Though the trend toward overseas development has been brewing for more than a decade, I’ve just lately been noticing a number of IT-sector layoff announcements in the U.S. featuring near-simultaneous announcements of increases in overseas outsourcing by the same companies. It’s not entirely clear if there’s an active migration of engineering jobs from the U.S. to overseas, but there’s certainly a decent case to be made that something like that is happening.
According to the Bureau of Labor Statistics, over 120,000 electrical engineers and computer scientists were unemployed at the end of 2002. That represents almost a three-fold increase in just the past two years, and a near record unemployment level. Yet even as skilled engineers remained in good supply, companies such as Microsoft, Sun, and HP recently announced major expansions of their overseas development operations.
To be honest, I am not sure what to make of this. I favor free markets and believe in the equality of all people in all nations. I traveled to India in 2001 and was impressed by the entrepreneurial spirit the new engineering jobs have generated there. I’m also pleased that engineers there and in many other parts of the world have increasing job prospects and standards of living.
You may be thinking that outsourcing is obviously a negative trend and that “the American engineer” will suffer. If you’re unemployed right now and are personally affected, hang in there. You’ll almost certainly disagree with what I have to say next, but I’ll say it anyway.
The very technologies we’ve been developing and improving for the past few decades are key enablers of distributed development. As the world becomes more interconnected, it becomes increasingly reasonable to bring together a group of geographically-diverse individuals with the collective skill set needed to get the job done. If some of these minds are on the other side of the world, so be it. If they’ve got the same skills as someone here but will work for a lot less, we’ll lose that job.
But in the long run we’ll win too. Increasing standards of living for workers in other parts of the world do more than just take jobs from better developed countries. Those workers spend the money they make in a variety of ways and that expands markets. Things also get cheaper here as a result of their labors. The ensuing economic growth creates more opportunities and jobs here too. Unfortunately, the process doesn’t happen as quickly or seamlessly as anyone likes—and some individuals do get caught in the crossfire.
Fortunately, U.S. engineers continue to be among the best in the world. Those who continue to improve their skills will always be in high demand. They’ll also be well poised when the global economy eventually does turn up again, which I’m confident it will.