by Mike Masnick

Filed Under:

Tech Innovators Aren't Big Offshorers

from the no-real-surprise-there dept

For years, we've been pointing out that the worries about offshoring have been greatly overhyped. In fact, a new study points out that, despite popular opinion, offshoring isn't particular popular in the tech industry -- especially among companies doing serious innovation. It is more popular in the banking and insurance industries, to be sure, but the tech industry has learned that you don't outsource the actual innovation. That's because innovation isn't a commodity that goes to the cheapest workers. It requires the best workers. Of course, if our immigration policy continues to keep some of the most qualified workers in other countries, then we should expect more innovation to shift overseas as well. That's why it's never made much sense that the same folks who are against offshoring are often against increasing the number of H1-B and other visas for highly skilled foreigners. If you keep them out of the country, the work will only go to where they are. However, if the best innovators are here, then that's where the innovation will stay and there's less incentive to offshore work.

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  1. identicon
    Ajax 4Hire, 26 Jul 2007 @ 6:46am

    The team that wins is the team together.

    The team that pulls together on the tug-o-war rope wins.

    You cannot have people come up whenever they want and pull and
    expect that all the contribution is additive.

    Yes individual at home, distance collabrative work is possible but I have seen that the best arrangement is all together.

    When the disparate far-flung groups working on the same project have problems the answer eventually is to get someone or someones on a plane to work together.

    Oh yeah, first.

    reply to this | link to this | view in thread ]

  2. identicon
    Overcast, 26 Jul 2007 @ 7:05am

    Yep, get what you pay for. An Axiom that always rings true.

    reply to this | link to this | view in thread ]

  3. identicon
    Unbiased, 26 Jul 2007 @ 7:14am

    Is it just me

    Is it just me or does Techdirt consistently argue in favor of increasing H1B's? What about reporting on the abuses of the H1B program by big business?

    reply to this | link to this | view in thread ]

  4. identicon
    Tod, 26 Jul 2007 @ 7:19am

    "Highly skilled workers"?

    If they really are highly skilled, they need to come over as something other than an H1B that allows them to integrate into society and gain permanent resident/citizenship status more quickly.

    I know some medical researchers from western Europe that spent or are still spending years and years trying to gain citizenship, who actually contribute greatly to America and wish to become American.

    However, having worked in IT for 20 years, I have to say that most H1Bs in IT that I've dealt with are no more skilled, and generally less skilled, than their domestic equivalents. The main difference is that since most of the H1Bs in IT come from countries that still have average incomes of under $1000 US, they can and will work for less here. (For example, they don't graduate owing thousands of dollars in school loans.)

    If someone is worth having, they deserve better than an H1B visa.

    reply to this | link to this | view in thread ]

  5. identicon
    Anonymous Coward, 26 Jul 2007 @ 7:32am

    It's a matter of having your cake and eating it too. Corporations want the innovation to stay in America but they want cheap foreign labor as well. They are against offshoring because they want to keep the high end paying jobs in America (the ones requireing specific skills) and are against the increase in visas because they are afraid skilled foreign workers will take their own high paying corporate jobs from them. They want the cheap foriegn unskilled labor but do not want not-so-cheap skilled foreign labor getting in as well.

    Notice that there regulations that employers have to go through to hire someone (to confirm national residency) and fines and punishments in place for employers that do not go by them? It's because American business owners like being able to hire laborers for as cheap as they can get away with in order to increase their bottom line. But if skilled foreigners start coming the employers are afraid that these foreigners will be able to compete their jobs. And we all know how American corporations feel about competition...

    reply to this | link to this | view in thread ]

  6. identicon
    mark r, 26 Jul 2007 @ 7:51am


    Awesome. So what magical threshold is in place to make sure that everyone (or that the effect of the program on aggregate) adds to the amount of innovation that happens in the US?

