Circa early 2000’s, US-based organizations moved quickly to outsource routine, low-skilled jobs to low-cost development centers around the world. Since this trend began, offshore pay rates continue to increase and much of the labor arbitrage advantages have been diminished (i.e., Offshore outsourced wage rates have increased).
At the same time, employment laws made it hard for EMEA-based organizations to outsource driving them instead to invest in early-stage robotics. Over the past 24 months, news of robotics success in EMEA has spread in the US which is now beyond early adoption and entering mainstream. While no single platform has emerged as dominant, several have matured and are now enterprise-class.
Ongoing improvements in cognitive computing are driving reinvention of enterprise software within 3-5 years. There will be lots of legacy applications needing integrating to the new technology framework and robotics is a quick and easy way to connect them.
The current US administration promises to make it unpleasant for firms doing business in the US who rely on offshore outsourced labor to maintain margins will accelerate robotics as a workforce alternative. Leveraging robotics to repatriate offshore work would engender “good will” for the winning governments and their citizens. For them, it’s a win / win.
Our bottom line: There is no getting around that Robots will eliminate the need for people to perform low-value activities which will reduce these the number of low paying jobs. However, the jobs that remain will require higher skilled resources, and be harder and more expensive to outsource. Plus, with these in-sourced jobs, employers get the extra benefit of easy collaboration among departments as everyone works for the same company. It’s even hard to make the case to outsource the business-as-usual operations as these are very small groups within companies and their absolute cost is low compared to the benefit of having them nearby.