Small business outsourcing can favor employment

Global giants aren’t the only companies cutting costs by shifting jobs overseas. Increasingly, small businesses are finding that “offshoring” jobs is a boon to their bottom line – and sometimes gives them room to create new jobs at home.
For example, when Rajeev Thadani wanted to expand Claimpower Inc., his medical-billing service in Fairlawn, N.J., he chose to outsource some of the work to India. But unlike most companies going this route, his business had just five other employees at the time.
Mr. Thadani, who runs the company with his wife, flew to his native Bombay in 2001 and hired four locals to help file insurance claims on behalf of New Jersey doctors. They use a software system that Mr. Thadani, a programmer by trade, developed specifically for the task.
Today, he employs 35 people [in India]…Now he’s taking steps to expand his business nationally, while planning to add staff in the U.S.

From The Wall Street Journal, Tuesday, March 16, Marketplace section.

This is comparative advantage in action, finding a cost advantage to create new and better jobs.

By the way, a new web site, BlameIndiaWatch details the scapegoating of India in the debate over trade and outsourcing. Here is their mission statement:

Blame India Watch is concerned with the increasing anti-Indian/anti-India sentiment among tech workers, as well as media coverage that focuses disproportionately on Indian workers or propagates anti-India(n) sentiment. What began a few years ago as IT grumbling about Indian-specific H-1B “Temporary Guest worker” and L-1 “Intracompany Transfer” workers and immigrants has now morphed into the outsourcing issue, and is now gaining international attention. We aim to highlight this scapegoating, encourage IT workers to put a stop it, and redirect the anger to where it belongs.

My take: I read about one Indian who said something like the following: “Hey, you lectured us for decades during the Cold War and Indian socialism. Aren’t we now doing exactly what you told us to?”


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