News Column

Offshoring: Coming to a Small Business Near You

Aug 27, 2012

Patrice Hill

Large corporations have been reaping the harvest of profits and efficiency gains from automation and outsourcing for years, but many small businesses, which do not enjoy the same economies of scale, have missed out.

That may soon change, thanks to a recently established California company, oDesk. Billing itself as the "world's largest online workplace," the company aims to provide the same kind of outsourcing services to small businesses that big businesses with overseas operations now have, through an online recruiting network linking workers in Jakarta or Mumbai with small businesses in Chicago or Berlin.

Because small businesses have been the most important engine of job growth in the U.S. economy for years, that may be an unwelcome development for many workers.

"In the world of work, this is a really disruptive business," said Gary Swart, the company's chief executive, conceding that his system is likely to end up poaching jobs where they have been most plentiful. "We didn't invent globalization. That train left the station 20 years ago."

About 90 percent of oDesk's workers, who typically have skills in technology, accounting and other in-demand areas, are from nations outside the U.S., though Mr. Swart points out that thousands of American workers also have signed up to offer their skills through oDesk. Some U.S. workers have started businesses and made quite of bit of money doing so, he said.

The company was featured at a recent World Bank conference as one of a new breed of innovative ventures that will enable people in the developing world to use their cellphones and computers to gain access to jobs in rich countries. In a hint of the huge potential reach of such companies, the World Bank reported this month that fully three-quarters of the world's population now have access to cellphones.

For oDesk, its online job service currently takes in $350 million in revenues each year, but Mr. Swart estimates that the market eventually will be in the trillions of dollars. He expects online workers eventually to constitute at least 10 percent of the workforce -- displacing millions of traditional workers in the process.

Technology firms such as oDesk make no apology for their drive to transform the workplace and world at large. In fact, Mr. Swart said, oDesk's disruptive potential is a major reason venture capital firms including T. Rowe Price Group Inc. are investing in the company.



Source: (c)2012 The Washington Times (Washington, DC). Distributed by MCT Information Services