Thread: Expect more offshoring if U.S. tightens on immigration

Analyst: Expect more offshoring if U.S. tightens on immigration

By Ephraim Schwartz
http://weblog.infoworld.com/realitychec ... edict.html
August 14, 2007

Offshore and near-shore development centers will proliferate, especially in major Latin American companies, Mexico, and Canada, if the U.S. government turns its focus on closing loopholes on H-1B legislation and tightens the screws on immigration to the point where it "almost feels punitive," said Tony Viola, vice president of marketing for North America for Patni, a global outsourcing firm.

Viola had this and plenty more to say in an InfoWorld interview on the future of offshoring.

Despite possible new restrictions and or changes in immigration legislation and regulations, Viola believes that the legislators are "closing the barn door way after the horse is made into glue." By which I assume he means it is too late to legislate stricter immigration policy.

"Globalization and outsourcing are a part of the fabric of U.S. business and have been for a long time," said Viola, who compared it to similar legislation against the automobile at the turn of the 20th century.

"Companies will find a way."

One way that they may find, said Viola, is by investing more in more automation technology that lessens the need to have a service delivery based on a large employment model.

To that end, we are already beginning to see the rapid growth of the SaaS (software as a service) delivery model.

"This is a way to deliver and maintain service offerings without having to have people in a particular location."

SaaS also plays into the H-1B phenomenon. It will allow companies to start putting more time into the tool sets that give them the ability to deliver in an automated way.

"Visa restrictions will push organizations in that direction."

Of course, Viola's conclusion that this isn't a bad thing because it will result in faster delivery, lower cost, and higher profitability for vendors and quicker service cut over from one technology to another isn't shared by everyone.

Someday, companies may automate themselves out of business. If they continue to reduce staff, who is going to be left with a decent salary so that they can buy those goods and services?

Is this more fear mongering?

Actually, the big trend now is Asian companies buying American companies and setting up shop here.

We hear this argument all the time, that tightening immigration will increase offshore outsourcing. Actually, that's completely untrue.

When you hear the word 'immigration' in this context, understand that for the vast majority of foreign individuals this means coming here on a guestworker visa and applying for a green card. The problem is that the guestworker visas are not immigration visas and this has hurt the feelings of many hopeful foreigners, who were apparently surprised by this. They will point out that guestworker visas allow 'dual intent' (the intent to either go home or immigrate) but that intent does not transform an H-1B into a green card. As a result, many foreign workers who were brought here when the guestworker visa cap was high (2000-2003) are now in limbo waiting for the green cards they were hoping for. Only so many green cards are allowed, whereas the number of guestworker visas was far higher for many years, so the immigration pipeline for these people is quite clogged.

We now know that guestworker visas actually accelerate the process of offshore outsourcing by providing 'on the job' training for foreign workers. Once the business process is learned and the specific domain knowledge is acquired, whole chunks of the work can then be exported, with guestworkers brought back and forth to manage the onsite phase of the process. Of course Tony Viola would say otherwise, he works for Patni, an Indian company who does just this sort of thing.

Actually, there are some factors working to mitigate the trend overseas. The rise of the rupee against the dollar and the exhaustion of suitable talent in India (many graduates, few with the skills for overseas work) have actually put a crimp in India, Inc.'s plans as well. They seriously thought they were just going to take IT (and finance, and medicine, and design, and architecture, ....) away from US workers there for a while. They came close, but no cigar.

Raising the guestworker visa caps is the last thing we should do. I believe it was Ron Hira who pointed out that the visa cap is the only thing standing between the American worker and chaos.

Someday, companies may automate themselves out of business. If they continue to reduce staff, who is going to be left with a decent salary so that they can buy those goods and services?

This is what I keep saying, Ford, who is going to buy your cars when middle class Americans can not afford it anymore, not that I would buy a ford anyway every since you moved to Mexico, I would but a Toyota before I would buy from traitor ford!!!

Whose going to buy all these cheap goods from china when nothing is left of their pay check after paying necessities. just like the report Lou Dobbs did on Wal-Mart yesterday, its pretty bad when people can't afford wal-mart

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ALIPAC AUGUST FUND RAISER
PLEASE help ALIPAC stay in the fight against illegal immigration!!!!
http://www.alipac.us/modules.php?name=F ... ic&t=75673
FOOD FOR THOUGHT
WHAT WOULD WE DO WITHOUT ALIPAC???

You know what - just me and I'm old - but I'll settle for America starting all over again - if we can just clean out our country of everyone who should not be here.

Remove the drains on our social services, our infrastructure, our very lives. Remove the death, disease and destruction brought here by people who should not be here.

Let the big corporations move off, they are lawbreakers, anyway, - maybe we could begin again in a small way, and supply ourselves.

It seems we have offshored our government already - let's just deport it with the illegals and start over there also.

Just don't let foreigners buy up the country -

Originally Posted by nntrixie

You know what - just me and I'm old - but I'll settle for America starting all over again - if we can just clean out our country of everyone who should not be here.

Remove the drains on our social services, our infrastructure, our very lives. Remove the death, disease and destruction brought here by people who should not be here.

Let the big corporations move off, they are lawbreakers, anyway, - maybe we could begin again in a small way, and supply ourselves.

It seems we have offshored our government already - let's just deport it with the illegals and start over there also.

Just don't let foreigners buy up the country -

I totally agree,let them move since they are traitors anyway.Make room for new patriotic citizen owned businesses.

Most citizens are so angry with these businesses they will support new pro american buinesses with open arms and our wallets.

A new era is about to begin in this country to return to American Owned and Made.Even the household name products are now outsourced (Hershey comes to mind).

Let them Go so we can have a fresh start,new businesses emerging.This will be exciting to see.

Wal-Mart's numbers were low,I believe,because patriots are not buying from them. I hope they go bankrupt or at least close up in some areas so Mom & Pop businesses can regain their place in the fabric of small town america .

USPatriot Wouldn't that be great?

People think we paid too high a price at Mom and Pop's, but they don't stop to think of the hidden costs of cheap (and shoddy) goods.

The price has been too high.