Posts Tagged ‘Obama’

Obama’s ‘insourcing’ highlights risks of relying on BPOs

January 31st, 2012

The recent pronouncement by US President Barack Obama to bring outsourcing jobs back to the US highlights the dangers of relying on business process outsourcing (BPO), and on foreign economies in general, for Filipino jobs. Even if it is still unclear if Obama’s proposed “insourcing” legislation will pass, the vulnerability of the sector and the government’s misplaced attention to this is increasingly apparent.

The “insourcing” initiative has been dismissed either as mere election-related rhetoric or in any case as unlikely to prosper against corporate lobbying, such as by the Business Processing Association of the Philippines (BPAP). But the initiative is just another example of adverse trends facing the sector and more of this are likely to emerge as the crisis in the US and the rest of the world worsens in the coming years.

Government and industry estimates for the BPO are of 1.3 million jobs and US$25 billion in revenues in 2016. These are unlikely and it will be recalled that the original BPO “Roadmap to 2010” target was for 1.0 million jobs and US$12 billion in revenues in 2010 – of which only 525,000 jobs and US$8.9 billion materialized.

As it is, the growth of the BPO sector is already slowing slightly in terms of jobs and revenues. The 21.9 percent growth in BPAP-reported jobs in the sector in 2011, to an estimated 640,000, was slightly slower than the 24.1 percent growth in 2010. Similarly the 22.5 percent reported growth in revenues, to some US$10.9 billion, was slightly slower than the 25.3 percent growth in 2010.

The slowing global and, in particular, US economy appears to have affected the sector’s performance despite the country reportedly having nudged India out as the world’s leading BPO center. The World Bank has previously estimated global economic growth to have fallen to 2.7 percent in 2011 from 4.1 percent in 2010 and US economic growth from to 1.7 percent (2011) from 3.0 percent (2010). Developments in the US economy are particularly relevant because the latest Bangko Sentral ng Pilipinas (BSP) data notes that the US accounts for 72 percent of foreign investment and 80 percent of BPO service exports.

It can for instance be noted that the trend in the deployment of Filipino nurses to the US dropped from 649 in 2008 to just 85 in 2010. In his campaign for the US presidency, President Obama campaigned for prioritizing American nurses over migrants declaring: ““The notion that we would have to import nurses makes absolutely no sense.” Recently, the Democrats’ House Bill 1933 reviving temporary visas for registered nurses was approved by Congress. Among others the bill limits the number of H1-C temporary registered nurse visas to 300 per year from a previous quota of 500 annually.

The government has so far budgeted at least P575 million in subsidies for private foreign BPO investors consisting of trainings, curriculum and teacher development, career marketing and scholarships through TESDA and CHED. These funds are more productively spent supporting Filipino industry, science and technology than for a sector that is such a small part of the economy and by its nature will never give much value-added. The BPO sector is barely integrated into the local economy outside of its relatively few jobs and so does not stimulate or encourage domestic production.

IBON Foundation, Inc. is an independent development institution established in 1978 that provides research, education, publications, information work and advocacy support on socioeconomic issues.

Source:http://globalnation.inquirer.net/24291/obamas-insourcing-highlights-risks-of-relying-on-bpos

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Obama State of the Union Message on Outsourcing a Positive Signal for Public Schools

January 27th, 2012

The 22 years I spent as a reporter before entering the teaching field left me with a healthy skepticism for any words escaping the lips of politicians.

That being said, I was encouraged by President Obama’s State of the Union address Tuesday night.

My optimism had nothing to do with the president’s kind words about teachers and his statement that we should not be “teaching to the test.”

As long as Arne Duncan is his secretary of education and Race to the Top is his blueprint for improving American schools, I will have a hard time believing those words.

It was the sizable portion of the speech dedicated to improving the lot of America’s middle class that provided the most hopeful words for teachers, students, and parents. Especially the following passage:

First, if you’re a business that wants to outsource jobs, you shouldn’t get a tax deduction for doing it. That money should be used to cover moving expenses for companies like Master Lock that decide to bring jobs home.

Second, no American company should be able to avoid paying its fair share of taxes by moving jobs and profits overseas. From now on, every multinational company should have to pay a basic minimum tax. And every penny should go towards lowering taxes for companies that choose to stay here and hire here.

