With the financial crisis hitting all areas of the US and global economy, it is becoming increasingly clear to this author that it is time for the large Indian outsourcers, such as Tata, Infosys, Wipro and Satyam, to step up to the plate and invest in the US economy.

With substantial cash resources, the current political pariahs (the Indian offshore companies) could pony up some of their cash and help stabilize the US economy and markets - and come away looking like heroes. Just think if a consortium of Indian outsourcers ponied up $10b to help stabilize AIG, for example.

Instead of politicians tottering around and talking about how they will put commissions together to figure out a solution, a consortium of private companies - who have made billions by providing offshored services - would be investing in their customer's market to help shore it up. The problem would be on its way to solution even before the commissions are named.

I can see the ads now... "The Outsourcers of India - your partners in good times and bad." Great PR and very possibly something that could save their businesses as America turns inward to deal with its economic crisis.

Done correctly, this could prove to be a publicity boon for the Indian outsourcing community. Furthermore, if it works, it could go a long way to staving off economic disaster for both the US companies and the Indian outsourcing community.

Certainly, the Indian outsourcing community needs to do something to shore themselves up in the public's perception soon. We'll have a new president in 4 months - and in either case, that president will be obligated to impose changes that will likely hurt Indian outsourcers - unless those very companies do something to raise their profile and improve their public perception - and do it quickly.

Today's bankruptcy of Lehman Brothers and the takeover of Merrill Lynch by Bank of America will present huge challenges to offshoring in the near- to mid-term. Aside from the clear consolidation in the markets that this will create, the penumbral effects of this crash will be felt throughout the markets. There is no doubt that these and other failures and troubles will have a far greater effect than the presidential elections.

First, it is important to remember that these crashes were caused by woeful risk management. Poor and risky management led to these crises. The result of this will likely be far more conservative management - on both the expense and profit sides. Remember, offshoring is still seen as a higher-risk way of doing business. More conservative management will likely lead to less offshoring - and a greater focus on fundamental business issues.

Second, without regard to political party, we will likely see a move to a real "country-first" approach that is, in one way or another, more inward-facing. I predict that the U.S. will "circle its wagons," and focus on rebuilding its fundamentals - without regard to the effect on the countries with substantial offshoring infrastructures.

Third, offshoring vendors have done a generally poor job of showing their commitments to the U.S. This is different than Japanese automakers - the whipping boy of the late 70's - reacted. Japanese automakers realized that they had to invest in the U.S. market, not just take from it. Offshoring companies, however, have not made that investment into the US market. As such, when the U.S. turns inwards - Wipro, Infosys and Satyam - will be left out. Unless these capital-rich companies step in and help during this time of crisis, and the clock is quickly running out - American business may turn away from offshoring.

Finally, there is little doubt that either administration, if elected, will face substantial pressure to take a "job creation" approach. I would expect some massive public works projects if Barack Obama is elected, or a continued and expanded war effort if John McCain is elected. Both create jobs - and neither are particularly friendly to offshoring.

In this difficult time, the U.S. will, no doubt, turn inward. As we do so, our standard suite of offshoring providers - particularly India and China - may be left on the sidelines.

Mark Ross of LawScribe, Inc., recently hosted a webinar discussing the ethics of legal process outsourcing. According to Mark, the Q&A section offered some surprising results.

As experienced outsourcing professionals, we recognize the need to keep our client's information confidential. Perhaps we have internalized this too much, however, as about 50% of the participants surveyed listed protection of client confidences as their greatest concern.

What does this say? Perhaps that LPO vendors are ahead of potential customers in dealing with critical issues; perhaps that client confidentiality represents one of the largest risks to potential outsourcing customers. In either case, LPO vendors should do a better job of assuring prospects that the information provided to them will be held in the utmost of confidences.

One perspective that I've never really considered is how the ability for someone to telecommute affects the potential four outsourcing their position. In this short post on ValleyWag, the writer makes the point that a job that can be done at home can also easily be offshored.

Interesting point - particularly as American workers struggle with life-consuming traffic, crumbling infrastructure and increasing work pressure. Many try - and succeed - at working remotely, but one must ask whether disaggregation of work from the workplace is, in essence, the ramp to outsourcing.

Both US Presidential campaigns have taken on the issue of outsourcing. Barack Obama is talking about restructuring incentives to encouraged companies to keep jobs on-shore and is talking about job creation in "new areas that cannot be offshored." John McCain is talking about a massive training program and some form of public assistance during the training process. But it is important to understand what type of jobs "cannot be outsourced" to determine (a) the underlying meaning of the Obama proposal, and (b) the long term value of the McCain proposal.

I can safely assert that "jobs that cannot be outsourced" are not really information-era or manufacturing jobs. Pretty much any job that is based upon data or manufacturing can easily be sent abroad. Historically, design and creative functions have been US- and European-based, but there are two problems with these areas - first, there are a limited number of these kind of jobs, and second, its only a matter of time before Indian and Chinese manufacturers develop design skills rivaling those of US and European designers.

So, taking information-era and manufacturing-type jobs out of the mix, we're left with three basic kinds of jobs: (a) infrastructure building and general construction; (b) governmental positions; and (c) a large portion (but by no means all) personal and professional services.

Under this analytical framework, the policies of the two parties diverge dramatically. The McCain policy will likely be oriented toward information-era jobs (the kind of jobs that require substantive training) - jobs that can be outsourced in the future. This could very much be a repeat of the 80s and 90s era policy push into IT education. The government and private industry set a goal, people are trained, then they get "good" jobs at good wages, and then the jobs are outsourced into lower-cost markets.

The Obama plan approaches this differently. First, but revising the tax incentive, some jobs may return or remain onshore (although exchange rates and labor costs will continue to have a more significant effect. Second, Obama wants to invest in infrastructure, a position that will not, by its nature, encourage education and retraining (although it will employ many that have been directly harmed by the housing crisis). Finally, Obama talks about creating jobs that "cannot be outsourced." But what kind of jobs cannot be outsourced (see above).

So what is the result? Certainly, the McCain approach is more favorable to corporate shareholders and offshorers for two reasons: (a) it doesn't create a disincentive to today's offshoring, and (b) it seeks to create new areas of high-wage, high-skill jobs - the jobs that our global competitors will gladly take from us.

The Obama approach is likely more favorable to the American worker. First, disincentivizing outsourcing may keep a few jobs on-shore. Second, rebuilding the infrastructure could provide lots of jobs to construction-industry workers now idled by the housing crisis. The third point, however, is questionable - as it has become abundantly clear anything that can be moved offshore will be moved. Materially changing that will require more than tax incentives.

Both positions, however, recognize the inevitability of the global economy and the need for the US to continue to be a part of it - so we're probably more talking about policy gradations than significant ultimate differences.

In a recent Wall Street Journal Business Technology article, findings of the Black Book of Outsourcing were discussed. In this year's survey, the Black Book discovered a trend of moving work back to on-shore and near-shore service centers - particularly for tasks where communication is important.

This is interesting for several reasons. First, it means that offshore-based companies are finally learning that something beside pure price is important - and that the ability to communicate with your customer is a critical factor in outsourcing success. Second, it means that cash-rich Indian companies may finally start buying into the US market as opposed to remaining happy servicing clients from afar. Finally, it acts as a call for the Indian offshore companies to really start focusing on customer service.

This approach may also save the Indian outsourcing industry from the political ire of US officials. By providing jobs in the US, Indian firms could counter-balance the perception that they are harming the US economy. This could be their best defense.