Offshoring of software work poses challenges, offers rewards

Posted on: March 1, 2006

Alla in the News, From the Indiana University Informatics Website:

While the shift of computer software development and research to other countries has increased and poses challenges to the United States, the offshoring of such work also has reaped benefits for our nation’s software industry and consumers.

That is one of the conclusions of a study released today by the Association for Computing Machinery, a report that had input from experts with the Indiana University School of Informatics. The report, The Globalization and Offshoring of Software, was designed to examine the issues surrounding the migration of jobs within the computing and information technology field and industry.

“Offshoring can be harmful to individuals who lose their jobs and the local communities they live in, but what often is neglected in the discussion is that when American companies are made more productive and competitive by offshoring – and this can create new jobs here at home,” says William Aspray, Rudy Professor of Informatics and an executive consultant and editor of the study.

The report also finds that concern about projected U.S. job losses to low-wage, high-education countries such as China and India are overblown. It predicts the most likely scenario is that up to 3 percent of the country’s IT work would go overseas over the next decade.

“It is true that jobs in the software industry are among the very best jobs available in India, and software services there represent the country’s largest export,” says Aspray, an expert in the historical, political, and socioeconomic aspects of information technology. Aspray is the co-author of The Supply of Information Technology Workers in the United States (Computing Research Association, 1999), an acclaimed study that probed the supply of and demand for information technology workers and related issues in the United States.

On the upside, Aspray notes that the U.S. IT industry has reaped favorably. He points out the industry has found new markets for its software products, which are bought by software companies in India and elsewhere, it has lowered prices on American products, and has speeded the products to the marketplace.

Despite widespread perceptions that IT jobs have rapidly dried up in the United States – particularly in the wake of the so-called Dot-Com boom-to-bust era (1999-2003) – the reality is that the number of jobs actually increased significantly during that period, the report says. And that came at a time when offshoring was intense and on the upswing.

The report found that workers and students can improve their chances of long-term employment in IT occupations by acquiring a strong educational foundation, learning the technologies used in global software, and keeping skills up to date throughout their careers

“Some of the recommendations of this report fit well with the School of Informatics and its objectives,” Aspray says. “For example, it takes an interdisciplinary approach to an IT education, coupling core technical knowledge with other specialty knowledge. Students and young researchers learn the values of teamwork and communication, and they get to learn about other cultures, which really is a strength of the School and Indiana University as a whole.”

Other IU people had a role in the ACM report. L. Jean Camp, associate professor of informatics, was a contributing writer to a chapter about the risks and exposures to intellectual property, privacy and security by offshoring. Matthew Hottell, lecturer in informatics, and Alla Genkina, a former IU graduate student now pursuing a doctorate in California, also provided research support for the study.
To read the report’s full text, go to

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Alla Zollers

I design products and services that just. make. sense.

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