Thursday, March 01, 2007


Nearshoring - Could This Nova Scotian Shark Eat Your Job?

Many high tech companies in Silicon Valley and elsewhere are switching from traditional "offshoring" to far-flung places like India and China to a more local version called "nearshoring", which taps the labor pool in countries in the Western Hemisphere like Mexico, Costa Rica and Canada.

There are numerous reasons for the shift. Part of it is language. Telemarketers and technical support in Latin American countries can interface seamlessly with the Hispanic market in the United States, and English itself is spoken in Canada and in much of the Caribbean. Sun Microsystems, for instance, moved its offshore technical support center from India to Nova Scotia because Americans are better able to understand English spoken with a Canadian accent. Certainly, both languages are spoken in the local markets that many U.S. corporations already serve in the countries where this nearshoring would take place.

The range of time zones is essentially identical with those in the United States, which has the great benefit of synchronizing business hours and eliminating the need for, say, programmers in Asia to stay up past their bedtime to confer on technical matters with their counterparts in the United States - as well as minimizing those occasions on which the time difference precludes any real-time communication between Asian and American workers. (If you ask me however, I still think having Indian programmers performing batch support in broad daylight on IT processes that run at night in the U.S. is way better than being awakened at 3:00 AM to resuscitate some foundering triple-A application.)

Another factor I did not see mentioned in the article at the link below is the greatly reduced expense and inconvenience of flying managers and workers back and forth between the U.S. and the offshoring site. This happens all the time, and I think everyone would agree that it is cheaper and faster to fly to Boston from Halifax, or to Los Angeles from Mexico City, than to fly to either place from Mumbai or Bangalore. There is also a sneaky psychological advantage to nearshoring to the Americas, as opposed to offshoring to Asia or Eastern Europe. Since it remains within the Western hemisphere, it makes it easier for executives to pretend to themselves, not to mention to others, that they aren't really employing labor resources that are not on "American soil". Sometimes it all boils down to spin.

"Moving tech support jobs closer to home" from The Mercury News (San Jose, CA)

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