High-tech companies are keeping jobs in the US by setting up offices in rural areas to cut costs.
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.