Offshore Outsourcing of High Tech Jobs: The View from India

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In the recent past there has been considerable media attention on the exodus of jobs in various high-tech industries from the developed world (USA and Europe) to emerging countries, notably India. The phenomenon has strong economic justification for the companies that are outsourcing these jobs to destinations. In the U.S. there is a growing resentment and backlash to offshore outsourcing. Many people are complaining that far too many high-paying jobs are being exported abroad.Given that this new wave of job migration out of U.S. (and to some extent Europe as well) causes cataclysmic changes in the lives of those getting displaced out of their jobs, the issue is indeed loaded from an emotive perspective. If this movement grows and politicians in the affected countries respond with tariffs, quotas and outright bans on outsourcing (and politicians do have a tendency to react to such outcries), then IT companies such as Infosys, WIPRO, and Tata Consultancy Services from India and those from other emerging countries will be hard hit, since much of their sales comes from international markets. The purpose of this paper is to find out how the leaders of major Indian companies feel about the growing threat of protectionism in IT out-sourcing, a domain that has been witnessing of a lot of high-tech job migration in the past several years. Phase-1 of the study (which is the scope of this working paper) is designed to understand the phenomenon from the perspective of top managers of Indian IT companies and key decision makers in the Indian federal and relevant state governments, as well as NASSCOM, the nodal Indian agency that is involved in promoting India as an IT outsourcing destination. The focus of this study in India, since it in the vortex of on-going debate of job losses. A more extended study (Phase 2) is contemplated subsequently, covering other emerging nations that compete with India for a share of the IT outsourcing pie. As a part of Phase-1, several top managers of large India - based IT companies, leaders of Indian Industrial forums as well as key government officials were interviewed. Anecdotes, quotes, and ideas were collected from them, which we present in this paper. This on-going research seeks to develop a framework for international trade that is based on the creation and sharing of jobs.