Skill shortage will force US to live with offshoring: IT companies
The Indian IT industry would have preferred not to have another four years of Barack Obama, having been at the receiving end of higher visa fees, lawsuits on misuse of visas and general anti-offshoring rhetoric during his first tenure. But some veterans said the Indian IT sector was “too big and too important” to the US to be affected much by whatever Obama now does.
IT industry body Nasscom’s President Som Mittal said Indian tech services firms help the US to become more efficient and competitive. “And they have a shortage of skills. There is now growing realization that we are part of the solution (to the US’s problems),” he said. He has some statistics to bear him out. In May this year, a group called the Partnership for A New American Economy, backed by US technology industry bigwigs, released a report that said that if the US did not adjust its immigration policies to make it easier for foreign born technology workers to reside in the country, it could fall behind the rest of the world in growth and innovation.
The argument was based on the finding that the demand by US companies for talent with degrees in STEM (science, technology, engineering and math) was rising three times faster than jobs in the rest of the economy, but these positions were “the hardest to fill because of the dearth of native-born Americans with these degrees”. The report said the US would face a shortage of 224,000 hi-tech workers by 2018.
Vineet Nayar, CEO of HCL Technologies, isn’t worried either. “We are increasingly being called upon by US corporations to drive revenue growth through technology innovations and even creating local jobs,” he said. Blake Chisam, who leads the professional practice at Washington-based immigration law firm Fragomen, echoes that sentiment. America, he says, is heavily focused on innovation and therefore it cannot afford to stop the entry of tech specialists and domain experts from India.
Krishnakumar Natarajan , MD of IT company Mindtree , also noted that protectionism in the US was no longer in conflict with the Indian IT industry, given that many Indian IT companies were establishing centres in the US. “Earlier, we were merely offshoring work to India. But given that we are now doing much more work that is core to the customer, we have to be closer to the customer,” he said.
However, Phaneesh Murthy, CEO of iGate, said Obama’s victory was “not the best news for India or the IT outsourcing industry”, given his record with visa regulation and pressure on American companies to insource (drawing outsourced jobs back inhouse ). Pari Natarajan, CEO of IT consulting firm Zinnov, noted that General Motors had begun insourcing IT work and believes that Indian IT companies are being too optimistic. “If US companies find that they can get offshored work done at similar rates in a tier-2 US city, they may start doing that (given the implicit pressure from the US government ),” he said.