The recent technology boom has resulted in an abundance of development resources for companies seeking software development, from one-off code shops and contract developers to full technology solution providers. Offshore development companies started to really cash in on this market starting in 2003 mainly in India, Canada and Israel. According to Garter and Bluewoolf Reports, by 2009 worldwide spend on IT outsourcing had reached $268 billion, and spend is forecasted to surge above $325 billion by early this year. In 2012, approximately 41% of companies contracting IT and development services were using onshore resources while around 55% used both on and offshore partners, and approximately 2 out of 5 CIO’s are forecasted to outsource some aspect of web or mobile development this year.
Many choose to outsource IT services because of flexible costs and faster project lifecycles. However, the down US economy in recent years has legislators and onshore IT industry players looking for ways to discourage sending projects overseas in order to capitalize on the technology market and keep revenues in the United States. Washington and the US media have been very focused on heated debates surrounding immigration reform but often tend to gloss over aspects of these policies that will be centered on the tech sector. US tech businesses on the other hand, are watching these provisions very closely, particularly reforms to H1-B legislation.
The H1-B is a visa specifically for the purpose of temporarily employing foreign-born workers in specialty occupations often referred to as the STEM (science, technology, engineering and mathematics) fields. There is no shortage of qualified applications for the H1-B annually, but unfortunately there are caps on the number of eligible workers per year that are far too low to meet the high demand for skilled workers in STEM fields; last year when the pool of H1-B’s was opened the cap was reach in less than a week. This means that many potential tech workers are being turned away, likely resorting to employment at technology firms in their home countries instead of bringing their skills to the US. Pushing for looser H1-B legislation will not only discourage offshore outsourcing, but also empower skilled engineers, developers and scientists to come and strengthen the US economy and promote better STEM education programs.
In an article from CIO, Chairman of the Commerce Committee John Rockefeller weighed in on the H1-B policy issue: “The role of immigrants in the phenomenal growth of the U.S. technology industry over the past two decades is very well documented–and stunning, is it not? Absolutely stunning. Many of our largest and most successful tech companies like Intel, eBay, Yahoo, Google were founded or co-founded by foreign-born immigrants.” He added, “high demand for H-1B visas and long waiting times for green cards make it more difficult for talented, foreign students to work, to start a business here after they finish their degree. Some students give up and go home, unfortunately.”
Fortunately it seems as though this legislation is slated to pass very soon. At a Senate Judiciary hearing yesterday there was broad agreement that proposed provisions to H1-B policies are necessary and desperately needed, nearly doubling the cap of 65,000 to 110,000 along with support for recruiting and hiring foreign-born workers. More hearings are to come throughout the week.