Well, Look At That: Offshoring Didn't Destroy The Tech Industry
from the shocking dept
Back during the recession years, whenever we’d write about how offshoring technology jobs wasn’t the big problem people made it out to be, we’d get tons of angry comments. However, the points many of us were making were pretty straightforward. First, offshoring wasn’t as cheap as people were making it out to be. The monetary costs would continue to increase as demand increased (which is exactly what happened), but more importantly, the non-monetary costs were a lot higher than people expected. Managing a team halfway around the world isn’t easy, and there are lots of problems with it for certain types of projects. In fact, that’s exactly what many companies discovered. At the same time, there are clearly cases where offshoring makes sense. It’s classic comparative advantage economics at work, where benefits tend to accrue to both sides of the equation. People forget this and think that it’s a zero sum game and that a job that goes to India is somehow “lost” forever. However, the value from well done offshoring actually opens up new opportunities and so it should come as no surprise that unemployment for techies is the lowest its been in years. This fits with other recent stories about tech wages at new highs and H1-B visas being exhausted in a single day. The simple fact is that the economy is not a zero sum game. Allowing the economy to grow by letting jobs go where they’re most efficient will increase the overall pie and open up plenty of new job opportunities in other places — which appears to be exactly what’s happened. As if to underscore this, now that tech jobs are scarce in the US, those who were complaining about “lost” jobs a few years ago must think that there’s less demand in India for skilled tech workers — but the opposite is true. Tech companies there are also having trouble hiring. In other words, the sector just keeps growing, and having jobs move around doesn’t mean that any jobs are permanently “lost.” At some point, we’ll go through this cycle again, but hopefully next time around people will recognize it for what it is, rather than passing around the blame and pushing Congress to pass protectionist laws that actually shrink the economic opportunity.