The current tax system in the US requires companies to pay SS, medicare, unemplyoment, environmental costs, medical… Change from an income tax to a consumption tax at consumer goods and business to business and put the basic developed world costs on all products and services consumed in the given country. Then the 3rd world things are now on a more level field. Keep the total tax amount the same just redistribute costs to all profiting form a countries consumers and not just domestic sources. Otherwise, we race to the bottom.

1. Outsourcing creates an artificial supply/demand of talent. Take for example engineers who are able proficient with IPv6. You outsource the work to country x; they are now paid to develop the skill set in their country, and the engineers in the US who can do this are fewer thus, jacking their salaries up.

2. Businesses are in business to make money, which creates jobs, all good. However corporations have completely swung to the profit at any cost side of things, thus, it does become a race to the bottom. Corporations, workers and those investing in the stock market must come to middle ground as it relates to profits, salaries and ROI, or there will be no middle class.

On the down side, the communications is more challenging and there is more room for error. You also need to be aware of the cultural differences as well and be razor sharp in your emails and phone conversations. Having spent time in different countries, this wasn't hard for me, but I can see how it may not be as easy for others.

One thing which became clear was that for success, there needs to be a local, high level person from the offshore vendor who is very experienced in software development. This is not a project manager shipped from India or China who repeatedly asks what do you want and communicates back home. Someone your development team can respect, with proven software development background in the US, who will push back when necessary and can foresee problems before they happen. Perhaps a tall order, but it works. We use this hybrid offshore development method with very technical former CTOs and Directors. Even with the higher cost of US executives managing the project and handling client interface (who wants to call India at midnight for a conference call, do you?) the projects are still coming less than half the cost of doing it internally.

My recommendation would be to forget discussions on whether we should offshore or not. Offshoring is here to stay and it will grow. Just a law of economics. Our cost structure is not aligned with the rest of the world. Most of the comments made against offshoring are made by people who are not running their businesses and are not faced by the realities of having a business one day considering closing it down the next day. Change is always hard and sometimes there are casualties. Business is business, it is not a charity.

So what should we do? I believe INNOVATION is our way out. We create new products and services that are much better, cheaper, faster. That open up new possibilities, that solve our customers’ pain, help them grow and profit. Let’s not argue about offshoring. Let’s talk about how we can grow our businesses. Look into hybrid offshoring with companies focusing on quality and service, looking for long-term relationships. These companies are not looking to make money on one project and then move on. They invest in the relationship hoping that they will get more projects from you if they do good work. Both sides win, as the goals are aligned. Use the global reach we have today to reduce costs, stay competitive and innovate. And if you still have money left over, use it for sales and marketing. If your market is in the US, as in the case for most small and medium sized businesses, those dollars will be spent in the US.

In these tough times, how can we afford not to look at these alternatives?

Either we need to equalize those rules or drop this Globalization trend that is supposedly "inevitable". It's not inevitable it's by explicit policy and is not even free or fair trade. Make the playing field equal if we are going to play the game.

I was talking to a friend, who works for state govt. When Govt tried to outsourced the Tech job, there was huge drama. So, instead of giving the contract to Indian IT firm, govt hired IBM/Accenture/CSC at SIX times higher rate. These so called US firms..shipped worked to india offices!!! Same job for SIX times more billing…job again going to india!!!….How do you define this?

This is nothing more than supply and demand (taking cost into account). The supply of reasonably priced labor in the US is lower than the supply from other sources, potentially even reasonably priced labor from one state to another.

I do agree that many jobs are being outsourced due to simple cost differences; but this is not the only case for outsourcing.

In my case, it is a seller's market for accountants. High demand, low supply equals leverage. Very difficult to find qualified candidates who actually want to do the work (not everyone gets to be a consultant). So I am looking at opening an office in Mexico, where I can find bookkeepers who….want to keep books.

Problem is that the middle and low income jobs that are being sent overseas means that people in this country do not have money to spend on products so companies will start going out of business anyway.