For those of you who have read The Economist’s 19th January article “Welcome Home” I confess I am a week behind on my reading. The article joins a growing chorus of pundits and researchers such as HfS Research, for whom I co-authored a recent paper, who are declaring the era of foreign dominance of service delivery is soon to be over.
Sure, The Economist’s latest riff is right on re: shifting jobs back when it declares “but only if governments and people in prosperous places invest heavily in building up skills will the workforces there properly benefit.” Skills are table stakes in this business. But the article misses a key point that many are missing when it comes to services jobs: the jobs went to India, China and other LDCs in part, (and I say in part) because government stepped in with economic development benefits that tore a patch into the cost of providing services in the US, the UK and other jobs-exporting countries. India and China not only fostered the training of talent, but they also cut the cost of doing business by investing in infrastructure and implementing taxation policies that were just too good to pass up. And they marketed the hell out of themselves through the likes of NASSCOM and other entities.
How many US or UK economic development organizations show up at sourcing conferences with a basket of “we-can-reduce-the cost-of-doing-business-through-some –creative” incentives, as well as providing enough people with the right service skills? Off the top of my head, can’t think of one. Sure, there are great examples of states such as South Carolina and Texas chasing higher paid manufacturing jobs, but when it comes to data work, a $25,000 job looks much less attractive to their tax bases.
It’s time to realize that skills and their cost are only part of the equation. Over two years ago I wrote a recipe for moving jobs back for Outsource Magazine cheekily entitled Nothing North of Watford. Other goodies are a critical part of the jobs repatriation equation. It’s time for government to realize that they have to put out a welcome mat.