Ron Hira, a professor at the Rochester Institute of Technology, is an expert on the intersection of technology and economic policy.
The upcoming entrepreneurship summit in Washington – to which President Obama invited business owners from countries with sizeable Muslim populations – will create opportunities.
This summit will highlight the challenges and opportunities for entrepreneurs extending their businesses to the U.S. market. It will be an opportunity to further business cooperation between business hubs in countries with sizeable Muslim communities and the USA.
While the potential is great, it will be challenging to identify business sectors and markets that offer the greatest potential. Information technology will be one, as is already clear from the phenomenal growth of business-process outsourcing and information-technology outsourcing between firms in the USA and in developing countries. The USA constitutes a huge and lucrative market for winning IT business by entrepreneurs in Muslim-majority countries, and there is growing IT talent in the Muslim world.
Investing in IT export-driven growth will also catalyze socioeconomic development in the Muslim world, which comprises countries with large populations and limited domestic opportunities. Traditional domestic industries remain inefficient, and their employment generation capability limited. IT, on the other hand, can extend opportunities to even the most underrepresented sections of the society in such countries, including women, the handicapped and those living in rural and underserved areas.
Ron Hira:The opportunities for offshore outsourcing — using high-skilled workers in low-cost countries to service customers in the USA — will continue to grow. We aren’t anywhere near the point of saturation as businesses look for ways to become more efficient. New tasks and sectors are becoming ripe for the outsourcing.
U.S. business customers are searching for ways to diversify the geographies of their supplier locations, offering opportunities to new companies and countries poised to take advantage. And U.S. businesses have become adept at managing across geographic boundaries, making “off-shoring” attractive.
To win outsourcing contracts in information technology, business processes, and knowledge processes, learn from India, the leading outsourcing destination country:
- It delivers beyond expectations in quality and price. Indian firms meet the highest quality standards in software production, something called CMM Level 5;
- It has solid infrastructure. Reliable high-speed communications is pre-requisite. India’s software technology parks serve as a model;
- Its government helps. India provides a tax holiday for domestic and foreign multinational firms for any exports;
- Its national trade body is strong. NASSCOM, India’s IT trade body, has done a masterful job in marketing offshore outsourcing in general and India’s firms in particular.
- Indian firms have good workforce training programs.
Outsourcing has been a boon to India’s economy and is part of its national sense of pride. And outsourcing has boosted other economic sectors in India.
While the outsourcing of American jobs remains controversial in the USA, it has become routine, and politicians have effectively ignored the concerns of American workers when it comes to off-shoring. It is unlikely that changes in American policy would be adverse to off-shoring.