Outsourcing and the US IT boom!

Paul McDougall suggests that the employment is growing in the US IT sector as well as the Indian IT sector! This runs contrary to what the patriotic and xenophobic pundits like Lou Dobbs have been ranting about all along! So how come this is happening?

IT employment in the United States is growing even as more businesses outsource tech work overseas. Hudson, a professional staffing firm, reports in their July survey that hiring and pay in the tech sector is up, as is worker confidence. At the same time, India’s revenues from outsourcing are climbing–up 32% in the second quarter, according to an Indian trade group.

How can these seemingly contradictory facts co-exist?

Paul feels it is more likely that while the routine work is going out.. the higher end work is still being done here. I think that is a simplistic way of looking at things. It is probably a combination of everything that is being done in both India and the US. The reason why this is happening is probably because the companies are indeed saving tons of money sending stuff overseas. But all the work cannot be sent overseas. Instead of sending 100% work out, they send out some and work on some here at home. Now, that is only possible because they can save more than they could earlier – thus boosting their Net Profit Margins – which they invest more of back in here in the US.

Technorati : ERP, IT, Outsourcing