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The New India: Michigan?

Posted by: Steve Hamm on January 13

While the Indian outsourcing community is flipping out about the Satyam scandal, IBM, which has a major presence in India, is opening its newest service delivery center in….East Lansing, Michigan. IBM is setting up an unusual sort of delivery center on the campus of Michigan State University. The company plans to hire MSU students and graduates, plus others, to develop software applications and modernize computing systems for government agencies and universities. It plans on hiring 100 people by June and 1,500 eventually. An IBM spokesman said this isn’t a low-cost labor play; it’s about the talent. But I’m betting salaries for software programmers are a lot cheaper in East Lansing than they are in Somers, New York; Boston; or Silicon Valley—where IBM employs a lot of programmers.

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Reader Comments

Justin Fogarty

January 13, 2009 07:20 PM

I lived in Philly for a few years and always wondered why companies didn't try to keep the massive pool of talent graduating from the universities there IN PHILLY, where the cost of living - like East Lansing's - is relatively cheap. Instead the graduates packed up and headed to NYC, DC, Boston and the West Coast upon graduation.

There's a massive pool of talent available in the US. And if we can get our business liabilities in order (health care coverage comes to mind), we can be competitive on a global scale.

Deano

January 15, 2009 07:42 AM

The fat cats on Wall Street convinced businesses that it was better for them to outsource, better for the Wall Streeter's that is. Businesses in this country need to start doing what is best for them and their communities and stop listening to those greedy egomaniacs in Manhattan. Thanks for the economy boys.....

outsource now

January 15, 2009 11:34 AM

Where are all the CIO snake oil pushers of outsourcing now? They jump ship before the company heads south and they get a juicy contract from the very out they sourced to.

Outsourcing101

January 19, 2009 03:17 PM

"salaries for software programmers are a lot cheaper in East Lansing than they are in Somers, New York; Boston; or Silicon Valley". sounds like some NY jobs have been outsourced to MI. cost therefore does play a role but in this case New Yorkers should perhaps be happy because the jobs moved to Michigan and not India. It is not only CEOs who outsource. All those who buy GM cars made in Mexico or Chinese made products at Walmart help outsource American jobs to Mexico or China and for the same reason. Chinese made product is cheaper than American made product.

Squeezebox

January 20, 2009 12:13 PM

East Lansing's probably one of the cheapest labor markets for programmers in the U.S. The state contracts IBM is looking for frequently have "Buy American" clauses in them, making outsourcing illegal.

Damian Palmares

January 20, 2009 03:27 PM

I think it's a great move, and hopefully other companies will follow suit...I would like to see all countries thrive but when we are outsourcing jobs, and not increasing work in the U.S., but alternately forcing qualified and talented people here in the U.S. to make less money than they are worth, especially when they spent their money on an education...it doesn't make sense. It's almost like our trade deficit...when we move away from a manufacturing stance in the U.S. because we can open factories in Vietnam that do shoddy work because the factory workers are paid well below what we would consider a "livable" income...it doesn't make sense. It does for the companies bottom line, but how does it help the people that have lost their jobs and can't afford to go to school to change their career? It doesn't, I know a company needs to make a profit, but to what extent will it go to keep lining it's pockets with millions and millions of dollars. To make up for it, we should address more seriously, college education or the lack thereof. But then again, if we keep outsourcing jobs to other countries, it wont matter if you have a college degree because someone in another country will do it cheaper, not necessarily better though. I agree it will be cheaper in Lansing, but at least it is still here in the U.S. I know this is focused on the Tech industry, which has suffered just as much as the manufacturing industry regarding outsourcing.

Joe Biden

January 30, 2009 04:34 PM

Do you really think IBM will employ US employees just because the location is at East Lansing? Or do you think it will use some MSU students as front face and then get L1 Visa salves from Philippines/India/China/Brazil?

US workers expect to be paid prevailing wages or they have freedom to change their employer in US. L1 Visa workers can't and are not required to be paid prevailing wages by US immigration law loophole.

Do you consider these US jobs?

Aravindan Umashankar

February 2, 2009 10:08 AM

More and more you will find New India from US cities like New Jersey , San Fransisco , London etc. So will you find New China towns from New York and Detroit. Over a period of a decade effects of globalization will be more wide spread. It really will not matter where the business is run from or which country men and their origin is ? Rather it will depend on what value systems are commonly shared or what shared visions are backed by impeccable business execution and importantly where consumers will consume the next new business product or service. Wouldn't that be nice and democratic ?

Aravindan Umashankar

February 2, 2009 10:09 AM

More and more you will find New India from US cities like New Jersey , San Fransisco , London etc. So will you find New China towns from New York and Detroit. Over a period of a decade effects of globalization will be more wide spread. It really will not matter where the business is run from or which country men and their origin is ? Rather it will depend on what value systems are commonly shared or what shared visions are backed by impeccable business execution and importantly where consumers will consume the next new business product or service. Wouldn't that be nice and democratic ?

Aravindan Umashankar

February 2, 2009 10:10 AM

More and more you will find New India from US cities like New Jersey , San Fransisco , London etc. So will you find New China towns from New York and Detroit. Over a period of a decade effects of globalization will be more wide spread. It really will not matter where the business is run from or which country men and their origin is ? Rather it will depend on what value systems are commonly shared or what shared visions are backed by impeccable business execution and importantly where consumers will consume the next new business product or service. Wouldn't that be nice and democratic ?

Aravindan Umashankar

February 2, 2009 10:11 AM

More and more you will find New India from US cities like New Jersey , San Fransisco , London etc. So will you find New China towns from New York and Detroit. Over a period of a decade effects of globalization will be more wide spread. It really will not matter where the business is run from or which country men and their origin is ? Rather it will depend on what value systems are commonly shared or what shared visions are backed by impeccable business execution and importantly where consumers will consume the next new business product or service. Wouldn't that be nice and democratic ?

Aravindan Umashankar

February 2, 2009 10:12 AM

More and more you will find New India from US cities like New Jersey , San Fransisco , London etc. So will you find New China towns from New York and Detroit. Over a period of a decade effects of globalization will be more wide spread. It really will not matter where the business is run from or which country men and their origin is ? Rather it will depend on what value systems are commonly shared or what shared visions are backed by impeccable business execution and importantly where consumers will consume the next new business product or service. Wouldn't that be nice and democratic ?

Aravindan Umashankar

February 2, 2009 10:12 AM

More and more you will find New India from US cities like New Jersey , San Fransisco , London etc. So will you find New China towns from New York and Detroit. Over a period of a decade effects of globalization will be more wide spread. It really will not matter where the business is run from or which country men and their origin is ? Rather it will depend on what value systems are commonly shared or what shared visions are backed by impeccable business execution and importantly where consumers will consume the next new business product or service. Wouldn't that be nice and democratic ?

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