Ohio bans government agencies from offshore outsourcing

Ohio bans government agencies from offshore outsourcingOhio State in the US, in a new shocking move, has banned offshore outsourcing of all government IT and back-office projects raising concerns that other states facing high unemployment could make similar laws.

Governor of Ohio, Ted Strickland has criticized offshore outsourcing as not only a threat to jobs but also an IT security risk. "There are pervasive service delivery problems with offshore providers, including dissatisfaction with the quality of their services and with the fact that services are being provided offshore," he said in an executive order.

India's outsourcing industry is worth $50-billion as the Indian tech firms gained immensely from American firms looking to cut costs by taking advantage of low cost and quality works of the Indian firms in order to become more competitive. The outsourcing Industry employs about three million people across India.

The industry has is already facing protests and higher Visa fees as challenges for conducting business with the US. Most Indian outsourcing firms get business from private American firms and the deals from government agencies are rare however this trend has been changing.

The decision of the authorities in Ohio indicates the perception help by some that outsourcing is risky and that it involves serious loss of jobs. However, India firms have said that the outsourcing actually improves the efficiency of the American economy by making companies and government departments more productive.