"Throughout Governor Strickland's time in office, procurement procedures have been in place that restrict the purchase of offshore services," said Wurst, in an e-mail response to questions. "Despite these requirements, federal stimulus funds were recently used to purchase services from a domestic company which ultimately provided some of those services offshore." That incident led the governor "to redouble his commitment" to bar the use of public funds for offshore services, she said.
Ohio isn't the first state to bar offshore outsourcing. New Jersey also moved to block offshore outsourcing after a vendor used offshore labor for call center support.
Regarding the state's support for Tata, Wurst said, "the governor worked hard to bring Tata Consultancy to Ohio, where the company is making investments and creating jobs for Ohio workers. That's called insourcing, for which the governor makes no apologies. Similarly, he makes no apologies for his longstanding opposition to the outsourcing of Ohio jobs."
Ron Hira, an assistant professor of public policy at the Rochester Institute of Technology, sees a contradiction in the governor's action.
"Governor Strickland should be commended for his recognition that outsourcing reduces employment opportunities for Americans and harms American workers," Hira said. "This is an important epiphany given the massive government subsidy he gave to the largest offshore outsourcing company."
Tata's business model "is to offshore as many American jobs as possible. So, it's strange that Mr. Strickland would use precious tax dollars to subsidize such a company," Hira said. About 80 percent of Tata's workers are in low-cost countries, he said.
Peter Bendor-Samuel, the CEO of Everest Group, an outsourcing consultancy and research firm, said Strickland's actions will have little impact on the overall industry.
But Ohio's action comes at a time of increasing "demagoguing and minor actions" against outsourcing, including the recent action in Congress to increase the H-1B fees on offshore firms, Bendor-Samuel said. The trend "is worrying for the industry, as this climate increases, you could have legislation come out that could have an impact," he said.
Most of the Indian firms realize that they need have more resources near the customers, but that's being driven not by the political climate but the type of work. "The nature of the work demands that they have more in-country resources," said Bendor Samuel.
Even as the political rhetoric increases over offshore outsourcing, the large Indian firms are "are all experiencing a significant uptick in new work," he said.
Patrick Thibodeau covers SaaS and enterprise applications, outsourcing, government IT policies, data centers and IT workforce issues for Computerworld. Follow Patrick on Twitter at @DCgov or subscribe to Patrick's RSS feed. His email address is firstname.lastname@example.org.
Read more about outsourcing in Computerworld's Outsourcing Topic Center.