The enthusiasm for overseas outsourcing and off shoring, mirrors the enthusiasm for Internet companies in the Nineties. Its worrisome when companies are criticized solely because they have hired people overseas. Off shoring is a mistake when technology companies confuse operational effectiveness and strategy. Strategy is about the creation of a long-term competitive advantage, which for technology companies is usually the ability to create innovative software. Operational effectiveness is about working cheaper or faster. Ultimately, the off shoring fad is bad for companies not because of the short-term programmer layoffs but because technology companies will lose their capacity to innovate.