The Not-so-new Arguments of Protectionists

Politicians everywhere are the same. Many a times they are really ignorant. And many times, they just act ignorant. Then, there are the classic fundamentalists in a debate, who are dogmatic, and no logic would convince them. The most dangerous, however, are those who take help of logic and selective facts to argue their point. In reality, they are as dogmatic, but they use logic to project themselves as liberal rationalists because few know the facts and sources that they quote. They often shift the debate to a completely different point in which they may be on stronger wickets but that is of little relevance to the original debate. Apart from some politicians, many in this category happen to be from my profession: media.

I came across this post in ComputerWorld Blog, called Clueless in White House. The whole piece, taken on its face value, argues that the US Vice president Joe Biden “doesn’t know a thing about H1-B visa” and the president Barack Obama was evasive about a question related to US job loss and probably he is also ignorant. So what? Didn’t Michael Moore write about this long back? But that is not the point. What is it that the author is actually hinting at?

You get the answer to that when you read this other piece of his, Indian IT firms heading for a fall. It starts with the sentence, “Indian IT firms understand software but not America.”

And you know what to expect.

The piece cites a few lawsuits that have been filed against Infosys, TCS and L&T Infotech to argue that these lawsuits are the results of the Indian companies’  lack of understanding of America, American spirit and so on, with a conclusion that they are heading for a fall, which comes right on the headline.

It goes on…

The lawsuits are a problem for each of the companies. But taken together, the cases are a major threat to the Indian IT industry in America.

India’s IT firms are dependent on American businesses for about half of their revenue. They can’t operate in this country without work visas, such as H-1B and L-1 visas.

Indian IT firms are dependent on American business. That is a fact. But it is time to put the other side of the story as well: The American businesses are equally dependent on Indian IT workers.  

Anyone who follows the outsourcing trends knows that the share of US revenue as a percentage of overall revenue is falling for most Indian IT companies. The share of offshoring to India as a percentage of total outsourcing contracts in the US is on the rise year after year. Ten years back, Indian companies would not have survived without American business. Ten years hence, American business would not survive without Indian workers.

As Tom Friedman put it so well in his 2005 book, The World is Flat: America must choose the future and not the past.

But let us even forget all that for a moment. Let us go back to the original debate. What is it about? Is it about H1-B visas and L-1 visas? Well, that may the most immediate issue, but the actual debate is whether you need people from outside America to do some of the IT work more efficiently or not?

And let us, for sake of argument, assume that the US government decides it does not need foreign workers. In that case, it must say so rather than creating hurdles in the visa process.

And who is saying that? It is not just Infosys, TCS and L&T Infotech but Accenture, eBay, Microsoft, and GE as well. The letter that the industry sent to the president on this issue is signed by more American companies than Indian companies.

Protectionism is not about politics. It is about fear. America is still the most open society, the most innovative among large nations, and of course, still the biggest economic and military power globally. It may get concerned about employment levels but there is no reason to panic.

 

 

 

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Filed under Globalization, Outsourcing & Offshoring, Technology Business

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