Insourcing: Reversing the Outsourcing Tide

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Upon finishing their outsourcing of labor-intensive jobs, US corporations soon began outsourcing white-collar jobs too. Today, overseas labor handles all sorts of communication and computing development and services, even examining X-rays for American patients. And now that very same Internet might reverse the outsourcing trend. Take the world of e-Learning and training as an example.

The first wave of outsourcing hit the American manufacturing sector in the early 1990s as jobs headed south to Mexico and across the Pacific to lower wage countries. Free trade advocates cheered the efficiency of the capitalist market as labor-intensive work moved to the least expensive labor markets. They saw the opportunity for unemployed workers to switch jobs in the fast growing high-tech sector.

Then something unexpected happened.

Upon finishing their outsourcing of labor-intensive jobs, US corporations soon began outsourcing white-collar jobs too. Today, overseas labor handles all sorts of communication and computing development and services, even examining X-rays for American patients.

No less an authority than CNN news host Lou Dobbs has focused relentlessly on outsourcing’s effects on the US economy. He feels that white-collar outsourcing began with the Internet because it enabled companies to transfer data rapidly anywhere in the world, or in this case, from anywhere in the world back to the company.

And now that very same Internet might reverse the outsourcing trend. Take the world of e-Learning and training as an example.

In the past year, user-friendly, non-technical software solutions have emerged that empower any user (regardless of that person’s programming proficiency) to create their own web content and even website. Until 2005, such work has been the exclusive domain of highly trained and skilled programmers. As long as the work was labor intensive, the more expensive US labor force remained at risk to lower cost countries like India and China.

However, while poorer countries compete very well against first world countries like the US in labor, no laborer regardless of location can match the even lower cost basis of software and other technology solutions. With the emergence of such software for the mass market, US professionals are reclaiming the development work for themselves.

“In any job market, if the work is labor intensive, it will inevitably move to the location where labor rates are lowest,” said John A. Cervieri Jr., CEO of Distance Learning, Inc., a web services company focused on e-Learning. “In our market, where we focus on digital solutions for training and education across all sectors, we have seen a strong desire among our customers for do-it-yourself solutions. Such solutions mean that those who know their content the best develop the digital version as well.”

Therefore, technology is becoming the unexpected weapon turning at least part of the outsourcing tide. With new, high quality web tools priced at less than $100 per month, US workers can continue to develop content and software applications rather than have their tasks and responsibilities sent abroad to India, China or some other low cost locale.

“The trick in web services solutions is not to focus on low cost; low cost is inherent in software, it can’t be any other way. The trick is to make the solution easy to use so anyone can use it, and then benefit from the low cost,” said Cervieri. “What ultimately happens is that software tools breathe new life into US jobs, and stop their outflow. In doing so, we are also stopping the export of know-how and information. The loss of either cripples our own work force. At the end of the day, new technology solutions are win-win: high quality and low cost for the end consumer, and good jobs for our country.”

About Distance Learning, Inc.

DLI is an independent software company that designs, develops and delivers cost-effective applications for e-learning and training. Its complete solution suite includes software and professional services for the corporate, academic and government markets.

For additional information, contact Marion Rath via email at mrath@dli.com, by telephone at 212 353 0022 ext.28, or by mail at Distance Learning, Inc., 135 Fifth Avenue, New York, NY 10010. Visit the ScribeStudio Web site, at http://www.ScribeStudio.com, the Press Room at http://www.dli.com/about/news.jsp and our corporate Web site at http://www.dli.com.

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Stephen Cervieri
DLI
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