That's the view of Kasper Rorsted, Hewlett-Packard's managing director for Europe, Middle East and Africa, who believes it inevitable that many existing jobs in Europe's IT sector will move overseas to lower-cost countries.
Rorsted wants Europeans to accept this economic reality, as he sees it, and to engage in discussions about how to best respond to it. "We need a debate on how we manage this movement of jobs, and how we in Europe create the educational system we need to become a successful, predominantly knowledge-based economy," said Rorsted, speaking at Cisco Connection 2004 this week.
Rorsted added that many IT-based jobs are moving from Western Europe to countries such as Bulgaria, Russia and Romania -- where he says standards of mathematics are particularly high -- as well as to Asia.
Offshore outsourcing has grown dramatically in popularity over the last 12 months, with many large companies setting up software-development, support-centre or back-office operations in countries such as India. This trend has worried some politicians and union leaders, and sparked demands that some work -- such as that related to public service contracts -- should be kept within the home country.
Rorsted, though, warns that such measures would be counterproductive.
"Any country who takes a protectionist approach to its workforce always loses," said Rorsted, adding that most European countries can never compete on raw cost.
But even though big firms such as Oracle, IBM and Microsoft are all increasing the number of people they employ in the Asia, fears that Europe is pricing itself out of the IT sector are probably misplaced.
"We have 30 years of experience optimising IT into business process," said Rorsted. This view was backed up by Rob Lloyd -- Cisco's president of Europe, Middle East and Africa -- who is confident that Europe has enough unique skills to survive.
"The experience that Europe's banking systems have of working with IT isn't easily replicated, for example. Nor are the individual skill bases of countries such as Germany and Holland," Lloyd said.
Talkback
Kasper Rorsted is as full of crap as Carly Fiornia. He is merely echoing his CEO's position who is in the process of destroying a once great company. Hewlett-Packard, under the founders, once upon a time really cared about their employees. Do you wonder why a company that was rated #10 in Fortune's top 100 companies to work for hasn't made the list the past three years?
I now completely avoid HP products.
I refuse to buy products from a company so hostile to domestic employees.
Good riddance to HP.
I'm absolutely positiv on outsourcing to low wage countries. However I excourage law makers to adjust laws that companies are only allowed to sell products that are produced on the same and equal social benefits standard as the target sales market has. Most cost savings don't come from low wages, but from saving social benefits on these people. Basically these managers just wanna increase their profit on the lack of social networks for these workers. So please sell your products in these markets where you produce them. Why charge prices that include social benefits for products that are produced without ? What they call global outsourcing is in truth digital colonialism. We are back in the colonies, this time with ties and excel sheets. Managers should be made much more accountable for their work, only then society will improve. This profit first, grab and run attitude must stop.
Europe, don't buy this nonsense. The US has spent the past 20 years selling off bits and pieces of its economy to the lowest labor markets. What this means for us is that we have a limited lifespan as an economic power. We are spiraling downward. Hold on to your jobs. Do not let these outsourcers/free market trickle-down economic theorists ruin your economies like they have done to us. It may appear that we remain strong, but it is a short sighted view that will ultimately lead to our own self inflicted distruction.
Sheila
USA
I have just returned from India, where I went to look at the outsourcing problem.
SHOCK! The problem is massive and increasing at a rate that is incredible. Its not just IT and Call Centres its huge and is covering every professional sector and any labour intesive job-functions.
In the professional sectors, I am talking about Engineering design services, architectural, legal, accountacy,,,,, if is not happend in your industry, its on its way.
I spoke with these huge corps at senior level and my advantage of being British born Indian, I got eveywhere and what I learnd was depressing.
Its not that dont want these country to develop, If they develop for their own markets there would masses of jobs created for all.
It just one sided, level the field. If I could pay for what I have worked hard for with £2000 per annum, including my mortgage, I would do so.
The govenment are spinless to act. India has more than enough wealth to cure its problem. the Problem is that few at the top keep it all.
outsourcing is great,
it cuts costs and improves lives,
please outsource all non mission critical operations to other countries and reap the advantages of outsourcing,
Do not be left behind with high labor costs and low quality,. outsource now.