Like every other person with a pulse, my heart goes out to those Americans -- as well as workers in other countries -- who through no fault of their own have lost their jobs in this global economic slowdown. And without question, some of those job losses have come as a result of corporate decisions to shift those jobs from the United States to other countries. But this current round of jobs being moved around the globe is not an isolated occurrence, it's not something specific to our troubled times right now in 2009, and it's not the cause of the rising unemployment in this country.

If U.S. firms are to remain competitive in the global economy, they need to be free to conceive, create, sell, and ship products in whatever combinations of locations and processes that yield the greatest chances for success. If that means making cars in the United States as Honda and Mercedes and Toyota do, then that's terrific. If it means the iPod is "proudly designed in California" but is built in the Far East from components supplied from multiple countries, then that's terrific as well. And if it means U.S.-based companies employ outsourcers to help them create great products and services that are sold around the world -- thereby creating more jobs for that company in this country -- then that's equally terrific as well.

In addition to the comments above from HP's Marius Haas, consider these remarks from execs at IBM and Sun Microsystems on the same subject of the futility of protectionist policies in a massively interdependent global economy, as noted in a Global CIO blog last week:

IBM's Edward Orange, emphasizing that IBM manufactures products and delivers services in 170 countries, echoed Haas' point: "IBM goes wherever the talent and the market is." Orange is the Asia-Pacific director for IBM's Lotus unit, the article said.

Sun's Joe Hartley was even more blunt: "The policy may shrink global trade in the long run. Not every job can be outsourced. But a job has to be done at the right place and at the right time," according to the Economic Times, which also offered these statistics: Indian subsidiaries of U.S. companies such as IBM, Sun, Microsoft, Oracle, and HP together employ over 150,000 people. IBM, which has more than 70,000 employees in India, sees no merit in U.S. government's protectionist policies.

These are indeed hard times, but the approach that will get us out of this mess is the spirit of American innovation and determination, which over the past 200 years has created the highest standard of living the world has ever known with dazzling breakthroughs in medicine, manufacturing, higher education, entertainment, space exploration, pharmaceuticals, and much more. Going into the 21st century, we have the opportunity to leverage that priceless spirit of American innovation and determination with not only the remarkable immigrant entrepreneurs who've contributed so much to this country but also with global partners in countries across the globe who currently serve as our partners in every industry. To attempt to cut off those enormously valuable partnerships and collaborations, and to attempt to turn the clock back 50 years and magically define what "our jobs" are, will only ensure that today's hard times stay with us for many years to come.

About the Author(s)

Bob Evans


Bob Evans is senior VP, communications, for Oracle Corp. He is a former InformationWeek editor.

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