Backshoring is Now Officially a Megatrend

It was an inevitable outcome for a failed policy. The criminal fraud which has occurred with wanton abandonment over off-shoring had to end with Bernie Madoff style arrests and thousands of companies quickly trying to tidy up their books before the feds come in for a closer look. The beginnings of the legal brew-ha-ha began today with the auctioning of a piece of Satyam.

The criminal cases are going to drag on for years and involve many companies. Given the news and the closeness of growth reported by most other offshoring companies, Satyam wasn’t the only offshore company going for a Pulitzer with their financials.

Now, it appears, that the Fed has offered up something of a get-out-of-jail-free card to companies who were willingly participating in the offshoring scam which ran rampant through the business community. All you have to do is jump onto the backshoring bandwagon with both feet like this company did.

It’s really quite amazing that you could be a company engaging in a practice which brought about world wide recession and have the Fed offer up a get-out-of-jail-free card. At least they are going to force one of the leading culprits into bankruptcy now. GM and EDS were at the root of the offshoring debacle, and they both need to be forced into bankruptcy with upper mucky-mucks servering lengthy prison sentences. Yes, HP owns EDS now, but they should have thought about the prison time before offering to buy a company which was going to be held accountable for its role in the global economic resession.

What to look for?

Over the course of the next 6 months, you will see large companies who couldn’t talk enough about their offshoring suddenly start talking about how many jobs they are bringing back to the U.S. They will also go deathly silent about their offshore divisions. Most of the offshore divisions will be spun off into “ partnership” type companies so the parent company doesn’t have to admit they have an offshoring business. The companies who don’t do this simply won’t be in business right now. Mom, dad, and Aunt Carol simply aren’t going to buy stock in your company. The “green” and “social conscience” funds seem to already be migrating to companies that have publicly sworn they will abandon offshoring before the end of the year. In less than 18 months, if you are a company that still has offshored some portion of your IT jobs, you simply won’t be able to give your stock away. Your competitors, on the other hand, will enjoy a rising stock price along with available credit.

Second thing to look for:

A re-writing of the charters for many “green” and “social conscience” funds. Oh, they will still be sticking to their values. They simply will want the investors of those funds to let them issue loans directly to companies which meet the fund’s investment criteria. The green wave is taking off and will run for at least 5 more years (longer if all governments officially admit we’ve passed the tipping point for crude oil). You can only help a company become green so much by purchasing its stock. The SEC will only let the company sell a limited number of shares. So, the next big thumb screw will come from the funds themselves issuing loans with a magnitude of strings and inspections to the companies they are trying to force to be green.


Roland Hughes started his IT career in the early 1980s. He quickly became a consultant and president of Logikal Solutions, a software consulting firm specializing in OpenVMS application and C++/Qt touchscreen/embedded Linux development. Early in his career he became involved in what is now called cross platform development. Given the dearth of useful books on the subject he ventured into the world of professional author in 1995 writing the first of the "Zinc It!" book series for John Gordon Burke Publisher, Inc. A decade later he released a massive (nearly 800 pages) tome "The Minimum You Need to Know to Be an OpenVMS Application Developer" which tried to encapsulate the essential skills gained over what was nearly a 20 year career at that point. From there "The Minimum You Need to Know" book series was born. Three years later he wrote his first novel "Infinite Exposure" which got much notice from people involved in the banking and financial security worlds. Some of the attacks predicted in that book have since come to pass. While it was not originally intended to be a trilogy, it became the first book of "The Earth That Was" trilogy: Infinite Exposure Lesedi - The Greatest Lie Ever Told John Smith - Last Known Survivor of the Microsoft Wars When he is not consulting Roland Hughes posts about technology and sometimes politics on his blog. He also has regularly scheduled Sunday posts appearing on the Interesting Authors blog.