By Patrik Jonsson, Staff writer of The Christian Science Monitor
February 23, 2006
LEBANON, VA.
In a crook of Clinch Valley in Lebanon, Va., there are no counterculture coffeehouses, no art museums, and the "ginger" salad dressing at the town's only Japanese restaurant is really Thousand Island.
Despite its country couture, Lebanon (pop. 3,300), once betrothed to King Coal, is on the cutting edge of a new business trend. The farmshoring phenomenon, in which high-tech companies choose to open offices in rural America as opposed to India, China, or Mexico, is coming to this mid-Appalachian plateau.
Late last year, two major IT firms, CGI-AMS and Northrop-Grumman, announced they were bringing more than 700 technology jobs to Lebanon that pay around $50,000 a year. These positions are in the same class as the 112,000 IT jobs nationwide that were lost to overseas outsourcing in 2003, according to Global Insight in Boston.
In a town where the average salary is around $27,000, many residents welcome the arrival of the IT revolution. It's also a subtle promise that the region's talented young people may stay where horses and mules graze behind rickety fences on sloping hillsides.
Other technology companies are also putting high-level programming and data- crunching jobs in rural America locales with less traffic and lower rents to cut costs and remove the legal entanglements, cross-cultural differences, and time-zone hassles that come with overseas outsourcing.
"When you look at [farmshore] communities that are becoming successful, they're saying, 'Yes, we can compete with offshore, and we add value to these companies,' " says John Allen, director of the Western Rural Development Center at Utah State University.
Critics, meanwhile, worry that these jobs, which are often temporary, could give false hope to desperate communities.
For CGI-AMS and Northrop-Grumman, the decision to set up in Lebanon was mostly driven by high labor costs in hot job markets such as Fairfax, Va., and neighboring Reston in northern Virginia. In another instance, DaimlerChrysler recently hired Lakota Express to do its Web design, which it is sending to a South Dakota Indian reservation. Even Dell, which recently announced another major offshoring gambit, is now shipping some of its work to Twin Falls, Idaho. In Cheyenne, Wy., transportation logistics firms, full of young people, dot the interstate.
To be sure, with as many as 3 million IT jobs expected to go overseas in the next few years according to Forrester Research in Cambridge, Mass., only a handful of companies are setting up shop in rural areas in the US.
That Appalachia is on the forefront of farmshoring is a result of massive investing in broadband, which connects wide, rural swaths to the Internet. The Department of Agriculture has handed out more than $800 million in low-interest loans for broadband expansion nationwide, a portion of which went to Virginia. Lebanon and Russell County, Va., received more than $4 million in grants from the Department of Commerce as well as from the state's tobacco settlement fund. The fiber optic cable through Russell County, Daniel Boone's old stomping grounds, officially went live last year.
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February 23, 2006
LEBANON, VA.
In a crook of Clinch Valley in Lebanon, Va., there are no counterculture coffeehouses, no art museums, and the "ginger" salad dressing at the town's only Japanese restaurant is really Thousand Island.
Despite its country couture, Lebanon (pop. 3,300), once betrothed to King Coal, is on the cutting edge of a new business trend. The farmshoring phenomenon, in which high-tech companies choose to open offices in rural America as opposed to India, China, or Mexico, is coming to this mid-Appalachian plateau.
Late last year, two major IT firms, CGI-AMS and Northrop-Grumman, announced they were bringing more than 700 technology jobs to Lebanon that pay around $50,000 a year. These positions are in the same class as the 112,000 IT jobs nationwide that were lost to overseas outsourcing in 2003, according to Global Insight in Boston.
In a town where the average salary is around $27,000, many residents welcome the arrival of the IT revolution. It's also a subtle promise that the region's talented young people may stay where horses and mules graze behind rickety fences on sloping hillsides.
Other technology companies are also putting high-level programming and data- crunching jobs in rural America locales with less traffic and lower rents to cut costs and remove the legal entanglements, cross-cultural differences, and time-zone hassles that come with overseas outsourcing.
"When you look at [farmshore] communities that are becoming successful, they're saying, 'Yes, we can compete with offshore, and we add value to these companies,' " says John Allen, director of the Western Rural Development Center at Utah State University.
Critics, meanwhile, worry that these jobs, which are often temporary, could give false hope to desperate communities.
For CGI-AMS and Northrop-Grumman, the decision to set up in Lebanon was mostly driven by high labor costs in hot job markets such as Fairfax, Va., and neighboring Reston in northern Virginia. In another instance, DaimlerChrysler recently hired Lakota Express to do its Web design, which it is sending to a South Dakota Indian reservation. Even Dell, which recently announced another major offshoring gambit, is now shipping some of its work to Twin Falls, Idaho. In Cheyenne, Wy., transportation logistics firms, full of young people, dot the interstate.
To be sure, with as many as 3 million IT jobs expected to go overseas in the next few years according to Forrester Research in Cambridge, Mass., only a handful of companies are setting up shop in rural areas in the US.
That Appalachia is on the forefront of farmshoring is a result of massive investing in broadband, which connects wide, rural swaths to the Internet. The Department of Agriculture has handed out more than $800 million in low-interest loans for broadband expansion nationwide, a portion of which went to Virginia. Lebanon and Russell County, Va., received more than $4 million in grants from the Department of Commerce as well as from the state's tobacco settlement fund. The fiber optic cable through Russell County, Daniel Boone's old stomping grounds, officially went live last year.
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