Third, if you’re an American manufacturer, you should get a bigger tax cut. If you’re a high-tech manufacturer, we should double the tax deduction you get for making products here. And if you want to relocate in a community that was hit hard when a factory left town, you should get help financing a new plant, equipment, or training for new workers.

My message is simple. It’s time to stop rewarding businesses that ship jobs overseas, and start rewarding companies that create jobs right here in America. Send me these tax reforms, and I’ll sign them right away.

For years, our system has been stacked against the middle class and the public educational system that has been the heart of that segment of our nation.

Jobs are shipped overseas, and we are told that schools are failing because we are not preparing the displaced workers for the new and different jobs.

Meanwhile, as the number of those without jobs increases, the poverty level skyrockets, and as everyone except the so-called “educational reformers” understands — poverty, not “bad teachers” has been the number one problem in our failing inner-city schools.

By targeting teachers, those who have made millions by outsourcing jobs have effectively turned the conversation away from their own role in America’s current economic situation, including their sizable impact on public education.

With this has come a push to send students to college who, quite frankly, have no business going to college and would never have needed higher education in the past. College and university officials complain about students who come to their institutions lacking basic knowledge and those who bash public education use that as evidence that our schools are failing.

It seems far more likely that we are sending students to our college campuses who in past years would have made a comfortable living doing decent-paying work in our plants and factories.

Higher education should be available for everyone, but it should not be an absolute requirement to live a successful life in this country.

At the same time that more students are being pushed into higher education, the shell game continues. Many of the white collar jobs that we have been told repeatedly would be available are being outsourced and as more and more Americans are sinking tens of thousands of dollars into higher education, their reward could well be a lifetime of debt and either long-term unemployment or richly rewarding work greeting Wal-Mart customers or handling drive-through orders at McDonald’s — useful jobs that should be available to the young who are getting their start in the workplace, not to those who have diplomas that don’t mean a thing in our diminished workforce.

As the people at the very top of the totem pole become wealthy beyond their wildest dreams, those of us who choose to criticize their selfishness and lack of patriotism are castigated and accused of practicing “class warfare.”

Public education is, and always has been, a reflection of society. We teach the value of hard work and instill in the children who come into our classrooms every day the idea that with that hard work they will be able to accomplish success.

With each day that we hear national, state, and local candidates preach the gospel that we must cut taxes on job providers who never seem to provide any jobs and eliminate services for the people whose jobs have been cut out from under them, it becomes harder for teachers and students to buy into those traditional American values.

What President Obama promised Tuesday night in his State of the Union message was a return to an America where the hard work and patriotism are prized and where those who contribute the most to the American dream, not those who consider it just another commodity to be exported, are those who will reap its rewards.

Source:http://www.huffingtonpost.com/randy-turner/obama-state-of-the-union-_1_b_1233610.html

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Obama wants US firms to stop outsourcing

January 25th, 2012

US President Barack Obama proposed several tax measures aimed at encouraging American companies to bring jobs back home, a move that is expected to have an adverse impact on the Philippines’ growing outsourcing industry.

In his annual State of the Union speech on Tuesday evening (Wednesday morning, Manila time), Obama laid out a vision for strengthening the US economy in an election-year by focusing on tax inequality and making the case for his economic leadership.

“Tonight, my message to business leaders is simple: Ask yourselves what you can do to bring jobs back to your country, and your country will do everything we can to help you succeed,” he said.

“It’s time to stop rewarding businesses that ship jobs overseas, and start rewarding companies that create jobs right here in America,” he added.

Obama’s proposed tax measures are seen as affecting the Philippine outsourcing industry, the second largest in the world, which is heavily reliant on US-based companies.

While the US economy is now recovering, Obama blamed outsourcing for weakening it in the first place. “No, we will not go back to an economy weakened by outsourcing, bad debt, and phony financial profits,” he said.

Obama proposed changing the US tax code that currently gives tax breaks to companies that outsource jobs overseas.

“If you’re a business that wants to outsource jobs, you shouldn’t get a tax deduction for doing it. That money should be used to cover moving expenses for companies like Master Lock that decide to bring jobs home,” he said.

The US President said no American company should be allowed to avoid paying taxes by moving jobs and profits overseas.

“From now on, every multinational company should have to pay a basic minimum tax. And every penny should go towards lowering taxes for companies that choose to stay here and hire here,” Obama said.

