Tuesday, March 19, 2013

State of Outsourcing Post Obama’s Re-Election: Has outsourcing survived the rough seas? by guest blogger Kulwinder Singh

Just a few months back, Obama’s candidature for the presidential term had sparked a debate on the potential of new policies being introduced with the goal to discourage the movement of jobs from US to low cost locations across the globe. While skeptics wrote a lot about the adverse effects on outsourcing post Obama’s re-election, the majority of industry leaders and trade groups no longer seem to be perturbed by his re-election. Most industry leaders and decision makers are optimistic that Obama’s current term will actually help improve bilateral ties. They also opine that US based businesses are likely to continue to derive the benefits of outsourcing, something that will go a long way in improving the US economy.

The general optimism may change in the near term in case anti-outsourcing policies are introduced, but given the current scenario; policy decisions post Obama’s re-election have not resulted in any significant impact on the industry. Even during Obama’s political campaign during the last term, the voices raised against outsourcing had turned out to be political rhetoric and did not impact policy decisions. This year also, there was a lot of noise against outsourcing during the presidential campaign. For instance, Obama was critical of private equity firm, Bain Capital, for investing in businesses that relied on outsourcing. This firm was once led by Mitt Romney. Overall, the presidential campaigns were mostly acerbic on the topic of outsourcing. But that was then; a lot of water has passed under the bridge since that time, and the outsourcing industry has not experienced any major roadblocks.

The fact that opinions expressed during election campaigns have limited impact on policy decisions is also evident when we analyze the various policies introduced during Obama’s presidential term. The common ingredient in most policies is the focus on promoting business, and not the goal to limit the movement of jobs overseas. In his victory speech, Obama clearly stated his opinions on the country’s future – “a country that lives up to its legacy as the global leader in technology and discovery and innovation, with all the good jobs and new businesses that follow.” This statement provides a clue as to why pro-business policies are likely to be the focus area during Obama’s second term as president.

With the global economy still struggling to get back to normal in the aftermath of the credit crisis in 2008-2009, it is likely that economic growth will be the primary focus for policy makers. United States is one of the major powerhouses that fuels global economy and it is unlikely that such aspects will be ignored while drafting new policies. In the current uncertainty involving flailing economies, world leaders are looking up to countries such as the United States for kick starting the global economy, and surely leaders like Obama are aware of this and working hard to find the right solutions.

Outsourcing, when utilized to its full potential, can actually act as a catalyst for fuelling growth across the globe. Technology will be the primary driving force behind the next phase of growth and US based businesses will continue to drive down costs, generate new revenue streams, and expand operations globally. It is also likely that outsourcing service providers will form joint ventures and partnerships with US based companies in the near future to achieve improved synergies across varied organizational functions and processes. Strategically, outsourcing is in the US national interest, and is likely to remain that way in the long term as well.

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Kulwinder Singh, Director – Global Marketing and Communication, Synechron

28 comments:

  1. Outsourcing is going to play a major role still in a low economy. As predicted by Nasscom the sector’s exports are expected to grow between 12 and 14 percent in 2013/14 to as much as $87 billion.

    The US firm will always take the advantage of outsourcing as it helps maintain the economy of the country and the firms take the benefit of getting quality output in low cost.

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  2. A good thought. The mixed reaction after President Obama’s re-election turned more worried in India. It is not a good news for India or the IT outsourcing industry.

    But technology will play a strong role in driving the next phase of growth and Indian IT companies will have opportunity to play a significant role to partner with US companies to achieve this. This will lead to further job creation in the US and other parts of the world.

    Keeping the above in mind, hope the issues and concerns regarding Outsourcing will be addressed soon.

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  3. Outsourcing and its implications are explained very well by Kulwinder here. Taking the example of Obama and United States, the blogger has emphasized on the need of outsourcing in every aspect of business,outsourcing will ensure growth of not only developed economies but also of developing economies of the world and any policies in its direction will be welcomed by all the leaders across the globe.

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  4. If businesses wish to remain competitive it is almost imperative that they outsource...an interesting read & good point of view brought by Kulwinder.

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  5. The article was a great read. Interesting points put forward by Kulwinder Singh emphasizing the importance of the oursourcing industry. This also says that outsourcing is here to stay even in changing market conditions and across geographies.

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  6. Nice article Kulwinder,

    Obama’s Anti-outsourcing policy will effect profit margins, especially on BPO sector of IT industry. But if we see the things in different angle, it will help in maintaining the economy of both the countries

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  7. A very good article. It gives clear understanding of outsourcing industry.

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