I am very proud of India’s achievements in technology, having been born and raised in India. At the same time, I have worked in the American IT industry for twenty-five years and many of my friends are now losing their jobs or taking huge pay cuts. The upshot is that I have deeply mixed feelings about the current state of global IT outsourcing.

To the Indian programmers who feel that it is their time to enjoy the fruits of years of hard work, I say you are right. To my American friends who say that their careers have been wrecked through no fault of their own, I completely agree. But to the Americans who say "Ban outsourcing!" and to the Indians who say, "The backlash is not our problem, just a passing phase," I say you are both wrong.

Instead of fighting over whose share of the pie is bigger, let’s try to make the proverbial pie bigger. What both sides need is a cooperative, proactive strategy that can defuse the backlash and lay the basis for a long-term strategic alliance between the US and Indian IT industries.

Given current economic and political realities, it is up to the Indian IT industry to take the lead on this. The market realities are that you currently have the advantage: the advantage over domestic software consulting firms and other competitors overseas.

In fact you have most US consulting firms on the ropes. The first IT recession, the jobless recovery, and outsourcing have just about knocked us off. It is your choice whether you want to move in for the kill or decide on a cooperative approach. My suggestion is that the Indian IT industry must look beyond its current perceptions to understand a few realities about the US.

Here are a few things that Indian IT leaders would do well to consider:

n There is a rising tide of populism. The argument that outsourcing is good for big business and therefore good for America doesn’t carry much weight with US voters. While an unemployed programmer in an American suburb may not be worthy of sympathy in India, he is getting a lot of press here in the American heartland. Most Americans ignored outsourcing when it hit blue-collar workers, but now that it's starting to threaten lawyers, engineers, and doctors, people are worried.

n IT security is a critical issue. People who think a few firewalls will solve the problem don’t know what PC security is about. And now there are a lot of disgruntled US programmers with an axe to grind. As a result, both US clients and Indian vendors will have to invest more in due diligence, auditing, and management of security issues.

n The backlash to knowledge industry "off-shoring" isn’t going away: If price is the only differential you will soon be undercut by China, then Indian programmers will be the next ones protesting against outsourcing. Instead, good customer relationships and advanced skills are essential.

This fact points out a way towards a real win-win solution instead of the American and Indian IT industries cutting each other to shreds.

There are many skilled US programmer/analysts whose chief skill is not coding. Instead, their understanding of a customer’s business and their relationships within a client are invaluable to actually implementing a successful project. It is true that US programmers can’t beat the Indians in terms of price or productivity and I don’t think Nasscom, CII and their US allies can beat the American middle-class politically. If they do, the victory may not be worth the collateral damage. Instead, let’s find a solution that addresses concerns of US IT workers and cements long-term alliances between India and US.

Beyond the Backlash
Indian companies should utilize experienced US consultants for onsite work as much as possible. This adds value to Indian companies who make use of the American’s customer business and applications knowledge. Indian firms can hire and integrate US employees into their firms.

By taking these issues into account, Indian IT leaders can make firm steps to defuse the outsourcing backlash in the US. In return, it will require a genuine response on the part of American politicians, companies, and IT workers themselves. With some effort on both sides, we can make that a reality.

Rob Ramer The author is CEO of a Minnesota-based outsourcing risk-management company

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