Global Sourcing

Detroit Comes Back as Outsourcing Hub

By Ashok Patil
Detroit has traditionally been a major IT hub. Popularly known as the “Motor City” due to its status as the home of US automobile industry, the region has always struggled to highlight its IT side. However, since the economic downturn of 2008, the city has seen extremely high rates of unemployment and mass migration of people to other areas in search of jobs.

But as the country slowly recovers from the “Great Recession,” Detroit is trying to bring back its vitality a technology and innovation city through startups.

How Big is Detroit’s Talent Pool?
In 2012, the Detroit region’s civilian working population was nearly 2.5 million. Southeastern Michigan is home for skilled labor and this is one of the area’s primary assets as a manufacturing location. This stable and well-educated workforce is ready and able to adapt to the changing needs of today’s technological innovations.

Even today, Detroit ranks fifth the US in total number of technology jobs (210,984), fourth in percentage of total employment within the tech industry (12.9 %), and first in architectural and engineering industry employment compared to all other regions of the US. If we look at the distribution of workforce in the region, we find that Detroit is home for 600,000 skilled people who handle back office functions such as office administrative support and sales-related activities in the region.

This human resource can be utilized by most companies seeking BPO and ITO services, as they need minimal training with technology or new business processes to deliver transactional or process driven activities. The city is also a hub for healthcare practitioners and healthcare support providers, with a total of around 250,000 people working in the industry. From an educational point of view, The University of Michigan ranks seventh among engineering technology and computer science programs in the world. And Detroit regional community colleges engage nearly 140,000 students and work with local companies to develop customized workforce training that aid in development of the required skillset for the job market.

What Initiatives and Benefits Exist for Start-up Companies?
For years, Detroit’s IT presence was driven by the auto and manufacturing industry. However, in the last five years, the tech scene has transformed from traditional IT and technology to an explosive growth in mobile and cloud technologies. During the last few years, thousands of new tech jobs have been created or have moved into the city. In the recent years, local government has encouraged many start-ups and college graduates to take up jobs in Detroit. To bring them back to the town, there have been many programs and initiatives that have come into existence.

One such initiative is IT in the D, a partnership between many technology company such as Quicken, GalaxE.Solutions, Compuware Ventures, Fathead, and Marketing Associates—and local universities. This is a training program designed to mentor students to get engaged with live IT projects from the industry and enhance their skill sets to suit and adopt workplace conditions. Under this program, the participating companies will deploy 35 volunteers from to teach .Net, Java, SQL Server, MY SQL, and PHP to students in Detroit. These classes have no fee and are funded by the participating companies. Also to support this ecosystem of small companies and start-ups, many venture funding and sponsors have come forward.

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