Offshore Outsourcing Is An Unavoidable Trend

As more companies transfer programming and call- center jobs offshore, the topic of offshore outsourcing is raging throughout the information technology industry. I understand the frustration of workers whose jobs have been removed and of customers who fail to get their technical-support questions answered. But one of the latest studies indicates that the trend may actually be creating more jobs.

Given our global economy, the globalization of the IT industry is inevitable. Most big IT companies do much of their business overseas and naturally want to have some of their employees in those markets. Lower wages in some countries are also a huge incentive to move operations, especially since high-speed communication removes many of the barriers to dealing with U.S.-based colleagues and customers.

Interestingly, figures say that rather than reducing the number of jobs in the U.S., offshoring is lowering costs for everyone and actually creating jobs, thanks to a more efficient economy. It says that about 354,000 new jobs—both IT and non-IT—were created in 2005 thanks to offshore IT outsourcing, and by 2008 the number will reach over 589,000.

According to a study, fewer than 5 percent of U.S. IT jobs have moved offshore. But analysts predict that by 2010 25 percent will be in developing countries. They urge companies to proceed carefully, as such moves could result in the loss of future talent, intellectual assets, and organizational performance.

Of course, the creation of new jobs isn't much consolation for people who have lost their jobs. Still, moving some jobs offshore seems inevitable. There is no good alternative.

All the emphasis on offshore jobs is obscuring an important trend: Information technology jobs are changing dramatically. Though many IT jobs are still out there, you won't find the huge demand—or the huge salaries and generous options—that we saw in the dot-com era. During that period, many companies had trouble filling open positions, which led to higher wages. Now that we're back to normal, wages have retreated too.

Increased productivity also plays a key role in the new IT job scene: IT support requires fewer people than it once did. Windows 2000, Windows XP, and Mac OS X are far from perfect, but there's no question that they are more stable than Windows 95 or 98, or Mac OS 8 or 9. As a result, companies need fewer people to support them. (And if we can ever get spam and viruses under control, we'll need even fewer support personnel.)

Meanwhile, server consolidation and better desktop management have been significant trends for a long time, resulting in the need for fewer IT jobs. These trends are also reflected in job statistics. IT jobs won't disappear altogether, but we may need fewer of them.

Perhaps the biggest transformation taking place is in programming. The number of computer science majors has dropped significantly, a big concern because these are the people who would have their names on the next great innovations.