When Andre Roode was ready to hire developers for his infant Portland software company, he got on the phone.

It wasn't a local call.

He hired two professors at Rhodes University in South Africa to help him write his company's software, a program that allows retailers and suppliers to automate order processing and billing.

Roode's startup, Universal EDI, has landed more than 30 customers -- among them several suppliers to major Northwest retailers -- since formally launching in December. The company is now gearing up to staff a headquarters office in Portland.

Similarly, Rohan Coelho shopped around India until he found a group of right-priced developers who could churn out -- through a process of trial and error -- a prototype version of software that helps nursing homes manage their drug dispensing.

Coelho figures he saved several hundred thousand dollars by getting the initial work done overseas, but now he's winding down that operation and hiring local employees, including several software engineers. By the end of August, he expects to have 22 employees in place at his company, Portland-based Daverci Solutions.

This pair of entrepreneurs provides a compelling counterpoint to the argument that shipping jobs overseas is bad for Oregon's economy.

To date, the high-tech offshoring debate has raged mostly around big companies making large-scale use of computer-savvy labor overseas -- the likes of IBM, Hewlett-Packard, Intel and Tektronix -- and whether the exodus of jobs signals the end of U.S. pre-eminence in the field. Meanwhile, U.S. startups are cruising beneath the radar, using the global economy to their advantage to create jobs here and abroad that wouldn't otherwise exist.

For these entrepreneurs, having faraway employees -- whether in Boise or Bangalore -- is a reality of the Internet age. And at a time when startup cash is scarce, cheap product development can mean the difference between survival and early extinction.

COELHO'S FIRST BRUSH with offshore outsourcing came seven years ago when he was an Intel employee. "It didn't really catch on very well," he says. While some divisions of the chip giant found that it made sense to use Indian programmers for maintenance work, Coelho says, the multimedia technology he was working on at Intel was just too complicated to outsource.

But as the CEO of a fledgling startup developing brand new software, cost was the paramount concern. "I needed to apply widespread engineering resources," says Coelho, who also hired two local programmers. "I knew I was going to throw away a lot of what I developed. The resources in India allowed me to do that and not worry that it was going to cost a lot."

But now that the product is ready for use by customers, Coelho wants to hire local developers in order to have more control over the process. And despite all the talk about legions of unemployed tech workers, he's having trouble filling his open positions. "The applicants are pretty much trickling in," he says.

Meanwhile, Roode says he'll continue to work with developers overseas -- it's not only cheaper, he says, but skills and attitude are often better.

"I've programmed in Portland for a long time," says Roode, who grew up in Zimbabwe, was educated in South Africa and has lived in the states since 1990. "Guys like me got totally spoiled in the '90s. We made a lot of money." A lot of programmers haven't kept up to date with new technologies, Roode says. "They don't try to create value; they want to slot into a place in the bureaucracy and code all day. I don't need people like that."

Roode says he'll eventually hire some local programmers -- new graduates, fewer bad habits -- and the bulk of his company's administrative and marketing work will be done in Portland, closer to the company's initial customer base. But he's also working to set up an office in Australia to take advantage of talent there and have round-the-clock/round-the-globe coverage for Universal EDI.

Tyson Pardue, a Bend software entrepreneur, points out that offshore outsourcing has been around a long time. More than a decade ago, while working in Silicon Valley for PeopleSoft, he managed workers in Singapore and the Netherlands.

"As a business owner, you're kind of obligated to send work wherever you're going to get the most bang for the buck," says Pardue, who runs an e-commerce site, Worldwaters.com, from his home in Bend. "It's not an us-versus-them thing. The more money you save as a company, the more money you have to spend."

Pardue is building a company around the e-commerce software he developed for Worldwaters. He has a half dozen employees, but only two are in Bend. "They're all remote, in places like Seattle and Sacramento," he says. "They could just as easily be in India."

Every week, Pardue gets e-mails from companies that want to help him ship his software development work overseas. He figures that at some point he'll sit down and pencil it out. If hiring programmers in India makes financial sense, he'll do it. "The beauty of being in tech is you don't have to worry too much about where your employees are."

In addition to startups, established small companies have stepped onto the outsourcing train, and they have local growth to show for it. Portland-based ValueCAD uses a team of about 15 computer-aided drafting and design workers in India. The cost savings ValueCAD has gleaned from sending work offshore since 1996 has prompted CEO Sal Kadri to staff up locally -- he has 31 employees working in Portland, Corvallis and Vancouver.

"Last year was one of our best years," Kadri says, "and I think some of the growth is due to our capability to have an offshore component as well."

To Kadri, the anti-offshoring argument is shortsighted. "To participate competitively in a global market, we have to use the resources where there is the best value," he says. He suggests that U.S.-paid wages stimulate demand for U.S. products. "They use our made-in-the-USA computers, they also drink Starbucks and Coca-Cola and fly in Boeing planes. If we are serious about participating in a global economy we have to open our minds."

THE THEORY THAT OFFSHORE OUTSOURCING ultimately creates local jobs is all well and good, says Mitch Besser, co-founder of ORTech, a labor group for high-tech workers. But he wants to see proof.

"Every case may well be unique," Besser says. "I'm not a rocket economist and I can't make those predictions. But even if [offshoring] does bring jobs back, that doesn't feed my family today. I have members who write me letters saying they can't make their house payments and they're scared. I don't like getting those letters."

There's no denying that sending jobs offshore has sent people to the unemployment line. Almost everyone in Silicon Forest knows somebody who knows somebody whose job went to China or Taiwan or Singapore or India. But what nobody knows for sure is what the long-term ramifications of the trend might be.

Touting startling numbers such as the oft-cited Forrester Research statistic that 3.3 million jobs will head overseas by 2015, anti-offshoring activists have pushed the topic front-and-center in an election year. More than 30 states are currently debating legislation aimed at limiting the practice. Oregon's Legislature, currently out of session, hasn't yet tackled the topic. The recent revelation that workers at an Indian call center were answering questions about the Oregon Trail debit card for food stamps prompted an angry response from Gov. Kulongoski's office. But while the governor has asked state agencies to avoid sending state work overseas, he has come out against trade barriers.

Jim Craven, government affairs manager for the Oregon chapter of the tech industry group AeA, hopes the furor will die down before the Legislature reconvenes for its regular session in January. The AeA's stance is that protectionism will ultimately cripple new job creation. Craven says he doesn't think combating offshore outsourcing should be high on Oregon's agenda.

"Oregon's economy is absolutely wedded to the global economy," Craven says. "I think the governor is going to be reluctant to send signals to our trading partners that we're not open for business."

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Copyright 2004 Oregon Business magazine