The Information Technology Association of America (ITAA) recently released a report on an alternative to offshoring of IT services – lower cost domestic outsourcing.

Nobody is disputing that global sourcing is here to stay. However, the offshoring debate continues as some companies are dissatisfied with their current offshore initiatives and politicians fight to prohibit IT offshoring for the public sector. Amidst this debate, many services providers have focused on public sector customers and ways to deliver more cost-effective services.

Some organizations are reconsidering global strategies and are looking to lower cost midsize metropolitan areas. According to the ITAA report by Conscient Partners, such localities can provide costs as much as 30% lower than traditional IT hubs like Silicon Valley. One example is rural Virginia, which is courting private and public sector IT employers through economic development strategy.

Government entities, semi-regulated industries, and corporations concerned about data privacy and security tend to be less inclined towards offshoring. Security and privacy concerns and the need to create jobs for U.S. workers will ensure that most public sector remains onshore. But as government needs to serve more and more constituents, lower cost domestic outsourcing poses an attractive option.

In order to create IT jobs in the U.S., however, many things need to be accomplished: Grow IT workforce, make high-speed broadband more widely available, and create economic development strategies to bring tech jobs to smaller, often economically disadvantaged cities, towns and rural areas.

For more information about the report, go to the ITAA site.

Amy Schurr is the former managing features editor of Network World.