December 14, 2003
Record Online (a service of Times Herald-Record)
By Michael LevensohnBy 2008, Wall Street will move half a million jobs offshore, taking 14,000 lawyers with them. Experts swear this is a bad thing.
"It's also just the tip of the iceberg" according to James Johnson, a professor at the Keenan-Flagler Business School at the University of North Carolina at Chapel Hill. "In all, there are 14 million U.S. jobs at risk to outsourcing in coming years", Johnson said, citing reports by a variety of consulting firms and think tanks. "Change", Johnson said, "is the only constant that you're going to be faced with in the future."
Johnson was the keynote speaker at Orange County Partnership's annual networking event held earlier this month at Anthony's Pier 9 in New Windsor. He left the audience of 600 with plenty to think about. "The partnership has received tremendous feedback in the days following the event", said President and Chief Executive Officer Maureen Halahan. "There were an awful lot of people in the community, who wanted his PowerPoint presentation – businesspeople, community leaders, our board", Halahan said.
Woody Levitan, managing partner of accounting firm Levitan, Yegidis and Goldstein LLP, said his firm has been approached several times with proposals to outsource its bookkeeping services to India. He's also heard pitches to join the fast-growing overseas tax return market. "About 50,000 U.S. income tax returns were prepared in India last year. They're estimating up to half a million [will be done] this year," Levitan said. "What I'm hearing from Dr. Johnson is that this is happening on an even broader scale, than I was aware." Levitan said his firm won't be shipping any of its work overseas.
But his attitude is becoming increasingly scarce, as businesses get swept up in a second white-collar wave of globalization. The shift began about a decade ago, as businesses discovered an untapped market of relatively cheap labor in Asia. According to Johnson "an offshore architect might make $250 a month, a financial analyst, $1,000". The shift overseas is being driven by labor costs and made possible by advances in communications technology. Cutbacks in U.S. employment visas in the past two years, meanwhile, have reduced the domestic workforce, forcing some companies to look abroad for certain types of talent. "The net result", Johnson said, "is that hundreds of thousands of white-collar jobs, from computer sciences to law, will move overseas in coming years".
And the jobs will leave thousands at a time. Two weeks ago, for instance, consulting company Accenture said it would more, than double its staff in India to 10,000 people in the next year, taking advantage of relatively low wages paid to software engineers in the country, according to a report by news service Reuters.
"The aftershocks of this changing marketplace will touch many facets of society", Johnson said. "Some colleges, for instance, will have problems making ends meet, if they can't make up for lost revenue from visiting foreign students. U.S. businesses will have to adapt, if they're going to thrive in the hypercompetitive world economy", said Johnson, who was clearly impressed with Orange County's efforts along these lines. "I have never, ever seen a community that is better positioned to compete in a 21st-century marketplace", he said. "Businesses that thrive will do so by combining hard work with soft skills", he said, "learning to interact with different cultures and compete in a multinational arena."
The message was particularly valuable for Orange County's business and community leaders, as the county attempts to shed its blue-collar reputation and recast itself as a destination for high-tech and high finance. "I see Dr. Johnson's forecast as an opportunity for Orange County and the Hudson Valley region to be innovative and strategic in its marketing and economic development efforts", Halahan said. "We have the potential to compete with off-shore operations and to keep Orange County as strong as it currently is and we will."
Ironically, one factor working in Orange County's favor is its historic reliance on warehouse jobs. "The United States is a nation of consumers", Johnson noted. "As manufacturing and financial jobs go overseas, logistics and distribution will continue to drive growth and development here, despite skyrocketing reliance on the Internet and the World Wide Web. Neither one of them can move a box", Johnson said.