Jojo’s World

Hope you all heard about the recent Obama move to bring back the ailing US economy back in track. Obama said that all US company’s who creates a job in Buffallo city instead of bangalore will get tax deductions. How great is that?

“We will stop letting American companies that create jobs overseas take deductions on their expenses when they do not pay any American taxes on their profits,” Obama said at White House announcing the international tax policy reform.

“We will use the savings to give tax cuts to companies that are investing in research and development here at home so that we can jump start job creation, foster innovation, and enhance America’s competitiveness,” Obama said.

What will be the effect of this idea on outsourcing to countries like India,China,Philipines etc? Is this an anti-outsourcing phenomenon? is america playing agianst globalisation? or is this just a strategy to increase the american reveneue or create new jobs inside america for a while?

Well literally 100’s of questions can arise on an Indian’s mind, especially on the young IT pros. I will share my thoughts below.

Taking biggies first, TCS,INFOSYS & WIPRO – what’s their stand? I dont think obama’s move is going to make any effect on these companies and its operations other than the setback they are facing now due to bad economic conditions. Reason is for years they have evolved & evolved in their process and operations to become IT giants! Means they have setup their own infrastructure,HR potentials,talent pools, knowledge resources etc etc which is not available in America right now. If any American Fortune 500 wanna execute some IT project, they must depend on these biggies or an Indian IT company. So I hope Obama’s move has nothing to do with IT outsourcing!

Second reason is – American companies are not forced to PAY any additional Taxes for outsourcing their businesses. Only thing is the Tax deductions they enjoyed so far because of creating an outsourcing job is gonna end. I dont think American fortunes created outsourcing jobs because they can benefit a lot from “Tax Deductions”!

But I highly doubt this “Obama move” can cause significant problems in the BPO industry like call centre, data checkings, entries, etc etc where not highly skilled jobs are created. Many companies can transfer these jobs to Baffalo city from Bangalore without much over head, if they wanna do so! This is because BPO industry is backed by Soft Skills (which can be achieved by training) and not by Technical Skills like IT industry is backed by.

Let me know your thoughts as comments!