He also proposed giving tax breaks for American manufacturers, especially high-tech firms, that have operations in the US.

“If you’re an American manufacturer, you should get a bigger tax cut. If you’re a high-tech manufacturer, we should double the tax deduction you get for making products here. And if you want to relocate in a community that was hit hard when a factory left town, you should get help financing a new plant, equipment, or training for new workers,” he said.

Obama told Congress to approve these tax reforms and he will sign it “right away.”

Many American companies have been outsourcing their call center services to the Philippines and India in recent years, since wages here are much lower than in the US.

Some Americans blame outsourcing for the lack of job opportunities in the US, which continues to grapple with high unemployment.

The outsourcing industry is one of the bright spots for the Philippine economy. The outsourcing workforce grew about 10% in 2011 to 600,000, according to the Business Processing Association of the Philippines.

Outsourcing was also expected to generate revenues of $11 billion in 2011, up from $8.9 billion in 2010. It is seen to continue growing by at least 15% annually to hit $20 billion by 2016.

Source:http://www.abs-cbnnews.com/business/01/25/12/obama-wants-us-firms-stop-outsourcing

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Obama and Steve Jobs argued over outsourcing

January 24th, 2012

Barack Obama and the late Steve Jobs had a terse exchange last February, over Apple out-sourcing the manufacturing of its famous products, the Economic Times.

The New York Times had reported on this matter last February, and had said that when Jobs was about to give an answer, Obama interrupted him with a query and asked ‘what would it take to make iPhones in the United States?’

It wasn’t long ago that Apple used to brag about its products being made in America, but nowadays almost none of the 70 million iPhones, 30 million iPads and 59 million other products sold last year, are made in America.

According to an insider, Obama had asked, “Why can’t that work come home?” and Jobs’ reply was clear-cut, “those jobs aren’t coming back”.

That wasn’t the first time that Obama and Jobs had a standoff. Jobs’ biography says that the Apple founder had told the US President that he was “headed for a one-term presidency”, mainly due to his administration’s business policies, the Politico reported.

According to the biography, written by Walter Isaacson, Jobs was an admirer of Chinese business practices and was a critic for the US regulations as well as labour rules.

Source:http://www.theborneopost.com/2012/01/24/obama-and-steve-jobs-argued-over-outsourcing/

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Mr Obama and outsourcing company India

November 15th, 2010

It was a big pressure month for Indian outsourcing company. Frequently bad or probably hard news keep coming for them from country of Mr Obama. Some time, Utah Govt ban on outsourcing, other time Extra tax on outsourcing. Don’t Hire Web Designer or Web developer at Bangalore. So though there are many face of monster but outsourcing company was under pressure of these monsters.

We need to give credit to Indian outsourcing Companies in india, they played a brave game and instead of getting panic they maintained bold and strong face. We see few comment hear and there from Some CEO but on a whole, most preferred to maintain and watch the development.

Lets put your thought a bit in depth about core issue of USA. Unemployment seems there biggest issue. That’s true and I guess most of you will agree. But lets use of of most used quality tool to find root. Why unemployment is so high?

America use to be considered as dream for development and infrastructure. Where did they miss the route? I see its continuous failure by there thought leader or lack of long term vision. Last 2 decades, they spent a lot more on war rather education and R&D. The USA known for Innovation and inventions became more of ego and reckless behavior. Moving away from political and administrative view to business and technical view, USA lost or started loosing edge on innovation.

When Mr Obama visited india, outsourcing company india, were expecting some bomb will fall on them, they kept there finger crossed and were in alert mode. But seems Mr Obama decided to play soft and try to pass the message bro I am with you. I have problem, please help me, intern I assure reciprocating support to you.

Probably this was best gesture can be expected from Mr Obama. He was not agenst outsourcing company India or Hire Web Designer at Bangalore or outsourcing at all.

But he want to say Bro now lets play two way game. You have grown up so don’t expect only me to give you every thing. And you can have all benefits or freedom of kids with responsibility. So I give you job that fit to your skill set and you give me job that will fit to my skill set. We treat you as a grown up so expect you to start taking your responsibility and don’t just look to me for all your problem.

Thanks a lot Mr Obama, We understand your message and take it as a good and sincere friend.

Abstracts: Mr Obama’s visit to india is a good example for balance between political ambition and economical ambitions. He leaved to best of behavior can be thought for the country head like usa.

