News

Outsourcing to the Heartland – New Study Concludes IT Outsourcing Benefits U.S. Economy

When Robin Viera graduated from East Carolina University in Greenville, North Carolina, in May, she assumed she would have to relocate to a larger city to use her degree in business and systems analysis. But she was reluctant to uproot her husband and 11-year-old stepson, and leave behind their extended families.

Instead, she landed a program-analyst position with Rural Sourcing, an IT company that outsources not to India or Mexico, but rural America.

"I don’t know what I would have done if (Rural Sourcing) hadn’t come here," said Viera, 24. "There are not a lot of jobs around here."

Rural Sourcing claims to provide information technology services at 30 percent to 50 percent below most U.S. consulting firms by tapping into the increasing number of IT professionals in rural America, where overhead and wages are lower than in metropolitan areas.

By Emma Johnson

Full Story: http://wired.com/news/business/0,1367,69585,00.html?tw=wn_tophead_1

***

A new study by Global Insight concluded that IT outsourcing, while displacing some IT workers, actually benefits the U.S. economy and increases the number of U.S. jobs. According to the 2005 study, The Impact of Offshore IT Software and Services Outsourcing on the U.S. Economy and the IT Industry, the U.S. economy has much to gain from global sourcing including net new job creation, higher real wages, higher real GDP growth, contained inflation and expanded exports.

The study was commissioned by The Information Technology Association of America (ITAA), the leading trade association for the IT industry, and led by Global Insight’s chief economist. One major finding is that worldwide sourcing of IT services generated an additional 257,042 net new U.S. jobs in 2005, adding $69 billion to U.S. Gross Domestic Product in 2005. Global sourcing also enables countries to buy more because they can sell more; it contributed $5 billion to U.S. exports in 2005.

A 14-page executive summary can be found at http://www.globalinsight.com/publicDownload/genericContent/103105execsum.pdf.

The full study can be ordered for a fee from http://www.globalinsight.com/publicDownload/genericContent/103105execsum_order.pdf.

(Thanks to Southern Compass for passing this along. Russ)

Posted in:

Sorry, we couldn't find any posts. Please try a different search.

Leave a Comment

You must be logged in to post a comment.