Nearshore Americas

Backed by Big Indian Firms, Lobbyists Fight Anti-Outsourcing Attacks

Melanie Carter-Maguire and Robert Hoffman are regulars at Capitol Hill, rubbing shoulders with lawmakers to try and influence events at the centre of US power. But the two lobbyists have perhaps their toughest assignments yet, as they brace to drum up support for their companies on immigration and outsourcing, high-strung issues in the US after the Great Recession.

Ms Maguire, who was hired by India’s third-largest software exporter Wipro last week, and Mr Hoffman, who joined as first vice-president of global public policy last year at Cognizant, another top IT company, have been entrusted with pushing their companies’ cases in a key market where the public outcry against outsourcing is getting shriller by the day.

India’s $60-billion technology services industry, which has had a largely uninterrupted run in its key market, has recognised that political lobbying is the need of the hour to educate local lawmakers about the economic benefits of outsourcing, after ballooning unemployment has exacerbated the cry against foreign tech companies. The task has been made more difficult by the US jobless rate galloping to double digits. US policymakers are under pressure to tighten immigration norms for protecting local jobs in software programming, call centres and legal paperwork.

“For global companies like Cognizant, there is a simple truth: government matters. Whether it’s in New Delhi, Washington, Beijing or Brussels, decisions made by legislators and regulators have a direct bearing on a company’s ability to compete and grow, and provide a unique experience to its customers,” Mr Hoffman said in an interview.

A Wipro spokeswoman was yet to respond to an ET query at the time of going to press. However, at least three people confirmed to ET that Wipro has hired Ms Maguire to lead local lobbying and public policy efforts in the US.

The US, along with Europe, accounts for about 80% of Indian software exports and Indian companies are keen to avoid any disruption to their fragile recovery.

Indeed, companies such as Wipro that earlier preferred industry lobby National Association of Software Services Companies (Nasscom) to do lobbying for them are now single-handedly toying with the practice. By getting public policy experts on their payroll, these companies are attempting to portray sensitive issues in a high-stakes market in a kinder light.

Indian tech firms realise that such efforts will help them break into the largely untapped US healthcare market worth over $20 billion. Reforms in corporate tax, visa and patents to oil their business practices are also on the agenda of the lobbying muscle employed by these companies.

Besides Wipro, companies such as Patni and TCS are learnt to have engaged different lobbying firms for their time-bound and specific needs, though Nasscom continues to lobby on behalf of the industry. Barbour Griffith & Rogers (BGR), The Cohen Group and Hill & Knowlton are among the top lobbying firms roped in by the likes of TCS, HCL and Patni Computer Systems to reach out to lawmakers.

For instance, Patni paid around $70,000 in 2008 to BGR towards immigration-related work, according to the Lobbying Disclosure Act database. The lobbyist involved was Roberts Walker who, as per the filing made with the database, provided strategic counsel, tactical planning and advocacy with respect to implementation of immigration and visa policies.

Nasscom declined to provide its annual lobbying spend, but according to estimates available with lobbying experts in the US and India, it spent nearly $2.7 million in 2008 and another $1.6 million by last October. ET could not independently verify these figures.

“The stakes are too high now. We need people who can engage with lawmakers and present our views,” said a senior executive at an Indian tech firm that has hired a lobbyist, adding that Indian companies need to be seen as global, proactively participating in the local thought leadership.

Clearly, Indian companies believe that some sophisticated lobbying efforts can break the myth surrounding job losses due to tech offshoring.

“This is signalling the kind of importance the industry gives to such issues as we become more globalised,” Som Mittal, president of Nasscom told ET in a recent interview. “It’s not about influencing opinion but more about ensuring that our perspectives are known,” he added.

In times of economic uncertainty and rising unemployment, the impulse for many policymakers is to build barriers, particularly against foreign trade, investment and migration.

“Efforts like these tend to have global ramifications, including driving both skilled workers and capital investment to countries with fewer barriers and more inviting economic development policies,” Mr Hoffman said. “In such a situation, policymakers have a critical role to play — use compelling evidence and urge refraining from protectionist measures in the long-term interest of their countries. Sometimes, it can be a hard sell,” he said.

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US President Barack Obama and his Democratic Party had made outsourcing an election issue, and have repeatedly brought it up since he got elected. The widespread belief is that a direct attack on outsourcing from the White House is on its way. And Indian outsourcing giants, rather than wait and watch, are taking up the issue with lobbyists.

Experts such as Rodney Nelsestuen, senior research director of TowerGroup in the US, said companies are realising that a longer Democrat rule would need intense lobbying.

The value of lobbying experts may diminish, if the US balance of power between Democrats and Republicans equalises in 2010 and there is a return to high levels of stalemate on every issue. “Still, there is likely to be some type of healthcare reform and outsourcing companies would do well to be on the inside of change given that one way to get more business will be to lead in the compliance and knowledge area of any new developments,” Mr Nelsestuen said.

Added Mr Hoffman: “To put it starkly but truthfully, when it comes to public policy, if you’re not at the table, chances are that you are on the menu.”

Kirk Laughlin

Kirk Laughlin is an award-winning editor and subject expert in information technology and offshore BPO/ contact center strategies.

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