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Forget India, Outsource to Arkansas

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Onshore Technology Services CEO Shane Mayes

Onshore Technology Services CEO Shane Mayes, who launched an IT outsourcing business in Missouri.

Credit: Shane Mayes

Looking for skilled, low-cost labor? Forget about India and China. How about Jonesboro, AR?

As the U.S. unemployment rate hovers near 10 percent, some companies are starting to eye job-hungry areas of the country as prime candidates for the kind of outsourced work that once would have gone overseas.

Dubbed "ruralsourcing," "rural outsourcing" and "onshoring," the practice relies on two simple premises: Smaller towns need jobs, and they offer a cheaper cost of living than urban centers. So businesses that outsource work to these areas can expect to pay less—rates are often as much as 25 percent to 50 percent lower—than if they were hiring urbanites with comparable skills.

In response, a new crop of outsourcing startups are popping up with development centers in places like Joplin, MO, and Eveleth, MN, where hundreds of employees crank out software code or offer IT support for large corporate clients.

"It's extremely timely given our economic climate," says Mary Lacity, an information systems professor at the University of Missouri-St. Louis. "And I think there's a demand for it."

From CNNMoney
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