Source:http://pinoypen.com/mr-obama-and-outsourcing-company-india-11047

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Indian IT industry hails Obama’s outsourcing stand

November 14th, 2010

The resilient Indian IT industry Wednesday lauded US President Barack Obama for terming those against outsourcing as holding onto old stereotypes and for committing to do away with protectionism.

“Obama did a great job for our industry by terming them (anti-outsourcing lobbies) as stereotypes. I think his administration will also do a great job in terms of changing those stereotypes,” IT industry lobby Nasscom president Som Mittal told reporters here.

For positioning India as the market for US businesses and declaring that India was no longer emerging but had emerged, the US administration’s efforts to change the stereotypes would get support of the industry, Mittal said.

“I think we too have to do our job to change those stereotypes and ensure there is a much larger community that understands our business model that we are part of the solution rather than creating the problem itself,” Mittal said on the margins of Nasscom’s annual Product Conclave & Expo 2010.

Expressing the industry’s satisfaction over the outsourcing issue figuring at the discussions between Obama and Prime Minister Manmohan Singh Monday, Mittal said that both the governments were committed to do away with protectionism.

“Obama and Singh have said that (against protectionism and curbs on outsourcing). It was part of their discussions. Both the governments have committed to protectionism not being the way forward. It is the open markets that are going to lead to this,” Mittal asserted.

Recalling the prime minister’s assertion at the joint press conference with Obama in New Delhi Monday that India was not in the business of stealing American jobs, Mittal said the Indian IT industry was actually adding value to the US corporations.

“General Electric (GE) chairman Jeffery R. Immelt and United Technologies chairman Louis Chenvert said at the India-US Business Council summit in Mumbai Saturday how they are winning export deals from the world over and creating jobs in the US because they are able to do design work in India and be able to shorten the product cycle,” Mittal noted.

Admitting that the rhetoric against outsourcing was a sentiment, driven because of high job losses in the US, Mittal said both the governments had assured the industry that its perspectives were understood.

“We hope this message is carried back to the US people by its administration and the media. We also hope that the US Congress will understand our industry’s business model. It is a different matter that those job losses happened to be in manufacturing, retail and construction. In fact, there is net hiring going on in the services if we go by the US labour statistics.

Source:http://www.thehindu.com/business/Industry/article878260.ece

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Obama in India: shooting from the hip

November 7th, 2010

Jeff Immelt’s message was clear. If India wants to escape protectionist pressure on its IT outsourcing sector, it needs to up the pace on infrastructure delivery and give more opportunities to US companies.

Speaking at the US-India Business and Entrepreneurship Summit in Mumbai, Immelt, the boss of GE, said the US had been let down by a sector of the Indian economy that held promise but where spending was slight. “You guys are not living up to your side of the bargain,” Immelt told a room full of India’s top executives. “There is a trillion dollars of infrastructure investment in India and it’s not happening.”

His advice is: engage US companies in modernising the Indian economy, and the rumpus over ‘offshoring’ and jobs moving from Buffalo to Bangalore will die down.

Infrastructure development – energy, transport and airports – is often touted by India’s government and leading businesspeople as where investment will flood in.

But with the exception of high profile projects like Delhi international airport and Mumbai’s congestion-relieving sea-link, progress is painfully slow. As a result, the country’s growth is shackled by poor roads, clogged ports and power shortages.

“There is no reason that our [US companies] infrastructure revenues should not be the same as in China…Let’s make the infrastructure happen,” urged Immelt.

The American industrialist was not alone in sharing his forthright views.

Mukesh Ambani, the chairman of Reliance Industries and a man usually careful not to give away too much, showed he was no Sino-phile in the cause of boosting India’s attractiveness to the US.

Only days after his brother, Anil, signed an agreement to buy $10bn worth of power equipment from with Shanghai Electric, Ambani said there was little trust between Indian and Chinese companies. By comparison, India and the US saw more eye to eye, he said.

Trust, however, will not sustain the promising US-India relationship alone. GE and others want contracts, and, in Immelt’s words, a fair bargain.

Halting progress spells bad news for the likes of outsourcers Infosys, Tata Consultancy Services and Genpact, and their access to the US economy. Their equivalents in China, on the other hand, might fare a little better.

Source:http://blogs.ft.com/beyond-brics/2010/11/07/obama-in-india-shooting-from-the-hip/

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