    If you want innovation, open it up to everyone. Nikola Tesla would have been a Yugoslavian citizen unable to emigrate to the US under current immigration statues. Westinghouse wouldn't have gotten the pattens on alternating current, a Yugoslavian company would have. Yugoslavia would probably still exist as a country today.

    reply to this | link to this | view in thread ]

  7. identicon
    Nick, 26 Jul 2007 @ 9:27am

    Re: Is it just me

    Good point..However, TechDirt usually flip-flops to the most popular side of issues...
    H1B abuse is wayy under rated and under reported on. Furthermore, the abuse of H1B consultants is yet an area people dont even try to find out about. They come here as HIGH TECH workers...and after the 9 to 5 day...return to their apartments..and live like Mexicans. No offense to Mexicans..they live together because not all of them get leases even though they can afford it. With the H1B consultants..its a sheer affordability issue. They come to the US and get peanuts. Which is why they are pref. over native consultants. Anyways..I can keep going..but am going to stop while I am ahead.

    reply to this | link to this | view in thread ]

  8. identicon
    hmmm, 26 Jul 2007 @ 9:36am

    not really sure

    reply to this | link to this | view in thread ]

  9. identicon
    Bill Gates, 26 Jul 2007 @ 9:50am


    The largest users of H-1B visas are the offshoring companies. In the computer industry the MAJORITY of H-1B visas go to offshoring companies. The assertion that not having H-1B visas will encourage offshoring is a conclusion one can only come to in complete ignorance of the data.

    H-1B is the bigger threat. Given a choice between more offshoring and more H-1B visas, I'd take more offshoring every time. Fortunately, we don't have to make that choice. More H-1B visas means more offshoring.

    reply to this | link to this | view in thread ]

  10. identicon
    Jamie, 26 Jul 2007 @ 10:05am

    Re: H-1B

    I'm not really for or against more H-1B. I feel like I don't have a good enough understanding of how it is used or how it is meant to be used. I've heard arguments from both sides that sound good. So I don't think I can make a decision as to where I stand on it.

    That said, I do completely disagree with your position that more off shoring is better than more H-1B visas. It's much better for the US economy to have money being paid to people who work here rather than some other country. the majority of money paid to workers in the US, gets spent in the US. Money paid to workers in another country gets spent there. Having underpaid workers in the US may not be good for the economy, but having the money from those underpaid workers go out of the country is a lot worse for the economy.

    reply to this | link to this | view in thread ]

  11. identicon
    Vinay, 26 Jul 2007 @ 10:51am

    I agree ....

    reply to this | link to this | view in thread ]

  12. identicon
    Kai, 26 Jul 2007 @ 12:08pm

    Immigrants yes, HB-1 no

    I strongly favor encouraging smart and/or hardworking people to come to the US to live and work and earn a wage that reflects their skills. Unfortunately, from what I have seen, the HB-1 program promotes peonage, and temporary peonage at that. How can we get innovation from someone who is under paid and knows they are only here for a short time?

    reply to this | link to this | view in thread ]

  13. identicon
    Steven Ashley, 26 Jul 2007 @ 3:30pm

    Increase Immigration Quotas, not H1B visas

    The H1B program is just another instance of creating an artificial program to solve a specific problem instead of doing the right thing in making the countries immigration laws match the countries needs.

    Temporary worker programs just create a underclass of workers and I thought we outlawed slavery and indentured servitude years ago.

    reply to this | link to this | view in thread ]

  14. identicon
    Anonymous Coward, 26 Jul 2007 @ 5:52pm

    Temporary worker programs just create a underclass


    and they also discourage US citizens from entering that field. Who wants to gamble on a career where you have to compete with cheap imported (or offshore) labor?

    Can you see that it is a vicious circle - that creates a self-fulfilling prophesy?

    Who benefits - workers or corporations?

    The only ones with the ability to start the circle going was . . . . . you guessed it. The corporations.

    reply to this | link to this | view in thread ]

  15. identicon
    Mohan, 2 Aug 2007 @ 12:42pm

    Innovation in the value chain.

    The blog makes me reflect on the point raised “However, if the best innovators are here, then that's where the innovation will stay” The intent to keep innovation “here,” in order to maintain a lead and ownership of processes up the value chain; right? …but the corollary may not be really true…there still may be other incentives to incentive to offshore work; right?

    reply to this | link to this | view in thread ]

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