Napolitano wants outsourced jobs back in Arizona

BYLINE: Mike Sunnucks

Gov. Janet Napolitano wants the state to recruit companies that have outsourced or sent jobs to foreign markets and bring those jobs back to the U.S.

Some of those companies are not happy with the results and are bringing jobs back to American soil, Napolitano told business leaders at a recent meeting in Phoenix. Arizona should be at the forefront in attracting those positions, she said.

Napolitano also wants to attract more international investment in the state, including research and development and jobs in high-wage sectors such as technology and biomedical.

"We're already working on some of those projects," said Napolitano, a pro-business, centrist Democrat. The governor has made economic innovation the centerpiece of her one-year term as chairwoman of the National Governors Association.

The economic emergence of China and India, improved global communications links and business-backed free trade accords have caused a slew of U.S. manufacturing, back-office, call center and information technology jobs to be shipped to cheaper foreign labor markets.

A reversal of that trend could help Arizona's economy. The Phoenix and Tucson areas are top spots for call centers and back-office hubs.

Mary Teagarden, a professor of global strategy and an economist at Thunderbird, the Garvin School of International Management, said Indian and Asian accents cause some problems at customer service centers when U.S. consumers can't understand them. She also said some foreign call center workers have problems understanding regional American accents.

In addition, political pressure is increasing on U.S. firms that ship domestic jobs overseas. State and federal regulations have been proposed to restrict tax benefits for offshore operations.

Napolitano issued an order in 2004 barring state agencies from awarding contracts to companies that outsource work overseas.

US Airways Group Inc. is among companies bringing offshored jobs back to the States. The Tempe-based airline announced earlier this year that it was shifting some call center jobs back to the U.S. from the Philippines because of language and quality-control issues.

Teagarden also said that labor costs in India have increased, especially in maturing business centers such as Bangalore, and outsourcing firms are turning to less experience, lower-grade workers to help keep costs down.

"Outsourcing companies that built their reputations on A-grade labor are now forced to dip into B and C labor pools," said the Thunderbird economist.

"The world-class quality is being eroded and some companies are questioning whether it is simply not better to keep jobs at home," Teagarden said.

Arizona Department of Commerce spokesman David Drennon said the key for Arizona is to tout the state as a quality business location that offers good access to the U.S. market and a strong work force.

Arizona and the U.S. cannot compete with overseas markets, especially in Asia, when it comes to cheap labor and costs, he said, stressing other factors impact business decisions as well.

"Lower wages aren't always the answer," said Drennon.

The state needs to bolster its educational standings and work force development programs to become a top alternative to foreign locations, Napolitano told the business leaders at a Sept. 20 campaign event.

The meeting included a number of business executives who are backing Napolitano in her race against Republican challenger Len Munsil.

JPMorgan Chase Arizona President Ben Campbell, Arizona Technology Council Chairman Todd Bankofier, SleepAmerica Chief Executive Debbie Gaby and Arizona Contractors Association President David Jones were among that group.






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Arizona Department of Commerce: www.azcommerce.com