Commentary

Euro-sourcing

Think Euros are against outsourcing? Daniel Drezner points to two articles that suggest they rather like it: European companies are increasingly turning IT operations over to large U.S. corporations such as IBM and its competitors Hewlett-Packard Co. (HP) and Electronic Data Systems Corp. “It is an interesting time in the outsourcing industry, where you have massive companies, like IBM, that dwarf their customers,” said Kirk Smith, of U.K. IT services provider LogicaCMG PLC. European companies are feeling the pull of U.S. and U.K. business models that require businesses to control the level of costs, playing into the strengths of outsourcing deals, according to Smith. “Companies in Europe realize they have to exist in a global economy, and in doing so are turning to outsourcing,” he said. “The large companies like IBM and HP are appealing because they are well-known brands with a global reach.” Across Europe, businesses are outsourcing departments from IT to human resources as well as finance and accounting. “It’s now really getting to the heart of business,” Smith said. Even the EU seems to be for it: A European Union delegation said Monday outsourcing was beneficial for the world economy and added it understood India’s concerns about objections in western nations to shifting jobs overseas. “It’s something that is good for you (India) and good for our service industries,” EU’s External Relations Commissioner Christopher Patten told reporters in New Delhi.

Ted Balaker is an award-winning filmmaker, journalist, and founding partner of Korchula Productions, a film and new media production company devoted to making important ideas entertaining.