The nice thing about these types of questions is that the market is very good at finding who needs what; we don't need a central planning committee.

1. Risk - you throw an SLA on services and can point fingers when shit hits the fan

2. Circular agreements - you get them to sell your goods/services in the region of their home country

3. These count as "Services" on the P&L and provide massive tax advantages to the company because these aren't treated as labor costs.

This may be from an old context in my brain since I worked with some of those companies, so those reasons may have changed or impact may have with various regulations, etc.

I had a chat today with a friend about this. I think my working thesis is that AI is bad news for outsourcing/offshoring.

What was it good for? Well, often it was prompting a person in a low-cost location what code to write. He would pick it up in his timezone and implement it overnight, and present findings/questions as a response.

The problem is, coding has made implementation super cheap. It is now so cheap you have to compare it to the cost of dealing with someone in another timezone, who does not have the same cultural context on the problem. They also can't ask you clarifying questions while you're asleep. AI wins against the offshore guy, on both money and context.

Who does it help? Amazingly, the experienced onshore dev who thought he was going to be unemployed past 40. This person is now able to implement several things concurrently, has experience in making technical decisions, and has local cultural context.

Based on the last 5+ years at working at FAANG adjacent companies - less than 5% of a SWEs time is dedicated to coding (Exceptions of course for crazy things like porting massive code bases to Rust...) - If anything - now that "coding has been solved" - it significantly reduces the need for body-shops, because now you require strategic product decision making - much harder skill to hire for/develop than yet another LeetCoder.

So - definitely agree with your general thesis.

Is it possible that individuals or groups use outsourcing as a way to funnel money into their private interests? IMO we're looking at good old corruption.

No, people should honestly confront your question. The “skilled labor shortage” premise for the H1B is dead, at least in tech. Maybe we still need to bring in a handful of superstars. But at this point I think TCS, Wipro, etc., exist only due to foreign lobbying efforts.

The village head typically prefers people from his own village. Not rocket science.

They tend to take care of sustainment and certain tasks more cost effectively.

This is a pretty stupid thing to do, btw, as whatever isn’t AI will just be offshored, which reduces government and social security revenue and closes a pipeline to get smart immigrants, who tend to vote Republican.

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