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fast-growing IT firms are positioning themselves as
more convenient, cost-effective alternatives to offshore
outsourcing.
Industry executives consulted by
Business Week
estimated that there are 20 such companies now, up from
only two 12 years ago.
While rural outsourcers will not replace the offshorers –
India has outsourcing revenue of about $50 billion now, and
that is expected to triple by 2020 – some of the American
companies have reported double- and triple-digit revenue
growth recently.
In a 2009 report cited by
Business Week
, the research firm
Gartner said that, while the rural companies make up only a
sliver of the IT market in the US, they offer an “attractive alter
native” for clients wishing to avoid any language barrier.
Dealing with a domestic IT company, even one located far
from an urban centre, also eases compliance with US data
privacy regulations, the report said.
The bottom line, according to Small Business Channel editor
Nick Leiber at
BusinessWeek.com
, is that
“US tech outsourcers
in rural areas are competing with offshorers on convenience
and with their domestic big-city rivals on price.”
The Economy
Modestly but measurably, an important
economic index
increases yet again
The most recent data in the Leading Economic Index
(LEI)
published by the Conference Board suggest that the economic
expansion gathering some strength in the US will continue in
the near term. Published 18
th
November, the new data derived
from ten key industrial components show a 0.5% increase
(to 111.3) in the LEI for October, following a 0.5% increase in
September and a 0.1% increase in August. A reading above
100 indicates gain; below 100, attrition. To Conference Board
economist Ken Goldstein, the report indicates a mild pickup
this spring, following the post-holiday lull. While the economy is
slow, he said, change “may be around the corner.” Another Board
economist, Ataman Ozyildirim, noted that gains in the financial
components of the LEI helped its pickup in October. Another
encouraging positive from the index is the lengthening of the
factory work week, also likely to continue given the nascent
uplift in the manufacturing sector. The Conference Board,
based in New York, is an independent global source of objective
economic data and analyses.