US protectionism, competitiveness up at IOS 2012

Michael Alan Hamlin

Posted on August 24, 2012

The timing is interesting, if not sublime. This year’s International Outsourcing Summit (IOS 2012) takes place in Manila October 7-9, less than a month before Americans decide whether President Barack Obama deserves another four years to try and get the US economy back on track. What has that got to do with IOS 2012? As it turns out, plenty. Since Mr. Obama can’t run on his economic accomplishments, his platform is “moral ascendancy.”

Another way to describe that strategy is straightforward: “trash your opponent,” a time-honored American electoral strategy. Central to Mr. Obama’s efforts to undermine the integrity of his challenger is outsourcing. Or rather, anti-outsourcing. Branding his republican challenger Mitt Romney the “Outsourcer in Chief,” Mr. Obama’s campaign recently launched a new television commercial to press allegations that Mr. Romney shipped American jobs off to China and India as head of Bain Capital, which Mr. Romney cofounded.

The ad launched about the time Mr. Romney’s party mates in the US Senate beat back a democrat-led effort to bring the “Bring Jobs Home Act” to a vote. The bill sought to penalize US firms for outsourcing work and reward companies for bringing previously outsourced jobs back home. The deeply flawed measure—which would have enabled US companies to receive cash incentives for continually recycling jobs on and offshore—was vigorously supported by Mr. Obama and his campaign.

Despite the successful republican effort to quash the measure, Mr. Romny has been just as disingenuous as Mr. Obama in responding to the president’s attacks, denying he outsourced jobs. That doesn’t seem to be the case, and by saying so Mr. Romney allowed himself to be pulled into an argument that doesn’t matter; and worse, puts him on the defensive. All companies outsource varying levels and types of work. US voters may not like that, but they’ll vote for the candidate they believe can fix the economy. And there’s only one candidate who hasn’t been able to do that.

Perhaps Mr. Romney’s indefensible defense accounts for Mr. Obama’s renewed criticism of his challenger’s private-sector record of accomplishments. The anti-outsourcing commercial concludes that Mr. Romney “isn’t the solution” to what ails America, “he’s the problem.” If he is, Mr. Obama clearly hasn’t solved the problem of Mr. Romney. He hasn’t explained how he’ll do so either. But what matters to the IT-BPO industry is that both candidates seem to agree that outsourcing is bad.

The results of a series of industry studies conducted several times a year by the Business Processing Association of the Philippines (BPAP) and TeamAsia show that 70% of IT-BPO services providers and global in-house centers provide support for US businesses. It may be a bitter irony that the global champion of free enterprise and free markets—and principal market for IT-BPO services—is turning out to be a conditional champion, but does it matter? (Disclosure: BPAP is a client of my firm, TeamAsia.)

That’s the question IT-BPO association chairmen from around the world will discuss with top industry executives in the annual IOS chairman’s panel in October. The theme for this much-watched panel is “Threats and challenges: Should protectionism be a genuine concern for the global service delivery business?” Moderated by BPAP chairman Alfred Ayala, the panel includes NASSCOM president Som Mittal; Brazilian Association of ITC Companies Sergio Pessoa; and, Aegis Limited managing director and CEO Aparup Sengupta.

Panelists will discuss their perspectives on the anti-outsourcing movement popularized by Mr. Obama as campaigning for the presidential election reaches a fever pitch. US IT-BPO services providers and GICs have invested billions in developing service capabilities overseas. Is that investment at risk? And conversely, should companies that have outsourced jobs to America rethink their strategies as well?

Anti-outsourcing sentiment in the US isn’t the only challenge the IT-BPO industry needs to address. In the Philippines and other delivery centers around the world, industry, government, and academe are working together to support efforts to move IT-BPO services up the value chain to non-voice, complex services. Non-voice services are the fastest-growing segment of the IT-BPO industry in the Philippines. Can that growth be accelerated?

Everest Group vice president H. Karthik, Ernst & Young head of AP Markets Paul Mitchell, and Department of Science & Technology-Information & Communications Technology Office deputy executive director Alejandro Melchor III will argue their viewpoints in a new “public-private” panel, “Strategizing for High Growth: Moving up the Value Chain.” The increasing cost of doing business in the Philippines—and its strengthening currency—provide real urgency to this debate.

Millions of jobs and billions of dollars in revenue are at stake. Information on IOS 2012 is available at the Summit website. To join the discussion—over 500 industry and client executives, analysts, and government officials are expected—register online.

(Michael Alan Hamlin is the managing director of TeamAsia and a Manila-based author and commentator. His latest book is High Visibility: Transforming Your Personal and Professional Brand. Write him at and follow him on TwitterFacebook and LinkedIn. Copyright © 2012 Michael Alan Hamlin. All Rights Reserved.)

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