In the popular perception, technology jobs are either shipped off to India (where labor is cheap), or kept here in the U.S. (which helps maintain American jobs). Its a staunchly Us vs. Them outlook.
But the reality isnt that simple. As American tech companies set up shop in India, and as India IT firms open American offices staffed by Americans the line between whats American and whats Indian is starting to blur. Mike Ford-Taggart, a Morningstar analyst who covers the IT sector, sums it up: I think five years from now were not going to talking about Indian IT services companies, were going to be talking about global IT services companies.
No matter what country an IT services firm is originally from, he says, If theyre not global firms, theyre not going to be around.
In this regard the tech industry bears something in common with the auto industry. In America, Toyota is considered a foreign brand. But whats more American, a Toyota built in a Kentucky plant, or a Ford built in a Mexican plant?
IBM very much an American company employs 53,000 staffers in India. (The company has 127,000 U.S.-based workers.) And a recent IBM project for Texas-based CenterPoint Energy Project included six software developers based in India combined with dozens of staffers from across the U.S.
Accenture presents a similar international picture. We think of them as an American firm, but its not, its based in Bermuda, Ford-Taggart says. The CFO is out of Frankfurt, and the marketing guy is in San Francisco. Theres no place where these guys sit together and share ideas.
As American firms hire more Indian workers, Indian companies are hiring more Americans. Indian IT giant Wipro (which is listed on the New York Stock Exchange), in August announced it would acquire Infocrossing, a U.S. infrastructure management firm with 900 employees. (The deal is scheduled to close in Q4.)
More and more, Infosys and Wipro are moving people to on-site [in the U.S.], Ford-Taggart says. Because they have H-1B visa problems, theyre hiring Americans. They send them to Bangalore for six months to be trained, then theyll send them back to the U.S.
Wipro just announced plans to open a development center in Atlanta, with three more in the works. The new hires will be Americans. Theyre going to hire people who have associates degrees, or people out of the military, Ford-Taggart says. In other words, lower cost U.S. workers. And as they go along, theyll separate the wheat from the chaff, and pay for the wheat to go get the bachelors degree and not ship them to India.
It is, to be sure, an idea that sounds strange to American ears: the Indian IT firm not as job stealer, but as job provider.
However, while this is not yet a common practice, its becoming common. They started doing this about two years ago. Now theyre really starting to ramp it up, he says. In the future, as IT outfits from each region take root in their competitors area, the tech industry can expect far more of this.
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