Last month, I had breakfast with Scott Case, CEO of Startup America, and we then started working with the organization.
Here is my recent guest column for Startup America. One thought that has come to me frequently is that the U.S. is simply not doing enough to take advantage of the nearshore outsourcing trend that has been developing for natural, organic reasons.
In 2008, I wrote a controversial piece called “The Coming Death of Indian Outsourcing” in which I predicted that some percentage of outsourcing jobs was likely to come back to U.S. shores. Well, this is happening. Two industry leaders I interviewed recently are Neeraj Gupta, CEO of Systems in Motion, based in Fremont, California, and with a delivery center in Ann Arbor, Michigan; and Lalit Dhingra, president of NIIT Technologies, which has headquarters in Atlanta. Both are expanding in the U.S., looking at small U.S. towns in which there is a supply of skilled talent, especially because of the presence of a good university.
I was surprised to hear from Lalit that in Georgia, where he is planning to set up a couple of 500- to 600-people operations, there are no tax incentives available for such projects.
Martha Bejar, president of global sales and operations for Wipro, however, has been quoted to have said that her company was able to create more than 800 IT jobs in the U.S. as a result of tax incentives offered by the state of Georgia. Not sure why Lalit’s experience doesn’t mirror Martha’s.
Clearly, the American recovery can happen more aggressively if the state and federal governments would pay more attention to these opportunities and create policies to encourage job creation, especially in the outsourcing sector.
Just to give you a point of comparison, India did a marvelous job with its IT policy for a long time, offering corporate tax holidays to IT companies. In the U.S., most likely, income taxes generated through higher employment, where more people are working and paying taxes, would offset the corporate tax breaks offered to companies. Employment growth would of course also mean that fewer people rely on public assistance.
But then, mathematics isn’t the strong suit of governments. Politics and posturing is.