How to handle raging, so called, “Offshore Backlash”?

Sudin Apte

As I participated in panel discussion on NDTV Profit today; I was joined by Som Mittal (Nasscom), Hari Bhartia (CII), and Mohan Das Pai (earlier in Infosys, now in Manipal University). The show’s backdrop was latest visit by Hillary Clinton and some of rhetoric in US elections.

Both the industry representatives argued that present situation is not extraordinary, as it happens during every election. They explained; Indian industry is creating jobs in US and we are moving in value chain so clients do not essentially come to Indian companies as low-cost sources. I have not yet read, but CII has published a report as well, that talks about investments made by Indian businesses and job opportunities created. I felt both of them were trying to stress that offshoring industry is not taking jobs away (according to them, it happens more in Manufacturing), rather are creating lot more.

Though I agree to some of their points, however I feel this approach (which is based on Indian IT moving up in value chain and creating job opportunities in US), is not tenable. Moreover, Indian IT may find it difficult to counter this American “you took my job” argument.

Fundamentally, I am not sure if we should really worry about every such rhetoric. Visa-fee escalation, visa quota and systemic changes that it needs, rising competition, changing business models and its challenges are major issues. I also think industry and associations must address (and lobby for) these issues. Though I am not sure, whether it is necessary to react to each sentence that American politicians use for their voters.. I feel these statements are aimed at “public at large” and not “IT decision makers. This is the third presidential election I am seeing, while these (anti) offshoring voices are being raised. However, it has not really impacted actual business, since decision makers are more concerned about saving and corporation benefits.

Is Indian IT industry taking wrong approach to handle this problem and its perception? Are there any better ways to handle this?

I am aiming to research and write a report on this subject. So views and ideas are welcome!

4 thoughts on “How to handle raging, so called, “Offshore Backlash”?

  1. Attractive section of content. I just stumbled upon your site and in accession capital to assert that I get in fact enjoyed account your blog posts. Anyway I will be subscribing to your feeds and even I achievement you access consistently fast.

    • Thanks Mandar, for your observations. In the last few years, there was also cobaldersnie pressure in the U.K. to enact a stakeholder approach to corporate governance and directors’ duties as part of the Companies Act, 2006. However, due to resistance on counts somewhat similar to your comments, the Act adopted a half-way house approach in the form of the “enlightened shareholder value” (ESV) approach, which takes the position that the ultimate objective of company law to generate maximum shareholder value is also the best means of securing protection of all interests and thereby overall prosperity and welfare. This is reflected in section 172(1) of the U.K. Companies Act, 2006.

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